The battle to acquire and retain new users rages on with $30 billion worth of in-app revenue distributed amongst developers in 2018.
App Annie reports that 79% of games are using in-app purchases as a monetization method and I can only imagine how creative teams are scrambling to come up with new virtual goods they can integrate into their games.
It’s challenging enough to figure out what your users want to purchase but try figuring out what they want before they even know.
Is there a type of reward that will stand the test of time and continuously deliver NEW users right to your app?
In my opinion, that thing is going to be branded digital collectibles, but we can chat more on that later.
So, how does a game reward a user so that they tell everyone they know and continue to come back for more?
That’s the problem every publisher needs to figure out.
First, let’s get our creative juices flowing by listing out the different types of rewards that you need to make yourself familiar with:
- Currency — Players receive currency which can be used in the game to level up, buy items or perform other actions.
- New items — Skins, weapons, and other accessories that are obtained through leveling up or completing various tasks or missions.
- Achievements — Anything that is bestowed on players for finishing a mission or participating in player tournaments.
- New players — Rewards given to players who have just started playing the game as encouragement to keep doing so.
- Narrative — Cut out scenes that add to the overall narrative of the game.
- Locations — Unlocked by players who reach a specific level.
Every game publisher and designer struggles to some degree with the question of how to encourage players to continue using a game once the initial novelty has worn off. No matter how many new updates may be released, there is still the issue of player fatigue, which can occur as some gamers beat every level and are then prepared to move on.
Let’s face it; not everyone can be as awesome as Adam Gazzaley and create games being used to treat serious medical conditions. I highly recommend you check that out on the Rob Reid podcast.
Back in my Everquest and WoW days I was all about the loot. So, I would like to believe that virtual goods are a huge variable in whether or not a game becomes successful. Personally, I find that VG’s are the fuel that drives the addiction. It’s that ever-elusive desire to be the “best” by having the best items and making sure everyone around you sees it.
Some may view the “virtual good” arm of their game as a stand-alone product. Virtual goods are certainly capable of being the glue that makes all the other unique value propositions of your game work in conjunction.
One powerful strategy to consider may be to brand your virtual goods by negotiating digital licensing agreements (such as the Fortnite & NFL deal). Allowing your users the freedom to express themselves within your game could prove to be a powerful motivator while also keeping things interesting in regards to content and gameplay.
This strategy can get really exciting as we enter the baseball card era of virtual goods through advancements in blockchain technology and digital collectibles (also known as NFT’s or non-fungible tokens).
In essence, users of all ages now have a massive opportunity to purchase unique virtual goods that not only have stored value but can increase in value over time, like an investment.
I’m going to tell you right now that as a parent to a 5-year-old Minecraft, Roblox, and Fortnite obsessed kid, I’m going to be a lot more frivolous when he comes asking me to buy him some new skin or consumable when that good is a branded digital collectible.
One could argue that the era of purchasing digital collectibles will contribute to the distribution of wealth. Right now at this moment I find myself getting excited at the thought of looking through my sons’ wallet to see what collectibles he has in there and how his “investment” is holding up!
The seamless use of wallets and tokens in-app will also help fuel the mainstream adoption of crypto and blockchain. You can turn your game into a dApp if you use the EPIK (formerly known as BLMP) SDK to integrate branded digital collectibles into your game.
The EPIK marketplace will match you up with brands where you can then propose, negotiate, and initiate digital licensing agreements. These agreements are stored on the blockchain and then executed on by smart contracts so you can rest easy knowing that your sales and royalty payouts are irrefutable.
One study shows that social identity is the driving force behind the purchasing of virtual goods. Every day in our real lives we’re interacting with a large variety of brands. I find it interesting that we can now interact with these brands digitally to the point where a virtual representation of our self can be created. Over time, I imagine we will gain much more clarity regarding the things we like or perhaps the things that best represent who we are as an individual.
If I were a game developer, I would be putting a lot of thought into the mechanisms that enable users to display their virtual identity socially. Half the fun in my eyes is that I get to wear my wallet or digital profile as a badge of honor and display it to the world as an extension of myself.
I see my digital identity being created through all the different items I’ve procured and by all the different games I engage with over time.
It will be interesting to see how our desire to establish virtual social identities grows over the next couple of years. Especially in regards to how that, in turn, motivates users to gravitate towards certain games and away from others.
Let me leave you with one final resource before I bid farewell.
If you want to get nitty-gritty with your virtual goods pricing strategy, I suggest reading this academic essay submitted to HICSS “Pricing of Virtual Goods and Designing Game Challenge Level for Free-toPlay Mobile Games in the Presence of Copycat Competitors“.
I encourage you to open this discussion up by posting your thoughts below.
What drives people to purchase virtual goods?
How will NFT’s or branded digital collectibles affect the gaming industry?
How will our virtual selves impact our daily life?