
How Clash of Clans earns $500,000 a day with in-app purchases - jpatokal
http://gyrovague.com/2013/06/05/time-is-money-how-clash-of-clans-earns-500000-a-day-with-in-app-purchases/
======
cageface
I really hope this game model suffers the same kind of crash that felled the
arcade business in the 80s. At some point I think people are going to
collectively realize that they're being manipulated and burn out en masse.

[http://en.wikipedia.org/wiki/North_American_video_game_crash...](http://en.wikipedia.org/wiki/North_American_video_game_crash_of_1983)

The overwhelming dominance of this kind of app in the app store has killed a
lot of my enthusiasm for mobile, unfortunately. There are a lot of very
interesting things you could do with a pocket computer that's always online
and equipped with a bunch of sensors but nobody cares because if you're not
playing these kinds of slimy games with the rest of the top 20 you might as
well not exist in the store.

~~~
simias
What really annoys me is when a game that might potentially interest me
chooses to go the pay2win way.

For instance, tribes:ascend. I wanted to get into it but forums were full of
people saying each time they released a paid upgrade the balance went FUBAR.

What annoys me the most is there's no way to do it "the old way" and pay a
bigger sum of money _once_ and get the full game without having to upgrade for
every single new weapon. That's where you realize that the microtransaction
model is a scam, because if you want to buy all the upgrades at once it would
cost you several hundreds of dollars.

I wish they'd go back to the older model of freeware demo + one time buy full
game. I remember buying Doom that way.

~~~
babuskov
I'm creating a strategy game right now and I'm facing this dilemma. I'd like
to get $20 from each customer during game lifetime, but it seems that it would
be easier to make it free to play and then charge for something in the game.
And it's hard to charge for anything that would not make you advance in the
game, otherwise it's cosmetics and you're not charging for the game, but
almost the same as asking for a donation.

Most people would like to play for free. This model enables you to attract
more users, which means a larger pool of potential customers. For example,
would you pay $20 for my game (see link at the end), or would you rather play
for free and then pay $1-$2 a month for some stuff that advances your
gameplay?

BTW, in case you're interested the game should be out in a month. See
gos.bigosaur.com/cards.html for more info.

~~~
jholman
Some thoughts about the economics (and ethics) of games:

    
    
      * if a game isn't fun (to me), I shouldn't have to pay for it
      * if a game is fun, I should pay for it
      * generally, "better" games deserve more money (non-linear)
      * ... but I'm skeptical that $500 is ever the right price (e.g. for every LoL champ)
      * "time spent playing" is a half-assed proxy for "better"...
      * ... but not if you rig your game mechanics around this proxy metric
      * pay-to-win games are "bad" (personal subjective perspective)
      * if I don't have to pay for a game, I probably won't (sorry!)
      * if I'm paying per-month for the game, I feel artificial pressure to play it...
      * ... and if I stop playing, I'll cancel
      * ... so I can't casually pick it up 3 months later
      * ... and I think maybe most people have a limited monthly-subscription budget
      * games that have free options have better word-of-mouth marketing
    

And a few observations derived from these:

    
    
      * gotta have a demo
      * the demo needs to demonstrate the actual gameplay
      * getting demo-length right is really hard
      * if you have the infrastructure to charge $2/month, you've got options
    

With all that in mind, here's what I would do (hopefully will do, one day):

    
    
      * lots of gameplay should be free
      * where it makes sense, put roadblocks that players will hit after a while
      * .... and then some more after some more while
      * charge say $5 to get past each roadblock
      * have say 5 total roadblocks
      * to assuage cheapskates (5-years-ago me!), give alternatives to paying real money
      * maybe crazy grinding?
      * even better would be if you could find a way to give players credit-towards-roadblocks if they are helpful to the game community, or to game development
    

Be up-front about all of this: "Early parts of the game are free! To feed my
family I'll be charging progressively for access to the later parts of the
game, but I'll never charge a given player more than $25" (or some other
promise you are willing to keep)

\---------

By the way, $20 is a lot for an indie game, especially up-front. The
humblebundle this week includes ELEVEN games, including several great ones,
and the "average price" (unlocks all 11 games) is around $6. So no, I will not
pay $20 for your game, are you crazy? Instead I'll go buy the humblebundle for
$10, give half of that to charity so I feel like a social justice crusader,
throw away 54% of the games in the bundle, and STILL have dozens of hours of
gameplay, and $10 in my pocket for the next humblebundle.

Yes, I'm a cheapskate. But this is the reality of the market at work. I'm not
saying your game isn't "worth" $20. I bet your game is more fun than a movie-
plus-snacks, and people pay $20 for that, right? But your game will be
compared to games selling for $10 or less.

Man, I just realized I sound like I'm trying to talk you out of a career in
game-dev, and that's not what I want (as a gamer).

\---------

One more thought:

You said "(not necessarily more powerful, but rather more diverse)". Yeah,
listen, when you play my Rock Paper Scissors online game, you get Rock for
free, and pay for Paper and Scissors. They're not necessarily more powerful,
just more diverse.

