Game Marketing Tips, Analysis, and News

Thursday, September 22, 2016

Value Is The Key to In-App Purchases

Many games are free-to-play these days -- the majority of mobile titles are F2P, some of the leading PC games are F2P, and now even some console games. Usually, that means the games monetize through in-app purchasing (the sale of virtual goods or services inside of the game, usually abbreviated IAP) or advertising. Surveys show that many gamers feel in-app purchases detract from their enjoyment of the game -- according to an Ipsos survey, 47% of UK gamers feel that way. Why? And is this a problem that game designers need to tackle, or game marketers?

It's useful to take a look at some examples of games with in-app purchases that are doing very well, like League of Legends, World of Tanks, Clash of Clans, and others. Those games don't have a problem with players; their players seem pretty happy to have the opportunity to purchase things for the game. (The image of DJ Sona above from League of Legends is an example of an extremely popular in-app purchase.) Those who don't buy in-app purchases enjoy playing the game, or at least don't seem put off by the fact that you can buy things in the game. At least, we can infer that from the tens of millions of people playing these games on a regular basis.

What is it about some games that makes IAP annoying, and tolerable or even appreciated in other games? There are two factors, I believe. One is the game design: Games that annoy you with purchase requests (intruding during the game play), games that require purchases to speed up play (time-gating), games that let you buy your way to victory (though this depends on the culture, as its a desirable thing in China), those types of game design make IAP into something annoying. The other factor is value: Games that offer a good value in IAP don't annoy the players.

The important part of this value determination is that what constitutes value comes from the player's point of view, not the designer or marketer's idea. The fact that you can buy 100 game tokens for only $7 instead of $20 doesn't mean it's a good value to the player. Sure, maybe it's a deal compared to is usually charged for game tokens, but that may not connect directly to value in the mind of the player. What can you get for those game tokens? Are they readily usable for things that players definitely find useful or enjoyable? The determination of value comes from using a player's point of view to look at things.

You may not really know what is valuable to players at the outset of the game design, but game testing should reveal that if you ask the right questions. You could even run some tests with different groups of players to see what they like, and what they think is a good deal for an in-app purchase. Sure, start with some assumptions, but test them out and verify them. You can also test the effectiveness of different price points, too.

The ideal F2P game lets you have fun with the free version, for as much time as you like. Then it allows you to pay something to increase your enjoyment, but in a way that doesn't leave you feeling annoyed if you don't buy it. Doing this well requires both good game design and good marketing input.

Sunday, September 11, 2016

The 4K HDR Console Wars Begin

Yes, 4K/UHD (Ultra High Definition) and HDR (High Dynamic Range) consoles are here, and the marketing battle is beginning. One major player has left the battle, and a major new weapon is yet to arrive, but it already looms large in strategy calculations. Let's survey the order of battle, and try to predict the outcome.

First, Microsoft introduced the Xbox One S, a smaller, lighter Xbox One that retails for $299 in its basic version. It's also about 15% more powerful than the original Xbox One; supports HDR output for games; supports 4K/UHD output for streaming video; and includes a 4K/UHD Blu-Ray player. The list of games with HDR output is short right now (Forza Horizon 3, Gears of War 4, NBA 2K17, and Scalebound) but you can bet it will grow. HDR support is usually quite easy to add, according to developers. The console will not support 4K gaming.

Now Sony has introduced its competitor: the PlayStation 4 Pro, with over twice the power of a PS4 (4.2 teraflops as opposed to 1.8 teraflops), support for 4K/UHD and HDR output for games as well as streaming video, for $399. Oddly, while the PS4 Pro includes a Blu-ray player, it is not a 4K/UHD Blu-ray player. The PS4 Pro, which has a 1 TB hard drive, will ship November 10. Meanwhile, the PS4 has been revised to the PS4 Slim, a smaller and lighter box with essentially the same capabilities as a PS4, retailing for $299 and shipping September 15.

Just to make matters more interesting, Sony also announced that a firmware patch would be pushed out to ALL existing PS4's that will allow them to output HDR to suitable TVs – that is, if you have any PS4 and a 4K/UHD HDR TV (virtually all 4K/UHD TVs support HDR), you'll be able to run games in HDR mode – provided the publisher of the game has provided a patch for that capability. Supposedly that's pretty easy to do for most games, but we'll see.

Looming on the horizon for launch in the fall of 2017 is Microsoft's Xbox 'Scorpio', a far more powerful Xbox One that has 6 teraflops of processing power. That should support true 4K gaming output. As of now, the exact specs and price are unknown – we probably won't know that until June 2017 (E3) at the earliest. This gives Microsoft plenty of time to decide its strategy based on the reception for the PS4 Pro.

The response so far to this news has been mixed. Some feel Sony is going to do very well with this strategy, expanding their lead in the market. Others think the PS4 Pro won't do all that well due to the fairly low number of 4K/UHD TVs installed, though it's worth knowing that Sony promises you can see visual benefits to games on a PS4 Pro even through a standard HDTV set. Assuming, once again, that the publisher of the game has provided some sort of patch to let the PS4 Pro show its power.

We're really in unknown territory here. Apparently the PS4 Pro does a pretty good job of making 4K games look very nice, even though it doesn't have the raw horsepower to drive true 4K games, but instead relies on some clever tricks to upscale lower resolution output to 4K and make it look pretty dar good. All observers seem to agree, though, that HDR color makes a big, noticeable improvement in games. The interesting thing with that is that soon all PS4's will be able to play HDR games, and so will the Xbox One S – but not older Xbox Ones.

So how many of the existing 40 million PS4 owners will upgrade (through selling their PS4 to GameStop or someone else) to the PS4 Pro? No one knows. Will Sony ever break out PS4 Pro sales from PS4 sales? Doubtful. And while the number of 4K/UHD TVs right now isn't large, the price on them has dropped to where HDTVs were last year. We should expect the bulk of TV sales going forward to be 4K TVs, so the installed base should be pretty good by next Christmas... about the time Microsoft ships the Xbox One Scorpio.

Microsoft is giving Sony a free year to build up some PS4 Pro momentum before the Xbox One Scorpio arrives with significantly more horsepower. Will Microsoft price the Scorpio aggressively? They could easily meet whatever PS4 Pro price Sony sets, even if means losing money... if Microsoft wants to capture market share. They haven't done that lately, but who knows what they will decide in a year?

Add to all of this is Nintendo launching its NX system in March. Odds are it won't have 4K output of any kind, so the Nintendo NX will be left out of the 4K Console Wars entirely. Which is probably fine by Nintendo, but it does make you wonder how well they will do. Will the NX be more like the Wii or the Wii U when it comes to sales? I don't know. Now that Nintendo is doing mobile games, will that help the NX somehow? Is this somehow an end run around Sony and Microsoft? Who knows?

The only thing I know for sure about the next year is it's going to be a lot of fun to watch the battle unfold.