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Design-Driven In App Purchases: Creating Sustainable Monetization

, June 23, 2015

We are in an era on mobile where Freemium has won; but there are many out there who question whether this is a good or bad thing for the player. Indeed, are the current approaches to Free2Play design sustainable and are some of them even ethical?

Over the last 4 years, the reported ‘typical’ paying player appears to have dropped from 3-5% of total downloads* to a mere 1-2%. This isn’t a smoking gun and there is a lot of conflicting evidence, but when you consider the improvements in data analysis to aid retention and the huge increased marketing spend from games at the top, I believe it’s worth taking another look at how we can develop a more sustainable approach to game monetization.

Let’s agree on three principles before we start.

  1. The games business is a leaky bucket

We will always lose players! Games are consumable entertainment and players will inevitably churn. This means we have two options – add more people faster than we lose them or plug as many leaks as we can.

  1. Retention has a huge impact

    Look at the results of our Unity Ads Survey with EEDAR:


Online Survey Conducted in 2014 with 3,000 paying players

  1. Buying (even downloading) is a risk


In The Journal of Marketing, James W Taylor wrote about the four forces which prevent people from making any purchase, be it a game or a pair of shoes. We need to know what we are getting, what we are missing out on, what others will think of our decisions and deal with other things in our lives.

In short, if we are going to make better, more sustainable In App Purchase (IAP) design, then first we have to keep more players for longer and create the conditions where they feel safe to buy things in our game.

The current IAP models typically use:

  • Unlimited Content – Capped by limited energy (such as Candy Crush Saga)
  • Exponential Cost Escalation – Building a bigger base requires bigger stores (Clash of Clans)
  • Time-Limited Events – Special limited editions and timed events (Puzzles & Dragons)
  • Casino Mechanics – Not part of this discussion as it relies on different psychology

These kind of purchases strongly focus on the conversion of the player to spending, rather than on delivering an expectation of value. We don’t get to retain users if we treat them as disposable, like visitors to a carnival midway (or fairground if you’re British). If we rig the games too far, then people will lose the joy and simply stop coming back.

The concept of ongoing spending as a user presents different short-term vs. long-term risks. Most players have a budget they are comfortable spending regularly. In the heat of a game they might exceed that, but this creates Buyer’s Remorse unless they feel they can choose to limit this spend in the future. We have to consider the short and long term risk profiles of the game as well as the context for players including:

  • Escalating costs – The perception of ever escalating costs will impact player demand. This isn’t the same as price sensitivity but never-ending upward pressure creates payment fatigue.
  • Never-ending spend – The perception that I will always be asked for more money from the game creates payment fatigue, but that is different from the desire to want to spend money of my own choice. Always have more for me to acquire on my own initiative; don’t make my basic retention depend on it.
  • Comparative progress – Seeing others perform better than me can create playing fatigue. If someone else’s spend alone makes it appear impractical for me to compete, I will abandon the game – claiming that it’s pay-to-win.
  • Substitute games – We can’t ignore that there were an average of 362 mobile games released every day in Feb this year alone. There are always substitute games, and they are all free too.

Buyer’s Remorse is a real thing. We build up a great deal of anticipation and often get caught up in the heat of the moment when we make a purchase (or download).  But after our purchase is when we are at our most vulnerable and we will (at some point) cool down and review our purchase decision. The role of a designer is to keep that player playing. More than that, as a designer of IAP we have to keep players wanting to not just continue playing, but paying. That requires us to sustain their attention, interest, and desire over time!

Just like every game mechanic has to engage and entertain a player, our game purchases have to ‘supercharge’ a player’s sense of delight and drive repeat engagement.

