I have posted an article already about common struggles of F2P PVP games which found quite a resonance and led to a number of direct conversations. Very frequently, the topic of monetizing came up so let me share my experience with a little preaching about the 7 sins of monetization:
1. LUST
Whoever thinks of Lust having a scantily dressed female offering the shiniest In-App Purchases would be the center piece of this sin will be disappointed; this belongs to the fine field of marketing (and a later article, promised) more than to the reality of the shopping experience and monetization design in F2P games.
As for this time, I would like to point to something more sinister, common, evil: The lust of game designers and producers in creating more and more IAP with more detailed pricing steps that sell practically every single piece that is monetizable to the furthest extent! 6 packs of hard currency with the middle one labeled as most popular (while it really isn't) and the highest being the best value, 4 packs of food resources which conveniently are marked in 25% steps forking over newer players, this special weapon of the month that is double as powerful than anything you can get in the game and really needs to go in 2 hours 30 minutes because then it's probably permanently erased from the database and surely not available ever again.
This lust is the gateway drug to all the following sins, and it has only one root cause: You don't have a clue what the player wants to buy, why he wants to buy it and how to run a stable business without fearing that you might miss out on the golden dollar. The antidote comes in 2 flavors that certainly can be combined: Fundamentals of Sales Psychology and solid understanding of UI/UX design. I will deepdive on both in later articles but let's look at the other 6 sins first!
2. GLUTTONY
Whale-hunting was practically the name of the game when Machine Zone ruled the top charts, developing more and more sophisticated analytics to find those players with a seemingly insatiable need to spend money for rising to the top of the game competition.
Let's face today's reality: Whale-hunting is not sustainable as a business in the long run as analytics systems become more widespread; Google and Facebook with their shifting to machine-learned customer identification is limiting targeting options, and I am taking bets already -- and predict -- that Apple will expand its User Privacy in favor of better monetizing themselves with Search Ads, leading to even more LAT (Limited Ad Tracking) up to complete shutdown of any third-party tracking as they will roll out soon for apps in the Kids category.
So don't try to keep shoving paid content into payers' faces, but go and try to find offers that a broader and engaged player base can appreciate.
3. GREED
Hands up, who was never in the situation when the revenue target was not met, and the urge for a quick sale was high? Don't do that, ever, seriously. I cannot stress that even enough - sales fatigue is a thing. Not only is it annoying for the majority of your player base -- even top games have a pay rate of below 10% -- you also devalue your revenue generators.
Anecdotally, my wife who is working as a Brand Strategist, recently shared an analysis that 50% of customers in Russia don't buy goods unless them being on sale.
Use positive reinforcement to your advantage. If you really need to sell something for your revenue goals, provide either an up-sell possibility through mass purchase (10x at the price of 9 or similar), top up the original offer with some useful item(s), or - for Gacha-style monetization - increase the random chances after a number of purchases up to a guaranteed chance, commonly referred to as Step-Up Gacha. But once again, don't overdo it as the risk of purchase restraint can damage your long term revenue.
4. SLOTH
The sloth, some might even call it laziness, is by far the most frequent sin I have encountered in my 15-year career. And I certainly get why: A clear production pipeline with definite costs is easier to manage than experiments and potential production for the virtual paper bin, and building a sophisticated payment analytics and prediction system is freaking hard and design experts on this are rare. However: Not everyone has to study psychology though for understanding sales techniques, the resources are widely available and just need a little abstraction from the experiences of selling in the analogue world to adapt it for the digital one.
If resources are rare and time is critical, stick to one golden rule: Value Proposition. Think about how a player can be more efficient, saving time while retaining the fun, having a clear benefit in the not-so-distant future all while not taking away what makes your game fun. If, for example, you have a game where harvesting goods is a main activity, it would be silly to try and sell those goods directly but if you sold a managing NPC that harvests faster or can store more harvest products while the player is not ingame, there's a clearly communicated benefit that on top of it has recognition value as a virtual person rather than just being a buff modifier, technically.
5. WRATH
Ever since the release of Clash Royale, its most obvious monetization feature -- the chest rewards that require hard currency to open -- has become almost a staple among many developers, both indie and commercial. I classify this as a very detrimental concept that had its place for trying but even Supercell moved on from this system - and players with them, as gold and the daily card offers are the major source of revenue, not the chests. Forcing players to reap rewards from what is actually a reward by playing, and on top of this randomizing the content, leads to what psychologists would call Buyer's Remorse, leaving your best-intended players who reward your developments in anger and wrath.
Focus on what you actually want to sell and work with sales attractiveness factors such as scarcity, value proposition and convenience, and leave the randomizing as a free part of the game that can be supplemented by personalized IAP offers to reduce anger and the threat of a churned player.
6. ENVY
Sometimes in talks with developers comes up the topic of hyper-casuals but also other games that seemingly have a lower quality standard compared to the own game, and how unfair it would be that they are financially more successful, have more exposure or even just more prestige. This way of envious looking at competition is grossly misplaced and really should be looked at more level-headed: Do they just attract a different audience which leads to better conversions? Are their methods of monetization integrated better into the game design? Do they use more sophisticated sales techniques, or have regional adaptation that address points of pricing better?
With accepting that every team has different strengths and seeking to learn from each example, your game business will grow automatically. Because you know the pain first-hand and you don't resort to lamenting things you cannot change but tackle them head on for the good of your product. And this ties in strongly to the last sin:
7. PRIDE
Especially prevalent in new Startups with founders being gamers first and having less of a business attitude, there is a certain tendency to self-perceived morality in monetization. Frequent assurances to the community that this game is definitely not Pay-2-Win, only sells skins and other vanity items, and be the most player-friendly company ever. You definitely deserve respect for being above predatory practices, however, you and your co-workers or employees equally deserve being paid for your work!
I touched on this topic in last week's article but it needs repeating: Vanity will bring you 0.5% pay rate tops, with every item being only sold once. And not only this creates a massive strain on your production pipeline, it will hurt your retention: Where for decent mobile games the D1 retention is somewhere north of 45%, first day payer cohorts typically are above 70%! With Google Play ranking algorithm taking retention and revenue as factors (Apple's doesn't, yet), a too lenient approach on monetization will leave you chasing for better conversion and more install velocity to make up for the loss in ranking factors compared to your competition.