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"in-app purchases"

no surprise here

I have some experience with game development and that is essentially the only way you can make money on the app store these days. If you charge more than the minimum (which may currently be zero) you will have no chance of getting into the top 10, so no way to make your money back. With in app purchases you can also make a lot more money from your whales, rather than charging everybody 10 usd - it doesn't quite solve the consumer surplus demand curve issue, but it does help.

And the gaming industry is such a bad bet financially (I am pretty sure the industry overall loses money) that you have to make as much as you can.

We were bound to get to this point, but I'm still a bit disappointed. I have very little desire to play a game which intentionally skews the playing field based on in-app purchases. Personally I would far rather pay $60 or whatever for the game and then compete based on skill and luck, rather than on who wants to waste the most money.
Agreed. I think these games teach its players harmful life lessons too. They're rewarded for spending the most money (like GoW) or for showing up (like an MMO). That's not how you get good at things in real life.

I've been a (relatively serious) gamer since I was a kid. My parents always thought it was a waste of time. But I think I learned more about dedication and growth playing WC3 than I did playing sports. I definitely would not feel that way had I played GoW instead.

"They're rewarded... for showing up (like an MMO). That's not how you get good at things in real life."

It really is though. If you show up every day and put in the work, you WILL get better at whatever you're doing. That's also something your colleagues and the people who surround you appreciate, see Cal Ripken, Jr. for example. He wasn't an outstanding player, but he didn't miss a single game for 16 years, he showed up every day, no matter what.

Not sure what sports you played and at what level, I played basketball growing up at national level but also competed at LANs across the country on COD4 and learned lots of lessons from both.

I should have clarified that there's a difference between showing up and mindfully playing / practicing and simply showing up. You and Cal Ripken Jr showed up to practice with the intention of getting better. If you're to actually get better at your job, you show up and try and get better at your job. But if you show up and just go through the motions (the real-life equivalent of clicking a bunch of buildings to mine resources) you will be squandering your potential. I think we agree--I just wasn't clear enough in my first comment.
In competitive games (UT, Quake, CS etc.) you get better by playing and critical analysis of your and your enemie's playing. In WoW, you get better through, more or less, mindless grinding. At least so mindless that you can pay peons to do the work for you, so you can enjoy your level 100 character.
Having once been a fairly serious raider in WoW, there's a ceiling in WoW wherein you no longer get better through mindless grinding. A level 100 character is nice and all, but serious end-game raiding or PvP requires more than just "Push button, collect loot."
I'm reminded of the Woody Allen quote that 80% of success is showing up. Patient practice leads to getting good at things.

(Was an MMO player, love the genre, don't have time lately)

I can see where you're coming from but I think you're oversimplifying it. Spending money and showing up ARE ways that you CAN get good at things. They might not be the only ways or even the most important ways but they are definitely ways.

No matter how skilled you are you can only get so far in life without spending any money. You'll definitely lag behind less skilled people that are willing or able to spend money. I don't like in app purchases myself either but even I can recognize when a timely purchase can have a big payoff. Sure, some games make to too easy to pay to win, but that's a balance each company has to discover.

Likewise, sometimes a big part of success IS just showing up. Much of luck is putting yourself in a position to take advantage of situations when they arise. Even in MMO type of games - I've seen plenty of people go from terrible to pretty good just by showing up enough and learning how to play.

Of course, by themselves, neither of these are good indicators of success and perhaps they are overvalued in some games, but they are definitely applicable to real life.

I'm with you, I've played some tablet games that have in-app purchases but don't purchase. The game gets to a plateau pretty quick to the point where it is boring and uninteresting. SimCity for instance is free on iOS but has in-app purchases. I'd rather have paid like $5-10 for it but the developers would have to completely change the game mechanics.

I wonder what the long term/lifetime value per customer is in that model. It sort of operates like a SaaS but the purchasing cadence is up to the customer.

In-app purchases are in a way like the analogy of how you can slowly boil a frog and the frog won't notice, but if you drop the frog in a half-inch hot water it will immediately leap out.

Is it good? Article is silent on that. Not one screenshot.
Does it matter? It's compulsive. That's why whales will spend $40k of money they don't have on in-app purchases.
I got the impression the whales can afford it. I'm sure there's counter-examples, but I'd imagine the "whales" are just very wealthy people, generally.
There is a reason at least one the really big casual gaming company allow you to deposit checks to get in game currency - because the really big whales are in the middle east and that is how they like to spend their money.

The people spending 40k can afford it, don't worry - and they might as well use the oil money for something.

