Pay, Horsepower and Reward - Edinburgh Interactive (Session 2)

Getting Brands to Pay for in Game Purchases

With spiralling development costs, piracy concerns, and a competitive market meaning less return on each project; game developers are increasingly looking at new business models. At the forefront of this is Free2Play or freemium games such as EA’s Battlefield Play4Free series on PC and Rovio’s Angry Birds on mobile platforms. Christian O. Petersen, CloudMade, discussed the subject.

In a traditional game consumers pay an up front fee which can later be supplemented by DLC. Freemium offerings give the player the core mechanics of the game but then offer players additional content that will individualise your game experience or offer an in-game advantage.

However only 2-3 % of people playing freemium games will actually spend any money on them. Christian O. Peterson, VP Community at Cloudmode, has 16 years experience in games, mobile and marketing and has worked as producer, for companies such as Mars, Kellogg’s and Lego, on over 100 advergames (that is games designed to specifically market a product). He thinks that the problem lies with the marketing thinking itself. He argues that Freemium is a business strategy not a business model.

Freemium allows wide adoption (a free to download game has 10x more adoption). However it also has a rapid drop off rate in playing: some they feel pressured by adverts to make purchases and therefore leave, some feel that they cannot master the game without purchasing and leave and others feel like they are being excluded from a VIP club and again leave.

So how can developers monetize existing users but not scare them off? Christian questions the effectiveness of traditional banner based advertising as although on a PC banners are tried and true; on mobile phone internet browsing the revenue is halved and for games it’s reduced sevenfold. In addition cookies (the little files that track the websites you visit) don’t work on mobiles and therefore adverts tend to be less targeted and therefore of less interest.

Total mobile play time has grown by 10x over the past two years and this margin is increasing so it’s no surprise that companies want a taste of this market. However growth in mobile game revenue has only increased by 3x and Christian urges new approaches. He says that although marketing departments keep a beady eye on the number of Facebook likes, they are unable to tell how many people will then buy something after following a link. Although this is not dissimilar to TV advertisements, TV spots are harder to ignore and the increase in sales is much more tangible.

So what is the answer? Cloudmade has come up with the idea of sponsored locations, using their experience in navigation technology the game can use a combination of GPS, Cellphone Towers and Wifi to check your location and if you might benefit from an in game item then a screen comes up suggesting you go to a local sponsor which is then displayed on a map.

It’s ideally suited for quick conversion environments such as coffee shops. The idea being you’re quite likely to buy something rather than browse at a coffee shop whereas at a clothing store the chances are a bit less. To help this conversion after you pick up your in-game item you’ll get a voucher from the sponsoring company. Christian tells us that a further 4-6% of users can be monetized using this strategy and it keeps the pressure off non paying users which improves retention.

Even though Cloudmade have just signed a major deal with an undisclosed game publisher, Christian still imparts some free advice to any developers in the audience. Developers shouldn’t treat all consumers equally and should incorporate various business models to entice the different types of users. Whilst most companies can’t hope to reach Rovio’s 20% purchase rate, the extra 6% offered by Cloudmade’s model is not to be sniffed at.

by Joel Spencer

From Horses to Horsepower – What NaturalMotion Games did Next

Following up on the success of their first free-to-play game, My Horse, NaturalMotion Games discuss the evolution of their thinking behind their newest freemium offering, CSR Racing. A part post-mortem for My Horse and part look at CSR’s performance so far in the marketplace.

Struan Robertson (@StruManchu), product director of Natural Motion, asks why we should care what they do next. A slide shows four free-to-play games as examples, saying they look too similar (cartoony and isometric farm-type games). My Horse and CSR Racing drop on top of them to illustrate how different they are.

Their goal has been to create console quality, addictive and polished. Their successes include Jenga, Backbreaker, Icebreaker Hockey and NFL Rivals, with over 20 million downloads before their first independently developed game. Which was My Horse, with over 11 million downloads and 500,000 active users.

Their newest game, CSR Racing has been Editor’s Choice on the App Store and is characterised by its stunning visuals. “Continuous improvement” has been their core principle throughout these games’ development. Struan points out that market analysis, analytics and introspection are key to that.

Showing a screenshot of “What’s Hot” on the App Store, Struan highlights the diversity of the kinds of games people are playing on their mobile devices. Which is why pains must be taken to differentiate the game you’re making. The more likely they are to show their friends, the better.