~~~
grayrest
Pay gated content has been tried in the MMO space to varying degrees of
success. The main problem with it is that the gates split your community,
effectively reducing the userbase of your game. As a non-pay example, take WoW
(I did Vanilla->WotLK) where Blizzard continuously reduced barriers to entry
for content so that a larger portion of the playerbase could experience it. I
honestly haven't seen a gated solution where everybody is happy but I haven't
surveyed every game out there and gating works well for single player games.

The other issue is that studios generally feel a need to put a carrot on the
other side of the gate. At the moment, I'm tracking Warframe and the current
update has (essentially) pay gated zones with a reagent drop that drives both
additional character progression and player housing. Neither is necessary to
complete any of the other content in the game–the game has a mechanics problem
where weapon damage scaling is excessive, the relative ease of content
clearing is one–and the playerbase is whining about P2W.

My inclination would be something like:

    
    
        * Subscription based
        * Sub payment produces in-game tradeable item, time added on use
        * Subscription use suspends X days after not logging in
        * Payment auto-renewal only triggers when 2 days left
        * You start off with X weeks of playtime
    

This covers revenue, pay to win, real money trading, free players and (IMO) is
both transparent and fair to players. It's basically a F2Pish variant of EVE's
PLEX system. The challenge then becomes maintaining engagement and having the
economy under control meaning that currency remains useful and inflation
remains reasonable.

I haven't actually seen it done, probably because it's not a reliable
recurring revenue stream like traditional subscriptions and isn't that strong
of an impulse buy. I have seen somewhat similar ideas in a game with limited
moves per day but from memory (been a while, blanking on the name) they also
used the time item as a catalyst for weapon upgrades which for me veered too
far into P2W so I dropped.

------
jamieb
"... I can’t really complain about the hours of entertainment I’ve gotten in
exchange."

"Yet I still can’t help but cringe as I run into all the ways the game is
intentionally crippled to get you to pay up, and the way its Pavlovian
triggers to come back for more operate on fear."

So, sir, you like war games. You observe that this game makes you cringe, and
is designed entirely to make you pay up through the experience of fear.
Despite this you are willing to pay $4.99 "largely as a token of appreciation
to the game’s makers".

Game companies that make games that don't intend to extort money out of you
are laying people off left and right, and here you are "appreciating"
developers that make you cringe. This makes me feel mad and sad.

If you are willing to pay $4.99 for a game that makes you cringe, might you be
willing to pay $5.99 or even $39.99 for a game designed to make you experience
joy?

The classic Master of Orion I&II are available for $5.99 from GoG. If you
demand a modern experience, the latest XCOM is a bargain at $39.99 on Steam.
The original XCOM is $4.99, also on Steam.

~~~
jpatokal
OP here. I paid the $4.99 quite early on, when I was still at the "joy" stage
and before I realized the full extent of manipulation going. But I don't
regret it: CoC _is_ a good game, and I enjoyed playing it earlier on. I've now
just reached the stage where it's pretty much impossible to keep playing
without paying.

And for what it's worth, I paid for Master of Orion back in the day when it
was still shiny and new, and was quite happy to fork out $15 for the full
version of Minecraft, the most "joyful" game I've seen in a long time.

------
simias
So it's the very definition of "pay2win".

What I don't understand is how they get people to keep playing once they
realize they don't need skill to win, but rather a valid credit card number.

Certainly it must feel like using cheatcodes? The victories must feel empty
and you'd get bored pretty quickly, at least I think I would.

~~~
czzarr
It's called addiction. They get people addicted to the power that gems confer
them. People don't care that they need no skills. They just want that high
that the gems give them.

~~~
dlhavema
i very much agree, i played an old web-game back in college called OGame that
came out before the "pay to win" model, but the basic premise was the same,
the more you login the better you do. and what's best was you had to protect
your stuff ( planets/fleets ) 24/7 from people from all different time zones..
it very much became an addiction...

