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How in-app purchases have destroyed the game industry (baekdal.com)
829 points by seivan on Feb 1, 2014 | hide | past | favorite | 524 comments

I suspect many game developers find themselves in an awkward spot:

1) People seem to balk at paying >$5 for a mobile or tablet game. (With some notable exceptions.)

2) The $0.99 or $1.99 price point is not financially viable for most games.

3) People do seem willing to purchase coins or lives or more daily playtime via in-app purchases. Some spend tens or hundreds of dollars on a single game.

If you're building a game for a large company like EA, you're probably forced to take the most lucrative path. EA's not an atelier for starving artists. And if you're a small, struggling game studio, you probably can't afford to leave money on the table.

So what's the solution? If people are unwilling to pay reasonable prices up-front for games, how besides in-app purchases does a game company profit from their work?

This is an honest question, because I also generally hate how IAP is integrated into most games. I'd much rather pay up-front.

It seems like a simple solution to me would be to make the game free, but with most features blocked behind a SINGLE in-app purchase. That way you can download it, play what amounts to basically a demo, and decide if you like the game. If you don't, you've lost nothing, and the game developer gets the opportunity to add an additional step to their funnel and see how many people genuinely don't like their game or are frustrated / confused by it. If you do, you buy it with the IAP and now have the rest of the game forever.

What am I missing here? Is this hard to do? Or prohibited somehow?

Disclosure: I'm not a mobile game developer, so maybe I'm missing something here about the rules of the app stores.

It's not necessarily difficult, and it's not prohibited, it's just not very profitable. The problem is you're cutting out the whales. You might have a $5 gate, and get 2% of people converting, whereas unlimited IAPs might only get 1% of people converting. But now some of that 1% can (and will, believe me) spend $30k a year on your game. And almost all of them will spend more than $10.

Games used to do this somewhat frequently, they just don't anymore because it leaves so much on the table.

Also the much lower RPUs will make paid acquisition unprofitable, and paid acquisition is the only reliable method. App stores are great if you get featured or by some fluke work your way to the top of the charts, but for 99.9% of developers, you're either doing paid acquisition or getting no substantial amount of customers.

Do you feel it's ethical to take $30k a year from 'the whales'?

As I understand it, "whales" tend to be less "poor gullible fools maxing out their credit cards" and more "extraordinarily wealthy people that enjoy wasting amounts that seem ridiculous to us but are truly nothing but a drop in the bucket to them." The term "oil prince" is trotted out sometimes, and people like that really do exist: I don't remember his name, but there is a very real "oil prince" who likes to go on twitch.tv and shower random (mostly female) streamers with thousands of dollars. It is an utterly bizarre experience seeing screenshots of these events, where, say, a teenaged girl is playing a game in her parent's kitchen with a webcam trained on her, the caption is something like, "wow, $person just donated $20,000 to me! thanks!", and the entire family is in the background with their mouths agape in shock.

I hate these glorified slot machines, I hate the companies that make them, and I do think it's unethical to prey upon children and regular people with bad judgment, but my guess is that the average "whale" is far too wealthy to deserve your sympathy. As a different example of the same idea, do you feel bad for the celebrities that spend hundreds of dollars for a drink at an exclusive club?

I spent over $400 on a certain free-to-play stronghold-building game, over a few weeks, after intending to spend only about $5 or so testing it.

It was very interesting to introspect on the self-rationalization, etc, all the while understanding that I was BS'ing myself and also understanding the tricks they were using. It was addiction, pure and simple.

Now, part of the reason I didn't stop sooner was that I can afford that, although it's not a good use of my funds. That was actually built into the rationalizations: Oh, if I'd taken the car to work today I'd have spent $20 on parking, and $15 on lunch, so I'll just take the subway and bring my lunch tomorrow ...

Would you do that again? (If $400 is a non negligible amount of money for you). Or would you rather avoid temptation by not installing such games in the first place?

I wouldn't do it again, and I now avoid such games. Since that game, I've spent about $50 on another iOS game, before tiring of it.

In both cases, I initially considered the games vapid, but my friends got into it, and I wanted to have stuff that was as good / better.

So spending 20$ on parking instead of taking the subway is better use of your funds?

I don't understand your question. This seems to be the opposite of what I said.

Talk to people in the social games industry privately.

I run one. When I've done cursory searches on our whales, I find people who appear (at least from LinkedIn/Facebook) to have great jobs. I don't get the impression the large guys can't afford it, generally speaking. I am sure it happens.

I trust that what you are saying is accurate for your company. (And, thanks for saying it. That's one data point I hadn't heard before.) It is at variance with things I have heard about other companies. I am, unfortunately, not able to elaborate.


Good article that got passed around in my office on Friday. People who are 'gamers' and by extension people who make games tend to look at "whales" as gullible stupid people but a lot of us tend to exhibit the same behaviour about other things all while congratulating ourselves for not pay 5 bucks to support a game we've played for 50 hours.

That said I think there is a really really fine line you have to walk to keep your IAPs "ethical" and it's very temping (and profitable) to fall on the Candy Crush side of things.

Oh, Candy Crush does this too? (I have honestly never played it so i don't know). Well apparently there was a little exploit to bypass the wait (without paying). My GF told me about it (yes, she's addicted). You can just change you local clock and the game thinks a day has passed and tada! free lives.

Why aren't HN readers outraged by this blatant privacy violation?

Do you mean him searching for open-source information about his customers that his customers voluntarily put on the web, or him saying it to us?

If someone spent $30,000 on my digital cards, I'd look him up so that I could sleep at night and not worry that his kids are going hungry because of this.

(I'm not someone who sells these kinds of things, so I'm fully aware this is largely armchair quarterbacking.)

Him using customer provided data to then go and look those people up on the Internet.

Creepy. I can't understand why anyone on HN thinks it's acceptable.

So googling for information about someone that I do business with is creepy? Pretty sure that I don't agree with that.

It depends on the business, but in general I give a supplier my information so that they can supply me with the goods I request; inform me about that process; and invoice me.

Using that information for other reasons without informing me is a clear, unambiguous, invasion of my privacy. It's probably not legal in the UK.

Tl:dr yes, it's creepy. Especially in the context of a game dev.

There are CRM plugins that do it for you automatically when you view records. At the low-end, when I go into Mailchimp, there's a pay plugin (that I don't use) that puts up social information. If anyone emails me, Rapportive brings up their social profile to the right of the email.

Depending on the business I guess it's okay. But for a game dev?

My question is: why is it unsavory when a game developer tries to get a customer to pay more, but not for any other startup? If Amazon improves its recommendation service, or another etailer a/b tests checkout flows, they're a genius. When a game developer does it, they're evil.

My theory is that a lot of it is back-rationalization. People just have a gut reaction against it and search for any reason they can find to argue that it's bad.

The main reason it's different for game developers is that in most instances, in-app purchases will undermine the integrity of the game more significantly than for other kinds of apps. Indeed that is the main point of the OP ("There is no game here.")

If you add a rule to chess where you can pay cash to put a taken piece back on the board, you don't have chess anymore. Additionally, consider that videogames are often escapist entertainment that people play specifically to get away from real-life financial pressures or wealth-based status sorting.

There are all kinds of ethical ways to get your most dedicated customers to "pay more" (what's the MBA-speak term for "trying to get everyone to pay exactly as much as they're comfortable with"? I can't remember). There are pre-order bonuses, special editions, purely cosmetic items that don't change the gameplay, mission packs, "mission pack sequels," actual sequels, "pay what you want," donations...

It gets "unsavory" when you're focusing more on designing the perfect skinner box than actually creating a game. I think games are all about the feelings and mental states you get into when you play them. An action game gets your adrenaline pumping, competitive ones especially so. Strategy games require incredibly deep thought to stay one step ahead of the enemy. Puzzle games really stretch your brain to the limits of logic (or maybe they're just bullshit). From my experience, the games that people malign when they talk about mobile games and "social games," on the other hand, promote nothing but anxiety, and use it as a tool to wedge themselves into your subconscious so that you will fork over more cash into their creator's pockets. See the common practice of games based around waiting for something to happen, and bugging you with an alert whenever it does. I don't think very well of people that create things (I won't dignify them by calling them games) that do nothing but prey on anxiety, compulsion, and our attractions to flashing lights.

It's the difference between creating something that people will pay $50 to experience, and creating something that is engineered to repeatedly exploit our basest negative emotions. These games are in some senses worse than heroin, because at least heroin is fun while it lasts.

Jonathan Blow does the topic far more justice than I can at the moment (what am I doing, it's way too late to be drink posting on HN...) in his talk "Video Games and the Human Condition"[1], if you're interested. It's nearly two hours long, but I believe it's very much worth your time.

As for "why do other startups not get shit for this," I think there's a big difference between A/B testing different versions of your game's site to see which version results in more "conversions" or whatever it's called, and designing your entire "game" around frisking people at every turn and being the best darn frisker you can. Not to mention the ones obviously marketed to children, which reasonable people agree is one step removed from turning up at your local elementary school with a trenchcoat full of free samples.

