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Kongregate: the science behind the massive profits of F2P games

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Re: Kongregate: the science behind the massive profits of F2P games

#31

Post by the_af »

freditup wrote: post #17
freditup wrote: post #15

Earlier quoted context omitted.

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

A few more thoughts on the matter of whales: On Kongregate, 2.1% of users buy virtual goods. Of these, about 4% (the whales) have spent over $500 and bring in about half of Kongregate's revenue. Top spenders often spend $50K-$80K. Emily's premise is this: that people who spend lots of money on games (whales) are people who healthily enjoy the games as hobbyists. Her most interesting points, in my opinion are as follo…

> The issue comes down to if games are a legitimate, healthy hobby or not.

For me the issue is not whether "games are a healthy hobby", but whether F2P games are. I think they are not, or rather I should clarify: the kind of games usually called F2P or "freemium", which base their gameplay on grinding and which try to make you spend money to buy coins, which are powerups that essentially "speed up" the boring parts of the game are not a legitimate, healthy hobby. They are preying on people's addictive behavior while providing very little genuine value in return. They are what people like Jonathan Blow (of Braid fame) derides as Skinner Boxes and what Ian Bogost mocked with his game "Cow Clicker" (http://bogost.com/games/cow_clicker/).

I'm a Kongregate player and there are true gems in there, but most F2P games can be safely disregarded. If it has coins you can buy, or you can spend real money to bypass parts of the game, this is a huge red flag. (Another genre that I completely ignore is the overcrowded "Empire Building Strategy Game", which if you pay attention is always the exact same game with a different skin every time -- and most are F2P, while we're at it).

Re: Kongregate: the science behind the massive profits of F2P games

#32

Post by Animats »

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

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

[1] http://developers.kongregate.com/blog/newbie-to-big-spender-...

Re: Kongregate: the science behind the massive profits of F2P games

#33

Post by personjerry »

patio11 wrote: post #18
freditup wrote: post #17

Earlier quoted context omitted.

A few more thoughts on the matter of whales: On Kongregate, 2.1% of users buy virtual goods. Of these, about 4% (the whales) have spent over $500 and bring in about half of Kongregate's revenue. Top spenders often spend $50K-$80K. Emily's premise is this: that people who spend lots of money on games (whales) are people who healthily enjoy the games as hobbyists. Her most interesting points, in my opinion are as follo…

Yep. In particular, if demographically whales are (as subtextually claimed on slide 12) functioning upper-middle-class professionals like business owners, engineers, doctors, and CPAs, then there doesn't seem to be any meaningful harm in it. My unease about F2P monetization is that my sense of the demographics is that it tilts more towards "people with undiagnosed depression" or "the Vegas slots demographic."

Why do we as a society scrutinize the F2P games industry for its bias against "people with undiagnosed depression" and yet let other industries (which have been in business for ages) slide? A seemingly silly example is knives, for cutting oneself. My concern is that we are looking too closely for patterns and problems when it seems like to me that the capturing of certain types of customers is just plain old marketing.

Re: Kongregate: the science behind the massive profits of F2P games

#34

Post by rjaco31 »

T-hawk wrote: post #23
rtpg wrote: post #13

Earlier quoted context omitted.

It's possible to make freemium without wait timers. See Hearthstone, League of Legends. I don't see freemium disappearing anytime soon.

Those both essentially do run on wait timers. You can earn the components needed to play at a high level gradually with a limited number of plays per day, or pay to accelerate that process. This model isn't as harsh as actually locking out from the game if you don't pay, but it sure does move along the same axis of paying to alleviate a time-based restriction.

Uh? This might be somehow true for Hearthstone, but you'll have a hard time convincing me there is any kind of timer in LoL. All the in-game purchases are basically just cosmetics, and the lightweight grinding is more of a tutorial phase than anything else.

Re: Kongregate: the science behind the massive profits of F2P games

#36

Post by Kesty »

the_af wrote: post #31
freditup wrote: post #17

Earlier quoted context omitted.