~~~
Osiris
I played a web game for a while that was free to play but had a subscription
model that gave you features that made management of a large number of assets
(villages) easier to do than in the free version.

I played for free for a long time until I ended up with so many resources to
manage that I couldn't do it well anymore. I had to pony up the $6/mn to get
the advanced features.

The problem with these small transactions is people don't see how much it's
costing them. If they priced the game at $20 no one would buy it, but they'll
be willing to spend $100 if it's spread out of 100 $1 purchases.

~~~
will_work4tears
Sounds like Tribal Wars. Fun game, but after the first couple villages
requires quite the increasing time commitment.

~~~
Osiris
Hit the nail on the head. That's what it was. Fun but I ended up giving up my
account to another player to manage and haven't looked back.

------
kmfrk

        Clash of Clans on iOS is doing well..
        supercell is making 1 mil a day off of microtransactions?
    

former_zyngite:

    
    
        So much more than 1m a day from what I understand. Yes.
        Clash of Clans is doing well. That's the understatement
        of the year.
    

[http://www.reddit.com/r/IAmA/comments/1fpbv1/i_was_one_of_th...](http://www.reddit.com/r/IAmA/comments/1fpbv1/i_was_one_of_the_520_people_laid_off_by_zynga/cacjaab?context=1)

------
programminggeek
I think League of Legends or maybe Team Fortress 2 are about as good as it
gets in terms of over-delivering value and not overselling their micro-
transactions. Not everyone is going to be so successful with the same approach
though.

~~~
trin_
LoL is horrible compared to Dota2 in this regard. You cant play every hero and
with added points you get addex abilities. Dota2 micro-transactions only pay
for cosmetic items that you can (mostly) also get via trading with other
players or as a drop after each finished game.

~~~
Pxtl
On the other hand, you can't really blame Riot for needing to grab more money
than Valve. Valve has deep pockets and is willing to take a small profit if it
means they survive in the long run. Also, Valve's brand is strong-enough that
they have players beating a path to their door no matter _what_ they publish.
Riot has none of these options. Every player they earn on the strength and
reputation of the game alone. They have no cash to fall back onto if LoL
doesn't make money for them.

If LoL doesn't make money for Riot, the developers don't get to eat. So yeah,
I'm not surprised they went with a F2P model with a little bit of pay-to-win
in there, and their variation on it (rotating characters and you pay to _keep_
the ones you liked) is a novel and fair approach to it.

~~~
sardonicbryan
Riot is now part of Tencent, which has a market cap of about $90B.

[http://allthingsd.com/20110204/chinas-tencent-buys-riot-
game...](http://allthingsd.com/20110204/chinas-tencent-buys-riot-games-
for-400-million/)

<http://finance.yahoo.com/q?s=0700.HK>

~~~
chc
I'm not sure what you mean for us to infer from this. Riot is owned by
Tencent, but that doesn't mean Tencent is willing to take a temporary loss on
Riot like Valve is willing to do with Dota 2.

------
kyrra
I've been playing Clash of Clans for a few weeks now. I have to say, it's a
pretty fun game. Most games that follow a similar layout and design are no
where near as polished. The developer behind this game did a really good job
making it fun to play.

While I agree that the general formula laid out in the blog post, there are a
lot of more subtle game mechanics that I feel help to balance the game (though
I am no where near the top-tier of the gameplay yet). I can see at the high
levels where the money generation vs cost of things would become a problem,
but at least where I'm at, it's fun to play. If I get to the point where I hit
a wall where Gems are required to really make progress, I'll just quit.

~~~
thangsten
The way this article is written leads me to believe the writer has not played
the game for long enough to make a fair assessment on the gems currency.

I have been playing this game for roughly over a month, and put $10 into gems
in the beginning. My roommate started a little over a month before me, and
refuses to put money into the game.

The amount of time to invest into buildings/resources/farming scales up with
how progressed your town is, and gems are present to alleviate this strain.
The implication that gems are necessary to win are unfound.

The game follows a simple town building principle, use currencies (gold /
elixir) to build/upgrade buildings, however you can only upgrade them to the
limit your town hall level will allow. The way to gain currency is attack
other towns (to steal their resources), or use gems. Even if you use gems to
upgrade your things, you are simply progressing further in the game, at the
risk of opening yourself up to more powerful enemies. When you attack weaker
enemies, there are diminishing returns (look up the loot multiplier). So while
gems allow you to progress, you must also adapt and attack higher level towns.
These higher level towns can be achieved without any monetary investment in
the game. Gems just allow you to reach that stage sooner.

I bought gems in the beginning, because the game uses a builder mechanic to
limit how many buildings you can build/upgrade at one time. When you start
out, you have 2 for free. You can have a maximum of 5, however these are
bought with gems and the cost increases each time you buy one. With $10, I
soon had 4 builders. With this, I was able to progress much faster than my
roommate. I am catching up to his level quickly, almost at where he was in two
months time with one month invested.

Additionally, gems can be attained for free by clearing brush, however it will
be a nominal amount versus buying them outright. But to say gems are required
to win this game is not true, but it does save you time versus waiting around
a week for a building upgrade to finish. The main thing most people need to
realize is this game isn't about spending money, but investing more time into
it. The game is a continual uphill grind where the true currency is how much
time you devote to it, but I'm still having fun with it for now.

