Game design as marketing:Business/game developer’s dilemma

Juho Hamari@

GAS Seminar2.3.2010

Juho Hamari – M. Sc. (Econ)Researcher @ HIITInformation System Science / eBusiness

Scope: Business models related to selling virtual goods

• Our game is • not big enough to be sold in a box• too big to be sold in a box

• What then is our business model?

15cm

10cm

Willingness-to-pay

Problem with flat pricing models: How can we meet the WTP

Let’s sell in-game artefacts!

Virtual goods

Microtransactions

Differences in main b.modelsRevenue

model

Service

design

emphasis

Marketing

emphasis

Pricing Customer

relationship

emphasis

Retail Large amount

of initial

content

Advertising Single price Acquisition

Subscription Long-term

engagement of

users

Time-based Retention

“free-to-play” /

Virtual good

sales

Monetisation

through

incentivising

service design

Creating

demand via

game

mechanics

Microtransactio

ns - emphasis

on meeting the

willingness-to-

spend by price

discriminating

Acquisition,

retention,

monetisation

Deg

ree

of inte

grat

ion b

etw

een g

ame

and b

iz d

esig

n

You…

- Amass in-game wealth- Make new friends- Generate content- Keep coming back everyday?

You are locked in, literally

• Lock-in: You are too deep into the game

• Loss aversion: You don’t want to loose your hard earned stuff

• You don’t want to be left behind…

… you pay up.

• Tempting to make players end up in jail more frequently -> $$$

• Not especially fun…• Not fair for non-paying users?

Dilemma #1: How to balance between:

• Aggressive marketing VS Fun• Monetization VS Retention• Selling stuff VS balancing the in-game

(virtual) economy

– No silverbullet – monitor, adjust, iterate to maximise both

OH NO!!MUDFLATION! – ECONOMIC CRISIS

Faucet -> Sink

• Sink stuff out– Decay– Consumables– Repair costs– Etc

– Not fun either?

Dilemma #2: How to balance between:

• Paying customers still wanting to get their money’s worth

• Non-paying customers still wanting to fare in the game

Evening out the playfield between paying and non-paying

customers

• Separated games for spenders and non-spender– Matchmaking– Separated servers (ZT Online)

• Get things a lot easier, only a bit later (monetising early adaptors and novelty value)

• Make it easier for losers (No one cares if noobs get a bit helped)

• Enabling trade between earned and bought content

• Abstracting functions of items (KartRider)• Not selling performance related items

– Selling functionality (convenience) – makes the gamplay easier and less time consuming

– Selling only aesthetic items

Thank you

References:

• Pictures:– Slides 3-20 - by Mark Strozier:

http://www.flickr.com/photos/r80o/sets/40318/– Slide 21 – by twenty_questions:

http://www.flickr.com/photos/twenty_questions/2888453842/– Slide 22 – by mellyjean:

http://www.flickr.com/photos/mellyjean/3200035895/– Slide 23-25 – by alles-schlumpf:

http://www.flickr.com/photos/29487767@N02/3288942594– Slide 27: Wikipedia commons