(I have no idea who you are or what games you make, so don't take these comments personally, this is just my general opinion of the mobile games I've tried. If it (or especially Jonathan Blow's talk, because he's much more eloquent than tired, drunken me) rings close to home, however, it might not be a bad idea to download a pack of the 1000+ NES games and try a few at random for a reminder of what playing a real game is like)

[1] https://www.youtube.com/watch?v=SqFu5O-oPmU

> what's the MBA-speak term for "trying to get everyone to pay exactly as much as they're comfortable with"? I can't remember

I don't know if MBAs have different jargon, but the term in economics is "price discrimination"/

You can use price discrimination to extract maximum consumer surplus, but there are other ways too. ( MBA here :-))

I think these games are more targeting "addiction-forming" (which is MBA speak for what any sane person calls "drugs").

The same sort of thing happened so mid-90s pay-per-second or pay-for-items games on what we now call dumbphones (ie. java games). They were regulated, essentially demanding up-front information about what they charge and an option to disable it on the telco contract (effectively giving parents a way to disable it for kids, and everyone a way to disable it for themselves), and their market completely dried up. This happened after several high-profile court cases where the telco was preventing from charging large amounts to kids (think $30k-40k). You can't find them anymore at all.

And that's just fine by me.

As far as I'm aware those things are still going, the one I remember was Jamster (though they use different names in different countries, so it was originally Jamba):


And the last link on the page goes to:


Which is a site for people who have been fraudulently charged, with comments from within the last few months.

Profiting from ludopathy is ethical if the other person is rich?

> Do you feel it's ethical to take $30k a year from 'the whales'?

I don't have any essential ethical problems with the question. I have two concerns.

(1) They're called "games" when they're not really "games."

(2) The socio-economic implications of a system where it's easier and more profitable to sell to 50 people willing to pay $30,000+ than to 1.5 million people willing to pay $2.

It's the exact same question whether it's ethical to take that amount of money from the whales in casinos. Because that's where the term whale comes from, synonymous with high rollers. It's the exact same scenario, except that in casinos, whales have a chance to make it back. But even in casinos, the rich people who can afford to be whales know that they're just throwing away their money. They're not like the poor stupid ones who go bankrupt with gambling debt.


I worked on a system where we could see these people's behavior. I recommended that we take the top X and refund their money. They had problems, and it was unethical for us to continue to bill them. Senior management said, "No." Which was appalling to me. It would cost us nothing, all virtual bits anyway. To see the greed of taking a sick persons money is kinda depressing.

> I recommended that we take the top X and refund their money.

> It would cost us nothing, all virtual bits anyway.

I see a contradiction here.

The system I worked on did 40M in revenue. We are talking about 10 people spending 5k a year (ish). So 0.5% of revenue for product that never even got activated? Refunding is the only correct response.

Thanks for the details. I wonder, what do you mean by "never even got activated"?

Yes we would have "lost money", if that is the contraction you are seeing. But it is money we shouldn't have rightly had in the first place.

Sure. The games (generally) aren't doing anything illegal or unethical. If someone has the spare money and the inclination, why would it be unethical to allow them to spend it?

Remember that there is a lot of money out there. If you're a millionaire, a billionare has 1000x more money than you. His $30,000 is your $30.

Would you think it is unethical for iTunes to take $30k from someone who purchased a large amount of music, tv and movies?

What about someone who spends $30k to get their Aston Martin repainted in chrome paint?

People have to be careful here - this is clearly consensual behaviour as long as they know how much they are spending as they purchase. Everyone wants to compare to gambling - I detest gambling and never do it - I would cautiously support moves to rein in an ever-expanding gambling industry - but at the same time if people want to spend money on entertainment, even all of their money, I find it hard to come up with a suitable argument. People can spend all their money on all sorts of weird obsessions, but these shouldn't be reasons for outlawing the behaviour for the majority of people who get along just fine.

>People have to be careful here - this is clearly consensual behaviour [...] //

Right. Many apps are designed to be effective Skinner boxes bypassing the brains logic to push at the base responses in order to initiate a "player" to want to continue without engaging their executive functions. Games like Candy Crush and Bejeweled play ever trick possible to part users from their cash.

It's more like having a bar and when the mark is drunk you waft a cheeseburger under their nose, flash subliminal messages on the video screens, pay beautiful people to sit eating cheeseburgers, tell them all their friends ordered one and finally selling it for 3 tokens [$1000] because you know they won't then notice the cost. Oh plus wash that burger down with a beer that's suddenly $500 because arbitraryTimeLimit just ran out.

Most obsessions that people spend silly money on aren't carefully designed to be obsessions. Those that are - smoking, gambling, drinking - are often tightly controlled.

Nightclubs, so far as I know, don't have systems of their own currency specially designed to hide the dollar amounts of their drinks, for example. They also, where I am at least, have to post prices and are by law required to stop serving people who're drunk [though I hesitate to guess how often that law is flouted].

Your position on gambling seems contrary to your position on other for money gaming.

All consensual and non-coercive transactions are ethical.

It is simply not your place to decide for others how they should get their dopamine, or how much they should be paying for it.

A gambler comes into a casino, which I own. I know this gambler personally, and I know his style. However much he comes in with, he bets it all on black at the roulette tables. If he wins, he places the bet again, and again, until he loses. This time, he has come in with what I know to be his 17-year-old child's college fund. The fund is in his name, and is legally his, but is intended for paying for college. If he loses it, he will not have enough time to build it up again before the child graduates high school. I allow him to bet and lose the money.

How the hell would this be ethical, no matter how consensual and non-coercive it is?

What would be unethical is if you tried to coerce him into somehow not spending it.

The money is not a college fund. Your customer's previously-held inaccurate predictions of the future turned out to be false. He changed his mind. Your assertion that it "is intended for paying for college" is false. It is intended for paying for roulette.

It is not your right to choose for others how they spend their money.

Stop trying to control other people because of your certainty in the belief that you know what's best for them.

That view is insanely simplistic. Sometimes people do things that are against their own interests because they are in the clutches of an addiction. In these situations, it is sometimes OK for someone to step in and overrule them. Sometimes it's not just OK, but morally necessary.

It can be better to temporarily infringe someone's rights if it stops them from doing something that they will regret for the rest of their life.

> It can be better to temporarily infringe someone's rights if it stops them from doing something that they will regret for the rest of their life.

No, this is false. You're incapable of guessing what other people may or may not regret with enough accuracy to use it as a justification for infringing upon the rights of others.

Furthermore, most are heavily influenced by societal norms and customs, making this even more dangerous a justification when used against the rights of those with eccentricities or nonstandard tastes or lifestyles.

It's never ok to infringe upon someone's rights.

A question: how do people find themselves "in the clutches of an addiction"? How do they escape? Could it possibly be their own free will to decide to smoke the first cigarette, or their individual decision to walk past the bar without going in, on their way home from AA?

> It's never ok to infringe upon someone's rights.

Do you agree that it's right to have age restrictions for buying and selling alcohol?

Not at all. However, any responsible guardian of someone drinking underage should be subject to the appropriate penalties for neglect. It's not a child's fault when they make an error.

> It's not a child's fault when they make an error

You realise that many alcoholics start drinking when they're children?

Let's take another example, even more extreme. Suppose I run a pawn shop. Somebody comes in looking to sell goods that I know are stolen. I buy them from him. This contract is entered by both of us consensually and without coercion. It is also entirely immoral.

People are social creatures. Trying to ignore that and treat everybody as isolated individuals ignores those.

That transaction is illegal. There is a difference.

Laws follow morals, not the other way around. If the parent poster's absolute statement is to hold, it should be independent of the legal system.

That's a baseless assertion -- legality and morality are independent and only coincidentally aligned. Unless you want to start telling us about the ethical necessity upheld by the farm subsidy bill.

Clearly it would be immoral for you to intentionally provide a source of liquidity for stolen goods. How does that show anything about your gambler?

They are both separate examples of contracts that are consensual and without coercion, but are immoral, both for different reasons. My goal was to find a counter-example to the statement that "All consensual and non-coercive transactions are ethical.". Once that example was found, expanding from there.

They were discussing morality, not legality. There is a difference. You can base your decision to do/not do something because (you feel) it is immoral, whether it is illegal or not.

Often legality and morality do align (but really not as often as you'd think), and this is fortunate, because it allows good people an easy mental short-cut for weighing one's actions based on legality (and punishment), as well as protecting the weaker-willed parts of society that often end up on the wrong end of moral decisions by people like sneak, who'd let people drink themselves to death because if everybody was completely free they'd surely decide out of their own free will to do what's best for them and nobody would ever prey on the weak-willed like that, ever.

  All consensual and non-coercive transactions are ethical.
Another contractor and I are bidding to build a website. The customer is a guy in his 90s who wants a website for his antique furniture shop. The customer requirements aren't water-tight as he's not really into computers. For example they don't say the website should be accessible from the public internet or that I should hand over the source code and hosting credentials. My competitor has bid $1000. Is it ethical for me to bid $900 then later to demand an extra $200 to connect it to the internet, work that only I can do?