~~~
jpatokal
I was at your stage not too long ago, and trust me, you simply haven't played
long enough. Come back and revisit this when you're at Town Hall 8+ and
building anything of interest requires 2M+ gold or elixir.

~~~
kip_
Have to agree here. I managed to avoid gem purchases up to this point, but now
trying to gather up 2M gold or elixir means I have to carefully pick other
castles with more than 200K elixir to attack to make it worth my time and
dedicate more than a solid hour to play at one time, otherwise I'll get
attacked and lose too much of my stockpile in exchange for a paltry 12-15
hours immunity, during which I'll only generate 216-270K of resources.

------
vittore
There is one quote that explains everything:

>> Jorge Yao, the game’s undisputed champion, figures he has spent north of
$2500 in real money

>> on buying gems, and according to back-of-the-envelope calculations, the
cost of fully fitting out your virtual

>> village is on the order of $5000 when you include walls. It’s little wonder
the top clans leaderboard is full of

>> players like “>< Royal ><” from Kuwaiti clan “Q8 FORCE” and clan UAE’s
“khalifa” (presumably from Bahrain’s

>> ruling House of Khalifa).

So just make game interesting for this Kuwaiti guys and you are bathing in
gold.

~~~
objclxt
Zynga had (and I assume still have) a 'platinum purchase program' that let
players deposit money for in-app purchases via direct bank transfer. It was
kept rather hush-hush, but it was definitely targeted at those spending
thousands of dollars. It also offered things like referral schemes. A sort of
'high rollers club' for social games. I wouldn't be surprised if Supercell
(who make Clash of Clans) had a similar thing going.

Link: [http://www.businessinsider.com/the-secret-dealer-for-
farmvil...](http://www.businessinsider.com/the-secret-dealer-for-farmville-
addicts-evil-corporations-in-action-2010-9)

------
coherentpony
This makes me feel sick inside. These kind of apps are the wood rot of the
modern gaming industry. As soon as I see a "beat your opponent by buying more
of our shit" I delete the app.

Good fucking riddance.

------
danso
I luckily grew up in the time of BBS text games (TradeWars, Legend of the Red
Dragon) and never got into the MMORPGs...but from my reading of articles about
UO, WoW, and the like, I thought the average casual player could not stomach
PvP? And yet in the OP, it sounds like a key mechanic in the game is to prey
on players who don't log in as frequently. So while that's fun for the
hardcore players, I would've thought that would drive off a large part of the
target audience (i.e. casual gamers with iPhones).

~~~
jpatokal
That's the beauty of the setup: since things are cheap on the lower levels,
raids aren't really a problem, you can earn enough anyway. It's only when you
reach the higher levels that they start to become a major pain.

~~~
danso
And so by then, the habit is strong enough to get the casual player to start
forking over money? I wonder what the balance there is...I would've guessed
that users who were used to playing consistently without paying would have a
strong psychological reaction toward having to pay...but I guess if you warm
the water in the cooking pot slowly enough....

~~~
jpatokal
Again, the psychology is clever: you're not being asked to pay to complete
_one specific thing_ , you're given the option of using gems for a huge range
of things. So it's not "I need to pay $6.98 to upgrade my Wizard Tower" (which
would make most people balk), but "if I let them charge my iTunes account a
bit, I get this pack of 1400 gems, which lets me skip some tedious grinding
and get all sorts of cool stuff quickly".

Also, a lot of people get a single Builder early on for 500 gems ($4.99), and
when you've done that once, the barrier to doing it again is lowered.

~~~
epmatsw
Yep, that first builder is hard to avoid.

"I'll never pay for anything in this game. What, 50% increase in output? Well,
I can reward the devs a bit I suppose..."