  • Unfinished Business: Games like Kim Kardashian Hollywood do an amazing job with the narrative progression and the format of what are essentially ‘Cookie Clicker’ tasks and still create a sense of unfinished business. The gameplay may be limited but the engagement is very real – this leaves the player always wanting more. That engagement directly helps overcome the issues from any opportunity cost there may be
  • Continued Relevance: Games like the VEGA conflict show items which players will be able to unlock later in the game. Their associated stats similarly go a long way to show the continued relevance of playing as well as how what the players just unlocked fits into the game. Often this is about putting the monetization in the context loop, rather than in with the core game mechanics.
  • Social Capital: It’s also important not to ignore both the social consequences and the value that players put on the ability to personalize their experience as long as others are able to observe their decisions. This was key to most of the revenue in the now shutdown Playstation®Home experience with examples like the ‘Gold Suit’ offering its wearers social capital. However, people often misunderstand this phenomena – customization has to be authentic as it’s about a real person’s response to your experience.
  • Inertia: It’s also easy to underestimate how important it is to keep your players playing – even if they are freeloaders! The fact that a player deliberately chose to play your game is hugely valuable – it’s a massive compliment to you and your team and you should respect that.  This is the key to you being able to generate revenue in the first place and their ongoing commitment will be hard to win. That’s why your initial on-boarding process is so vital. Acknowledge that every player has a lifecycle and be aware of how their needs will change as they move from Discovering to Learning then Engaging.  Building longevity takes an understanding of the community as well as how your game’s rhythm of play fits into your players’ lifestyles.

We should not consider someone who pays once to be a customer.  They may have purchased, but unless they do it again there is work to do to not only create a scaleable business, but also one which delivers what our players actually want!

According to Park & Lee, players are buying because they have an expectation of value, not just because they are happy with the game. They are demonstrating a desire to get more out of our game and we have to sustain that if we are to encourage them to keep spending. You can’t sustain this desire if your IAP doesn’t deliver both logical and emotional value. If we respect our players, we will earn a longer Lifetime Value (LTV), but unfortunately no matter how good our game is there will always be a diminishing return.

That’s why we have to take a design view to the kinds of goods we offer players.  I like to break these down into four categories:

  • Sustenance – Goods we require to continue playing
  • Shortcuts – Goods which speed up the actions we are performing
  • Socialisation – Goods which are primarily about social capital
  • Strategy – Goods which open new playing options

These goods can come in various forms:

  • Consumable – a one-time use item
  • Capacity – something which enhances growth/play
  • Permanent – a permanent upgrade or unlock item
  • Generators – an increase in the supply of a consumable

Looking at your game, you will be able to identify a point in the game mechanic or the context loops of play (perhaps even the metagame) where any of these items would benefit the players. However, the problem most developers fall into is forgetting to make their goods scaleable.

It’s something which, in my opinion, was the downfall of the free2play version of Dungeon Keeper.

Scale matters!

Some methods we can use to help scale goods include:

  • Bundles – Whether it’s a BOGO or a pack of 10, selling more than one consumable in a single transaction not only makes the offer more attractive to the player, it also means that they may have some left over. And that means they’ll need to come back to use them.
  • Ratchet Mechanisms: It can be scaling how many recharge crystals you need to continue your run, having died multiple times like in Blades of Brim by SYBO, or the classic mechanic where to upgrade your HQ you first have to upgrade your Gold and Mana Stores (which of course takes an escalating amount of time and resources to complete). I’m falling out of love for this system to be honest, but it’s still valid when spread amongst a large number of assets such as the different heroes in Marvel Future Fight. This method also includes multi-part items such as the Blueprints in the Force Collection.
  • Scissor-Paper-Stone: This remains my favorite approach to scale and I think the most consumer friendly – add a touch of dilemma to the purchase. Do you buy the Blue Sword or the Red one? Blue is better on Green, but Vulnerable to Red attacks… Do it well and you’ll turn purchase decisions into a positive part of the reason to play. Look at games like Hearthstone or DOTA where players have no problems with spending money. A dilemma doesn’t have to be profound, it can be as simple as the mental switch between collecting gems and avoiding obstacles in Lets Go Rocket from Cobra Mobile.
  • Customization: The more creativity you allow your players, the more engaged they will be with their characters emotionally and the better impact your purchases will have on ongoing retention. However, this has to be authentic. You can’t fake Geek Cool.

