Below is my essay for Aalto Ventures Program course "Game Monetization Design" held early in 2014. I promised to publish my essay so here it is. Essay was submitted without any images but I've provided them for blog purposes. Enjoy at your discretion. Please note that certain things have happened after I wrote this and there's no need to point them out. :)
When the course began, I had absolutely no idea what I was getting in to. Please note that I'm studying financing and investing and therefore I decided to write this from my own point of view, which I hope to be somewhat unique. I don't know much about game design and I have a very low probability of ending up working directly as one. I came to the course thinking that the game industry in Finland has during recent years reached a critical point where the game developer scene is self sustaining and attractive enough to grow tremendously.
I see myself working more in the finance industry, but knowing how the game developers see the world and how they percieve the games as money making factories will be my advantage during my career as the gaming industry keeps growing and more of my customers come from this line of work. But hey, I could be persuaded to gaming industry if I have something relevant to give - I have no reason to rule it out as an industry. I'm what one might call an old school hardcore PC gamer, one that has had extreme troubles fitting in the mindset required for F2P games and basic mechanism of having to wait for extraordinary lenghts of time for simple things. I've used money on one occasion: To buy some sort of Origin points in Electronic Arts system, while I played Command & Conquer online with a bunch of friends from the "old days."
That was the first and probably the last time I will pay for free games, as long as the current revenue model is in place. Why? I bought too much and now have useless hard currency for a game I don't give a crap about. Waste of money and a mistake I'll not soon make again.
On with the essay. The course has enabled me to see a few bigger issues - one of which I'll discuss in this essay about - than any core loop, retention, LTV, and IDSPISPOPD. You'll probably get to read essays about acronyms soon enough so please try to enjoy this one: Problem with F2P games, in my opinion, is that they have usually at least two currencies.
One that you get by playing the game loops and one that you can buy with real currency. There is a major flaw here that I see that makes spending money on F2P games a lot harder than it should be: The need to buy seperate currencies to all the games, or publishers, individually. Users who could be monetized, dare not buy hard currency, for they fear they cannot use all that purchasing power. As I mentioned, I myself am an example of such individual.. Or, the unmonetized customers could be minors who don't have permission to use parents credit cards to make online purchases. Or, they're adults who, for one reason or another, dare not use their credit cards online.
Solution is simple: Enter Bitcoin and use that as the hard currency in all games. Sure enough Apple, Google and tax collectors might see this as a problem... that is, until they see that the problem is just their attitude with the problem, and start making truckloads of money again. As for the majority of parties involved, which are consumers and producers, this would enable instant and secure transactions across the globe and remove the fear of having unspent hard currency for the game. Plus BTC would lower the buying barrier.
Besides that the obvious advantage of using just one digital currency for all games, this would enable all sorts of funny things. Such as, making money in virtual world. Its possible already in some games, but quite hard since most games and publishers have their own hard currencies and most are not tradeable between players - payment in real world cash is possible for items but requires a terrible amount of effort and trust.
Okay there is Second Life and a few other titles that let people do stuff like this, but imagine for a second that you could, in World of Warcraft for example, COD mail someone a sword and put a pricetag of, say, 0,005btc for it. Game server would do the transaction if someone clicked "buy" -button. The seller could then use the same money he just got from selling a sword to buy himself something in Hay Day or fuel his car in CSR Racing - Or, better yet, purchase a case of beer from an online webshop.
Blizzard would ofcourse take 0,1% transaction fee. Supercell would take another 0,1% and shopkeeper from beerworld would either actually be the person who initially bought the WoW sword, or, he could just sell the Bitcoins for few euros in an online trading exchange.
This would definately fit Eve Online view of universe as the ultimate sandbox game and I'm certain that some savvy developers are already looking in to enabling Bitcoin in their games. Games could have account bound and password protected BTC wallets to which the gamers could transfer to and from their "real" BTC wallets. Basically the developers would also have a BTC wallet from which the players could buy BTC directly to their game accounts if they didn't have their own Bitcoin wallets already.
There are "problems" such as the volatility of Bitcoin price. However the real problem is again the attitude with the problem. Simple and profitable solution would be to tie the price of ingame purchases B2C purchase to public trading course between BTC and USD/EUR and price the items in USD/EUR but make exchange with BTC, and trade the coins received from players in near-realtime to USD or EUR - And benefit from arbitrage between the two courses. There is more profit to be made! And I'm sure more profitable (and complex) BTC-EUR/USD -schemes are just waiting to be made.
