This post is part of a series of articles discussing game monetization concepts and strategies in Core. The goal of this series is to help creators improve the monetization in their games by sharing knowledge and information, as well as learning from the experiences of the Core community. If you would like to contribute your own article, please contact the author.
The methodology in this article was developed by Javier Barnes, a long time game developer and monetization specialist, who published these concepts at a game developer conference in a session entitled How to Price Items on F2P Games.
By following a specific methodology, you can develop a proven method for pricing items in your games. This will help you determine how much to charge for Perks, virtual currencies, resources, and other items in your Core games.
Each of these steps will be described in detail below.
Step 1: Research Competitor Pricing and Player Spending Habits
Step 2: Establish an Equivalence Between Resources, Time, and Money
Step 3: Rank Items by Value
Step 4: Assign Prices to Your Items
Ongoing: Test and Refresh
The first step is to research competitor pricing as well as player spending habits to get a baseline for your pricing. This serves as a good starting point, but your own pricing model should be adjusted for your specific game and audience.
Think of the competition in broad terms so that it includes games from all gaming platforms, not just the Core platform. Focus on games in the same genre, or games similar to your game. For each of these games, look at all the items available in the game, how much the items cost, how much time is required to acquire the items, and the game design objectives of the items.
Your research should focus on key elements such as:
Distribution of Prices and Currencies
What price points and currencies are the items offered at?
Prices of the Most Popular Items
What are the price points of the most popular items?
Rate of Acquiring Items for Free
What speed and frequency are items obtained without spending real money.
Game Design Objectives of Items
As discussed later, items can have various objectives such as monetization, conversion, engagement, and retention.
It is important to know your target audience and their spending habits to help you optimize prices and make monetization decisions based on player behavior.
Player research can be done by playing or watching similar games. Twitch has an unlimited amount of games that you can watch and learn from. It may also be helpful to visit Discord servers or forums of similar games to learn about important topics discussed by players.
Important elements to research include:
Items Players Are Willing to Pay For
Which game items do players want and find valuable? Which items are not as desired, or valued as much?
Items That Are Off Limits to Monetization
Which items do players not want monetized? For example, players may not want the game to sell any items that are considered pay to win.
How often do players buy items, and how much do they spend?
What types of players make the purchases? Is it a small percentage of big spenders, or a large percentage of smaller spenders?
Now that you have a good idea of pricing and spending habits in other games, it is time to focus on your game economy.
It is very useful to establish the equivalence between the different resources in your game to time and money. For example, consider a game that offers coins as the main virtual currency, as well as gems as a premium virtual currency. The following may represent the equivalence:
1 gem = 50 coins = 15 minutes to acquire = 100 Core Credits = $1 dollar
Using this, you can easily determine the value of any item in your game in terms of time or money. You can fully control your game economy by knowing these values and adjusting the amount and frequency of game items in order to obtain the desired results. You will know exactly how each item affects the economy, which will allow you to set such things as prices, rewards, resources, and acquisition rate.
For more information on additional factors that may affect this equivalence, please see the reference above.
The next step is to rank all your items by value in order to create a progression for item pricing and acquisition.
First, group all items based on their use or purpose in the game.
For example, group items into weapons, armors, consumables, cosmetics, etc.
Then, rank each item in each group by value.
Rank the items in each group from least valuable to most valuable. The items can be ranked by various criteria such as:
- Power (weapon damage, armor level, etc)
- Rarity (common, rare, etc)
- Cosmetic (low demand, high demand, etc)
With all the information above, you can now assign prices to each item based on their ranked value, as well as their game design objectives.
A common misconception in pricing models is that most game items are entirely related to monetization. In reality, game items are designed for various purposes and objectives, which directly affect their prices.
Items that are priced at the optimal point to generate the most revenue.
Items that are priced to make other items seem like a better deal or less expensive.
Items that are priced low and offer great value in order to create incentives for purchase. Often used to convert players into making their first purchase, which often leads to additional purchases in the future.
Items that are priced for specific target audiences such as players who have achieved a certain level of progression, or players that have not bought something in a while.
Items that are priced for store sales or special events. Many games will offer sales or discounts from time to time. Special events are also a great way to offer new items or bundles related to the event.
Engagement and Retention
Items that are priced to increase engagement or retention. For example, allowing players to grind resources or virtual currencies generates objectives for the player to keep playing and requires a time investment. Items and resources can also be used to guide players to certain game activities that will generate engagement. Items and rewards can be used to grant a constant sense of progression and increase retention. All of these objectives affect the pricing and acquisition of the items.
The ranked value together with the game design objective of each item determines the price that you set for the item. The best games offer a range of prices designed for a variety of objectives. This includes low prices to convert buyers, or help new players get off to a strong start. It also includes prices to monetize the most popular content. And it includes prices to generate engagement and retention. Finally, it includes prices targeted for certain audiences, as well as promotional or event pricing.
Please see the reference above for more information about keeping prices achievable and avoiding inflation.
Once you set your prices, continue improving your pricing model with frequent testing. Also be sure to refresh your content often to keep things new and interesting for your players.
Top games in the industry are continually testing their item pricing to determine the optimal pricing points. A/B Testing is a great way to test pricing by testing two different prices, and seeing which one does the best. Community Content has component called Funnel Analytics by Team META that makes A/B testing very easy to implement.
Another thing the top games do is to refresh their store content frequently. Stores are continually updating products, bundles, and offers to keep things fresh and interesting for players.
Please join the discussion and let us know about your ideas or experiences in Core related to this topic.