There are other things you can consider too, such as how rare an item might be, what function that item delivers, why that’s special, and how it improves the gameplay. But also ask why an item will be something a player aspires to get and how you can make it more personal.

IAP must be part of the game design experience. We have to create a sense of anticipation and delight if we are to attract players’ interest and create the desire to act and purchase from us.  We are now retailers inside our game and as such have to think in a similar way. Why not consider some of the following techniques?

  • Help from a friend: Games like Criminal Case actively use Facebook connections to offer gifts to their friends of freely available consumable items like energy. Learning from Puzzles & Dragons as well as Marvel Future Fight, we can connect with other players who are online at the same time as us and make tentative allies. These can be a great excuse to see what impact a power or new character might have on our game, and make it easier to get past a troublesome boss.
  • Free use of an item: Sometimes we have to show people what they are missing out on; unless you have used a better car/gun/etc, how will you know how much more fun it is that the one you already have? Sometimes this temporary use can be a reward or part of a daily challenge, but it can also be highly effective to use ‘Opt-In’ Video Ads to offer such experiences. These put a commercial value to the free item, something the player often appreciates more as a result.
  • Predictable uncertainty: Knowing you will get something but not knowing what is a great tool. This is often used crudely by throwing a roulette wheel into the game. However, it’s more interesting in its use in Crossy Road: I regularly get a random creature from the coins I earn through play or from watching opt-in videos. These creatures are all delightful in some way, and each time I get one the other becomes more interesting. There are some which I just had to get my hands on straight away – as a result I was willing to spend real money to get the ones I wanted, Emo Goose and Frankenstein.
  • Limited offer: Whether it’s limited by time or event, it can be really effective to make players authentic and in-game context plausible offers. Fake scarcity will add to playing fatigue.

Finally, the point of making sustainable IAP is to look at the sale as the beginning not the end. If we are to really achieve that, then we have to recognize that each purchase we initiate creates its own sense of buyer’s remorse and build playing and paying fatigue – leading to churn. We have to constantly fight this inevitable loss by building post-purchase utility. That means making the user feel special every time they make a purchase, similar to the unboxing experience of an Apple product. Identify and allow players to show off ‘landmark items’ which genuinely expand the scale of play, but then don’t forget to show them what their money has bought. All this has to also take into account how each purchase affects the gameplay of others; we can’t afford to increase the engagement of one player at the cost of dozens of others.

Show me as a player that you respect my decision to invest in your game and give me a reason to do it again!

And for those of you want to see our recent webinar on this same topic, you can view it here:


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  1. What I have to say in all this iap and freemium talk is having played Angry Birds 2, some type of role playing dragon game in the windows store, the sonic the hedgehog infinite runner game, and Looney Tunes Dash is that the IAP is used for people that seem to want to pay to avoid playing the game and so IAP for those games seems inappropriate. Sure they make money from it but it must seem a little sad they are paying to avoid playing the game because what does that say about the game?

    That said Sonic the Hedgehog and Looney Tunes IR games are the only ones I play occasionally and I make it a point not to buy IAP. I also make it a point to not do unsolicited FB sharing of my game results however if asked I would recommend those games.

    As far as my own aspirations I am a hobbyist so my only goal is fun hobby and if I get lucky good but I still like seeing moderation models.

    1. I guess this comes down to making games for art or making games commercially. If we are to make/sustain an industry of making games which i believe we should then accepting that the profit motive is part of that is I think unavoidable. But! Please dont mistake that for putting the players need second.

      In fact unlike games as art commercial games have to consider the players. The trouble is right now people can make a lot of money by playing with monetisation levers. Not unlike in pop music with trash bands.

      However, if we want games with the ambition and potential to change the way games are accepted as well as to be commercially sustainable they have to put players first. Its the point im trying to make here. We need to create an expectation of value for player and deliver on it.