In most jurisdictions, that would be in violation of laws. The laws are created to prevent shady operators, like people who go around 'fixing' the roof for old people. They agree to the work, then get charged a fortune for overages, which usually just amount to painting the gutters.

Another example is the phone scammers offering 'virus fixes'. These are generally in violation of different laws.

When I was a consultant in the construction industry world, our contracts all had an clause requiring a "reasonable standard of care". Basically, if something would be reasonably expected to be included (say accessing a website from the public internet which is the reason it's being built in the first place), you need to provide it.

Whether software contracts include that same kind of verbiage, I don't know.

That's simple extortion, and is obviously nonconsensual.

It sounds to me like you've redefined 'consensual' to make your philosophy produce the results you want.

Both transactions were consentual and noncoercive. There were no threats of violence. An adult business owner signed a contract for services which were provided exactly as specified. The customer didn't have to agree to the first, poorly negotiated contract. And they don't have to pay extra for the extra services later on - it's entirely their choice.

It's no more extortion than if you need a new ink cartridge for your printer and you find they're expensive.

I put it to you that the situation I've outlined is unethical, even though it's consensual and non-coercive.

It is as long as you say it upfront

Of course I wouldn't say it upfront without being asked - Caveat emptor. If I wanted to be upfront I would have just quoted $1100 to begin with!

Exploiting contracts is OK. Providing public with detailed info about contract exploiters is OK either.

"For every complex problem there is an answer that is clear, simple, and wrong." -- H. L. Mencken

A half-way competent attempt to examine this issue would need to dig deeper into the meaning of "consensual", "non-coercive", and the fact that we are engineering these products, knowing that these cognitive biases (defects) exists.

Your dogmatic quote meets none of these criteria, and is frankly a pathetic attempt to address this complex and well-studied problem.

What do you think "consensual and non-coercive" means in the context of addictive behavior?

It is everyone's individual right to have and maintain whatever addictions they choose.

"addictions they choose"

What makes you think that addiction is a choice?

Because almost no-one is born with them, and many choose to end them.

It is clear that they are undertaken with free will, and ended similarly thereby. All of AA and everyone who's ever quit smoking stand as evidence.

Addiction by itself is absolutely not a choice. Whatever it is that someone tried or was coerced to try that eventually resulted in that addiction may or may not have been a choice. A person may indeed, with appropriate support and resources be able to break their addiction, but they remain afflicted with it throughout the rest of their lives. Why do you think most people who were once addicted to alcohol must remain eternally vigilant to never touch the stuff again?

Playing the "no one's pointing a gun to your head" card and claiming it is therefore "non-coersive" in defense of targeting and manipulating addictive behavior may very well be profitable but it's delusional and downright dishonest to everyone, including yourself, to think it isn't exploitive and conducive to serious personal and social issues. You need look no further in the historical record to see how this plays out than the tobacco and alcohol industry.

> but they remain afflicted with it throughout the rest of their lives.

That is not accurate.

There are quite literally thousands of documents that disagree with you on that, especially when it comes to physical addiction. Your response demonstrates a misunderstanding as to what addiction is, even if you happen to have experienced it first hand.

If you're really interested in continuing to debate whether your perspective of addiction should be adopted by others feel free to search Google for "addiction" or "is addiction a lifelong problem" or if that's something you don't have time for start with the first Google result I pulled up: http://aspe.hhs.gov/hsp/subabuse99/chap2.htm

There are plenty of other, better, sources that will provide more thorough descriptions of both the physical and psychological characteristics of addition. Practically all of them acknowledge that addiction, once attained, does not grant an individual the luxury of choice as you entertain it. One can certainly choose to seek the tools to control the impulses of addiction through willpower (be it internally or externally inspired), but that will never mean they can choose to make the underlying addiction go away and never bother them again at any point for the rest of their lives.

> All of AA and everyone who's ever quit smoking stand as evidence

Have you ever met a "former" addict? Plenty will tell you it's not as simple as that, unless you're using your own novel definition of "choice," "free will," and given studies generally show genetic predisposition is a factor, "born with."

The issue for me is that if you went to every smoker and said "Do you want to just quit now, cold turkey, no repercussions, no cravings?" I think the majority would say Yes. But the majority don't quit on the spot like that because addiction is a tough thing that can wrap tentacles around your brain.

They're lying to you. Most smokers pay lip service to wanting to quit. They're in denial.

The ones who actually want to quit, do.

Because they can't quit. They can't even bring themselves to want to quit. The actions are muscle memory, the thought of smoking brings pleasure to them. Even people who've successfully quit miss it.

It's unfathomable to someone who hasn't smoked.

The average person sees a video game as care-free entertainment, not a dangerous compulsion.

If you want to make your business about manipulation of the customer, don't pretend to be morally pure. You are scum.

Are you saying people's decisions are never influenced by society, advertising or habits?

Should we factor this in, or is public health department a nanny state intervention?

"Free will" is not black and white.

The lines of free will and accountability are blurred by things like mental illness, addictions, childhood naivety, etc.

By definition an addiction is not a choice. That's a fallacy

By that logic, it would be impossible to escape them without being physically restrained against your will.

That's not the case. People choose to stop being addicted to things all the time.

Nope. Think British selling opium in India, ethical? And notably, selling a variety of addictive dopamine stimulants [including cocaine and methamphetamine] other than games is considered to be unethical.

Leading people to ruin is not ethical. Ripping vulnerable people off is not ethical.

Where did you get this view on ethics? It certainly isn't most peoples view, for sure.

Ah the free market guys.

I think every time I hear "you should eb ashamed" the free market guy SHOULD stand up and say NO, morality is actually whining that someone should be coerced into doing something they wouldnt want to selfishly do. If there is a market for your thing then caveat emptor.

Screwing your clients? The market will decide whether you can keep operating.

Providing a dopamine fix may be being coercive. It's a reward that may be manipulated by those with few ethics. Certain types of marketing, similarly, may be considered coercive. Coercion isn't limited to physical violence.

> Providing a dopamine fix is being coercive.

Convince my girlfriend of that.

Seriously, though, it doesn't even pass the laugh test. People control their own circumstances. Making those circumstances available to be chosen does not alter the source or responsibility of those decisions.

Smokers choose to smoke. Gamblers choose to gamble.

Proof lies in those who subsequently choose to stop.

You always have free will, even if you aren't using it at the moment.

Your view of addiction is incredibly simplistic.

You are assuming that what one person can do, the rest of the population can do with a similar amount of effort. This should be self-evidently false.

Some people can stop addictive behavior with relatively little effort, other people need external help and tons of effort, and other people will literally prefer to die before stopping.

The only way to say that the latter two groups "don't actually want to quit" is to redefine "wanting to" in terms of "being able to", which makes your argument circular.

I don't think you have any idea what the word "ethical" means.

The issue is that you'll run into the Gasketball problem of having 100,000 players but limiting the amount of things they can buy (should every player be worth $1.99 IAP?). It's just a math problem, and the reality is that you want to do it like League of Legends where you can never run out of things to buy for a long time, but of course whilst not being annoying like most mobile games are currently.

I think it's better for players to enjoy a game fully for free (if you're doing IAP), and then provide ways to monetize that enhance their experience. Ramin Shokrizade has lots of amazing blogs about this: http://www.gamasutra.com/blogs/RaminShokrizade/914048/

Definitely: I think the only real solution for the industry at this point is finding better ways to monetize with IAP that don't mix so heavily with the gameplay. And League of Legends is a great example of keeping the gameplay separate from the monetization.

No pay to win, no timers, no paywalls that ruin the experience: we need to go back to building games as entertainment experiences, and find ways to monetize with things like skins (purely aesthetic so they don't disrupt gameplay, but can make you look cool when you play with your friends).

Unfortunately the sad truth is that for the majority of mobile games if you charge up front you will not have enough sales volume. And a single $1.99 IAP has the same problem because while you might get 10x downloads from being free initially, you'll still only get your $2 from <10% of them, and $2 LTV is not nearly enough to support a game (+ some gamers like those here might be willing to support a great game with more than $2 but won't have the option to do so in this setup).

At the end of the day, when people invest in an entertainment experience they want to be entertained. And thinking about money and waiting for timers during the experience only reduces the amount of entertainment we get out of it. So we need to find ways to design IAP that is separate enough from the core experience, and yet still works well enough to fund the games we want to play.

It's nice to hold up League of Legends as a shining example of IAP done right, but the fact is that there are plenty of excellent games with vibrant communities that couldn't even dream of having 5 million concurrent players. Riot does fine with very little marginal revenue per player, but not many other games can do the same, especially on mobile.

let s mine bitcoins as playing, a primitive Ender's game if you will.

> It seems like a simple solution to me would be to make the game free, but with most features blocked behind a SINGLE in-app purchase.

This is pretty much what id Software did in the 90s with Wolfenstein, Doom, and Quake and most people in the industry thought they were nuts and it would never work. Obviously it worked extremely well (the difference being it was levels that were gated instead of features, but same concept).

Yes, it works well. But mobile gaming companies have discovered that selling drugs is far more lucrative.

