
Kongregate: the science behind the massive profits of F2P games - tlarkworthy
http://www.kongregate.com/forums/2468-general/topics/431337-emily-greer-ceo-of-kongregate-on-the-science-behind-the-massive-profits-of-tyrant-unleashed-and-other-f2p-games
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patio11
Emily Greer (CEO of Kongregate) has a very good presentation, not to my
knowledge already linked in this discussion, about F2P whales:
[http://www.slideshare.net/emily_greer/dont-call-them-
whales-...](http://www.slideshare.net/emily_greer/dont-call-them-whales-
freetoplay-spenders-virtual-value-gdc-2015) Partially it's an apologia for the
business model, but it is dripping with useful facts and commentary.

~~~
freditup
I used to be a moderator on Kongregate and had a decent amount on interaction
with multiple of the administrators. I also was somewhat involved in the flash
game market (just casually as a hobby). When I found out how Kongregate
specifically worked with developers to help make games that target the 'whale'
spenders, I was pretty shocked. Making games that are not enjoyable, just
addictive, in order to take in thousands of dollars from single individuals
just seemed so unethical.

I just glanced over that link of Emily's ethical rationale for this, and it
didn't convince me. But I'll have to go back through it more carefully before
I can decide for sure.

~~~
freditup
A few more thoughts on the matter of whales:

On Kongregate, 2.1% of users buy virtual goods. Of these, about 4% (the
whales) have spent over $500 and bring in about half of Kongregate's revenue.
Top spenders often spend $50K-$80K.

Emily's premise is this: that people who spend lots of money on games (whales)
are people who healthily enjoy the games as hobbyists.

Her most interesting points, in my opinion are as follows:

We think whales are bad (but shouldn't) because they spend their money on
virtual goods: "Spending $5-­$10k on specialized PC Gaming rigs that improve
your skills and enhance your competitiveness is not really that different from
spending money for in-game items that do the same. But I bet you all ﬁnd it a
lot easier to contemplate."

We think whales are bad (but shouldn't) because we don't think games are a
legitimate hobby: "The bias against games is so insidious that even within the
industry we’ve internalized it enough that we question someone with means
spending tens of thousands of $s on a game, especially when you combine it
with the low value we place on mobile and PC games and especially virtual
goods. And so people jump to explanations like “mental illness” or “evil games
manipulating players” when the real explanation is that they are rational,
wealthy people who are dedicated fans investing in a particular game."

I personally don't agree with her though. We would have no problem with a
person spending $10K on software. The issue isn't virtual vs. physical goods.
The issue comes down to if games are a legitimate, healthy hobby or not. I
would argue that they are not, at least for most of those who are whales. I
don't have time to flesh this argument out tonight though.

~~~
patio11
Yep. In particular, if demographically whales are (as subtextually claimed on
slide 12) functioning upper-middle-class professionals like business owners,
engineers, doctors, and CPAs, then there doesn't seem to be any meaningful
harm in it.

My unease about F2P monetization is that my sense of the demographics is that
it tilts more towards "people with undiagnosed depression" or "the Vegas slots
demographic."

~~~
freditup
Slide 12 isn't a convincing argument that these people are okay, but of course
it doesn't indicate the latter either. But even if these people are upper-
middle-class professionals, there's still a chance that their action stem from
things like depression/addiction. My hunch would be that the cause of the big
spending leans more towards addiction than well-reasoned spending on a health
hobby, but without data or evidence that's purely a guess.

It would also be interesting to look at the group of whales in general.
Perhaps the very top 20 spenders are all well-balanced, healthy individuals
with large incomes. But what about the rest of people who are spending large
amounts of money? This might be where struggling individuals are more likely
to be found.

~~~
cactusface
I think in the absence of data, people see what they want to see such that it
agrees with their worldview. Nobody likes to endure cognitive dissonance. Even
in the presence of data people see what they want to see. Me? Well, some of
the time the people spending money are sorely addicted; some of the time they
have a mental illness like depression / mania / psychosis / schizophrenia /
OCD / whatever; some of the time it's credit card fraud; some of the time it's
kids spending their parents' money; some of the time it's just some person
with access to a lot of cash that decides to throw money at the problem of
becoming good at the game. It would be really neat to see some numbers.

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fsk
Eventually, the pendulum will swing the other way. People will get sick of
freemium games, and go back to games where you pay $1-$10 once.

Some people made a lot of money with freemium, so everyone is copying them.

I can't stand wait timers, energy systems, and all the other tricks they use
to balance freemium games.

Many freemium games require an Internet connection to play, which is bad for
me because my prime gaming time is on the subway while commuting.

Another bad part about freemium is that, when they someday shut down the
servers, you won't be able to play the game AT ALL anymore. I can still play
Super Mario Bros. even if Nintendo goes bankrupt and decides they don't care
about the game anymore.

~~~
themartorana
I make my living off of mobile freemium games. We don't do anything with
replay timers or the like - we advertise, mostly, and have fun in-app
purchases.

