Production 101 – #5 Free to Play Game Performance Metrics – Part 1
Why performance metrics matter to game producers.
Explore the Free to Play model in gaming, highlighting its evolution, accessibility, and strategies for monetisation through in-game purchases and advertising.
Delve into the impact of Free to Play games on the market, exemplified by successes like "Fortnite" and "Clash of Clans", and discuss the industry trends such as live services and cross-platform play.
Gain insights into core performance metrics in Free to Play gaming, including Daily Active Users (DAU), retention rates, and Average Revenue Per User (ARPU), essential for strategising and enhancing player engagement and revenue.
Welcome to Production 101. Here is where we dive deep into game production.
In the first instalment of our multi-part series, we will cover the basics of the Free to Play business model and a few essential metrics. The second part will focus on advanced performance metrics and strategies for player acquisition. In the third part, we’ll discuss the psychology and ethical considerations behind the model.
To start our exploration, we delve into the free-to-play model, tracing its evolution from a niche idea to a mainstream juggernaut.
Introduction to Free to Play games
The term “Free to Play” (F2P) encompasses more than just a pricing strategy—it represents a revolution in how games are consumed and enjoyed. F2P games are video games that users can download and start playing without any initial payment, making them exceptionally accessible to a broad audience. This model contrasts sharply with traditional games, which typically require an upfront purchase. The real genius of F2P games lies in their ability to engage players and monetise that engagement through cleverly integrated in-game transactions and advertising.
The free-to-play model for online games started in the late 1990s with games like MapleStory. It became especially popular in South Korea and Russia. In this model, the base game is free, but players can buy extra features or items for real money. This model has been successful for many MMOs (massively multiplayer online games) that switched from subscription-based models. The free-to-play model is also popular in mobile games and has become the top revenue generator for mobile apps. While most players don’t spend money, a small percentage who spend a lot can make the game profitable. This model is especially successful in MOBA (multiplayer online battle arena) games like League of Legends.
Gaming for everyone
One of the most compelling aspects of F2P games is their accessibility. By removing the cost barrier, these games open the gaming world to anyone with a smartphone, tablet, or computer. This inclusivity has led to a dramatic expansion in the gaming community, bringing in players from all demographics and backgrounds who might not have participated otherwise. Whether through mobile app stores or social media platforms, accessing these games is as simple as a click, ensuring anyone interested can dive right in without financial hesitation.
Beyond the initial download
While the games themselves are free, the journey within them often offers various avenues for spending. F2P games are masterfully designed to create value for the player through in-game purchases such as virtual goods, character upgrades, cosmetic items, or even temporary boosts. These transactions are strategically offered to enhance the gaming experience rather than detract from it. For example, while a player can enjoy the game without spending a penny, investing in a unique character skin or a powerful new weapon can enrich the experience and offer a personal touch.
Moreover, advertising is pivotal in revenue generation in many F2P games. Ads are typically integrated in a way that meshes with the game’s design—through rewarded video ads that offer in-game bonuses in exchange for watching or interstitial ads that appear at natural transition points within the game. This method ensures that the gameplay experience remains uninterrupted while providing developers with revenue streams.
Engagement and retention
F2P games excel in building an engaging experience that keeps players coming back. Through carefully crafted progression systems, daily rewards, and regular updates with new content, these games create a compelling loop of activities that players feel motivated to return to. This sustained engagement is critical for retention and the potential monetisation of each player over the lifetime of their interaction with the game.
F2P games have democratised gaming, breaking down barriers and creating a dynamic ecosystem where value is offered and continuously enhanced. As these games evolve, they continue innovating how they engage players and generate revenue, making them fascinating subjects for players and industry analysts.
F2P games have not just participated in the gaming market; they have come to dominate it. This model has proven so successful that it has reshaped industry strategies from development to marketing. Major success stories like “Fortnite” and “Clash of Clans” are testaments to the viability and potential of the F2P model.
From engaging individual players to impacting the global market, let’s see how these psychological insights drive success on a larger scale.
Market impact and success
F2P games have fundamentally changed how games are monetised, leading to massive financial success for developers and publishers. These games often generate revenue through in-game purchases and advertising, creating a continuous revenue stream that can far exceed what might be possible from a single upfront purchase.
Fortnite, developed by Epic Games, is a prime example of F2P success. It’s more than just a game; it’s a cultural phenomenon. Despite being free to download, “Fortnite” has generated billions in revenue. It harnesses a combination of compelling, competitive gameplay and a continuous stream of new content, including skins, emotes, and season passes, which keep players engaged and spending.