The problem with that approach is that you are likely to get lots of highly negative (one-star) reviews.

I can already hear "greedy devs charging me money for levels"

Great point.

There are several highly rated games that do this. If i remember correctly, "Where's my water?" is one of them.

One other great example i recently experienced was BADLAND. Its a really cool game in which they give you a level pack called "Day I" for free which has 40 levels. If you want the second set of 40 levels (which are way cooler btw), you have to purchase those. Also, they let you purchase multiplayer levels (6 of those are free btw). So just as you said, they let you demo their game and if you love it, you buy the rest of the game.

But one thing i REALLY loved about the devs was that that they you EARN the extra levels. If you unlock a certain achievement, you get the Day II pack for free! So that's like the devs rewarding their biggest fans. (I unlocked those levels for free btw).

Disclosure: BADLAND is also powered by video ads. You can pay a little to turn them off. There's also the option of a small fee that's not enough to buy the levels, but it lets you turn off the ads.

Sorry, I haven't read your reply and replied with almost the same thought. It is not hard to do and many developers already do this, Triple Town by Spry Fox is doing exactly that for example.

>It seems like a simple solution to me would be to make the game free, but with most features blocked behind a SINGLE in-app purchase.

This is the strategy of the Ouya - games on the market have to have a free, playable demo of some type in order to be included. I think it's great, and I'd like it even more on a mobile device since my phone isn't brand new and this would let me quickly find out whether the game will even be playable.

This is completely possible and as a consumer my preference. Most hidden object games follow this practice.

I would not object to this. Play for free, see if you like it, buy the full version.

Some developers do do this, but it's much rarer than P2W.

Hmmm... isn't that what id used to do with Doom? I think they're called shareware if I'm not mistaken.

Not only this, developers shouldn't shy away from charging what they think the game is worth, $5, $29, $59, $99, whatever. If the game is good, people will pay it.

I would bet the higher that price the less likely the sale and also the more likely the piracy. Charging even $5 for a game will likely drive your actual installs and sales through the floor. If you make a good product but most people can't justify paying for it, they'll just find an alternative means of playing it. Also the pump and dump industry in the app stores especially in gaming is another thing you have to worry about. You make a good game at a $10 price tag within a couple weeks you'll find your exact game with slightly altered graphics and a similar name that will be under cutting your price point. This used to be much worse, but unless you're a big studio like EA, Rovio, or King it's still a problem for you as a little guy.

I can't think of anyone without an already established reputation managing to do OK at a $5+ price point in the last year or two.

Like literally the only example of paid games I can think of to do one on phones in recent year are Minecraft, Final Fantasy and GTA.

People pay $99 for 99 lives in Bjorks Butter Batterer. People will pay $99 for a real game.

"already established reputation" is overrated in the age of the internet. Lets hope the internet is still around these days.

I remember paying ~ £5 in the 80s for 8bit games on cassette tape and considering it a bargain. I remember when Street Fighter II came out on the SNES ~ 20 years ago. It was priced at ~ £65-70 and people snapped it up (I DO remember considering it expensive, in relation to the normal price for SNES games which must've been about £30-40).

If prices had kept up with inflation, 'budget' games would be about £12; blockbusters, over £100. Games are well undervalued on app stores, and exploitative rubbish is the result. I've personally paid reasonable small amounts for some of the classic games (e.g. Monkey Island) and am on the lookout for good modern games at about the same price point.

This is simply not true. Price has an enormous impact on units sold.

Price elasticity is strong, but the original comment is presumably assuming you can make a decent revenue with a non-minimum price tag.

For instance, imagine a game listed as free:

- a freemium model let you play 15 levels and asks for 4.99 to unleash 500 more levels, maybe let a 1.99 option for 100 levels; this should convert 3-5% with a million testing players; v.s.

- free-to-play with locking levels every 10 levels that are so hard you have to use bonus, that would convert 1% to pay for either a Golden Orb for 1.99, or a Golden Blast for 5.99, etc. each who may or may not make a difference, and appease your frustration, and work only once. You get a couple of whales (desperate, clueless players) who pay 50$ a month, but even with a larger distribution (two to three millions players) you don't break even.

The idea in the original comment is not that a price twice higher will double sales, but more that having a price tag (which free-to-play games deny having) makes sense for good games.

Sure, if units sold is your only metric, then optimize for that.


The problem new devs face isn't even really that people won't pay for the game. It's that no one knows about the game.

It's all good and well that 100 of your friends and acquaintances will pay $20 for your game, but you really need 10000 people to buy it.

Kingdom Of Loathing (www.kingdomofloathing) is a game (well webgame) that I think has a good business model. The game and all of its (vast) content is free. But to get certain items or items of the month (that are optimal but by no means necessary), you donate $10 to the site.

It is not a pay-to-win type of scenario because it is a single player game (with one minor PVP minigame element). It also never feels scummy because you can do basically everything in the game without ever paying a single cent. Even 'premium' content that is unlocked by purchasable items is generally tradable and purchasable with the in-game currency (meat) that drops from the monsters.

Thus you don't have to pay up front... But you do end up donating some money for interesting items at some point due to the game being great, current, funny, having a great community, etc.

The business model probably wouldn't work for most, but in the case of Kingdom of Loathing it works really well.

One of the reasons this model worked for KoL is that it grew organically, as a side project that started as a joke and slowly built a community. Initially, donations were mostly to cover bandwidth costs, then became enough for the creator to quit his day job, and eventually enough to hire some extra people.

For more complex games that require more work (and possibly investment), it's questionable that this model could be relied upon. Still, as an old-timer who seldom plays anymore (#53596), I have huge admiration for the Asymmetric team for carving out an awesome niche gaming community with non-exploitive business model.

Do they have public numbers on how much they make with this model?

You advertise the game as free with voluntary donations (Mr. A and Mr. Eh accessories). Without pressing for financial info, can we ask: Does this translate into a full-time paying job, cover the expenses of running the project, or simply add a bit of pocket change here and there? Why did you choose this business model?

KoL's donation revenue is currently sufficient to support a full-time staff and a second team working on a new game. I feel like we were extremely fortunate to have launched when we did and to have gotten the critical mass in the beginning that makes it possible for this to be a career instead of just a hobby.

As far as choosing the business model, I'm not sure there was ever a moment when I made a choice about it. A couple of months in, the hosting bills were starting to cost more than I was comfortable paying out of pocket, so I put up a link to ask for donations to offset the cost. A player suggested, "Hey, why don't you give donators an in-game reward?" and I figured "Hey, why not, it couldn't hurt." To my surprise and delight, it was pretty much instantly profitable. I was still processing the donations by hand for quite a while -- the revenue model was really kind of an afterthought.

After it got to the point where I was able to comfortably and safely quit my day job (and finally start paying Josh, who had been diligently working for free for several months), I started offering the monthly specials, which caused another surge in income and allowed me to hire an office manager, another writer/designer, and another programmer. Since then we've added a full-time customer service/abuse-tracking position and part-time forum and chat-moderation supervisors.

I do not believe so... Though I could be wrong and they are out there somewhere?

What I do know is that it was enough for the two initial guys to now do it full-time and they now also employ something like 4 additional people full-time (I think its 4 additional).

Thanks, that is a good ballpark figure.

KoL is something totally different, it started out as an attempt to create something that didn't exist and was more of a joke, now 10 years later it still lives on and to me it is one of the most enjoyable videogames I've played (and replayed) again.

Nothing even close to a major studio adapting an old hit to mobile platforms to squeeze out as much profit as possible.

When I found out that there was a mandatory quest at the altar of literacy to gain access to the chat channels of kingdom of loathing, I knew I was hooked. I even learned haiku to be able to chat on the haiku chan. http://kol.coldfront.net/thekolwiki/index.php/The_Altar_of_L...

I don't necessarily think that there is a solution. In almost all cases, the game itself is the problem. Most people won't pay full price, because most mobile games lack depth. When you develop for mobile, you can either make a game with simple mechanics, or you can make a game with terrible controls. Those are the options. While it is possible to make a great game with simple mechanics, it takes an extraordinary level of talent that most game development shops simply don't possess.

On the PC/console side, you of course have ports of popular mobile games. In addition, however, you have AAA games like Diablo 3 that are reasonably complex, yet seem to have been intentionally ruined by IAP and the real money sale of items that affect performance.

> Most people won't pay full price, because most mobile games lack depth.

I think you might have this backwards: Mobile games lack depth because their developers know most people won't pay full price.

Mobile games can have great depth. Just like PC/console games can be extremely simple and trivial.

(Depth doesn't come from complex mechanics or controls, btw. In fact, those things are often used to mask how shallow a game really is.)

I agree that the ability to use complex control system isn't necessarily an indicator of depth, but it certainly opens up a lot of possibilities. There are entire genres that have always been and will always be terrible on touchscreen devices.

Perhaps you are also right that most developers won't even try to make a real game, due to the difficulty in getting customers to pay for them. Now that its more profitable to milk small amounts of money out of non-gamers, I think the rest of us are going to eventually get stuck playing the kick starter lottery in order to see real games hit the market.

