It will probably come as terrible news for manipulative game developers. From first-hand experience working at a company that did this and first-hand developer testimonials, IAP in "free" games and its design has long been associated with forcing emotional, heat-of-the-moment-spurred buys from consumers - ie. You were so close to beating the level that time but you lost your last life :( Get an extra life right now and you'll kill it this time around!!!.
Sadly, a portion of total players (1-2% from what I've seen) will fall for these emotional tactics and spend the money, often more than once. Even worse is when they later convince themselves that the money was well spent (say, for an extra life in Candy Crush).
I hope Apple also follows suit, as some sources allude to.
I think we're skipping the non-exploitative companies that rely on this model. Like mine.
We tried selling a game - it doesn't work. We have a free (ad-supported) and paid version of our game, and we make 95% of our money on ads.
Adding removing ads as an iAP to the free version, instead of having multiple versions of the game on the store, saw that go from 5% to 15% or so.
It's RARE to have any true success in the mobile game market. It's even RARER to have that come from a game that has an up-front cost.
iAP is the new shareware. Anyone that bitches about iAP has to get their head around this. The market dictates how people are willing to spend money, and it's via iAP, not up-front costs.
We love making games. We love our job, and our company, and we want to keep doing it. But there's a hard truth that ad-supported free games have very, very low ARPU - for us, in the $0.20 range. We're lucky to have millions of downloads and hundreds of thousands of daily active users, but very few game studios are.
Someone that buys the ad-free iAP is worth 5x our average ARPU. So selling people customizations or whatever else iAP is the only way to raise ARPU to anything sustainable. Gamers don't (and never will) spend $60 on a mobile game again, and we have employees to pay and families to support. Yes, it can get exploitative, but if you have a better idea of how small game companies should survive - real ideas, not trolling - we'd love to hear them, because we would implement them immediately.
The problem is not IAP on itself. The problem is when the apps mislead about what you get for your payment or when so called "free" apps are unusable without payment.
In a way, non-exploitative apps (with or without IAPs) are probably victims in current situation. I guess I'm not alone who simply do not trust anything with "offers in-app payments" label and avoids it as much as possible. There is no way for me to distinguish between "real game company" and exploitative company.
The problem of small game companies is that customers have no way to distinguish between good and crap game before buying and most of what is found in app store is of very little quality. I do not know how the company can solve it without better app discovery features from app stores themselves.
Yes, but at least the apps are free to investigate. Far less risk / hassle than paying, downloading, installing, running, uninstalling, and requesting a refund.
As a fellow developer at a software company, I totally get where you are coming from, and can see the challenge this presents. It could absolutely require a change of direction for your company.
As a consumer, I really don't like being asked to buy things in a Free game. I'm more than willing to shell out for a quality game upfront, and do so without hesitation.
The "free" games upselling me at every turn has honestly made me a bit burnt out with the Play store. If your app/game is of high quality, let me try it for a few minutes and I'll buy it if I like it, no problem. No need to badger me about "optional" extras.
People like me may or may not be a large chunk of the Android-using population, but I figured I'd share.
>I'm more than willing to shell out for a quality game upfront, and do so without hesitation.
clearly you are in the tiny minority
>Free game
no such thing. people need to make money, they don't just have time to make great games and give them away. I understand not wanting to "pay to win" but IAP isn't at fault here. Also, these games are very obvious. if you don't want to do it, just don't play those games.
>If your app/game is of high quality, let me try it for a few minutes and I'll buy it if I like it, no problem.
wait wait wait. you JUST said you were willing to shell out for a quality game upfront. After downloading it free and playing it is not in fact upfront.
This whole comment is pretty silly and trollbaity, so I'll only bother addressing what I think was your primary snark.
> wait wait wait. you JUST said you were willing to shell out for a quality game upfront. After downloading it free and playing it is not in fact upfront.
If I don't ask for a refund after the first 15 minutes, it's a done deal. Most app authors would probably prefer that I get a refund instead of buying their app and leaving a negative rating.
Psychologically it is not the same. One action requires you to get out a credit card and then later do more work to get a refund. One of theM is actually free. Not to mention that this only covers 1 of the 2 major platforms. No free demo refund on iOS. What would you propose for iOS games?