For a couple years we offered two versions of our apps - paid and free, free
being ad supported. In a bid to simplify things and encourage more
conversions, we switched to in-app purchase to get rid of ads. (Also, app
stores had been optimized to push down app results for non-free games - plenty
of reading out there about the causes and effects.)

To date, just under 5% of our revenue is paid. Despite playing for years, many
people don't believe our games are worth $1.99. If you believe the race to the
bottom will reverse itself, I'm here to tell you it won't. It's guided by the
walled gardens and they like it this way.

We have had millions of downloads and on our most popular game, have
abnormally long retention. Even some of our most die-hard players will not
spend $1.99.

Maybe - MAYBE console gaming will one day return from F2P, but I doubt it. At
least not in the _near_ future - the industry is still moving _towards_ it.

But in mobile gaming, success is a volume play. And the volumes won't part
with $.99 in the traditional way. If they did, F2P wouldn't be a thing. And
maybe gamers will pay for games, but the masses? Not so much.

~~~
welly
I'm not what I would ever describe as a gamer. Well, I was massively when I
was much younger in the arcade, 8 and 16 bit days but now, not so much/at all.

The problem I have with many freemium games is for me they have absolutely no
lasting appeal. I would estimate that 75% of freemium games I've installed, I
may have played a sum total of half an hour and then got annoyed/fed up/bored
and removed it. Adverts, replay timers etc. are certainly to blame but what
mostly is a turn off for games of these types is there is no soul in a lot of
these games.

Take Triple Jump, Don't Step On The White Tile, Avoid The Blocks etc. for
example(s). They're like Christmas cracker toys. You play them once or twice,
discover how lame they are and throw them away.

While I realise those games aren't meant to be much more than that (and an SEO
exercise), there are so many like these on the various app stores and few
games that have any kind of depth to them. I would more than happily, and have
happily, paid $1, $2 or more for a game that held my interest for longer than
half an hour. The biggest problem I have is these throw-away games have been
so cleverly marketed or SE-optimised that they make up the bulk of "featured",
"highlighted" or "best selling" games and any game with a modicum of depth
disappear into the ether, undiscovered. It's frustrating for someone who wants
to play a fun, entertaining game, not an annoying, repetitive and uninspiring
christmas cracker game.

~~~
GeneralTspoon
This is exactly the problem I'm trying to solve with Curated[1]. The Play
Store is filled with low-think, one-tap junk these days... Finding a good game
on the Play Store is almost as hard as finding a science show on the Discovery
Channel. It's optimised for the unthinking masses, which makes sense for
Google from a monetary perspective, but for anyone interested in a deep game,
then either Google's algorithm needs to get waaaay smarter or we have to do it
ourselves.

[1][https://play.google.com/store/apps/details?id=com.curated.an...](https://play.google.com/store/apps/details?id=com.curated.android)

~~~
aphrax
really good, I like how you've done this: clear layout, shows the sort of
stuff I'm interested in. Good job.

------
Animats
I'm watching "Newbie to Big Spender: Understanding the Player Lifecycle", by
Kongregate's CEO.[1] That's from 2012. This was made before they felt a need
to apologize for the business model. It's openly about to hook players and
turn them into big spenders. There's a 4-stage process to hook them. Few
players start out as big spenders in a game. Heavy spending comes later. Game
levels are designed accordingly. The user shouldn't be pressured to pay until
they have 50 plays or so. By Stage 4 (Committed Players), players are no-
longer price sensitive and will buy cosmetic items.

68% of revenue comes from players who spend over $500 in a single game. Their
biggest whale back then had spent $30,000 on one game. All those people who
spend $5 don't matter. That's the free-to-play business.

[1] [http://developers.kongregate.com/blog/newbie-to-big-
spender-...](http://developers.kongregate.com/blog/newbie-to-big-spender-
understanding-the-player-lifecycle)

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jpatokal
That's a lot of raw data and not a whole lot of specifics. Here's a dissection
of how one particular massively popular F2P game (Clash of Clans) gets people
to pay up:

[http://gyrovague.com/2013/06/05/time-is-money-how-clash-
of-c...](http://gyrovague.com/2013/06/05/time-is-money-how-clash-of-clans-
earns-500000-a-day-with-in-app-purchases/)

HN discussion:
[https://news.ycombinator.com/item?id=5825158](https://news.ycombinator.com/item?id=5825158)

That's two years old now, but it's interesting to see some of the points in
there validated by Kongregate's research: eg. how guilds primarily serve to
exert social pressure, and how UAE and Kuwait have ridiculous whales (
_average_ spend per playing user $500!).

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tlarkworthy
This is the best source of numbers I have found in the industry. Especially
the CPI numbers and 6 months of buying installs before it paid off.

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tempodox
There is an interesting article on how F2P monetisation works:

[http://www.gamasutra.com/blogs/RaminShokrizade/20130626/1949...](http://www.gamasutra.com/blogs/RaminShokrizade/20130626/194933/The_Top_F2P_Monetization_Tricks.php)

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fdb
South Park had an excellent episode explaining freemium games:
[http://southpark.cc.com/full-episodes/s18e06-freemium-
isnt-f...](http://southpark.cc.com/full-episodes/s18e06-freemium-isnt-free)