> > Most people won't pay full price, because most mobile games lack depth.

> I think you might have this backwards: Mobile games lack depth because their developers know most people won't pay full price.

Chicken, meet egg. :(

This is why I hate the mobile space for gaming.

to be fair, you have to make the game for the market. If the market will only bear $2 then you need to make a simpler game... not "play the horses" that you can beat them into spending more money. That's why the App Store and Mac market in general was full of much smaller game companies for so long. People were putting "more love than money" into games. But along come the big companies that want to sink half a million dollars and then complain that they won't get it back. that's not reasonable expectations... but they're too rich to be told that.

Depth doesn't come from complex controls, but complex controls are almost always needed to be able to play a game with any depth.

It's hard for me to gauge whether this is true or not. There are some amazing deep games like chess and bridge that have extremely simple controls. Do these counterexamples disprove the rule, or are they rare outliers?

Games in general don't have to have control complexity in order to have depth, but some genres have to be significantly dumbed-down in order to work with touch controls.

The concept of an on-screen virtual analog stick is great in theory. I practice, its always going to be terrible in comparison to its physical counterpart. Games like Modern Combat 4 are pretty impressive when you first see them, but 5 minutes in you realize two things: The controls are bad, and the entire game has been dumbed-down because the developers know that the controls are bad. Its not even their fault. They did as good of a job as anyone has, but a capacitive touchscreen just isn't going to offer the user a pleasant experience in a 3d fps.

Certain genres are well-suited to touch controls. Many genres are not. Board games and card games work very well.

I would say any strategy game would be just fine with touch controls. Any quest or exploration game too. Many puzzle-type or construction-type games as well. So I don't think touch is a huge problem here except for some genres like hardcore "click-click-click" action or racing games.

>I would say any strategy game would be just fine with touch controls.

I'd agree that board-game style strategy/war games would work, and also quite a few turn-based strategy games.

Its also possible to make certain types of real-time strategy games. Unfortunately, complex RTS games like Starcraft probably can't be done well without extreme oversimplification.

What would be the problem with Starcraft? I can't think of a lot of things that you can't do using touch/twofinger touch/long touch.

I think you'd need to slow down starcraft for it to be playable as the same game. People hit 60-100 actions per minute, like jumping around the map and directing units, setting build queues. Without hotkeys, you'd drop to around 20apm, and you'd be unable to do any micromanagment of units in battle. So it's not that any one action is impossible, just that lots of tactics that require many actions would be impossible.

Maybe for hardcore sport-like starcraft players this is true. But when I played starcraft I never did nearly anything like 100 apm neither my game ever required me to. Yes, that'd probably mean I'd lose miserably if I ever play 1-on-1 against a hardcore sport players, but that's not why I would be playing it and I'd probably never play with them anyway, I'm not in the same league. So I think for a casual player it would be OK. And hardcore players would have their hardcore setups.

There's also the accelerometers, compass, perhaps more. X-Plane is basing the primary controls on those and I find it works amazingly well (I've been playing the Android version).

Mario. Sonic. Doom. Complex controls?

The missing element for all three of those (which are action games) is latency.

With mobile touch-screen controls the game has to somehow register a button-press as soon as a button-press is made.

But it must also never (to a first approximation) register a button-press when a button-press was not requested (e.g. an accidental brush of a finger against the screen).

It's hard enough to do this anyways, but the "input device" does no favors for the game developer either. There's a reason that input devices on consoles and computers have evolved over the years into the shapes they have, they are meant to be easy to hold in a certain position (so that you always know where the buttons are) and perhaps more important, they have tactile features that allow your finger to quickly find and stay near the buttons. It's the reason that buttons and the D-pad are not fully-flush with the shell, even though that might have been more stylish.

Imagine trying to play Super Mario World with a NES-shaped rectangular controller where there are no tactile buttons. This might have worked if you only needed Left, Right, Jump, but even that game required all of the following for the best gameplay: Left/Right, Up/Down (for pipes and to literally scroll the screen up), Jump, Run/Hold/Fireball, Spin Jump, Pause, Drop Stored Item and Shoulder Left/Right (to scroll the screen). And if the input wasn't right you'd either jump into a spike you had meant to run under or accidentally run off a cliff you'd meant to jump past.

The controls on Mario seem complex only because they were so completely intuitive when you were actually playing them but I assure you they were far more difficult to implement than you think. It's not until you start playing platformer games with horrible controls that you can realize the great job done by the development teams at Sega (for Sonic) and Nintendo.

In this context, yes. Precision jumping and strafing-while-turning-while-firing are basically impossible with touchscreen controls; at least I've yet to see them done well.

On a phone, yes, they can be harder to control.

Chess is deep but it's not complex. Starcraft is both deep and complex. Candy Crush is shallow and simple. I can't think of a game off the top of my head that's really complex and really shallow but whatever it is it's definitely not on a mobile device.

I'm not so sure. I suspect writing a near-optimal Candy Crush AI would be quite difficult.

Diablo 3 was something of a different story. Blizzard knew players would create their own functionally-IAP black market anyway, because it happened in Diablo 2 and World of Warcraft. So Blizzard figured they may as well bring auctions in house to make the market honest and usable for players without worrying about scammers. There's nothing inherently wrong with that.

What wrecked Diablo 3 was the enormous power discrepancy between what a player could reasonably find on their own and what was readily available on the auction market. The game had to be balanced around the latter to avoid auction buyers god-moding over everything, which left solo players completely screwed. With a tighter power balance between common and rare items, Diablo 3 would have continued to be playable just fine.

>There's nothing inherently wrong with that.

Yes there is. Diablo 3 would have been much better if buying gear was the exception to the rule. By legitimizing it and as you mentioned, failing to provide balance, Blizzard unintentionally made the purchase of gear the only viable method of progression for most players.

With World of Warcraft, Blizzard made tons of money off of cosmetic items. If they wanted to increase revenue, they should have gone this route instead of ruining the best action-rpg franchise in the world.

I think D3's AH failing was using real money, not just balancing or buying gear by default.

Buying gear in WoW is easy and a given up to a point, but limited to in-game currency. To buy some of the best gear, you just have to be the owner of enough gold to buy something from one of the two auction houses if it shows up. That meant you were active in your server's economy (helpful) or you were buying gold from scammers (which a lot of people are scared to do) - or you were raiding at a point where that gear was equivalent to what you can get, so you just ignored it (a small minority of raiders, not just WoW players overall). If real money was involved, it'd probably turn into something worse than D3's AH fiasco where people would quit playing since everyone playing for non-RP/solo reasons would eventually be forced to spend a bunch of money on top of in-game time to be on an even footing.

Not that I think D3 should have followed the same exact footsteps as WoW in terms of how to make money, but I'm looking forward to next month to maybe get around to start playing D3 again now that the AH will be gone there.

Most gear in WoW cannot be traded. If you want to buy the best gear, you wait for a guild to farm the content, then buy the gear from the guild by doing the instance with them. People do trade real money for this service, but it is understandably quite expensive.

Current-tier raid and PVP gear can show up on the Black Market Auction House, sold by NPCs. The BMAH sells a very small number of pieces during the few months it takes people to clear content. When I played in a top 20 US 25 man guild in T14-15, our BMAH was usually camped by the other faction, so we couldn't buy stuff anyway. It didn't make any noticeable difference.

Yeah to those who see it as some catch-22 that was forged at the dawn of man, sure might as well "legitimize" IAP...

For others, like myself & Phaus, apparently, we'll just play a different damn game. I think the disconnect here is that people are like "well look its still working, isnt it?" but the idea of "ruining" a game isnt that the thing is broken now, its that casual players dont wanna get involved cuz its an all-or-nothing shitshow where youre not sure exactly when the menu is gonna pop up saying "give us more money or your time invested is now a complete waste".

i only play single-player story titles now for the most part because i know that pretty much anything else is gonna try to mess with my mind & prey on the consumer. COD & Battlefield are the best examples i can think of. They keep game prices high, get players addicted to repetitive mindless multiplayer, then charge $15 for a change of scenery (should 3 or 4 maps cost 1/4 the price of the game itself?)

If you buy, you know beyond a shadow of a doubt that you're being ripped off & it makes you resent the gamemakers. If you don't buy, you're left with a limited set of maps that is getting duller by the second, lol

I'm avoiding by just buying downloadable PC games for between $1 - $10 each & then when its over its over. its the skinner box games that overprice DLC and this alone should be a trigger that makes people see them for what they are & have the willpower to opt out

Its especially sad i think because old-school PC gamers probly remember when COD2 & the like were very DIY, moddable titles for nerdy WW2 enthuiasts.

Now they are a massive corporation with nothing moddable & the balls to sell simple gun skins in like $15 packs :D

This is pretty much spot-on. I can't stand CoD anymore for quite a few reasons, but one of the biggest is that they charge money for map packs that are often based on old content. If I'm loyal enough to give you 60 bucks every time you come out with a new game, don't try screwing me out of extra money for maps that I already bought a year ago. Port them for free like good developers always have, or just don't do it at all.