And thus begins the gemming.

------
ebbv
This model is Unethical Freemium which has been around for a while now, Clash
of Clans is not unique or doing anything new.

IMHO, you should not support games that use this model. It's often called "Pay
to Win".

I will only play games that use the Guild Wars 2 or Path of Exile model; all
paid items are cosmetic/fun/convenience only and don't really assist in one
player being more powerful than another player.

Pay to Win model games are never going to be fun long term because the game
will be won/dominated by the people willing to sink the most money into it,
rather than the player who invests the most time/thought/skill/etc.

~~~
andypants
> the game will be won/dominated by the people willing to sink the most money
> into it, rather than the player who invests the most time/thought/skill/etc.

What is wrong with that? Some people have more money to invest than time, and
others the opposite. Find a game that suits you.

~~~
ebbv
Because it's not really a game then, it's a store where you buy a thing that
says "Winner" on it.

~~~
andypants
If the developers put themselves in a non-game category of the app store, it
would be alright?

Whether something is a game or not isn't defined by how much money you need to
spend to play it (or to win it).

Plenty of games and hobbies require purchases to play, and plenty give better
chances of winning if you spend more.

------
keithwarren
Where did the 500K per day number come from? The Forbes article put their
revenue at 2.4m per day between CoC and HayDay.

[http://www.forbes.com/sites/karstenstrauss/2013/04/17/is-
thi...](http://www.forbes.com/sites/karstenstrauss/2013/04/17/is-this-the-
fastest-growing-game-company-ever/)

~~~
itsybitsycoder
This was the author's source for the 500k number (linked in the article text):

[http://www.insidemobileapps.com/2013/01/10/supercell-
generat...](http://www.insidemobileapps.com/2013/01/10/supercell-
generating-1m-a-day/)

------
baddox
> * If you’ve ever played Starcraft, Age of Empires or pretty much any other
> real-time strategy game, you’ll know the drill, and the buildings and units
> come off as almost painfully derivative.*

That's a strange claim. In fact, I would claim that, if you've ever played
Starcraft, Age of Empires, or pretty much any other real-time strategy game,
you would be aware that they have very little in common with Clash of Clans.

------
swombat
_And how much more awesome would Clash of Clans be if the effort of squeezing
every last cent out had been put into improving the game itself instead?_

Depends. If they were aiming to earn $182 million a year, then it's clearly
pretty awesome. If they were aiming to build a great game, then perhaps not as
much.

------
jkkorn
I read somewhere, a while ago that games like Clash of Clans are really just
payment apps disguised as entertainment.

On a somewhat related note, I tried playing Clash of Clans for a month and
once the time to complete a building took too unbearingly long, i just became
disinterested in the game and opened it less often.

Feels like there some variation of the law of diminishing returns, or at least
a system suggested by the post that weeds out the patient and stimulates
instant gratification.

Glad I didn't get addicted :)

------
xsmasher
This is gross, not net, right? If they're spending 500,000 a day on
advertising / paid installs then it's not as impressive.

They have the volume, but are they making a profit?

------
not_that_noob
Can I buy HN karma points like this? PG could clean out :)

I feel like I am addicted to increasing my karma points sometimes. I submit so
many things and so few of them get up there on the main page. The one thing
that made it to the main page got me addicted to trying, but sadly the ones
subsequent to them haven't had the same effect.

And imagine - instead of flame wars, we could deploy little hacker-warrior-
bots!

------
mcintyre1994
It's a shame, though totally understandable, that we won't see these sorts of
games without pay to win mechanisms on mobile. They seem perfectly suited for
mobile, but even if you charged monthly I doubt you'd make this sort of money.

------
jonnathanson
In fairness, the "gems" system isn't unique to this game. I've seen it in
quite a few others, especially in the Tower Defense genre.

Where it gets particularly annoying is in games with difficulty curves I can
only assume were designed to _require_ more resources than the player is
allotted naturally, thus forcing him to buy gems and trade them for upgrades.
It's not literal payment-gating of advancement, but it is de facto payment-
gating of advancement.

------
a-stjohn
I missed the reference about the earnings? Was there one? Are they generating
500k a day or was this projected / estimated somehow?

------
ChikkaChiChi
Plague Inc. is a great example of a pay model I think works wonderfully.

If you want cheats or you want to skip content, you can pay. If you want
advanced expansion packs, you can pay. But you don't have to.

The concept of a "free" game has been completely destroyed by garbage like
this.