      Nothing wrong with kickstarter, Patreon, arts funding etc to free the developer to make the games to delight audiences but that is no guarentee that they will satisfy player’s needs. Indeed there is less incentive to do anything but the developers own vision.

      The good news is that there is room for both.

      Suspect we wont agree but i do hope i have at least encouraged you to consider that despite the current examples it is possible to make better commercial games.

  2. It seems, your ultimate goal is, to just make the most money. Its all about extracting the most out of the players. Even if you write that making the game awesome is a much better way to go than to employ cheap short-term psychological tricks, its still about extracting money from people.

    “Doing evil trick #23?” – “Oh, that’s possible but it will increase the money fatigue of your paying dipsticks”.

    Don’t get me wrong.. All these points are probably very valid and there are a LOT worse articles out there…

    But I still would not want to work at your company.

    1. @Imi Sorry you feel that way and whilst I appreciate that there is a concern over where we cross over between making great gameplay and making money I don’t think the two are neccessarily at odds. In fact I’d argue the opposite. The advice I’ve tried to give here (and I accept I may have failed to get this across) is actually about looking at the way designers have to put the player first and their enjoyment as paramount importance.
      Yes I want designers to do that in a way which makes it more likely to make more money. However, I do that as I believe game designer and development is a worthwhile process and like any art is worth paying for on it’s intrinsic merits. I don’t believe we should be paid just because we turn up and do our jobs – if I did I’d work in a Bank!
      Perhaps the language we use as shorthand doesn’t help. I know lots of different people read this so as well as right-minded people like yourself concerned about the over commercialisation of the hobby we all love; there are others whose motivation is more commercial and I want to show them that the use of dirty tricks is actually self-defeating in the long run.

      1. I still have to disagree heavily. Concerns about money are fundamentaly at odds with concerns about the well-being of your players!

        Nobody likes to spend money intrinsically – just for the sake of spending money. Psychological manipulations that make players want to give you money may be the “best possible manipulation” in your eyes, but don’t dillude yourself in thinking that you do your players some favour by making them give you money.

        Also, there are people who totally don’t care about money at all as its never a limiting resource for their activities (“whales”). Still, extracting money from those people is not an intrinsic reward.

        Your point basically says: Instead of just grabbing their wallets and run, make them give you their wallets. Then you don’t need to run. And they might come back with their girlfriends wallet.

        There ARE other models how game developer can get food. For example, they could be sponsored by angle investors or through sites like kickstarter. Or they could get compensated by taxes. Or critics prices. Or devs can do some other work and write games in their free time – many composers I know work that way and their songs are pretty awesome..

        That may not feed the same amount of developers that are fed by the game industry today, but if those who only care about money leave the game branch, I wouldn’t care..

        1. (and by “kickstarter”, I meant “” ;) )

  3. One thing that I think is very important is a ´bonus´ effect you receive after your first purchase. Two free games I played, Dungeons and Dragons Online and Stronghold Kingdoms both did that. When you make your first purchase, not only do you get the credits that you buy, but other things get changed about your gameplay. In fact, Stronghold Kingdoms even had a bonus after your second purchase also. In DDO, you got more character slots and a few other perks after you make a purchase, and in Stronghold Kingdoms the rate at which you get freebie cards is increased after your first, and again your second purchase.

    In both games, for me, that bonus you get with your first purchase was the reason I made the first purchase at all… and then obviously once you have someone familiar with the mechanisms and safety of making a purchase, they are much more likely to do it again.

    1. Bella merda.

    2. Thanks!
      Its been a v long time since I played D&DO and I don’t remember getting round to spending money – Ironically I can personally be a cheapskate with F2P games. However, that does sound smart. Some games do that by removing ads for a period of time after a purchase is made, but as I think I said I’m never too sure about whether thats the right approach. Something like an extended XP bonus for 24 hours after a purchase might be a cool way to do it but extra character slots and some bonus perks makes sense too

  4. Very good article!
    Second and Third picture – are very good examples of in-app purchases risk in my area.

    1. thanks!