Which company would that be? A quick google search doesn't turn anything up.
You can play it, but to compete well you need to spend money. Pay to win, like any other game. So no, it's not good. It's based on wallet size, not skill.
Is there any competitive simulation game for mobile that is not pay to win? I'm looking for something along the lines of League of Legends business model.
For me the question is are there any games where you can trade time for money. Which is to say you can be just as good/powerful/equipped as any other player who spent $x by putting in y minutes of play time. And then what is the factor 'k' such that $1 = k? Basically what level does skill play in your cost of levelling.
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Vainglory

Hearthstone is also a good one if you're more into CCGs. Prime World Defenders has gotten me lately too, though that's just a single-player game.

it's a little older and more for tablets than phones, but Frozen Synapse is well regarded
It's just the new way of things: The game is free, but the fun costs extra.
That's the best way I've heard it worded. Makes it more obvious than "pay to win."
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Nope. The graphics are overly intricate and look messy on small screens. The UI is incredibly cluttered and has distracting animations you can tap to spend money. The game is essentially about optimization, spending resources to get more resources and hopefully make your numbers higher than other players' numbers. That kind of management game can be fun, but when the most powerful resource you can spend is real-world money, it's little more than a spending competition.
In a funny way it's players teaching game developers bad lessons.

Consumers don't wanna pay 60 bucks for a phone game. Or even 6 bucks. They do want to make in-app purchases.

The saying may go don't hate the player, hate the game, but its a funny turnabout one level up, where players influence developers.

Don't hate the nature of the game, hate the nature of the player.

Tant pis.

I think it's just a case of novelty. The average mobile gamer hasn't been playing video-games for a very long time, so contrary to veterans gamers who will from the very start model the game as a system in their head, they just interact with it in a more primitive fashion. Therefore they won't feel that the game is unfair or dumb because they don't see the ropes long-time players do see and criticize.

And just like mobile UI designers are starting to reintroduce more complexity as the average user becomes more familiar with touch interfaces, I'm sure we'll see a decline in "pay to win" games as the average mobile gamer becomes more experienced and long for more interesting games.

You can have successful in-game-purchase games that aren't "pay to win". Cf. League of Legends.
True there are hills and valleys but certain addiction game designs will always draw a crowd.

You can look at any top list in grossing, free or paid and still see casino games of all types because the new mobile games like Game of War or Clash of Clans still tap into that PvP or beat the system type competitive behavior.

I prefer games with gameplay but others play games just to compete and it fuels PvP type games and pay to win.

People get hooked on them that are competitive, it is why Clash of Clans had to be banned on the MLB Kansas City Royals (http://www.cbssports.com/mlb/eye-on-baseball/24762153/royals...) because the low impact, frequent replay, low action game fit perfectly into their day and fulfilled their competitive spirit, once they got invested they were also paying to win which is an element of competing in the real world and works.

On behalf of the Minister of Mobile Gaming, Canada thanks all your freemium gamers.

Now we can have our new hospital.

What happened to that page? Did Bloomberg hire Maddox to design it?
I was going to ask the same thing. It's like they hired a designer, told him or her to go look at current internet culture for design cues, and he or she still managed to fail.

It's like stabbing myself in the eyes every time I look at one of those articles.

Does no one here play arcade games?

Okay granted In-App purchases are generally more than 25-50 cents or the 1-2$ it costs these days at your local AMC, but I don't think it's disappointing in the slightest (and pretty predictable if you look at gaming history) that many people prefer to throw a few bucks a week at a casual game vs. spending $60 on something that might sit on the shelf.

Though, I'm more a Clash of Clans guy...

As a sample, how much do you spend on Clans? It seems hard to find people who will admit they make in-app purchases.

I play simcity buildit and I'm not tempted to buy things, I find it a challenge to get by without purchases. I can imagine as time goes by that games will get less playable without the purchases.

same thing here. I played some PvZ2 without buying anything. A pity, I would have easily paid 7$ for it as a full game(I know I must be in a minority though). The new content pack (beach themed) seems to focus on arcade like experience where you need to pay some credits in order to advance. At that point I just stopped playing.
I have spent a total of £15 on it, in around 18 months.

I bought 2 builders near the very start. Then I got frustrated with slow progress about 12 months ago and hit buy on some gems to speed things up.

The first purchase I never regretted.

The second I regretted almost straight away and promised myself never to buy/spend anymore. I got a brief glimmer of a future filled with regret looking at how much I would pouring into the game regularly and decided to not walk that path.

I still play occasionally play (been on TH9 for a long long time), but it's pretty much open it in the morning, collect elixir/gold, refill traps & xbows, donate troops to clan members, spend anything I've accumulated (probably once a fortnight now). It's more of a habit than anything and frankly one I'm glad I don't spend any money or serious time on.

I am definitely more inclined to consider a purchase when t's a permanent effect. In a couple games you could buy a permanent double your coins effect. That felt like me actually purchasing the game, considering everything before it a hobbled demo.

Things where could straight purchase in game currency or timer refreshes feel more like extortion.

But I suppose I'm not the demographic.

