f2p online games need more than just a game on launch. This talk tells you about the things outside the game you need like community management, support, metrics, payment systems and more

1. Virtual Economies by TeutWeidemann Consultant Online Entertainment Please do not put online for download without my permission. If you use parts of this presentation please quote me as the source teut986@gmail.com Free to Play Games

2. Who is Teut Weidemann Working on Games since 1981 Professional since 1987 Over 70 titles on C64, Amiga, Atari ST, PC, Consoles, Online … Specialised since 1996 on online games Jobs: Graphic Artist, Programmer, Designer, Development Director, CEO, CTO Now consultant for Online Formats Also teacher at Film Academy Ludwigsburg Companies: Rainbow Arts, Softgold, Lucasfilm Games, Microsoft, Wings Simulations, Jowood, CDV, UBISoft

3. Teut‘s Oldies … 1987-1990 Katakis, Denaris, Turrican, Spherical, X-Out, MUDS, R-Type, Rock’n Roll, 60 more

4. My „Serious Games“ … Andsomemore …

5. Teut‘s Classics … 1997-2009 And 20+ more

7. Nadirim for Digital Reality/Docler in Hungary

8. Both free to play

11. Monetization Strategies Making money with a free game “f2p never works in europe” Unnamed CEO of <put name here> Publisher 2005

12. Definition: Classic Business Retail Sale Buy before you play Reviews, Demos as guidelines Risk of returns Very indirect customer feedback System Specs sensitive

13. Classic Market

14. No costs involved free game download or free access via browser try before you commit: no costs involved Low entry barrier Usually low system specs Majority are online games (MMO) Free to Play (=f2p)

15. Some Foundations 13 F2p Business Overview

16. Business model Unlimited free play Dual currency system: “Coins” are earned by game mechanics “Gems” are bought for real money Coins are used for trade and production Gems can be spend in the item shop „Achievements“ earn gems too (fair play)

17. Soft Currency Part ofyourvirtualeconomy Earnedbygamemechanics Quests Achievements Monster kills Spend on gamemechanics Repairs Trade NPC sales Will beaffectedbyinflation on elderservers Is not convertableintohardcurrency

18. Hard Currency Boughtwith real money Earned in verysmallquantities Quests Achievements Monster kills Spend on virtualitems Itemshop In Game Monetizers Services & Comfort Only „drops“ influenceseconomics Is sometimesconvertableinto soft currency

19. Why 2 Currencies Business depends on hardcurrency Should not bepronetoinflation Userbaseischaoticsystem, don‘tdependyourbusiness on it Drop Rates & Sales are 100% controlledbyyou Metricskeytosuccess: hardcurrencyhastobetracked 100% andid‘edaccordingly Note: global currencyfor all games = badidea Thatswhy Facebook Creditsmight hurt thebusiness Ithappened in thepast (Compuserve vs. Genie vs. AOL)

20. Its not as easy as it sounds But its all out there Google is king 18 Hard Currency Sales

21. This is how its done*: 19 * If you do it different you do it wrong Image from www.grepolis.com

23. Scaled hard currency amount

24. List advantages of larger packages

25. Show older expensive prices

26. Do not page/scroll

27. 3 click buying processThis fits even 800x600! 20 Image from www.grepolis.com

29. Depending on country they change

30. Not all options are available:

31. 1.99€ is SMS only

32. 4.99€ can be T-Pay only

33. Reason: Costs of payment system influence your packet sizes

34. Adding payment systems doesn’t cannibalize others!The more the merrier! 21 Image from www.grepolis.com

36. People do travel!

37. Note the https symbol

38. Progress indicator

39. Other options

40. Friend invites

41. Link to Payshop

42. Explanations

43. Other services

44. Service & Faq

45. Users have to TRUST your shop & service to pay!The small stuff 22 Image from www.grepolis.com

46. 23 Integrate into webpage! No pop up! Not inside flash! https! This is a service page! No advertising! Less clicks=win 3 clicks maximum Each additional click costs you 30% users! Metrics! Metrics! A/B Tests Image from www.ikariam.com

47. Payment Systems Eachcountryhasfavouriteones Eachcountryhasspecificones Addingpaymentsystems do not cannibalizeothers Support iskeytosuccess Thatswhy: Yourproviderhastobe in the same timezone Hastobe flexible withthe UI (noreadymade box) Hastobe international (Europe, Eastern Europe) (in otherwordsdon‘tuse US onlyproviders)

48. FREE Advice!!!! UseGlobal Collectformostpaymentoptions UseMoPayfor SMS payments UseInFinforLandlinePayments Thatsit! Covers 95% marketandareprovenexperts Europe, RussianTerritories, Arabian Countries, Turkey, etc. Theyaren‘tthecheapest, but thats not important! Service is!