Another standout, Clash of Clans by Supercell, has been a top performer in mobile gaming since its release in 2012. It utilises a strategic gameplay loop where players build and defend villages while attacking others, encouraging them to make in-game purchases to speed up their progress and enhance their capabilities. This model has retained a large player base and maintained its position at the top of the revenue charts for years.
Industry trends
The success of these games has led to significant industry trends, including:
Live Services – Many developers now focus on creating games as live services. This approach involves regular updates, new features, and events to keep the game fresh and engaging over an extended period, which is integral to the F2P model.
Cross-Platform Play – F2P games often feature cross-platform capabilities, as seen with “Fortnite.” This expands the game’s accessibility, allowing more players to interact regardless of the device, further increasing its appeal and user base.
Community and Social Features – F2P games frequently incorporate strong community and social features, making them stickier and more engaging. Features like clan systems, leaderboards, and in-game chat facilitate community-building that keeps players returning.
The dominance of F2P games in the gaming industry is marked by their innovative monetisation strategies and ability to maintain large, active player bases over time. “Fortnite” and “Clash of Clans” are just two examples that highlight the potential of the F2P model to succeed financially and create vibrant, enduring gaming communities. As the industry continues to evolve, the influence of F2P games is likely to grow, guiding the future of game development and player engagement strategies.
Next, let’s decode the business models these successful games leverage, paving the way for profitability and player satisfaction.
Overview of business models in Free-to-Play games
In the F2P games landscape, several revenue strategies have proven effective in turning free user experiences into substantial income streams for developers. These strategies maximise player engagement and monetisation without compromising the gameplay experience. Here’s an overview of the critical revenue strategies utilised in F2P games:
In-app purchases (IAPs)
In-app purchases are the backbone of most F2P revenue models. These can include a variety of items:
Virtual Goods – Players can buy virtual goods such as new characters, skins, or decorative items that enhance the game’s aesthetic.
Power-ups and Boosts – Temporary items, such as speed boosts, additional strength, or other performance enhancers, can help players advance faster within the game.
Resources and Currency – Purchasable resources that are otherwise slow to accumulate in the game, such as coins, gems, or specific crafting materials necessary for progression.
While not necessary to play or succeed in the game, these purchases offer players the option to enhance their experience or speed up their progress.
Another pillar of the F2P revenue strategy is advertising, seamlessly woven into the gameplay to enhance and monetise the experience.
Advertising
Advertising is another significant revenue stream for F2P games, implemented in various forms:
Interstitial Ads – Full-screen ads are displayed at natural pause points, such as in between game levels or during the loading screen.
Rewarded Videos – Players choose to watch advertisements in exchange for in-game rewards. This benefits the advertisers and enhances user engagement by providing tangible game benefits for watching ads.
Banners and Display Ads – Less intrusive ads displayed during gameplay or within the game’s layout without disrupting the core gaming experience.
Premium upgrades
Many F2P games offer a basic, free version of their game alongside optional premium upgrades or subscriptions that provide enhanced features or an ad-free experience. This model, often referred to as “freemium,” allows players to:
Remove Ads – Pay a one-time fee or maintain a subscription to play the game without advertisements.
Access Exclusive Content – Premium accounts might have access to exclusive levels, particular areas, or unique events unavailable to free players.
Receive Regular Bonuses – Subscribers can receive regular in-game bonuses or currency at set intervals, enhancing their gameplay over non-paying players.
These premium options offer continuous value and satisfy players’ desire for a more controlled and enhanced gaming experience.
The diversity in revenue strategies within F2P games allows developers to cater to different player preferences and maximise revenue without forcing players into a one-size-fits-all payment model. By carefully balancing these strategies, developers can maintain a large and active player base, ensuring the game’s longevity and profitability.
Core Performance Metrics
Core performance metrics serve as vital navigational tools. These metrics are not merely numbers; they reflect player behaviour and game health, providing insights crucial for refining game performance and boosting player engagement. For developers and project managers, understanding these metrics is fundamental to strategising ways to enhance user experience and escalate revenue. The effectiveness of new features, promotional events, and content updates can all be gauged through these core metrics, making them indispensable for the sustained success and growth of F2P games.