I think valve has done the best job out of anyone when it comes to monetization in Counterstrike:GO. You can purchase custom maps and skins to use on official matchmaking servers, or you get all of the same content for free plus a wide variety of mods and use them on custom servers. They get paid, and the customers still have freedom of choice.

thats cool, i didnt know GO does that (bought it during xmas sale, haven't even played yet).

its nice to be back in the PC world. my friend gave me an xbox360 & i was playing that for a bit but now instead of a console i have geforce 770... hadn't even realized the notion of "custom servers" still existed, hah :D

The cosmetic business model has seemed to work well for Valve. Team Fortress 2, CS:GO and Dota 2 use this model, from which Dota gathered worth of $600'000 only from donations towards the game's yearly championship. The players received some in-game items from the donation, which gave them cosmetic items for playable characters and new UI skins. I personally like the idea, as the highly competetive games stay balanced as the cosmetic items do not give any edge to their owner.

Valve also gives the cosmetic items as random drops after matches or from spectating competetive games. The players are then able to sell these items to other players trough Valve's market. From the trades Valve takes a procentual fee (or margin, that is), which can raise quite high as some knives in CS cost over $300 and some couriers in Dota have been sold as high as $9000 a pop.

Even though the cosmetic business model sounds like a golden road, I've yet to across any mobile game which would have used it.

Valve also had a virtual monopoly on digital game sales, billions of dollars of alternate revenue and huge teams of engineers and artists to build that Steam market and make the initial bunch of items.

Valve is incredibly unique yet people keep telling tiny companies making mobile games that they should be like Valve.

Look at games like XCom, or Jagged Alliance. These games had better depth and AI than even current console games. They work well with a touchscreen interface.

The problem is that good game design is hard, and not particularly repeatable. Having a single simple mechanic, surrounded by a reusable monetization platform is much more formulaic and repeatable. Formulaic is bad for players, but good for businesses.

As another example, any traditional turn-based RPG can probably be controlled better on a touchscreen than a controller (navigating menus on a controller sucks) and have at least the potential to be deep. Or roguelikes... really, most turn based games can be done okay on a touchscreen.

There could possibly be a solution that has to do with legislation forcing game developers to be upfront and transparent about the kinds of purchases in their games. Lots of games, for instance, might have a very reasonable limit on in-app purchases analogous to paying for "the full game". Other games have no limit on what they'll let you buy. It could be done by an independent ratings board (much like how movies are rated for age limits).

Nintendo has resisted this trend of nickel-and-diming users with bags of coins and gems. However, they're struggling mightily to convince modern consumers to fork over $60 up front for their (very fun) Mario games.

I'm an indie developer and my paid games have done very poorly. It's just so much easier to convince someone to download my apps for free, and then try to upsell them later on. I've also resisted bags of coins, but probably to my own detriment.

I don't mind at all when a game is free for the first few level but then asks you to pay to unlock the full version. It's basically the same as the old shareware model, giving you an option to try out the game before purchasing. It's only when paying money actually becomes part of the game that I start to feel ripped off.

I agree with you. However, most consumers just play the free part and then move on to the next game. Everyone's busy, and there are so many games to try!

Sadly I find myself feeling the same way (as a consumer). I don't really want to pay > $5 for a game. Yet, I don't like microtransactions... so I generally just play the free part of a game until I get bored and move on.

Yes, but then again, you're probably not the type that spends ANY money for IAP (not judging you, am like that too). Now consider people that DO spend money on IAP, wouldn't it be much better if that money is utilized properly? Wouldn't it be much better if those people aren't being scamemd and milked dry, but intead are being given a rich gaming experience for that money?

PS: i recently ran in to a game for people like you and me. They give you the premium stuff for unlocking a few (surprisingly achievable) achievements. Yay devs! (Its BADLAND)

I think $60 is pretty high price for a game. I'm a very casual gamer and I'd probably would never ever paid this much. OTOH, thinking about it I realize that I would pay like $15 for a movie ticket, to be entertained for like 2-3 hours, so if the game entertains me for 20 hours, I should consider $60 a bargain. But I guess linear extrapolation does not work here.

I'm curious why the very successful Apogee model of indie sales and development (first episode is free and later episodes (sequels) cost) hasn't really stuck around.

That's basically a demo, and demos are proven to reduce sales:


The claim that demos are proven to reduce sales lacks context.

The Apogee shareware model was extremely successful in its day but was predicated on certain assumptions about marketing and distribution that are no longer true. A standard scenario is that you'd read about the game in a magazine, play the demo episode on the accompanying disk, order the full version by fax or telephone and then have it within a few days.

Games based on the Apogee model were designed from the ground up to demo well and hence monetize well.

I hear what you're saying, but I feel like their approach was a bit different. A demo is clearly an incomplete piece of a larger product, hopefully setting up the customer to see the steak, but never taste it. The Apogee model really was to give away a complete contained game, and if the customer wanted "more like that" they basically bought additional "episodes" which were more or less just a couple more complete games built with the same engine and style.

i.e. You can play through all of the Doom shareware episode and enjoy the entire experience of playing a complete game.

It's hard to say it didn't work, when it did work very well for many years. Today, games just aren't produced like that I guess. But I guess the equivalent would be say, a Grand Theft Auto Game set in NYC, with what's just the part of the game where you're locked onto one borough/island, and where you complete enough of the game the episode has a logical "conclusion" or "finish". If you want to play more missions and see more story arcs that include other boroughs you can buy episodes 2 and 3. (this is also different than the DLC approach in some important ways).

I am doing that, and the sales suck.

After buying mobile games for 3 years, at Christmas I bought a 3DS. The quality in games is comparable. While I would like to be wrong, at the moment I plan on never buying another ios or Android game.

It's a problem of economics. The costs of making table stakes-quality mobile games has been holding steady, if not increasing. Meanwhile, the price people are willing to pay up front has been converging on $0. Something's gotta give.

One could argue, and perhaps somewhat convincingly, that the mobile gaming space is in its chaotic adolescence. It started off as an undifferentiated mass market, but making games for the mass market is extremely challenging unless you're a big publisher with economies of scale. Enter IAP, the best way to bootstrap a game and maintain cash flow over the lifetime of a given gamer.

So now IAP has been exploited to the hilt. It's everywhere. It's the new mass-market model.

Don't want to do IAP? In that case, you should find a lucrative niche. Differentiate. Certain developers are doing fairly well charging large (by iOS & Android standards) up-front prices for deep games in hardcore categories. Square-Enix, for instance, routinely charges upwards of $15 for its Final Fantasy releases, and by all accounts, it's doing just fine with them. (S-E is a fairly big publisher, but I see no reason why a small RPG shop couldn't attempt the same, provided it got itself in front of the right initial audience.)

Devs and publishers who don't have $10M+ in venture funding in the bank are going to have to make their peace with freemium, with niche pricing, or with IAP. Any of these things can be done well. IAP can be done well, for that matter. It's not, in and of itself, an unalloyed evil. De facto-forced IAP, of the sort you need to opt into in order to pass a roadblock, is the dickish (if lucrative) way to go. But IAP that is a fun add-on to an already awesome gaming experience is a bird of a different feather.

My rule is that there is no such thing as free-as-in-beer software. (There are exceptions, but they are exceptions.) The developer's bills will get paid one way or the other. The simplest and most efficient way is to just pay them up front. If you try to get things for "free" both you as the consumer and the developer will end up worse off.

Dwarf Fortress, the creator writes you a short story or illustrates a drawing in crayon in exchange for your optional donation. Quite the exception.

...and the developer lives on about $35K/year, which is far less than what he could be generating with that franchise.

Maybe that's because the creators don't see their work as a "franchise" and are happy to have a vibrant community around their game without needing to milk it dry for money.

Most open source/free software(free as in liberty) is free as in beer. It gets payed for by donations and/or big sponsors. It has no hidden costs. Not everything is available as open source/free software, but it is enough have a usable computer and even some games.

The difference is that such software goes through multi-year evolution and usage (be it bash or OpenOffice or kernel) so it makes sense for a company to invest on feature X that's missing for them, and get everything else for free.

On the other hand, in the game market, most games are a one-off experience with a very short lifetime (excluding MMO games). So there is no way they could be constructed through subsequent donations and evolutions.

Add to this the fact that open source communities are only made of programmers (because they are the ones benefiting most from the network effect and from incremental integration of software components), while games require other kind of professionals. Eg: volunteer designers in OSS world are mostly non existent; most of them are on the payroll of some sponsor.

I agree with this. I've been playing Final Fantasy XIV which has a monthly subscription fee. It's refreshing after Guild Wars 2 which was constantly trying to sell you something in the gem store. Unfortunately, I doubt many companies without the name recognition of SquareEnix/Final Fantasy could pull it off though.

The obvious solution is to put a cap on IAPs. Once you've paid however much it should have cost to buy the game outright in the first place, everything gets unlocked.

Unfortunately, that won't happen because it's much more lucrative to raise a generation of "gamers" who don't know any better than to provide a continuous revenue stream in exchange for the occasional dopamine hit.