A few more thoughts on the matter of whales: On Kongregate, 2.1% of users buy virtual goods. Of these, about 4% (the whales) have spent over $500 and bring in about half of Kongregate's revenue. Top spenders often spend $50K-$80K. Emily's premise is this: that people who spend lots of money on games (whales) are people who healthily enjoy the games as hobbyists. Her most interesting points, in my opinion are as follo…

> The issue comes down to if games are a legitimate, healthy hobby or not. For me the issue is not whether "games are a healthy hobby", but whether F2P games are. I think they are not, or rather I should clarify: the kind of games usually called F2P or "freemium", which base their gameplay on grinding and which try to make you spend money to buy coins, which are powerups that essentially "speed up" the boring parts o…

I 100% agree. That's my main issue too.

Most of the games taht works on this kind of model are usually simply not very good. And seeing that at the beginning, for me it's a very big red flag that will say. Don't waste your time on this.

This is because they don't need that many people to make money, and they will always get at least someone, so the better business model is quantity over quality.

Re: Kongregate: the science behind the massive profits of F2P games

#38

Post by throwaway2048 »

rjaco31 wrote: post #34
T-hawk wrote: post #23

Earlier quoted context omitted.

Those both essentially do run on wait timers. You can earn the components needed to play at a high level gradually with a limited number of plays per day, or pay to accelerate that process. This model isn't as harsh as actually locking out from the game if you don't pay, but it sure does move along the same axis of paying to alleviate a time-based restriction.

Uh? This might be somehow true for Hearthstone, but you'll have a hard time convincing me there is any kind of timer in LoL. All the in-game purchases are basically just cosmetics, and the lightweight grinding is more of a tutorial phase than anything else.

Hero purchases are not cosmetic, neither is the grind to level 30 so you can use full rune pages (basicly minor buffs to a collection of stats). It is inaccurate to portray these things as cosmetic.

And yes, I'm sure you can 'have fun anyways' and a host of other standard pay to win excuses, but the fact remains its an element you pay for that makes you more competitive, and not simply cosmetic.

Re: Kongregate: the science behind the massive profits of F2P games

#39

Post by throwaway2048 »

personjerry wrote: post #33
patio11 wrote: post #18

Earlier quoted context omitted.

Yep. In particular, if demographically whales are (as subtextually claimed on slide 12) functioning upper-middle-class professionals like business owners, engineers, doctors, and CPAs, then there doesn't seem to be any meaningful harm in it. My unease about F2P monetization is that my sense of the demographics is that it tilts more towards "people with undiagnosed depression" or "the Vegas slots demographic."

Why do we as a society scrutinize the F2P games industry for its bias against "people with undiagnosed depression" and yet let other industries (which have been in business for ages) slide? A seemingly silly example is knives, for cutting oneself. My concern is that we are looking too closely for patterns and problems when it seems like to me that the capturing of certain types of customers is just plain old marketin…

i don't see many knife companies actively courting people attempting to self harm.

Re: Kongregate: the science behind the massive profits of F2P games

#40

Post by cactusface »

toyg wrote: post #28
tjradcliffe wrote: post #22

Earlier quoted context omitted.

Other products don't aren't optimized by their creators to extract the maximum revenue from the 0.046% of their market that the creators have determined are vulnerable to remarkably effective psychological manipulation techiniques, and upon whom the creators are dependent for the majority of their revenue. Next question? And the next question really shouldn't be "Oh but aren't they really? Other products use advertis…

You don't know much about other industries then. Both gambling, food and drink sectors are optimized to build addiction and maintain it over the longest possible period. They call it "fidelity" but it's the same thing. I personally think f2p is essentially a branch of the gambling industry and will eventually be recognised as such in law. After all, it was the case for coin-ops (at least here in Europe), which had ba…

His point was that in other industries they don't optimize their products for a tiny percentage of their clients.
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