Daily Active Users (DAU) and Monthly Active Users (MAU)
Daily Active Users (DAU) and Monthly Active Users (MAU) are critical indicators used to measure the popularity and scale of a game’s user base. DAU counts the unique users who engage with the game daily, offering a snapshot of its everyday engagement. Conversely, MAU extends this gauge to a monthly scale, tracking the number of distinct users who play the game at least once a month.
These metrics provide more than just numbers; they offer insights into the game’s ability to attract and retain players. A robust DAU count suggests that the game successfully compels users to return daily, often indicative of engaging content or compelling gameplay mechanics. Similarly, a strong MAU indicates the game’s broader appeal and ability to draw in a larger audience over time.
Fluctuations in these metrics can significantly impact revenue forecasts and strategic planning. For instance, a sudden drop in DAU might signal issues such as bugs or unappealing content updates, prompting immediate corrective actions. Conversely, a spike in MAU after a marketing campaign or new feature release can suggest success in those initiatives, potentially leading to increased investment in similar strategies.
Ultimately, understanding the dynamics between DAU and MAU helps developers and marketers to fine-tune their approaches, ensuring the game remains profitable and popular among its target audience. These metrics are pivotal in making informed decisions about everything from marketing budgets to feature development, directly influencing the game’s financial success and growth trajectory.
Having quantified the audience size and consistency with DAU and MAU, we now turn to retention rates to understand the depth of player commitment.
Retention rates
Retention rates in the context of F2P games gauge the percentage of players who return to a game after their initial session. These rates are typically tracked at various intervals, such as Day 1, Day 7, and Day 30, providing insights into player engagement over time. Day 1 retention measures the percentage of users who come back one day after their first play, giving an early indication of the game’s first impressions. Day 7 retention extends this view to a week, testing the game’s ability to engage users beyond the initial novelty. Day 30 retention, a critical metric, assesses the game’s long-term appeal, indicating how well it holds player interest over a more extended period.
Understanding retention rates is crucial because they are direct indicators of player loyalty and game stickiness—key factors determining a game’s ability to maintain a viable user base. High retention rates often signal that a game meets player expectations through compelling content, enjoyable gameplay, and rewarding experiences, essential for cultivating a loyal player community.
Moreover, high retention rates are closely linked to successful monetisation strategies. Players who frequently return are likelier to develop a more profound commitment and investment in the game. This increases the chances of making in-game purchases or engaging with monetised content. Such players contribute to a steady revenue stream and are often the primary target for new monetisation opportunities, such as special offers or premium content. Therefore, maintaining high retention rates signifies a game’s health, attractiveness and profitability, making them a pivotal focus for game developers aiming for long-term success.
Average Revenue Per User (ARPU)
Average Revenue Per User (ARPU) is a crucial financial metric in the gaming industry that measures the average revenue generated by each active user over a specific period, typically monthly or annually. Calculating ARPU involves dividing the total income earned in a given period by the number of active users during the same period. For example, if a game generates £10,000 in January and has 5,000 active users, the ARPU for January would be £2 per user.
ARPU is instrumental in evaluating a game’s profitability as it measures how effectively it monetises its user base. A higher ARPU indicates that a match successfully converts its player engagement into revenue, suggesting that players are willing to spend money on the game through in-app purchases, subscriptions, or other monetisation methods. This metric helps developers and marketers gauge the game’s financial health and assess the viability of their current business model.
Furthermore, ARPU can guide developers in refining their monetisation strategies by highlighting the revenue impact of different features and updates. Developers can identify what resonates best with their audience by tracking changes in ARPU in response to updates, new content releases, or changes in monetisation tactics. For instance, developers might consider focusing on similar features that encourage spending if a new in-game item or subscription model leads to a noticeable increase in ARPU. Conversely, if an update fails to move the ARPU needle, it might indicate that the new content is not appealing enough or that the pricing strategy needs adjustment.
Overall, understanding and optimising ARPU enables game developers to make more informed decisions about product development and marketing, aligning their strategies to enhance player satisfaction and maximise revenue.
Engagement metrics
Engagement metrics emerge as vital indicators of a game’s health and ability to captivate players. These metrics paint a detailed picture of how players interact with the game, from the frequency of their sessions to the depth of their involvement. Understanding these dynamics allows developers to assess whether a game is meeting the expectations of its audience and if it holds the magnetic appeal necessary to keep players coming back.
Engagement metrics are the backbone for strategic decisions regarding game design and user experience enhancements. By analysing trends within these metrics, developers can identify successful elements worth expanding and areas where the game may fall short. This continuous loop of feedback and adaptation is crucial for maintaining a game’s relevance in the competitive F2P market.