"To have done anything just for money is to have been truly idle."
-- Henry David Thoreau
When the course began, I had absolutely no idea what I was getting in to. Please note that I'm studying financing and investing and therefore I decided to write this from my own point of view, which I hope to be somewhat unique. I don't know much about game design and I have a very low probability of ending up working directly as one. I came to the course thinking that the game industry in Finland has during recent years reached a critical point where the game developer scene is self sustaining and attractive enough to grow tremendously.
I see myself working more in the finance industry, but knowing how the game developers see the world and how they percieve the games as money making factories will be my advantage during my career as the gaming industry keeps growing and more of my customers come from this line of work. But hey, I could be persuaded to gaming industry if I have something relevant to give - I have no reason to rule it out as an industry. I'm what one might call an old school hardcore PC gamer, one that has had extreme troubles fitting in the mindset required for F2P games and basic mechanism of having to wait for extraordinary lenghts of time for simple things. I've used money on one occasion: To buy some sort of Origin points in Electronic Arts system, while I played Command & Conquer online with a bunch of friends from the "old days."That was the first and probably the last time I will pay for free games, as long as the current revenue model is in place. Why? I bought too much and now have useless hard currency for a game I don't give a crap about. Waste of money and a mistake I'll not soon make again.
On with the essay. The course has enabled me to see a few bigger issues - one of which I'll discuss in this essay about - than any core loop, retention, LTV, and IDSPISPOPD. You'll probably get to read essays about acronyms soon enough so please try to enjoy this one: Problem with F2P games, in my opinion, is that they have usually at least two currencies.
One that you get by playing the game loops and one that you can buy with real currency. There is a major flaw here that I see that makes spending money on F2P games a lot harder than it should be: The need to buy seperate currencies to all the games, or publishers, individually. Users who could be monetized, dare not buy hard currency, for they fear they cannot use all that purchasing power. As I mentioned, I myself am an example of such individual.. Or, the unmonetized customers could be minors who don't have permission to use parents credit cards to make online purchases. Or, they're adults who, for one reason or another, dare not use their credit cards online.Solution is simple: Enter Bitcoin and use that as the hard currency in all games. Sure enough Apple, Google and tax collectors might see this as a problem... that is, until they see that the problem is just their attitude with the problem, and start making truckloads of money again. As for the majority of parties involved, which are consumers and producers, this would enable instant and secure transactions across the globe and remove the fear of having unspent hard currency for the game. Plus BTC would lower the buying barrier.
Besides that the obvious advantage of using just one digital currency for all games, this would enable all sorts of funny things. Such as, making money in virtual world. Its possible already in some games, but quite hard since most games and publishers have their own hard currencies and most are not tradeable between players - payment in real world cash is possible for items but requires a terrible amount of effort and trust.
Okay there is Second Life and a few other titles that let people do stuff like this, but imagine for a second that you could, in World of Warcraft for example, COD mail someone a sword and put a pricetag of, say, 0,005btc for it. Game server would do the transaction if someone clicked "buy" -button. The seller could then use the same money he just got from selling a sword to buy himself something in Hay Day or fuel his car in CSR Racing - Or, better yet, purchase a case of beer from an online webshop.Blizzard would ofcourse take 0,1% transaction fee. Supercell would take another 0,1% and shopkeeper from beerworld would either actually be the person who initially bought the WoW sword, or, he could just sell the Bitcoins for few euros in an online trading exchange.
This would definately fit Eve Online view of universe as the ultimate sandbox game and I'm certain that some savvy developers are already looking in to enabling Bitcoin in their games. Games could have account bound and password protected BTC wallets to which the gamers could transfer to and from their "real" BTC wallets. Basically the developers would also have a BTC wallet from which the players could buy BTC directly to their game accounts if they didn't have their own Bitcoin wallets already.
There are "problems" such as the volatility of Bitcoin price. However the real problem is again the attitude with the problem. Simple and profitable solution would be to tie the price of ingame purchases B2C purchase to public trading course between BTC and USD/EUR and price the items in USD/EUR but make exchange with BTC, and trade the coins received from players in near-realtime to USD or EUR - And benefit from arbitrage between the two courses. There is more profit to be made! And I'm sure more profitable (and complex) BTC-EUR/USD -schemes are just waiting to be made.
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