Monday, September 13, 2010

Social Game Design: Monetization part 1

As I stated last time: social game creation and distribution companies often discuss three important qualities of a game on a social network. Virality, Monetization, and Retention. Today's topic is monetization.

What? You say that monetization isn't a game design topic? That's for marketing, sales, and business departments to handle? Look, I know you're in the design business for the pure love of making the best possible games, but you've gotta eat too, right? Also, I believe monetization works ten times better if it is integrated into the design of the game by the designer.

This topic is so huge I could probably write a book about it, so I must choose to narrow my focus for this first post about it. Today will be more of an overview and starting point for the topic that I will come back to from time to time.

Most games are monetized in one of these ways:
  • Single (one-time) purchase
  • Advergames
  • Episodic content and paid unlocks
  • Subscription
  • Virtual Goods
Social network games do not mix well with all of these methods. Single-purchase, for example, is a terrible way to make money in social games. All the other games are free, so you can't ask for money up front, you'll just get ignored. You could use the established download game model of free for a while (commonly 60 minutes for download games) and then charge the one-time fee, but it's still a lousy fit for the environment. In social games you need players to keep playing and keep recruiting their friends.

While Advergames can work on social networks, they are pretty inefficient ways to make money for the game builders. For the company that desires the advertising it might be another story. As a game designer, I find this is just a sad way to leave a lot of money on the table. If you want to combine it with other methods (like virtual goods) that would be another story!

Pure subscription models also don't work well on social networks for a lot of the same reasons single-purchase doesn't work. The other games are all free and the smaller, more casual games you're probably making for social networks don't appear to be worth the price of a subscription. (Yes, I know you might be making more money with a virtual goods model than a subscription - but we're talking about how it feels to players, not about reality.)

Episodic content and paid unlocks are a solid way for a social game to make money. The hard part is deciding what parts of the game will be locked and which parts will not. You need just enough to get players hooked, but still have enough meaty options for them to unlock. The more content you can add as time goes on the better. You can start with little or perhaps nothing for pay and so long as you can keep to a solid schedule of adding new content for pay your game may thrive. Episodic content is half of the "freemium" model.

Virtual goods are by far my favorite way to monetize a social game. The game is free, but must include items or objects that can be collected, used, or (often) worn by player characters. Almost all (if not all) of the best known social games sell virtual goods to their players. This is the other half of the freemium model.

Episodic content and virtual goods both must be designed into the game to perform at their best. It's hard to add them later. How to best use them? That's a topic for another day.

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