Moreover, the insights from engagement metrics enable a targeted approach to improving player retention and monetisation—a key to long-term success. Each player’s interaction with the game offers a potential opportunity for engagement that, if leveraged correctly, can lead to increased satisfaction and revenue. Thus, these metrics are not just numbers but are pivotal in shaping the evolutionary path of a game.
Session length and intervals
Understanding how players interact with your game is crucial for ensuring their engagement and overall satisfaction. Two critical metrics that offer deep insights into player behaviour are “Session Length” and “Session Intervals.” Let’s explore what these metrics tell us about player engagement and how they can influence the game design and player retention strategies.
More than just time spent
Session Length refers to the time a player spends in-game per session. This metric is pivotal because it directly correlates with how captivating and engaging your game content is. A more extended session length typically indicates that players find the game enjoyable and engaging, compelling them to spend more time exploring its features and content.
However, it’s not just the allure of the content that can extend session lengths; game mechanics play a significant role, too. For instance, games that involve complex strategies or in-depth storytelling might naturally encourage longer sessions. This is often seen in RPGs, where players dive deep into rich narratives and complex character development.
Frequency matters
Conversely, Session Intervals measure the time between individual game sessions. This metric helps developers understand how often players feel compelled to return to the game. Shorter intervals may suggest a game is part of a daily routine or offers elements that keep pulling players back quickly, such as daily rewards or short, addictive gameplay loops that are typical in puzzle games or casual mobile apps.
Frequent short sessions could indicate that the game serves as a quick respite for players, fitting easily into the busy schedules of a mobile-first audience. Conversely, longer intervals might suggest the game is more of a commitment, requiring dedicated time to engage fully with its content.
Balancing act: engagement and aatisfaction
Both session length and intervals are vital for tailoring the game experience to meet player expectations and improve satisfaction. Games with longer session times must remain engaging and rewarding throughout without causing fatigue or boredom. This could be managed by pacing the challenges correctly or interspersing intense gameplay with lighter, more relaxing segments.
Similarly, managing session intervals involves crafting a user experience that encourages regular returns without becoming burdensome. Features like push notifications, new daily challenges, and regular updates with fresh content are common strategies to decrease session intervals, increasing the game’s stickiness.
Strategic implications
Understanding these metrics allows game developers to fine-tune their games to fit their target audience’s lifestyle and playing habits. For instance, if a match is found to have unexpectedly short session lengths, developers might look into adding more engaging content or adjusting the game’s difficulty levels. If the session intervals are more extended than desired, introducing mechanics that reward players for daily logins or continuous play can be effective.
Ultimately, session length and intervals are about finding the right balance that maximises player engagement and satisfaction. This ensures players stay longer in a single session and return more frequently, leading to higher overall retention and success for the game.
Event tracking
Explain how tracking specific in-game events (like completing levels, making purchases, or engaging with social features) can provide deeper insights into user behaviour and preferences.
Monetisation strategies
Monetisation strategy forms the backbone of F2P game development, critical in transforming enjoyable gameplay into a viable business model. This strategy involves designing ways to generate revenue while maintaining a game’s appeal and accessibility. The challenge lies in crafting a monetisation approach that feels integrated and fair to players, encouraging them to spend without detracting from their gaming experience. Successful monetisation requires a deep understanding of player behaviour, preferences, and spending patterns, ensuring that the revenue mechanisms are effective and enhance the overall player experience.
Conversion rate
Conversion rates are a pivotal metric in determining a game’s financial viability. They measure the percentage of players transitioning from playing for free to making in-game purchases, indicating the effectiveness of a game’s monetisation strategies. Improving these rates is crucial for enhancing a game’s revenue and ensuring its long-term success.
A strong conversion rate means that a game not only attracts players but is also successful in persuading them to spend money. This transition from free gameplay to paid content is where profitability lies, as it funds further development, marketing efforts, and maintenance. Therefore, understanding and optimising the factors influencing player spending behaviour is fundamental for any game developer aiming to thrive in the competitive F2P market.
Improving conversion rates involves a combination of analytics, user feedback, and iterative design. Below are some practical strategies that can lead to higher conversion rates:
Optimising In-Game Offers – Tailoring offers to match player needs and preferences is crucial. This can be achieved through data-driven insights that track player behaviour within the game. Offers perceived as valuable can incentivise purchases, especially if they are timed well, such as during critical moments in gameplay where the perceived value of the purchase is at its peak.