Overall, app stores are changing, bringing in new players. The majority of games played are simple Space Invaders and Pac-man fare, but we’re also seeing some move into more complex games. Struan cites Natural Motion’s My Horse as an example of more complex games, saying that the importance of making horse behave naturally was the hardest thing but creates a magic moment.

Play patterns on mobile devices have to be different to console play; creating console quality games is not as simple is putting a console game on a phone. They need to be tailored to mobile devices. Apparently, the average play session of a racing game on a phone is 1.9 minutes. He says CSR Racing is much higher.

Undirected play, tending, focussed play, callback and timers are the basic elements of My Horse. This allows however much time the player has to fit something in the game, from 20 seconds upwards.

Demographics up next, what works for My Horse isn’t best for CSR Racing. What is a core loop? It’s “Do a thing, get a thing, expand your things”. The main element of any game.

CSR’s play sessions is made up of race, get cash, upgrade. He talks about how the micro-transactions and callbacks had to be in sync with what users would consider a satisfying experience. Tactile ownership, or smart use of touch-screens, is also worth special care, as it makes the player more attached to their horse or car.

It proved important to have people in the game, simply because it’s important to humanise a game. To the point that feedback from the sole character in My Horse inspired Natural Motion to hire a prominent script write and a graphic artist for CSR Racing. Which also shows the relevance of cohesive narrative.

Lovely wrapping is the next point though. The app for a free-to-play game is the store front and the wrapper all in one. If, like the slide of an iPhone shown, you can create packaging that makes people feel good about your game, you’ve won half the battle.

In closing, Struan points out the key tenets of the talk: Know your games, know the market, know your core loop, know your users, learn from everyone.

by Michael Black (@firm3d)

Retain and Reward

He graduated college at 14, dropped out of university and has been listed in Forbes magazine under people to look out for in online advertising is also one of the top 25 business advisors in Silicon Valley. But Brian Wong, founder of Kiip, isn’t a heartless corporate machine. He wants to put the humanity back into advertising.

Starting off by talking about a golden era of advertising when characters such as Tony the Tiger and the Green Giant were dominant it’s clear he’s not your usual slick marketing type. He’s quick to criticize banners, particularly on mobile phones. He argues that marketing companies think that smart phones are just computers with smaller screens. On a computer an advert will open in a new window but on a phone adverts will completely take over what you are doing to force you to watch a video, fill in a survey or like a facebook page.

He also debunks the myth that search engines take a long time because they’re really going the extra mile to look out the best deal. He suggests that search engines could be instantaneous but the delay is there to make us feel valued. It’s a tactic used by social media sites when a friend views and automatically likes our photos.

He wants to make advertising based on what we do, a short promotional video show us shows a woman reaching a new personal best jogging and Kiip rewards this with an offer of a free drink. The challenge Brian says is “How do we take these achievements moments and not take a giant shit on them?”

Talking us through how to market effectively he identifies several interesting techniques. It’s important to follow existing patterns of behaviour, for instance in areas where there are clubs and pubs McDonalds stays open as people like to eat fast food when they’re drunk. He also tells us that marketing has to be relevant to the activity, which is seen in the prominence of sports drinks companies at marathons and other intense events.

Whether high from drinking or endorphins from exercise it’s a great time for marketing as our minds are more suggestible. It’s also effective if you create a new currency, Microsoft points and EA’s Battlefunds stand out in the gaming world but of course casino’s combine the suggestibility of drinking with the currency of chips. Creating that one degree of separation between you and your hard earned cash means you forget it’s your money.

Instead of just spreading the word traditionally Kiip also promotes itself by allowing users to gift unwanted rewards to friends. Kiip have recently launched a wallet service to help users keep track of their vouchers and its touches like this that help put a brand on the right side of a customer. Brian points out the difference in how people respond to negative press for Apple and Microsoft. Microsoft are often painted as the evil empire with Apple the rebel underdog when in reality Apple turn a far higher profit.

Kiip is currently launching in the UK, with an offer of a promotional dish at yo-sushi, and although its success is yet to be seen here in the USA 500 apps already integrate “moments based rewards” and there have been 100 million rewards distributed.

It seems to be a solid commitment to this young energetic man who not only talks a good talk but proves it too.

By Joel Spencer