Roger Dickey from Zynga on how to monetize games and apps.

Posted by Friedrick on January 22, 2013 in Great Articles, Mobile Apps

Awesome video about what Zynga has learned about monetizing app games on facebook or mobile platforms.

Watch the video here:

Engagement is the heart of your game
Roger Dickey started off his presentation outlining the three R’s of social games:
Reach, Retention, and Revenue.

  • Reach is how many people that your game touches, both through gameplay and also impressions in viral channels such as Facebook and Twitter.
  • Retention is how many people keep playing your game over time.
  • Revenue is money, of course.

Roger argues that if these were in a graph, engagement would be in the center. He compares engagement to the heart of your game because “it is effectively pumping blood to every other part of your game”. Engaged users will help you reach more people by sharing the game with your friend, they will retain longer, and they will be more willing to pay. At a high level, engagement is the key metric you should be watching before you worry about ARPU or ARPDAU.

“Fun Pain”
One of Roger’s most interesting points was that “fun pain” was the key to social games’ success. Think about how a player needed to click each square to plant or harvest their crops in Farmville. This is a perfect example of “fun pain”, something that is simultaneously entertaining and a little bit annoying. This type of game mechanic gave Zynga the opportunity to upsell the player on pain-reducing items, such as a tractor that clicked four fields at once. These items were extremely popular among players, even though they only existed because it was painful to play the game in the first place!

Grind vs. Spam vs. Pay
This social game monetization tactic is frequently employed with special items that are built via a combination of parts. Typically, you can earn the parts for the special item in three ways:

  1. Grind for them over a long period of time [Engagement]
  2. Spam your friends to have the send you the pieces you need [Virality]
  3. Pay for the parts that you are missing [Monetization]

Players almost always start with Grind or Spam to kick off their pursuit of the item. However, as the player grows weary of grinding and doesn’t see the response he was hoping for from his friends, he is left with a partially completed item and no use for the parts. Now, the user is willing to pay for the item to be completed.

Estimating your game’s monetization
A simple, rough formula to estimate how much a casual social game could earn via industry standard game mechanics can be broken out as follows:

  • An energy mechanic was worth $0.03 ARPU
  • A decorative factor was worth $0.02 ARPU
  • Competitive gameplay was worth $0.05 ARPU

This is a pretty high level estimation that begs the question…

What do people pay for?
Roger found that people pay for the following in social games:

Identity expression
Players will pay for anything that is socially surfaced in the game because you’re presenting your farm, city, or avatar to your friends.

This drives demand for exclusive items: people will pay more when there is only a limited number of an item available, or to get things before other players.

Items that make the game more convenient and tip the “fun pain” scale more towards fun are worth a lot to a wide variety of players.

Exclusive features
Having certain features or aspects of gameplay only become available for a fee can be an effective monetization model, as we see often with free-to-play games and freemium software.

Hardcore players, especially males, will pay to get a competitive advantage against their opponents.

Social value
Your players want their friends to play and by helping them, they increase their friend’s chance of sticking with the game. Once power becomes social, it becomes much more valuable and people pay for it.

Roger found that random chance was a huge incentive for people to buy. We wrote a blog post that highlights the power of the Mystery Box that covers this in more detail.

Stat Progress
Players will pay for progress or temporary power in a game, especially a competitive one. Many game developers love this game mechanic because it monetizes so consistently.

Surprisingly, people will pay very well to advance the story. They feel a sense of progress when completing quests and will pay to overcome roadblocks in that progression.

Measure everything
Roger was adamant about launching with game analytics and metrics already in place. Furthermore, he pushed for game studios to record every single click or action that players did in the game. This requires reams of data but is always worth it when you’re looking to optimize your game down the road. Much of the insights that Roger gained about player behavior was from data that he didn’t even know he needed when he built his analytics systems.

Breaking your users into cohorts is an incredibly important tactic for monetizing your game. Roger’s recommended cohorts goes far beyond the typical hardcore vs. casual groupings. He recommended using the following cohorts:

  • Play Frequency – how often do people play
  • Socialness – how viral or willing to share are they
  • Spending profile – how often do they pay for an in-game item
  • Lifetime – how long have they been playing, how long will they play

Mine the theme space
When working at Zynga as the GM for Fishville, Roger Dickey and his team spent a good amount of time doing what he calls “mining the theme space”. They read books on fish and put up fish posters around the office to make sure that they were immersed in the world they were creating. That way, when it came time for game design meetings, the team was usually full of new ideas for new gameplay and content.

Master plan for monetization
Lastly, Roger emphasized the need for a master plan for game monetization. This means including monetization strategy from the very onset of the game design’s inception. To this end, he offered up a number of tips and strategies from his game monetization toolkit:

Negative reinforcement
Your obligation to your creations is a real driver of engagement. You don’t want your fish to die and float to the top of your tank because they look ugly and show your neglect for all your friends to see.

It is worth noting that players care much less about payer vs. non-payer fairness than a game designer would think.

When working to launch a competing game in Japan, Roger studied Kaido Royale extensively. In this Mafia Wars-style game, you needed to not only buy a gun to use but also the bullets to fire the gun, and this consumable use system helped the game monetize extremely well.

“If you give somebody a huge bucket of candy, they’re gonna love the candy for a week, and then never want any again. If you give them 10 pieces a day, they’ll keep coming back for years”.

Premium decorations
“Farmville was at one point mostly a canvas for people to decorate on.”

Territory expansion
In any game where the long term goal is to build, territory expansion is a big part of the game.

Seasonal content
A necessary evil that helps the game retain users by keeping it interesting and dynamic.

Content grab bags
When buying multiple items at once, players simultaneously feel like they’re getting a deal and that they’re buying something more substantial than a virtual gun.

This is a decent way to increase revenues, just don’t let sponsored content “go all Myspace and take over the whole game.”

Free currency
This doesn’t monetize well, but low level players will purchase free currency to advance faster or complete quests.

Collection completion
This means mechanics like ‘do this 10 times and master it’ in Mafia Wars. “It’s kind of funny sitting there as a game designer and being like ‘our game is already kind of mundane… what if we make everyone do things 10 times?’ Well, it can work.”

First time buyer incentive
To get people to convert from free-to-paid, first time buyer incentive gives players that haven’t purchased a ‘deal’ that gets them over that crucial first purchase hurdle.

The ability to wager on the outcome of your game could be a game changer. Betable is the first platform that makes it possible for game developers to implement this in their games.


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