Tweaking Pricing Models – Flexible pricing models can cater to a broader range of players. Implementing a tiered pricing strategy that includes small, medium, and extensive purchase options can appeal to different segments of players and increase the likelihood of purchases from various economic backgrounds.
Enhancing the Value Proposition – Players are more likely to invest in a game if they feel the purchase will significantly improve their gaming experience. This could involve exclusive content, special abilities, or other in-game features locked behind a paywall. Ensuring these desirable features add meaningful value is key to converting free users into paying customers.
Streamlining the Purchase Process – A simple and secure payment process can reduce barriers to purchasing. The fewer steps and complications in the payment process, the better the user experience, which can directly influence a player’s decision to buy.
A/B Testing – Regularly testing different aspects of your monetisation strategy, from the placement of purchase buttons to the types of offers available, can provide valuable insights into what works best for converting players into paying customers.
Creating a Sense of Urgency – Limited-time offers and exclusive events can create a sense of urgency that encourages players to purchase. However, this tactic must be used sparingly to maintain its effectiveness.
Ultimately, conversion rates are about convincing players to spend money and creating a game environment that values player satisfaction and engagement. By focusing on player experience and continuously refining monetisation strategies, developers can effectively boost their conversion rates, securing their games’ financial health and future.
In-App Purchases vs. ad revenue
Developers often rely on two primary revenue models: in-app purchases (IAPs) and ad revenue. Each model offers distinct advantages and challenges, and the choice between them can significantly impact user experience, profitability, and the overall success of a game. Here’s a detailed examination of both models to help developers make informed decisions based on their specific game genres and business objectives.
In-App Purchases
Benefits:
Higher Revenue Potential – IAPs can generate significant revenue from a relatively small percentage of users. Players willing to pay for in-app purchases tend to spend more over time, especially in games that offer continuous value through updates and new content.
Enhanced Player Engagement – IAPs can deepen engagement by offering players advanced features, exclusive content, or shortcuts that enhance the gaming experience. This can lead to increased player retention and loyalty.
Direct Control Over Monetisation – Developers can strategically design their game economy and IAP offerings to optimise revenue, tailoring offers based on player behaviour and preferences.
Drawbacks:
Potential Player Alienation – If not handled carefully, IAPs can alienate players who feel that paying players gain an unfair advantage, particularly in competitive games.
Complexity in Balance – Maintaining a fair and engaging game environment for paying and non-paying players requires careful balancing. Missteps here can lead to player churn.
Dependency on Few Players – Typically, a small fraction of players (often called “whales”) make up the majority of revenue in IAP-driven games, which can be risky if those players lose interest.
Ad revenue
Benefits:
Broad Revenue Base – Ad revenue allows developers to monetise all players, including those who never make in-app purchases. This can be particularly effective in games with large player bases.
Passive User Engagement – Ads can be less intrusive to the gaming experience if well-integrated, such as rewarded videos that offer in-game bonuses for watching.
Immediate Monetisation – New games can start earning revenue immediately without needing a matured game economy or high levels of player commitment.
Drawbacks:
Potential Disruption to User Experience – Ads can detract from the gaming experience if they are too frequent, poorly timed, or irrelevant. This can frustrate players and lead to higher dropout rates.
Variable Revenue – Ad earnings can be unpredictable and fluctuate based on factors like changes in ad network policies, player base size, and market trends.
Requires Massive Scale – To generate significant ad revenue, a game typically needs a large, active user base, as ad payouts are often based on the number of impressions or clicks.
Game genre suitability
The choice between IAPs and ad revenue often depends on the game genre:
Strategy and Role-Playing Games (RPGs) are well-suited for IAPs due to their depth and the value players place on progress and exclusivity.
Casual and Hyper-Casual Games often benefit more from ad revenue due to their wide appeal and shorter session lengths, making integrating ads without disrupting gameplay easier.
Ultimately, the decision between in-app purchases and ad revenue should be guided by the game’s design, target audience, and long-term business strategy. Many successful games integrate both models to maximise revenue while balancing user experience. By understanding the strengths and limitations of each model, developers can tailor their monetisation strategy to suit their game’s unique needs and player expectations.
Conclusion
Understanding and leveraging key performance metrics is essential for game producers. These metrics are not just numbers; they provide deep insights into player behaviour and game performance. By analysing these, producers can pinpoint what’s working and what isn’t, allowing them to adapt and evolve their strategies effectively.
