Live Service — Condensed Version

In case you have missed it I have spent the last several weeks talking about the live service of free-to-play games. This text is a condensed version of the previous five longer stories. It was created entirely using ChatGPT. I still recommend reading the longer version, but if you don’t have the time this might give you a quick start. Enjoy!

Intro

The traditional premium model of game business has been replaced by the free-to-play (F2P) and game as a service (GaaS) business models. F2P allows players to try the game without any initial investment, which is reflected in the high install bases of successful F2P games. GaaS doesn’t put a cap on the player’s spending and enables the game developers to provide value to their players.

When launching and running a game as a service, the engagement of the players should be the first priority. Retention should be the second priority. This means keeping the players engaged as long as possible to give them time to decide to spend money within the game. Monetization is the ultimate priority, but it is important to remember that providing value to the players is crucial for the success of the game.

Player retention and monetization are the domain of the live service, which can be seen as mini-games bolted on top of the original gameplay experience. The interplay between retention and monetization is important and can vary depending on the game.

The observations in the following text are not a ready-made template but can be used as a starting point for game developers to think about their live service.

Two Kinds of Monetization

When talking about the monetization of particular features, I like to make a distinction between two types of monetization.

Direct monetization refers to players spending money within a game to unlock a specific feature, resource or box. This type of monetization is straightforward and usually involves real money. A premium pass is an example of direct monetization.

On the other hand, indirect monetization motivates players to spend money within the game but does not offer a direct way to purchase anything. Instead, it encourages players to spend money on items and resources to help them unlock rewards in the game. This type of monetization can be just as powerful as direct monetization and can provide a more fair and rewarding experience for players. Both strategies have a place in a well-managed live service.

Live Service

I like to use a particular metaphor when discussing the live service strategy of any game. A successful live service strategy for a game should be built like a layered cake, where each layer is built on top of existing layers and geared towards player retention and monetization.

It’s not necessary to have all the layers ready and implemented at the initial soft launch period, as it can be counterproductive and requires time and resources.

Instead, what you shout strive towards by the time of the soft launch are the following three things:

1. A solid platform, with engaging core gameplay that can support the ever-growing live service metagame.
2. Minimal set of metagame features that support running a live service for an initial couple of months. My yardstick is around one to three months, depending on the type of game, but these numbers can be widely different.
3. A clearly defined road map of metagame features that you would like to have to operate at the end of the first year of the live service. You should also be willing and ready to alter this roadmap and reprioritize the features within it according to the data that you will be gathering as you launch your game.

There are recent cases that can serve as an illustration of my points. Among Us, an indie hit from last year, had a minimal set of features but didn’t have a plan prepared for running a live service, leading to dwindling numbers. Zynga’s FarmVille 3 launched with a full set of features after a prolonged soft launch time but struggled in front of the global audience. In contrast, the gradual development of Township by Playrix has led to a steady and relentless rise of the live service. A game should be profitable with a minimal set of features and if a concept requires throwing everything in, it’s a sign of trouble ahead.

Foundations

Monetization is about creating value for players and presenting this value to the players. It should be an integral part of the gameplay experience and not something that can be slapped onto a game.

In order to provide value, developers need to understand why players spend money: to achieve more, establish identity, or maintain relationships. Gameplay items belong to the first category, cosmetics to the second, and social spending features to the third.

In establishing value, developers need to establish exchange ratios between real money, virtual goods, and player time. It is helpful to use a single virtual currency as a proxy for all other items.

However, virtual currencies are prone to inflation, and developers should be aware of changes in currency value over time. Balancing sources and sinks of currencies and items is crucial, especially for hard currency. Being too greedy or too generous with hard currency can ruin monetization efforts. Developers should focus on making features fun and engaging intrinsically, rather than relying on extrinsic rewards to attract players.

Layers

In what follows, we will examine the structure of the live service monetization layer by layer. Layers 1, 2 consist of evergreen purchases, i.e. stuff that your players are always able to purchase within your game. Strictly speaking, these are not a part of the live service. However, these two layers are the basis on which the other layers are built.

Layers 3 to 5 contain the monetization mechanisms that are part of the live service in a stricter sense.

The last layer, layer 6, consists of advanced monetization features.

Layer 1 — Basic Monetization

The bottom layer of the monetization cake consists of the basic types of monetization features in free-to-play games. These are in-app purchases (IAPs) that include packs of hard and soft currency.

Some games employ only hard currency, while others use a dual currency system with hard currency representing an abstraction between real-world money and the game economy.

The pricing of the packs of currency is crucial, and the price of the smallest gem pack should never go below the impulse purchase threshold. Setting a high anchor point helps establish a frame of reference for virtual goods that players might not have in the real world. High-value packs are purchased by big spenders who understand the value they are getting and are likely to make repeated purchases. One of the most common complaints from these types of players is that they are forced to buy small packs multiple times instead of one large pack. It is essential to provide value for the customers when designing these systems.

Layer 2 — Convenience Purchases

Layer 1 of in-game purchases includes universal packs of hard and soft currency (gems and gold coins) useful in any free-to-play game. Layer 2 purchases are context-specific, such as buying missing resources, speeding up timers, and unlocking chests. Various types of gacha boxes can also constitute a major sink of gems.