50. Reg to Active: How many play* after registering

51. *Active User Definition: returning after first day and first login, definition varies

52. Active to Pay: How many actives pay = Conversion Rate

53. ARPU: Average Revenue per User (total revenue/active users)

54. ARPPU: Average Revenue per Paying User (total revenue/paying users)

55. CPA/CPL: Cost per Acquisition/Lead (of user)

56. LTV: Lifetime value (total revenue per paying user over his lifetime)

57. PCCU: Peak Concurrent Users

59. Revenue Distribution 50% ofyourrevenuecomesfrom „highrollers“ or „wales“ Total Revenue These Users needspecialattention 90% of Pay Users 10% of Pay Users „VIP“ flagneededthrough all services

61. Printing Money?

63. Sample Business Case 1 Million registered users Reg to Active: Churn rate varies (we assume 60%) 400.000 Users left Rule of Thumb: 5%-15% Users pay 5%: 20.000 paying users 15%: 60.000 paying users ARPPU 15€: 300-900 thousand/month (ARPU: 0.75-1.5€) ARPPU 30€: 600-1.8Mil per month (ARPU: 2.25-4.50€)

65. Can leave anytime (low stickyness)

66. Usually brings 0.5-2 friends with him (6-8 on Facebook)

67. Once he pays, he pays even more (package selection)

68. Payingusersspendhardcurrencywithindays

69. Most users come from countries we are not used to make business in:

70. Low average income

71. Low or evolving internet infrastructure

72. Low system specs

73. Can’t afford PC or consoles

75. UAE countries

76. GUS states

77. India

78. Brasil

79. China

80. Poland

81. Phillipines

83. http://www.gamasutra.com/view/feature/6218/playing_with_fire_ethics_and_game_.php 35 Monetization Strategies Basics Examples Oddities

84. Item Sales: Overview In game economy required Monetization by player motivation: Players Game Progress 7 ‘Sins’ Online Role Behaviour Item Types Retention Strategy (pursue the player to come back) Examples

86. Super Powers

88. Specialization

89. Leveling

90. SocializationAct1: Early Game Time Accelerators Startup helps Power buffs Monitoring the player: Best buy offer for his current needs

91. Monetizetheplayerbythe 7 sins Vanity: Showing off socially/posing Envy: Desire for friends Possession Gluttony: Consume more Lust: Instant gratifications Anger: Wrath on enemies Greed: Virtual Wealth Sloth: Avoidance of work

92. Monetizetheplayerbyplaying style Challenger: Fast Leveling, Achievements, “Raids” Trader: Master Trader, Auction House, Resources Explorer: Maps, Exclusive Access, Easter Eggs Slayer: Better units, faster reactions, comfort battle UI Socializer: Gifting, Decorations, Customizations Note: Players switchroles all the time! Note 2: Ifyourgamedoesn‘tsupport all rolesyousufferrevenue Source: MMO Archetypesby Richard Bartle

93. Item Sale Types Permanents: last forever May have cool downs expensive Consumables: vanish after use one time buff or help Cheap ImmediateMonetization Actions Game hasdirectaccesstomonetizationactionsrightatthemomentwhenneeded Comfort: monthly premium services ok, but limits ARPU Rent: pay per use/day: not a good idea (time pressure on user), only works for long term rents

94. Processof Design Items Every gamemechanicshouldbethoughtabouttomonetize Makelistofplanneditemsandactions (! Note thedifference!) Attachattributesfor all 3 pillarstoeach item oraction Fill in newitemstolessoccupiedcolumnsforthe 3 pillars Makeexperimentsforlight, medium and heavy spenders Adjustpricesand total gemsspend Comparehardcurrencyspendswithyourcurrencyprices Adjust – Test - Readjust Source: MMO Archetypesby Richard Bartle, notethatplayerschangethoseroles all the time!