Most people who play it would still never pay for it though. Mobile games are somewhat dependent on whales to justify the costs of upfront investment. It's more like one person paying for 10 other guys who can enjoy it for free.

More like 100 than 10.

Playstore is horrible for matching buyers and sellers. You can filter games by category and that is it. Plus, mobile games reviews are practically useless. I can not even is no way to guess difficulty nor whether I will like the game.

The problem is, there are hundreds games coming out for Android every month. I might like maybe five of them, many are of them are crap and many many more are good games - for someone entirely else then me.

Tell me, how do I find those five I might like? Useful reviews are practically non existent. I'm not willing to pay 5$ for something I will probably play for 10 minutes.

In order to find 1 game you will like, you have to buy maybe 10. So, basically, those games I do not like count into my games budget. They are partly reason why I'm not willing to pay much for one game.

If there were a way (maybe curated storefront) for me to know in advance I will be playing this game for hours next two months, I would gladly pay those 5$. I would see it as cheap. As it is now, it is 5$ for something I will likely not play at all.

so.... You're ok with the "few levels for free, then pay more the rest" model?

The most lucrative path is NEVER to rip your customers off or sell a basket of virtual blueberries to children for 50 dollars each.

That's the solution of someone thinking one quarter ahead.

If a game company cannot find a way to be profitable without IAPs it might want to find something else to do besides make games.

> The most lucrative path is NEVER to rip your customers off

Las Vegas begs to disagree with you.

That's because Las Vegas is actually fair to the extreme. The odds are in place, they are what they are, and if you hit the lucky number, you win all the golds. There's no deception at all, except for that people enforce on themselves when they go there expecting to be that lucky winner.

Not quite.

As a simple example, slot machines are actually implemented as raffle tickets, not mechanical random generators. But not losing plays are deceptively displayed as being "almost" winners. You get a "star star (half star, half bar)" far more often than if the machine behaved the way it appeared.

Then of course you have free alcohol during bad decisions, no clocks, upsells for crap like "insurance" at blackjack....

And if you play blackjack as well as possible, they kick you out.

Why would they? Isn't it impossible to beat blackjack in a long run with 6 decks and such?

Not impossible, but you do have to do some brazen, easily-detected stuff like watch the table for awhile and refuse to sit down unless the count goes positive.

What's that old line..."The markets can remain irrational longer than you can remain solvent."

Similarly, even though a player may lose asymptotically to the house, they can be quite annoying in the short run.

Vegas is not ripping you off. Vegas is selling entertainment of the game, not winning. Except small percentage of professional gamblers, most people won't go to Vegas if not for the experience that surrounds the gambling process. Otherwise you could just as well play state lottery or gamble on forex markets online. Would also save on the plane ticket.

I was using "Vegas" as shorthand for "the gambling industry". Which is selling an addictive product that makes people worse off in direct proportion to the amount they consume. Which, yes, sells the hope of winning. Talk to anybody on a flight to Vegas and ask them if they hope to win. If they're playing, they're not playing to lose.

There's a difference between hoping to win and hoping to win being only reason of going there. If you ask me whether I hope to be a billionaire one day, I'd say, sure, why not, I'll take it. But that's different from actually working on becoming one.

But if they are happy to spend their money on the playing of the game...it's not like they are being tricked any more than the purchaser of an overpriced handbag.

Go to Vegas. Look at the expressions on the faces of people playing. Almost nobody looks happy there.

As far as I know, handbag addiction is not a serious problem. Gambling addiction is.

No kidding. Some say the odds are known, so you're not being ripped off, but that's not always the case. Beyond that, there is a science behind separating you from your money: free drinks, no clocks, no windows, ugly carpet and ceilings to keep you focused on the games, slot machine sounds, and likely a bunch of other stuff that we don't even know.

I'd say undertaking such a massive clandestine effort to liberate you from your cash is pretty customer-hostile.

I don't think the successful casinos today are as profitable as they could be. I believe they can be MUCH more profitable than they are now.

Then you fail to understand the sheer amount of analytics and data casinos use to tweak everything to "perfection"...

But but but San Francisco hipsters invented data science! No-one was optimizing their businesses based on numerical data before!

And you fail to understand the sheer amount of incompetence present in the gaming industry. You also overestimate the amount of anayltics (or even anything you could call math) happening in the gaming industry.


casinos fail all the time.

i'm not talking about keeping what casinos have right now and "tweaking" that. I'm talking about a reimagining.

Casinos fail all the time because they as everyone else have fixed cost, and in the Las Vegas style casinos especially because they are not just casinos but massive hotels or resorts where the fixed costs are absolutely huge. There's certainly lots of room for innovation in that area, and in attracting gamblers.

Casinos don't generally fail because they don't know how to tweak the odds.

I think you and girvo are talking about different things.

Why is that not the most lucrative path?

That seems to be the most lucrative path by far. There are always more whales that make serving the 99% of players worthwhile.

Most people just copy whatever everyone else is doing without thinking about it very hard. Hopefully people will eventually get tired of being nickle and dimed by their video games, and come to appreciate the advantage of paying upfront for a game and being done with it.

It is sort of funny to see people arguing about the most appropriate way to finance the activity of wasting time. There of plenty of games, movies, books, etc for people who want value for money, lots even of free value, and plenty of free crap to waste time.

There are now enough good games in the universe that I have trouble imagining the person who can legitimately think, "I have too much time, I should play some garbage to fill it."

> 1) People seem to balk at paying >$5 for a mobile or tablet game. (With some notable exceptions.)

The dotcom bubble of the 90's taught people to expect everything they do on a computer to be free. We're still digging ourselves out of the very deep psychological hole that VCs of that time dug.

Not the VCs. The natural scaling costs mean that marginal cost is cheaper than the hassle of billing. The trick is how to cover the overhead.

Spotify for games

Why not offer the customers an option? Download the game free with limitations that you can buy in game stuff to get around, or pay $5 and have the limitations removed (or an unlimited amount of the in game currency whatever. Sounds like the next logical evolution of shareware, to me.

You would probably get a lot of people who would download the game free, try it out, maybe make some in game purchases, then decide to upgrade to the $5 version, so you would make $5 + whatever they spend on in game items before upgrading. (Or whatever price you decide to charge). You won't be making hundreds off anyone, but you'll probably get more bites overall.

If you're honestly asking, the reason this isn't done is because the main source of revenue for these free to play games are the people who become addicted. ("whales") They spend enormous amounts of money and if they had the option to just upgrade then this would cut the legs out from the main chunk of the revenue the game generates.

I would personally buy jelly splash from wooga for 20 bucks but I would not spend anything in-game as it seems like cheating to me.

If you make that an option, then children might not spend $500 on their sword upgrades.

What child has $500? "Whales" are adults. (Usually, specifically, they are people in high-stress/high-reward jobs, like finance, who want to release their stress by throwing out their rewards. Same as casinos.)

Children use their parent's phone, there were a spate of cases recently where children's apps had a ton of expensive in-app purchases and hooked children ran up $2000-$3000 Bills

This happened to a friend of mine. Her grandson only 4 was able to make many in app purchases to the turn of hundreds of dollars.

They're mostly addicts who still have room left on one of their credit cards.

Apple could solve a lot by introducing video previews or game demos and overhauling the shittiest rating system on Earth.

Apple could put an spend curve next to each game too presumably (if they don't have stats they could make it a requirement of entry to the store to furnish them going forward).

Then you'd be able to see easily that more than 50% spend more than $10 on that 99¢ app and factor that in to your purchase decision.

Some apps, of course, do this. Paper on iOS, for instance, is a free app that relies upon you buying each of the tools. Alternately you can buy the whole set of tools for a given price. There are official emulators (e.g. Atari) that let you buy individual games, or you can buy the set for a price.

for me though the evidence of intent is in having $39 and $99 level tiers. There's no way to expect that to ever be "reasonable" for a mobile game. I could go with up to about $20 in IAP. For instance the Settlers of Catan iPad game is rather expensive at $9 up front with expansions at $2 - $3 each that match the paper version of expansions and you can easily sink $20 in to get all the pieces, but you don't NEED all the pieces to play the same game that's in the paper version box. Many other games do a very fine job of using it to unlock new "expansions" as they add extra additional effort to the game every few months. Those ultra expensive tiers are nothing but "click bait" to see if children and/or stupid people will "just pay it".

I did half to laugh that the reviewer clearly never played games like farmville. That worked out really well with it's timers and everybody checking in a few times a day to manage their items. so he's a little overreacting. That said, this new game looked really nice but I won't be buying...and I was already skeptical because it's EA. EA has plugged $50 games with this kind of stuff. I wasn't really holding my breath here. I don't want to play "dungeon-ville" I want to play an RTS.

The problem is that somebody could probably put this together for say $20 without using servers at all. But the App store buyers are so stingy with expensive games, only really established games like Final Fantasy can get away with more than $10. So they have to have some other way to get the $20 or even $10 or they can't make ANY GAME to sell you because they have bosses.

In some cases IAP actually facilitates better games. Developers can put in enough effort to get the base game up and running, and then use IAP to spur additional content development throughout the life of the game.