Right, this will have short term negative impact on your revenue but in the long run it may encourage more users to download the paid version because AAA iAP apps no longer set the "free" standard for pricing.
I have no problem with iAP and I have no problem with shareware.
However, at least when I get shareware, I know they are going to pull the rug out from under me 1/4th the way through. As a result, I usually don't play shareware because I know I will be unsatisfied, I know I wont enjoy the experience.
Now shareware is "free" and I can't find any actual free games, actual free applications. I can't find anything that isn't trying to use or manipulate me.
The set of applications that were made because someone wanted to solve a problem and share the solution are obscured by wolves in sheep's clothing. I can't trust anything on the app store. The signal has being completely drowned out by the noise.
I hate, truly truly hate, the current condition of the android market. My phone is only good for making calls and playing the Simon Tanthem puzzle collection. I don't understand how you could defend it. I don't understand how anyone could defend it. It's so openly hostile.
The iAP fad is a direct result of game studios becoming sharecroppers in Apple and Google's fields and of the rules they have set. If Apple and Google changed the rules, due to government regulation or something else, then studios' business models would adapt. If iAP were not an option at all, there would still be a demand for quality games and studios would converge on some new business model that satisfied that demand.
I like the free/paid model, but what you have doesn't strike me as "shareware", but rather "adware". How well does a completely free (no IAP, no ads) trial with a paid full version do in reality? That's more in line with the shareware model in desktop software and I remember it being a very successful strategy in console (and PC) games when I was younger.
Semantics. Basically, the ability to sell shareware doesn't exist anymore, so this is the new model of try, and if you like, maybe pay a bit. Unlike shareware, however, you can actually keep playing for free. So is the model better? Not sure, but after years of app stores, I still can't offer a trial, and I can't issue refunds, so this is my reality.
I take issue with the idea of considering consider this a "sad" event or assume that people are "falling" for emotional tactics and that they're later "convincing themselves" that the money was well spent. I think if you break down the vast majority of expenditures, you could say this.
* Bought a $500K house over a $400K house, or over a $25K house that was completely livable? Seems like the buyer fell for emotional tactics and peer and/or realtor pressure. Later they convinced themselves the money was well spent.
* Upsold on a new phone? Apple used emotional tactics to compel you to spend that money when you weren't really interested.
In games:
* Spent $200 during the Steam Sale on games you never actually played? How manipulative of Valve.
* Spent $1,000 buying Magic Cards after-market so you could win at a local tournament? It's a psychological sickness that you'll later convince yourself was just you "having fun".
There's a serious problem when people analyze any customer's behavior as being different from their own, and therefore irrational. I do think that there are many companies that trying to take advantage of consumers, but to another commenter's point, there are also many companies doing this responsibly. You could argue that many industries or businesses work on irrational behavior of consumers, but I think it's a slippery slope to categorize it as irrational - it's just behavior. People spend their income on all forms of entertainment good and bad, and frankly I was unhappy a lot of the time buying console games for $60 that never lived up to expectations. At least with free-to-play games I can choose what I'm paying for.
Economics says people will pay what they think something is worth, and it's up to the consumer to balance the cost vs. the utility they get from it. In your examples the key is if the buyer was fully informed, or surprised and learned something new after buying that changed their mind. It only works as well as the consumer is informed about the product, the market, and the alternatives.
Paying $200 for a bunch of Steam games might be fine, as long as you know what you're getting... Or, you might feel scammed if you thought you were getting a complete game and later discovered you had to pay more via IAP to get what you thought you paid for in the first place.
This change (not calling IAP apps "free") is part of trying to inform the consumer. I'm not sure if it's the best solution as IAP seems like its own category, but that's the goal.
I think the vast majority of customers know what they're getting when they start playing a free game with incredibly high production values. Additionally, to the economics point, consumers are making choices about whether they think a purchase is worth it every single time they are faced with an IAP.
There are also varying degrees of IAP:
- Should a "free" game that offers ads be considered free? You're paying for it by being forced to watch interstitial ads. (ex: Flappy Bird)
- Should a "free" game that has IAPs for purely cosmetic items that have no impact on the game be considered free (ex: TF2 model)?
- Should a "free" game that has IAPs that are optional that help you win be considered free (ex: Candy Crush)?
- Should a "free" game that has IAPs that have a pure pay gate 20 minutes into the game be considered free?