The trick of creating a successful indirect monetization feature is to make clever use of this particular monetization lawyer. Successful indirect monetization features should motivate players to make convenience purchases by offering puzzles or contests with a chance to strategically use money and resources to gain an edge over other players. The feature must involve significant decision-making and a chance to make a mistake to avoid a pay-to-win feel.

Layer 3 — Limited time events

Limited-time events are crucial for player retention in free-to-play games. They offer a departure from routine gameplay and ideally, a new gameplay context or a variation of rules.

These events also offer time-limited rewards that players can earn by participating in event-related activities and collecting specific event points. Offering multiple rewards with varying point requirements ensures players with different engagement levels are rewarded adequately. Rewards should be a mix of unique new content, old content, and evergreen items and resources to appeal to various player types. These events should be paired with targeted offers for monetization purposes.

The duration and cadence of limited-time events should reflect the pacing of core gameplay and the ability of the live team to produce content. Tying events to real-life holidays helps keep the game relevant and meets player expectations. The goal should be to have at least one live event per month, if not per week.

Layer 4 — Periodic Events

The live service layer includes regularly occurring events, some of which can be automated using an established template. Examples of such events are daily or weekly competitions like SimCity BuildIt’s Contest of Mayors and Hay Day’s Derby. Both of these features rely on evergreen purchases and periodic offers for monetization.

Premium pass mechanics are also popular example but often require handcrafting for new content. The regularity of these events provides players with a reason to revisit the core gameplay each week and stabilize retention and monetization. Layer 3 should be the backbone of a live service, while layer 2 provides the muscle.

Layer 5 — Offers

In free-to-play games, the most effective monetization features are found in the last layer of the live service metagame. These direct monetization features come in the form of various types of offers, including targeted offers, limited-time offers, and periodic offers. Each of these offers has its distinct purpose and should have a place in a monetization strategy.

Targeted offers focus on a specific subset of players, such as those who have reached a particular level or unlocked a new segment of the game. Starter packs are a special type of targeted offer offered early in the game to give new players a boost and establish a value proposition.

Limited-time offers are tied to time-limited events and offer players a chance to wisely invest money to obtain their goals.

Periodic offers are shown to players based on a fixed predetermined schedule tied to the real-world calendar and reinforce repeated purchase behavior. However, the regularity of periodic offers can make players rely on them and avoid buying at full price.

To maximize the effectiveness of these offers, it is crucial to consider factors such as offer targets, player spending profiles, and the game’s basic structure. By understanding the context of each offer and its place in a monetization strategy, game developers can use these features to deliver a punch to the game’s live service.

Layer 6 — Advanced Monetization Features

The last layer of a live service game typically contains advanced monetization features designed to directly monetize without relying on new content. These features, such as the Piggy Bank and Paid Progression Plan, originated in the Chinese market and have become popular in Western games as well.

The Piggy Bank adds virtual currency to a “bank” whenever a player achieves something, which can be opened with an in-app purchase sold at a discount.

Paid Progression Plan works in the opposite way, where the player buys virtual currency that is delivered in installments after reaching certain milestones. This feature reinforces player retention and is sold at a discount.

The Tower of Fortune is a feature popularized by Angry Birds 2, where players climb a tower and are presented with hidden cards at each stop of an elevator. Most cards contain virtual goods, while one has a bomb. Rewards become more lucrative as the player climbs higher, but the risk of drawing a bomb also increases. Players who trigger a bomb can pay a certain amount of hard currency to continue playing. The psychological angle is to reinforce player retention and encourage additional monetization.

These features should be built only after all other layers have been up and running, as the game should be able to run profitably without them.

Conclusions

The traditional premium model of game business has been replaced by the free-to-play (F2P) and game a as service (GaaS) business models. When launching and running a game as a service, the engagement of the players should be the first priority. Retention should be the second priority. Player retention and monetization are the domain of the live service, which can be seen as mini-games bolted on top of the original gameplay experience. The interplay between retention and monetization is important and can vary depending on the game.

There are two kinds of monetization. Direct monetization refers to players spending money within a game to unlock a specific feature, resource or box. Indirect monetization motivates players to spend money within the game but does not offer a direct way to purchase anything. Instead, it encourages players to spend money on items and resources to help them unlock rewards in the game.

A successful live service strategy for a game should be built like a layered cake, where each layer is built on top of existing layers and geared towards player retention and monetization.

Game designers need to understand why players spend money: to achieve more, establish identity, or maintain relationships. In order to construct the game economy, game designers need to establish exchange ratios between real money, virtual goods, and player time.

Layers of monetization:

• Layer 1 — Basic Monetization: The bottom layer of the monetization cake consists of the basic types of monetization features in free-to-play games. These are in-app purchases (IAPs) that include packs of hard and soft currency.
• Layer 2 — Evergreen Purchases: This layer consists of items that players can always purchase within a game.
• Layers 3 to 5: These contain the monetization mechanisms that are part of the live service in the stricter sense.
• Layer 6 — Advanced Monetization Features: The last layer consists of advanced monetization features.