I'm thinking specifically of Hero Academy here. A really neat little turn-based strategy game which cost a few bucks when it came out, and had (I think) 3 teams to choose from the beginning. More teams or different skins for your team cost extra. This was the best use of IAP I've seen, and facilitated the devs getting what was essentially a proof of concept out, then building on it.

For gamers it gave you the freedom to just buy the base game, or only pay for the additional features/teams etc that you felt were interesting. I would never have paid $20 for that game off the bat, but because I had the freedom to choose what I DID buy, I probably ended up spending a lot more, and happily so.

So IAP is not inherently bad, it's just frequently (and intentionally) misused to turn games into cash generating slot machines via intentionally bad game design. It doesn't have to, and isn't, always that way.

>1) People seem to balk at paying >$5 for a mobile or tablet game. (With some notable exceptions.) 2) The $0.99 or $1.99 price point is not financially viable for most games.

This sounds like: I want to sell for $5 but customers won't buy my product at that price.

Well, in that case your product, however much your toiled and however much you spend to make it, is not viable?

> Well, in that case your product, however much your toiled and however much you spend to make it, is not viable?

Exactly, it's not viable. Only IAP driven games are. That is the problem being discussed here.

Sounds more like a fact than a problem.

The problem is that everyone with opinions hates IAP even though they're ridiculously good at making money.

.. except is can be made viable by changing the charge structure; that's the whole point of IAP.

It defies simplistic supply-and-demand analysis because there is no longer just one price, but many; the customer has to make a constant series of decisions about the value of instant gratification. Some people hate this.

The problem with that logic, as much as I'd like to believe it, is that customers seem to be very happy to pay >5$ after "buying" the "free" game in IAP. And because "free"+IAP is the norm these days, customers scoff at expensive games. Why pay 5$ if you can get another one for "free"?

I'd much prefer the free demo + paid full version to be honest as I'd like to see if a game is worth it. If it is, I'm happy to pay a decent price. Then again, I might be a minority.

The marketplace isn't viable. Refunds aside, people aren't willing to spend that level of money on a mobile game when they don't know if it's going to be good or not (and many are not).

SquareEnix sells some ported versions of older Final Fantasy for around $15, but I doubt many other companies could get away with that.

If software refunds existed as a matter of course then up front prices should make a comeback. Otherwise the customer must trust marketing and we know how trustworthy that is.

This article hit on something very true... I used to LOVE games. Many of the top programmers I knew got their start making awesome games. Now the people I know getting into games are experts in gamification. And the games are absolutely awful. They just try to play into our personal addiction.

To limit addiction, I refuse all in-app purchases for games. As such, games suck for me, and I now hate them.

If I pay anything for an app, I hate the fact that after I'm bored with it, I'll usually leave it on my device since I paid for it.

If you think in app purchases are bad, you haven't seen skylanders (activision) or infinity (Disney). These games require action figures to experience the game...wouldn't be so bad if each action figure wasn't over $10!

$10? I'm guessing you don't collect anime figures.

LOL, from the perspective of someone who routinely buys anime figures >$50 I find it funny. Although, I guess there is a big difference when you see the value (more of an artistic value to figure itself) rather than as a secondary instrument to play the game.

Solution: make a game free with a small number of free levels and sell unlimited levels for a fee as a one-time in-app purchase.

I (naively) hope that eventually people who prefer microtransacions will realize what a waste of money it is, and start paying upfront. But seriously, maybe a good solution would be to design the in-app purchases in a game so that instead of endlessly paying for consumable items, one would pay for actual game features. That way, you can play the basic game for free, and then start "constructing" the full game piece-by-piece by purchasing individual features. For example, an RPG where you can play the warrior for free but then pay $X each for additional characters. Or a "dungeon-keeper"-style game where you can pay to unlock more types of monsters and tools.

Radiant Defense on Android works exactly how you described. It's a tower defense game,where in the free version you are given some towers, but there are a few which are locked behind a paywall - so you have to purchase like 6 separate packs to unlock them all(totalling like £8), but once you do, that's it, you own the entire thing and there is nothing else to buy.

>I (naively) hope that eventually people who prefer microtransacions will realize what a waste of money it is, and start paying upfront.

You mean like getting a NYT subscription for $200 dollars, instead of paying for the 10-20 articles I want to read all year for like $1 or $.5 a piece?

Well, not developing for mobile is one option.

There is a solution, but it won't work:

1. Release games for "pay what you want, whenever, as many times as you want".

2. Educate people that if they don't pay voluntarily for things they want to support/see more of, they will end up living in a world where they're forced to pay for crappy non-games (e.g., the micro-transactions above).

It won't happen cuz most people aren't smart enough to see the benefits of paying for things they want to see more of/support voluntarily. I wish they'd be, but it doesn't seem so.

You get what you pay for is pretty applicable here.

An important thing to keep in mind is that #1 here is the state of the affairs after the fact, i.e., when people can see many games that are apparently free built using the IAP concept.

Dan Ariely noted that the mobile app industry has done this to itself by ... well better read in his own words: http://danariely.com/2011/12/25/the-oatmeal-this-is-how-i-fe...

I think we have to give additional purchases some degree of legitimacy; look at EVE Online and the upcoming Star Citizens of examples of in-game purchases that, at the very least, are not dark user patterns or scams.

I generally find in-app purchases on iOS games to be scummy as hell, though, so the big problem is probably that it's a Wild West for dark user patterns in games on the App Store.

Online games are more amenable to legitimate purchase models.

When the game is entirely offline, though, it's just nuts to require the player to put in more money.

Contrarily, if you introduce pay for performance in to a competitive online game, it completely fucks the competitiveness.

We can accept sports where players and teams spends millions of dollars of on training, equipment, etc. What if instead the team just paid the money to buy additional points from the referee?

Yeah, that is not a game.

The appropriate way to do this is to make premium/paid items cosmetic only with zero influence on game play. If your game blows, this model doesn't work.

Sure it is. It's called "United States national elections".

I know this might be crazy, but what about Apple/Google setting a floor on app prices? What if no app could sell for less than $2.99 or even $4.99? Although, I'm sure that would probably result in less money overall for Google and Apple, so it would never happen, but if customer expectations were at a higher price point, maybe the developer options would increase.

I disagree with this because I think that there's a lot of cases where a free or very cheap app makes sense, but maybe they could do something to better surface the IAP pricing. I think metrics like the average amount of money spent by users or the highest IAP amount displayed prominently next to the app in the store would make it so that apps that try to pull stuff like this are much easier to recognize before the user downloads the app and invests time into it.

They could still allow free apps, for FLOSS software and glorified web browsers.

I think Google/Apple are happy with the game developers figuring out the solution to maximize the profit. They take a 30% cut.

It makes sense for Google, but I don't understand Apple's motives at all. The IAP model ruins gameplay for everyone but the whales. But Apple is making most of its profit through hardware, and now I (as a non-whale) have lost one of my main reasons for buying an iPad. It used to be a great casual gaming device.

I guess I'm just gonna play Carcassonne on iOS 6 forever :)

> I'm sure that would probably result in less money overall for Google and Apple, so it would never happen, but if customer expectations were at a higher price point, maybe the developer options would increase.

Given Apple & Google take a flat 30% of money coming in, if they get less money, that means developers are also getting less money. So I don't know how that would increase developer options.

I think part of the problem is not having a decent try before you buy option in the major app stores. Since the app stores manage purchase and licensing, it would be easy to remove apps after the demo period. The 5+ years of free and .99 cent apps created a psychological barrier that still stands today; thus the rise of IAP.

>I think part of the problem is not having a decent try before you buy option in the major app stores.

Part of the reason for this is that the games suck. When a game is good, word of mouth tends to spread it.

IAP isn't just a mobile concept, the non-mobile IAP sector is as large as the mobile one.

The desktop game CrossFire did $1bn revenue last year through micro-transactions:


Emulate a demo as much as possible without breaking the guidelines of the Play or App Store. I feel that once I put money into a game once, I should be done. With that being said, it can be hard to make a $10 investment based off of 4 screenshots and a description.

I don't care if a game has IAP or not. I do care Bout how playable the game is without IAP. Blocky Roads could probably start offering cars or road packs as IAPs and people would buy them. That's not destroying the game.

By making in-app purchases valuable and small, people are more likely to spend more on engaging games. This can increase TLV for good, replayable games.

The solution is for more people to build games simply for the love of building games. For example see Dwarf Fortress.

Nope. They've already been doing that for decades. The games industry is like the music industry in that regard. There's no shortage of people who are making games for the love of it. The vast majority of them will just never be able to support themselves doing it.

Free trials.

Most soldiers after returning home find themselves in an awkward spot, killing is the only thing they do right, and having a PTSD doesn't help to pick other skills, so their only pahts are:

1) They become hitman, even if its socially unacceptable

2) They become mercenaries even if it is for enemies of USA

3) They commit suicide

So what's the solution? If people is unwilling to let them kill everyone in sight how does a soldier profit from their work?

This is a honest question, I generally hate mass shooting and soldier suicides.


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