Scott Howard
These are the personal musings of Scott Howard, Producer / Designer / Gamer

Over the last 15 years in the games industry I have worked on console, mobile, social and free to play games enjoying the nuance and challenges each of these brings. 
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Entries in Monetization (1)

Friday
Jun172016

Ca$h Royal - “Show me the Money” or Monetizing on value.

Since the simple pleasures of Adventure on the Atari 2600 days, I have been a life long gamer. Since the uncharted frontier of the first out of the box, internet connected console - Sega Dreamcast, I have been a 17+ year, (and counting) veteran of game development. I have seen various business models, distribution models, technologies, etc come and go, like the ebb and flow of ocean currents. I have spent most of my career working on, “the" thing, before if became, “the” thing. Connected consoles with 56k modems, mobile games years before an iPhone ever shipped, F2P when it was called, “Social Games”, etc. Some times it has felt like paddling for hours only to miss the big wave before it had time to develop. After awhile though, you see certain patterns emerge that create some basic truths about the video games space and real market places in general. 

 

After making the transition early on into free to play (F2P), I found it to be hugely liberating and exciting. See previous blog post, “How I Learned to Stop Worrying and Love Free to Play”. Here I wrote about what I saw as the basic order of operations of game development of the two models.

 

Order of operations for F2P
  • Step 1 - Figure out how to make a fun game that engages people.
  • Step 2 - Figure out how to get a reasonable amount of the player base to spend enough to sustain the business.
Order of operations for P2P
  • Step 1 - Figure out how you are going to get people's money.
  • Step 2 - Figure out how to give them entertainment value greater than or equal to the money they just spent.
Five years later and I still believe in that same core concept. Free to play is not evil, the devil or the beginning of the apocalypse. It has pros and cons which we have seen play out in myriad ways. The problem is that so much of the F2P space, (and even in some ways the premium space), has pretty much become Las Vegas, minus geographical limitation and regulation. Blackjack is a game. Craps is a game. Poker is a game. Slots are games, but Vegas has no desire to make those games any better, they simply want to optimize their KPI’s. In other words, get people to monetize more, engage more, retain more and incentivize people to tell their friends about all the great fun they had losing money in Vegas (i.e. Virality). 

 

I am not saying there is anything wrong with Vegas, go ahead and get your gamble on, but lets call it what it is, gambling. The two main differences are, one, that in gambling you know, (or should know), that you have a greater than 50% chance of losing your money and two, you actually have some chance at winning real money, (true value), vs winning virtual goods that have only perceived value.

 

This is why when I see and play games like League of Legends (LoL), Dota 2, Clash Royal, Hearthstone, Team Fortress and a number of others, I actually enjoy them vs feel angry at them. They are monetizing on value vs monetizing to remove discomfort. When you buy a Champion in LoL or Dota 2, you are buying something of obvious value, the significant time and effort it took a huge number of artisans (concept artist, modelers, animators, VFX artist, writers, designers, engineers, sound designers, etc). This is not lost not the player when they open up their wallets. When you buy a new skin or champion it is actually a pleasurable experience like opening a brand new lego set or other recently purchased toy or coveted item. This also holds true for card packs in Hearthstone, or chests in Clash Royal (though, some subtle differences exist there which I will get into).

 

One of the things that I believe makes Clash Royal so successful, is that it takes an existing monetization mechanic, the Gatcha box and switches it from effectively a slot machine, to a more straight forward monetization for goods. In so many games, that use the Gatcha mechanic, such as Eternity Warriors, Summoner Wars, Puzzles and Dragons, etc, the player must wade through mountains of crap to find the rare, rare item of any value. In effect they are playing a slot machine that clearly, "pays out" way less than 50% of the time. Most of these games have secondary systems in them where you effectively, “trash” your crappy drops into very small incremental progress towards useful gear or items. The exchange rate is so terrible, that it is only barely worth more than not doing it at all.

 

To me this is the true innovation of Clash Royal, that when a player spends a small amount of hard currency to open a chest, they actually feel good that they are getting something of value, instead of removing discomfort (chest timers). Sure you can argue that they are using the standard timers so many other games use to monetize, but what is in the chest is pretty much always valuable, the cost is relatively low and the timers are effectively fixed and don’t scale up over life time play. Additionally the time cost is proportional to the reward and not in a BS way, such that a higher tier chest really does have more and better items in it.

 

I am not saying Clash Royal is perfect, clearly they are still tuning a bunch of the game, but they have managed to find a sweet spot in terms of taking a tried and true, yet some what, “dirty" monetization mechanic and tweak it towards returning real value to the player for their purchase. It will be interesting to see what happens in the coming months as the game scales and certain units become useless, effectively power deflation. In time we will see if they are back at square one, with much of the items in chest being perceived as useless or functionally are useless. Only time will tell. Of course in that time, I have me some games I have to get back to playing ...

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