Personally I think there are a ton of varying degrees here, and putting a "if you have IAP in the game, PERIOD" it's not considered free, makes a black-and-white statement about something that has many shades of gray.
Your assumption is wrong- games companies (clarifying- the exploitative ones) will generally take advantage of the fact that the majority of customers actually DONT know what they're getting. A free game is expected to be free. Ridiculous concept, I know.
A free game with ads should be considered free. That's simply how free services are categorized on the internet (facebook, twitter, reddit, etc).
Purely cosmetic items not affecting a game is a hard one to classify. Could go either way. A free game with optional IAP's is also hard to classify.
A game with a pay GATE is definitely not free.
So the hard to classify cases, if they are more pronounced to show that they are in fact, not completely free games, but free game with in app purchases available, the description or reviews can then go on to describe how that works. At the moment, the "offers in app purchases" in small subtext and a huge FREE DOWNLOAD button is insufficient and cause for much of the (I would argue, intentionally designed) confusion.
IAP created a breed of game developers that preys on spur of moment purchases on the part of the consumer. Yes, this exists in other businesses, but that doesn't make it acceptable or non-manipulative of consumers. A Lite version of a game, clearly specified, followed with a Full version paid version, is currently my preferred method of selling a game. No confusion is created on the part of the consumer, and they know what they're getting in either case.
First of all, "just behavior" doesn't really mean anything. You're arguing that people should stop trying to describe other people's behavior in certain terms, but I don't see any compelling argument. "I don't like it" isn't compelling.
Second, there's nothing wrong with "irrational". If I describe someone's behavior as irrational and I happen to be right, it doesn't automatically mean that I'm criticizing them. I might be, but just the use of that word doesn't automatically imply criticism. Humans don't make completely rational decision all of the time and that's okay.
Third, your examples are pretty much a mixed bag. At least three out of those four examples are about irrational decisions -- the first one might be completely rational, because we don't know all the details -- but that's the only characteristic they share. Dealing with an aggressive salesman who manages to convince you to get that new phone is very different from buying a bunch of Steam games because you thought you would like them and there was a bargain on them. That, in turn, is radically different from pouring $1,000 into Magic Cards alongside the time and dedication that go hand in hand with that level of enthusiasm for a hobby.
Fourth, spending $60 on a game you ended up not liking is a pretty good motivation for wanting to improve the process in order to avoid repeating the same mistake. Not all process improvements are legislative, of course. The sixty-dollar console game scenario, for example, doesn't deserve a law that decrees that all reviewers should be as critical as Yahtzee ;)
It all comes down to whether IAPs are a problem and, if they are, how much of a problem they are and how it can be solved. Personally, I find that the level of manipulation involved in mobile games with IAPs can sometimes be unacceptable [1] and that something should be done about it.
It appears that you're making a value judgement about behavior being rational or irrational, when it's just how human beings make decisions. If we all operated as purely rational individuals, unswayed by emotions, the vast majority of consumerism that exists in society would be gone. Singling out IAPs and free-to-play titles specifically while not going after basically every single consumer-based industry in the world is inconsistent and unfair to one specific sector.
We all make decisions based on our emotional responses to the information we're given - some people value certain things more heavily than others, and I don't think any individual or set of individuals can be the arbiter of whether a decision is rational or not. That's entirely up to the person making the decision.
The whole problem started with people who paid/downloaded and felt lied to afterwords. Better analogy would be an advertisement for renovated house with fixed ceiling and you find the ceiling was just colored and is leaking water during rain.
In most free-to-play games I have seen, player does not really know the real value he is paying for. At least when you do first buys, you usually do not know how far you can get with that item and when you will have to buy another one.
> [...] "free" games and its design has long been associated with forcing emotional, heat-of-the-moment-spurred buys from consumers
Why is this a bad thing? You decided to download and to play the game. You put yourself under the "game" rules. You are an adult, not a child.
>Even worse is when they later convince themselves that the money was well spent (say, for an extra life in Candy Crush).
This is a highly subjective claim to make it pass as an argument. I may personally agree that every money spent on games is money not well spent but that is just my opinion.
Users are not babies. As long as no gun is pointing at them (i.e. the game gives you any content for free but also offers you more if you pay ), every purchase they do is legitimate.
Maybe I'm losing the point of this whole debate, I don't understand what you think users need protection against.