I've probably spent $15 on in-app purchases for Space Hulk, and likely more than that for Warhammer Quest. They're closer to DLC than they are to "Insert coin to do more" purchases though.
I spend about $5-10 a week on Clans. It varies depending on my level of patience.

What I like about Clans is that spending money has to do with speeding things up. If you're obsessed, you'll spend a lot of money, if you're treating it casually, not so much. When I want a solid hour or two of gameplay, I'll throw in $5.

HN should introduce a "Reply now? That's only 5 HN dollars!" option. Money for the month goes to some good cause or other, decided by HN.

If you chose not to reply you have to wait 5 mins.

That's actually not a bad idea for hot button threads like the firefox CEO one a year ago, it would've forced ppl to think a lot more before replying and kept the discourse at a higher level (bec most ppl would've either waited or not replied at all and those who would pay wouldn't waste their $5 to call someone they never met a bigot or whatever).

Though for where the donation goes it'd probably be best to keep it rotating between non-political causes like Red Cross, AA, etc.

Most games I never make in-app purchases. But if the game is fun, and the in-app purchase makes sense, I'll pay.

Hearthstone, Zombie Farm Battles are examples of games I play all the time, so I don't mind spending a few bucks here and there.

I probably spend ten to twenty every few months.

Interesting point. I am embarrassed to say that in the early 90's I would spend on average around 1000$ USD a month on arcade games.
only 3% of users buy something? Wow. if that's true, trying to hack conversion rates would rain money on them like no other.
That's the general rate across all freemium games (1-5%).
That is one ugly site
I found this to be ingenious:

To allow for the building of alliances within the game, the app needed a sophisticated chat feature. In the middle of development, Leydon decided it made sense for all players, no matter what their native tongue, to speak the same language. So he built a messaging platform that included a translation engine based not only on Google Translate but also on crowdsourcing. Within Game of War, text messages, comments, and push notifications are translated with about 70 percent accuracy. Log in to the game in Polish, and everything you read from other players is in Polish, too. The game’s players correct any errors they notice in exchange for virtual rewards within the game. From the start, the average player corrected 10 misspellings and slang expressions per day.

After reading this I didn't understand why they hadn't been bought by Google or Microsoft just for that feature, access to a near real-time translator that not only gets the usual words and uses but lots of slang and edge cases that nerds like us love to use.

I mean google built/bought gVoice and GOOG-411 for the voicemails and transcriptions, they have that weird empire land based game for maps, and here's a chance to greatly improve gTranslate and possibly even gNow...

As a windows phone user, I, of course, want microsoft to snap them up (for cortana), but they don't have the foresight to make these types of buys (yet?).

it confuses me as to why some people are more susceptible to paying for in game items where those are not.

as soon as I see in game purchases, it's immediately uninstalled.

I want to pay for a game and compete based on some dexterity or skill gained over time not on the wallet.

Some people have more money than time or interest in spending that time grinding games. I've been level 12 in Battlefield 4 for years. I don't get to play it more than a few times a month. I'd love to pay $20 to have all of the unlocks so that I can actually use the weapons that everyone else has.

Because to me, that $20 is worth FAR less than the 100 or so hours I had to waste getting those weapons.

I don't see it as a grind because part of what makes leveling up fun is gaining more skills, the unlocks are a nice add on and certainly make an incentive.
It's really disappointing to see this trend, both as a consumer and as a developer.

On the consumer side, freemium games are designed to be inferior to their pre-paid cousins, or else there wouldn't be an incentive to spend on in-app purchases. And the lucrativeness of the market has turned the heads of most of the game development companies in the world, so it's getting harder and harder to find games that don't use this model.

And as a developer, I want to make things that people enjoy. I want to recreate the same feelings I had as a kid, the delight of mastering a game. Or the bliss of a program that enhances the user's capabilities, without adding new impediments of any kind. But consumers have so gone towards this freemium model that they just don't seem to pay attention to pre-paid programs. How do you compete against a company that can take a game that is as big of a piece of crap as Game of War and turn it into a printing press for money--can afford to spend $40 million to have Kate freaking Upton show up?

I'm sure it's stupid of me, from a business sense, to declare I'll never make a freemium game. But dammit, I went independent specifically because the general lack of ethics I had encountered in industry bothered me so much. If I can't make it on my own terms, I guess that's the fate I'm going to have to take.

I guess I will never make something popular because I am apparently on the different side than all those people who are happy eating shit (playing games that try to rip them off).
Yawn. Just another "free"-to-play app masquerading as a game in order to take as much money as possible from gullible people.
Read this article hoping for more about the Upton / marketing angle. One thing I took note of with this game - has anyone noticed on networks like instagram, all these pretty amateur model girls taking selfies with Game of War playing on a tablet in the picture, talking about the game etc? I have never seen that sort of promotion and I keep wondering if it's natural (maybe followers of the "Upton" aspirations) or if GoW marketing reached out somehow..... never seen that sort of mainstream viral promotion