A game developer’s primary objective is to create a really good game, paired with an optimal monetization strategy to maximize revenue. There are two goals that support this objective – firstly, the developer’s ability to keep players coming back to the game, and second, creating a dependency on in-game currencies for players to progress with.
Planning the synergy between a monetization strategy and in-game infrastructure depends on the value exchange for the players – which together shape the game economy. The beating heart of your game. From the moment players download your game and are able to understand the in-game currencies, they keep it alive by coming back.
But who and what makes this happen?
The DNA of an ideal game economy comprises three main elements.
Game developers create the game and bring it to life. They team up with game designers, artists, and programmers to power up the narrative, characters, mechanics, and backend cohesion. Some large publishers also hire game economists. These pros oversee, implement and tune the in-game economy while optimizing user experience – and are there to apply more scientific methods to make sure that a balanced game economy is achieved.
The consumers/game players. When thinking about the game economy and tactics on how to keep players in the game, developers look at four player types, divided based on their player behavior. Knowledge is power. Developers need to do their homework on getting to know their audience – what their motives are, what excites them – and what brings them back.
The player groups are divided by four player types based on their most valuable in-game actions – explorers, achievers, socializers, killers. Each archetype seeks satisfaction from the game in their own way and spends differently. By segmenting your audience, you can determine who the majority of your players are and work in the content and economic framework that brings them back. A quick tip to remember – don’t overgeneralize your players – they’re just like adtech – diverse and constantly evolving. To maintain a well-balanced game economy, developers must constantly evolve their games and mechanics too.
The goods = game content. Content is what players want and in almost all cases need to progress in a game. The game content will vary depending on the game genre and type -. “Goods” can be divided into two buckets. Resources such as power boosts, time cuts, revivals, access to locked levels, etc that all help players to progress faster in the game; or the resources that don’t directly affect gameplay but add an extra element of engagement – such as vanity or buff items.
How do players consume game content?
- Time > A player invests time in the game. Every time they enter, they use their time to progress whether it be by playing, purchasing or watching ads. And saving time is also key. Watching a video to shorten the wait time for resources to become available is valuable for some players. This exchange makes ads valuable for the players, allowing them to engage with an ad and progress quicker.
- In-App Purchases (IAP) > The players pay money for items, bundles, or subscriptions.
- In-App Ads (IAA) > The player sees or engages with ads in order to gain the content in the game.
Users get more into the game and stick around wishing to progress – creating the right opportunities to introduce them to different monetization options. And when they don’t just fall into one player type, there are those who use a combination of time, IAP or ad-engagement to earn in-game currency in exchange for the goods.
Unpacking in-game currencies
Currencies are the pillar of any real-world modern economy and their objective is to be as universal and frictionless as possible. However, in-game currencies have strict rules and limitations. They are designed with a purpose – be it getting a player to perform a specific activity that will elevate the game experience, generate scarcity, or give them a reason to come back later, amongst other things. Most games tend to implement a dual currency system, using both soft and hard currency.
- lower-value, general-purpose currency
- Earned through gameplay
Hard currency (real money)
- higher-value currency
- Primarily obtained through IAP
- Often allows access to exclusive premium content
Soft currency can be seen as a stepping stone to hard currency, part of the strategy to create that attraction. Paying users will continue to pay, but the 95% that don’t will be using the non-paying options.
To keep players invested for the long haul, make sure that the limited supply provided in the beginning is content they actually want, get excited about, and would be willing to pay hard currency for. To keep players coming back, make sure the soft currency is easy enough to obtain but still lies in the sweet spot to challenge and satisfy.
The blend between currencies and the options for players to obtain them creates a dual economy, which essentially separates the content for paying and non-paying players and bridges the monetization component. A dual currency not only makes your game more interesting to play, and also gives your users more ways to spend time in your store.
To avoid cannibalization between soft currency and hard currency use the differents ad formats for different currencies – for example, use rewarded video for items you can’t really purchase with IAP (lives, hints, or boosters) versus the rewards and content users need hard currency to progress with.
Give the user game content through engaging with ads
A developer needs to make important decisions on how to maximize revenue without compromising the players’ experience, and at the same time avoid a negative impact on retention, LTV, and even on store rankings.
A game’s genre can sometimes dictate which currency will be the primary option. For example, IAP revenue is a main source of revenue for strategy games, whereas, hypercasual games rely on 95% of their revenue from ad monetization. The good news about user-initiated ad formats such as Rewarded Video and Offer Wall is the ability to give users from both sides of the coin a choice to engage with ads for extra currency or to progress accordingly.
For example, in Picture Cross, we can see that a player can watch a video to bag a Token, while the Free Tokens button acts as an entry point to the Offer Wall where the Token payout is a lot higher. Both options enable the player to progress, but they decide which investment to make based on time, reward, and their preferred pace.
Retention and conversion go hand in hand
For developers, retention is a key metric here because of its direct effect on the way the economy is structured (again, the goal is to keep the players coming back). Conversion goes hand in hand and helps developers understand how players are interacting with the game. How are users consuming features in the game? Use the available data to track whether features or additions are cannibalizing each other.
In a nutshell
Regardless of your game’s genre – a well-balanced economy design is dependent on data, the blend of currencies, the players’ experience, the players’ wealth, and the developers’ capability to captivate players in the game’s core loop. Once players are into your game, chances are high that they will keep coming back. A good game plus a good game economy can increase retention and conversion – and that flywheel contributes positively to your business model.