Michail Katkoff

Michail Katkoff is product manager at Supercell and specializes in metrics and user driven service design, building and managing virtual economies and deconstructing moment-to-moment gameplay. He's exceptional at creating fun while providing options for monetization.

Editor’s note: This is the final instalment of a 4-part series written by Michail Katkoff, Product Manager at Supercell. In this series, he explores what it takes to create a successful “mid-core” mobile game. Make sure to check out the other instalments in the series:

Why Monetization?

I left monetization as the last piece in the mid-core success series simply because I see it as a result of a well-functioning core loop, of strong retention and of meaningful social mechanics. Thus, this post isn’t about the best tricks and tips on how to get people to spend. Instead, I’ll present monetization as a flow of all three of the success parts introduced in the previous posts.

The Monetization Formula

On a high level, the formula for monetization is actually pretty simple: DAU (Daily Active Users) x Conversion (% payers) x ARPPU (Avg. Revenue Per Paying User). Even though there are three key variables in the formula, we tend to focus only on the latter two, with the discussion revolving around whales, price points, DARPU, amount of payers and all those little ‘tricks’ developers employ to incentivize players to pay, and pay some more.

Personally, I have a different approach. I honestly believe that in order to achieve that desired financial result you have to simply forget all those monetization features. Instead of monetization you should concentrate on retention, game economy and social mechanics. I believe that demand for players to convert is created by slowing down the rate of progress in line with time spent playing a game. Social mechanics are vital in monetization because they make players compare their progress to others’ and thus tend to create a social obligation to keep up.

Players are primed to spend when their progression slows down over time and they are constantly comparing their progress through social interaction inside the game.
Players are primed to spend when their progression slows down over time and they are constantly comparing their progress through social interaction inside the game.

The Monetization Don’ts

There are two commonly used approaches I suggest avoiding when it comes to monetization. The first is the concept of in-game items that players can only get by spending real money; the second is the concept of in-game sales.

1. Premium Items

Adding in-game items that are sold only for hard currency is the most-used way to create a pay-to-win game. By adding these super-powerful items and offering them only to players who are willing to spend real money on the game, you’re essentially discriminating against the non-paying players, meaning the majority of your player base.

If there’s absolutely no way to earn these powerful premium items, the players owning them will be seen more or less as cheaters when they rack up wins. And who wants to play against ‘cheaters’? Or who wants to win, when everyone around knows the win was paid for?

Zynga's Respawnables encourages player to purchase premium weapons that players can only get with hard currency. These premium weapons eliminate all the need to progress and unlock new weapons, thus killing the core loop.
Zynga’s Respawnables encourages players to purchase premium weapons that they can only get with hard currency. These premium weapons eliminate all the need to progress and unlock new weapons, thus killing the core loop.

2. Sales

The problem with constantly running in-game sales is that they significantly change players’ purchasing habits. Sure, you’ll get those nice sales spikes when the sale is running, but once the sale is over your numbers will drop way below the initial levels. In other words, you’ll teach your players to purchase only during sales and avoid making purchases at other times.

Product Managers who like to run sales tend to underline that they are selling virtual items (at least that’s what I used to say a few years back), which is essentially an infinite resource. But virtual items have value, and that value is progress. So running sales actually allows engaged players to progress faster and thus increases the demand for more content.

Game of Wars by Machine Zone is notorious for its pushy sales. They run so many sales that I'm actually unsure if you can purchase something that's not on sale.
Game of Wars by Machine Zone is notorious for its pushy sales. They run so many sales that I’m actually unsure if you can purchase something that’s not on sale.

Don’t get me wrong, though. I’m not totally against sales. Personally, I like to do two kinds of sales. First, are the sales aimed at players who haven’t converted yet. Encouraging them to make their first purchase and stopping the sales offerings once they have, is a sound approach. The second are the seasonal sales: Halloween, Black Friday, New Year, etc. Seasonal sales won’t affect a player’s purchasing habits, as the season communicates clearly the uniqueness of a sale.

Treat Monetization as a Flow

In my mind, sustained monetization is a result achieved through excellent game design, a balanced game economy, engaging social mechanics and a fresh approach.

Personally, I like to look at monetization as a flow. It all begins when players start the game, with creating the impression that this is a cool new game, full of action and entertainment. It’s a game they haven’t played before.

After wowing the players and getting them to come back, it’s time to get to work. Make sure they enjoy playing the game. Gradually show all those interesting features that make the game experience so much better, and most importantly, create demand for them to progress.

When your players want to progress, it’s time to get those social mechanics in. Make sure that players can collaborate in a way that benefits all parties involved. Also, make sure that the collaboration between players happens in an environment where they can show off.

When your players are wowed from the get-go… When your players are enjoying your game and want to progress… When your players collaborate and show off their progress… It is then that you have a mid-core success.

Michail Katkoff

Michail Katkoff is product manager at Supercell and specializes in metrics and user driven service design, building and managing virtual economies and deconstructing moment-to-moment gameplay. He's exceptional at creating fun while providing options for monetization.

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