Even among these 1-2% of users there is a significant skew in spending, where 20% of the users make 80% of the total revenue.
In these games, you can say there are three kinds of payers:
80%: LTV of $5-10, or people who would have bought the game for $1-10 up front. A significant amount of additional revenue is earned from these users when you change from paid to free-to-play, because they end up paying not the $2.99 you charge at the door but the $9.99 they're actually willing to pay.
20%: LTV of $50-$1,000, or people who really like your game and understand how the mechanics of paying and playing tie together.
~1%: Unobservable LTV, people who will keep spending until your game dies, not until they get bored. These are your diehard fans, they'll buy your limited-run art posters from Kickstarter, they'll play all your sequels simultaneously, they will clamor for you not to shut down your servers, they'll ask you to make more of the same.
A game like Clash of Clans has generated a cohort of people whose lifetime value is longer than the likely age of the game. If you play it, and appreciate how the mechanics of the paying integrate with the mechanics of the game, you'd understand how it differs significantly from your typical psychologically-manipulative casino.
Suffice it to say, it is extraordinarily hard to make a Clash of Clans game.
With regards to your specific example, I think Blizzard with Hearthstone and Valve with Team Fortress 2 both showed unequivocally that, even for people who are willing to spend $60 (or TF2's case, $25), you earn 5x more (Valve's numbers) with a free-to-play title with no pay-to-play mechanics (like TF2). I don't know how much more Hearthstone has earned by being free-to-play, but TCG mechanics tend to earn very well in this setting.
I think "I want a diversion" is more common than "I want a game". Mobile games compete against Facebook, Twitter, the news, text messaging, anything else someone can do as a diversion on their phone. And none of those things cost anything at all. People who want a game and are willing to pay good money to get one generally expect a better experience than mobile can provide.
I guess as more people go mobile-only, there will be a bigger market for higher priced mobile games, but I can't imagine anyone who considers themselves a gamer right now doesn't have either a console or a relatively high-end computer. (And I don't see anyone who doesn't consider themselves a gamer dropping more than $5 to play a game.)
>I think "I want a diversion" is more common than "I want a game". Mobile games compete against Facebook, Twitter, the news, text messaging, anything else someone can do as a diversion on their phone. And none of those things cost anything at all. People who want a game and are willing to pay good money to get one generally expect a better experience than mobile can provide.
I agree with your general point, but I want to point out that the last sentence doesn't have to be true. Like tools in a toolbox, some platforms are more well-suited than others. The reasons vary for this, but in games it usually it comes down to control schemes. Mobile has its advantages as well- you always have it on you, likely has network connectivity 24/7, its unique control scheme, etc. I think mobile's biggest problem right now is creators are still trying to shoehorn last decade's games on a platform that was not designed for it. They may be different games than we're all used to, but there's no reason why mobile can't come into its own.
That all said, I would rephrase your last sentence to "...generally expect a better experience than mobile currently provides."
For what it's worth, I feel a game like Clash of Clans uses mobile's strengths very well (although I personally find it boring and its revenue model distasteful)- it makes good use of mobile's control scheme, makes good use of its platform's always-on mentality by delivering notifications of attacks, etc, and is social.
The values differ amongst those gamers. But on average it amounts to those 1-2% CLV being >= $.99 (and exactly why the games are free to begin with). The strategy that these developers make is simply, if we have a larger pool of total users, and we lower barrier to entry of downloads (make it free), then you can guess that the 1-2% of paying users will grow linearly with number of total users.
Making it free and marketing it as such lowers customer acquisition cost, while still retaining a low to decent CLV (and this is discounting the extreme case users who pay a lot higher than would be expected of a mobile purchase as well)
It will probably come as terrible news for manipulative game developers. From first-hand experience working at a company that did this and first-hand developer testimonials, IAP in "free" games and its design has long been associated with forcing emotional, heat-of-the-moment-spurred buys from consumers - ie. You were so close to beating the level that time but you lost your last life :( Get an extra life right now and you'll kill it this time around!!!.
Sadly, a portion of total players (1-2% from what I've seen) will fall for these emotional tactics and spend the money, often more than once. Even worse is when they later convince themselves that the money was well spent (say, for an extra life in Candy Crush).
I hope Apple also follows suit, as some sources allude to.