The choppy waters of free-to-play monetisation

The choppy waters of free-to-play monetisation
Will Freeman

By Will Freeman

October 22nd 2015 at 10:00AM

As monetising free-to-play games grows ever more complex, Develop takes a look at the role of data, brands and ads in generating revenue

Every now and then, it appears the waters of game monetisation have settled.

From standard DLC and timed life refills to a briefly heralded return for premium, various models have moved to assert themselves as the new foundation for pulling pennies from free-to-play games. The fact remains however that monetisation is a tumultuous entity. But there’s hope.

Increasingly, old friends like analytics and brands are giving developers and publishers an opportunity to navigate F2P’s turbulent waters.

Live games, games-as-a-service, and increasingly console titles, offer developers many opportunities, but one of particular interest within the context of monetisation through data is the notion of tailoring a game on a per-player basis. It’s a method growing in prominence, and one James Gwertzman, CEO of PlayFab – which provides a back-end service conceived to build, launch, and grow live games – believes demands attention. 

“Done well, this not only increases each player’s enjoyment, typically measured by retention, but also gives developers new opportunities to monetise since different players are motivated by different things,” Gwertzman says. “Some players love getting a good deal. Others want the latest and greatest gear. Still others want to help their friends.”

And that, asserts Gwertzman, is where data comes in. And, he says, increasingly access to meaningful data is being democratised.

“The good news for developers is that there’s been an explosion in the number of companies who gather and analyse game data,” he offers. “Even small studios can now get access to detailed information about their players. The question is what to do with this data – is it just gathering dust in some data warehouse somewhere? Or are you able to actually use the data to change how you interact with your players in on a real-time basis?

“Successful companies have detailed player segments, and use these segments to drive different offers, events, content, even pricing. Where this is all going, I think, is machine learning that drives individualised segments of ‘one’, so each player really is getting a unique personalised experience.”

Data today

Gwertzman certainly isn’t alone in harbouring a vision of a games sector where personalising monetisation strategies to a given player’s profile – built from mining a rich seam of data – offers an increasingly pertinent route to financial success.

Mark Robinson is CEO of DeltaDNA, which provides tools and technology for game analytics, data and player marketing, and he also sees potential in using data to customise the monetisation approach for each player.

“In the virtual world of the game it is possible to collect rich and detailed data about the player’s experience,” Robinson states. “The player is anonymous, but the data that can be gathered enables the playing experience to be shaped and the game to be made responsive to individual players.”

That means, says Robinson, that it is possible to monitor the moment when a player is running out of resources and is likely to leave the game. Coupling that kind of information with in-game messaging, a studio can establish message triggers for players with specific characteristics.

“For example, they can gift resources to players just at the point they are running out, or they can dynamically control the difficulty of a mission for players that our struggling,” says Robinson.

Commercial success

Away from data and analytics, a monetisation method that long predates even our humanity’s mastery of electricity – let alone ARPPU – is also increasingly prominent in games today. Advertising in-games is nothing new, but its presence as an alternative monetisation strategy in mobile free-to-play titles is particularly present in 2015. However, as time moves on, it might be inaccurate to say we’ve moved conversation that far from discussion about data.

“One key trend is the emergence of data-driven advertising, as developers are now able to utilise all the rich player data available to them to segment players into either IAP or ad-responsive groups,” says Robinson of mobile games today.

In my opinion the current advertising models will be less relevant going forward, but that at the moment they still have merit and their place.

Christian Godorr, Spil Games

By giving a game’s customers the monetisation experience that suits them best, he adds, DeltaDNA has observed dramatic improvements in CPM, store ratings, and even improved organic downloads.

“Players who have similar tolerances for ad consumption often share other in-game characteristics,” he adds.

“By analysing the in-game data across the entire game economy, from acquisition through to IAP marketing and ad engagement, predictive modelling can then be used to identify which players are ad-responsive and when to serve ads, thereby minimising player churn.”

Most agree that advertising in games is changing, and must advance if it is going to continue to retain users and generate revenue as an alternative to IAPs.

“In my opinion the current advertising models will be less relevant going forward, but that at the moment they still have merit and their place,” predicts Christian Godorr, director of game design and monetisation at publisher and distributor Spil Games. “I think that a new generation of advertising revenue will start to rise.” 

In a world where so many games are free, says Godorr, it’s no longer reasonable to assume players will accept any advertising strategy purely because they haven’t had to part with cash. With free’s days as a novelty long behind us, advertising has to be
about relevance.

Brand new thinking

Elsewhere, developers are looking to branded content as an alternative means to engage and monetise. It’s a technique that is something of a speciality for Iconicfuture, which focuses its efforts on delivering branded content for developers, from DLC packs to entire apps.

“Brands are a big business,” asserts Christopher Bergstresser, excecutive VP at Iconicfuture. “The ten biggest players on the market alone have accounted for a revenue of $131.46bn during 2014.”

Bergstresser and his colleagues see brands as a focal point for a distinct form of player community, where identifying collectively with a brand can be understood as a ‘community identity’. But how to pull on that to monetise? Most simply put, players are more prepared to pay to consume a brand they identify with, especially if that also makes them feel part of a community centred around a particular IP.


It’s a mindset that perfectly compliments this era of social media. But brands in games as a means to increase user acquisition, boost engagement, enhance retention and ultimately monetise must adapt to thrive.

“Highly engaged audiences spend more time in the game and eventually spend money,” explains Bergstresser, before identifying a rising trend in the way brands are being used to monetise games. “In-game events themed around brands can be a powerful tool provided the brand fits seamlessly with the gameplay experience, the audience and offers the player something in return – even in-game credits in return for watching an ad.”

To boldly pay

The real frontier for game monetisation at present, however, is not a place defined exclusively by ads, analytics or brands. Console and triple-A titles, while set to gain from all those methods, exist in a place where means to monetise games-as-a-service are far from standardised.

“There are live games now available on all the major consoles, but overall I’d label this as a largely untapped opportunity,” suggests PlayFab’s Gwertzman. “The question is how to optimise monetisation on consoles so that players actually embrace it, instead of feeling like they’re being taken advantage of by the big triple-A publishers.”

It’s a question yet to be answered, but one thing is certain. Triple-A fans are often happy to play something of a whale’s role.

“Look at the $130 Star Wars: Battlefront deluxe edition, for example,” offers Gwertzman.

And so it is that monetising on console currently makes the choppy waters of mobile monetisation seem like a placid lake.

“The benefit for the triple-A business is too big to ignore though, because next to DLC, the integration of live operations and IAPs can raise the lifetime value significantly, meaning publishers can look to operate a triple-A game profitably for years,” concludes Godorr.

Image credit: Hyper Hippo Games' AdVenture Capitalist