95. ProcessofResearching Items Play hugelysuccessful f2p games, i.e. Metin 2, Dark Orbit, Grepolis Makeexcellistof all theiritems in shopandsortthemto 3 pillars Makelistof all payedactionsandputthemtheretoo Don‘tforgettheirpricing Repeat for Runes of Magic, Seafight, Farmerama etc. Compare Askyourself WHY each item works Watch item shopsfornewitemsandseasonal/eventitems

97. Daily Offers & Bonus

98. Production limits

100. Gifts & Friends

102. Building upgrades

104. Alliances & Guild Wars

106. Oddities in Monetization Orwhy ist the Wild West out there (wordingby Dave Perry) The followingitems Are All Best Sellers! 45 Odd Examples

107. Item Attributes Metin 2 Wedding Ring Allowsclosersocializationwithoneplayer Offersadvantageslikemore XP, teleportationtopartner etc. Divorcecoststentimesasmuch 46 Wedding Ring

108. Item Attributes Shit Allowstothrowit on otherplayers Everyoneseesyoudirty Cleaningtakes a daysor … … a pay item ;) 47 Shit No picture given ;)

109. Item Attributes Mute button Allowsto mute a playerfromchatfor 24h Everyonesees YOU didit Savesmoderators Andtheusersevenpayforit! 48 Mute

110. OOC Hereiswheremostdevelopersfail by Underestimation 49 Out of Client Modules

111. Landing Pages 50 Various LP’s for various countries, Biz Dev partners or markeitng events Ultra fast Loading speed Advertises what your game is all about In VERY short steps Task: Lead user to register

112. Community Pages 51 Localized CP’s Requires CMS (!!) Imagine posting to 25 languages At the same time Service Portal! Here you communicate to active users No Flash! (loading times) No sound! (office browsers) No Advertising! (but your own) Task: engage the users within your community

113. Forum 52 Use industry standards i.e. vBulletin, nothing else Forum Web Server and DB Server on their own machines Establish a common login for game & forum Forum CM is not as easy as it sounds!

114. Community Management 53 Is NOT support! Lead CM must sit in your offices Honest, direct, immediate communication to your users is KEY Even if its bad news Train your CM he is worth thousands of marketing dollars!

115. Payment Systems 54 Support as many as possible Research what big (European) companies support Do not underestimate this point Secure transfers Rollbacks Accounting Fraud P.s.: Bigpoint has 160+ payment systems online

116. Support 55 Ticket System Rights system Intl. support Support actions Reimburse items Check player game status Check player payment status Check player support history Includes bans, mutes, etc. Support actions needs to logged Knowledge base key Other problems needs to be escalated

117. VIP Support 56 Ticket System auto priorizes VIP’s Turn around time less than 12 hours VIP’s receive special treatment See Pokersites, they do this since years Btw, Wales, ask Zynga …

118. Maintenance & Monitoring 57 Prevent downtime Every hour DT costs € Altert system to your IT staff 24/7 (pager, sms etc.) Do not think your provider can do this Most problems are software based Most problems occur when you’re out of office (Murphies law)

119. Maintenance & Update Deployment 58 Fixed Maintenance day Wednesdays (or Thursdays) Mo-Tue is a bad idea, Fr is even worse Do not underestimate time needed for deployment Deployment strategy is KEY for stable versions Without Perforce you WONT be able to do this

120. Life Team – Dev Team 59 Life operations draws time You won’t have time for other stuff i.e. further development So you need 2 teams Shared resources are ok Sizes vary over time as game matures Do not underestimate requirements & demands from Marketing, BizDev, Support, Community Management, Users, IT

121. Business Development (BizDev) 60 Sells your game to media But you operate it On your servers White labeling needed BizDev can generate millions of users Deals vary from CPA/CPL to lifetime share BizDev partners do not cost money initially! They are only payed on success

122. E-Marketing 61 Your key to acquire users Traditional marketing won’t work Banners are out Forget magazines You can acquire users without leaving your offices – world wide SEM, SEO is key

123. Player retentionstrategy: Updates & Expansions Plan for bi-weeklyupdates Major expansionsevery 1-2 months usingslicedeconomics* High update frequencymeans 2 Teams: Life & expansionteamneeded High Performance Version Control (Perforce) Users needtoseethe „service“ Mini Expansionsweekly (items, events) Ever expanding game means users will stay Be careful however with major gameplay changes As users always will complain

124. Hacks & Exploitation Players will find potential exploits, all the time They exploit as its „just“ a game Guaranteed - at 70k active users It will harm your business So you need to protect yourself Process needed Alert System needed

125. Q & A Contact me: on Facebook or Twitter (Teut) or LinkedIn or Xing or ... simply teut986@gmail.com