Great Game – Shame About the Pop-Ups!

Mark Stephens

One of the hardest questions for social game developers is how to maintain the integrity of their game, while also making money from it. As any gamer who has become infuriated with pop up ads will tell you – it’s a delicate balancing act. Get it wrong and people simply stop playing. The economics of gaming are important – as any one of the small developers out there trying to get their games promoted, downloaded, played and making money will tell you. Alternatively, just ask Zynga! Anyway, as new developments and challenges come to the fore and new strategies to monetize games are tried and tested, it’s time to take another look at the options available.


The Smorgasbord of Free Gaming

Social gamers have been raised on a healthy diet of free games to pick and choose from – a real smorgasbord!

Free or almost-free is what’s expected in the big buffet lounge of gaming, where you are able to feast on as many games as you like without it costing a cent.

What about the poor chefs, who created all this delicious fare? How do they get paid?

A few basic ways still remain for game developers to monetize their games:

1. Paid advertising/sponsorship
2. Charging small fees to unlock features or new levels
3. Charging to make in-game purchases

So a game is featured on Facebook, the AppStore or Google Play and new users register or download it and the developer is able to make money from methods two and three, if paid advertising is not an option.

However, both these methods do still rely on in-game advertising in a way, usually via pop-up reminders to the gamer that they can unlock levels or purchase new features.

The fine line between gameplay enjoyment and major annoyance from these “ads” still applies – and developers need to get the balance right.

The Challenge

“I’ve been playing this game for a few days and the pop-ups are exhausting. They pop up every few minutes…”

Go round the online forums or read reviews of games in the AppStore or on Play and you will read this type of comment endlessly. It is a typical reaction from a user to game where they are constantly being reminded to buy this or upgrade to that; commonly known as “overkill”.

The freemium model is probably not about to change any time soon so how does a developer balance things so that users do not feel blitzed by ads, but they are still able to make money?

Hussein Chahine, Founder of Yazino, summarises the challenge facing developers very well:

“Make the experience as immersive as possible so that they not only stay with the game, but start to pay for the game….It’s all about engagement and a good user experience.”
“The user needs to trust you, and feel that the game is fair….merchants need to tap into the right emotive triggers such as achievement, recognition, and social standing among their social gaming peers. The role of the community is very powerful.”

Currently, on average, around 2 to 3 percent of social gamers convert into paying customers, and the average purchase amount is not much. So as well as providing the “emotive triggers” mentioned above you also need the numbers.

Put a nominal figure of a few dollars on the average purchase amount per month per user: you can do the maths and see that getting financial reward for developing social games is still very much about attracting the numbers.

Attracting numbers generally means keeping the game attractive, easy to understand, a little challenging, and maintaining the user experience as fun and un-annoying! So over-doing the pop-up reminders or the ads is not going to work.

Understand the Payment Culture

Another important way for a game developer to maximise revenue is to make it easy for users to pay for the in-game services. This means tailoring games to the markets in which they are most popular.

Your game may be “number uno” in Brazil but have you made it easy for Brazilians to pay for it how they like to pay for it? Understanding the nuances of the payment culture of the places where your games are popular can make a big difference to transaction acceptance levels.

In Japan, for example, people mainly use i-BANQ, in the UK Intercash, in Germany Sofort, and in Australia POLi.

Also try to keep the payment process transparent and non-disruptive of the gaming experience; hidden fees, confusion about how and where to make the payment, or having to remember passwords for external sites will just turn people away. It is easy to lose trust and confidence quickly and this can really impact monetization, so make sure your payment process is seamless and smooth.

Developments in Advertising

Developments in social game advertising may make it a more viable option for developers to consider.

OBJ Enterprises, a Californian developer of social gaming apps, is introducing a new way to improve the gaming experience and increase profits in two upcoming titles.

The new model works with local retailers and franchises to strategically place advertisements within their games – thereby avoiding one of the main complaints of gamers about pop-ups being intrusive and annoying.

This is something that Facebook has done with some success this year too – and means that advertisers can place targeted ads in front of large numbers of eyes at a fraction of the cost of doing that through traditional media. More importantly it could be a good solution for developers to make money and the gamers to enjoy the game more.

OBJE is also changing the nature of rewards for game success, offering real gifts rather than the virtual coins or trophies that most gaming companies offer.

These developments are, no doubt, just the start, as the industry goes through “birthing pains” and increasingly looks at ways of keeping everyone happy. If the developers cannot make some sort of profit for their work then it impacts everything – fewer games are made, and the industry becomes more dominated by the big players, meaning less choice for the gamers. Nobody wants that.