How to build a Game model economics - First hand view

This report was created in 2021 based on the then industry data, user sentiment, total addressable market and user engagement level

Concept

I have an idea about a multiplayer F2P game involving famous action characters from Indian

comics like Nagraj, Captain Dhruv, Doga, Bhediya etc. The reason is there is an entire

generation of Indian adults aged 20 - 35 years who have grown up reading about these

characters and hence the engagement is naturally high. Infact Comics agencies like Raj Comics

and Amar Chitra Katha are constantly looking for new avenues to commercialise through the

digital routes like their foreign counterparts in the West - Marvel & DC did. So an entire

ecosystem of next gen. engaging games for India can be created.

Crafting system

“Elevating your rank in your squad” in proportion to the “Count of Death by friendly fires” is

something that could be tried. The elevation of rank would allow the player to decide the

“strategy” of the combat in the next level and would be the custodian of certain virtual coins that

he can use to allocate weapons of different types amongst his squad (different weapons are of

different value). The performance of the squad in that next level together with the ‘Count of

Death by friendly fires' would determine the player’s rank. So this process requires the leader of

the squad to know which player is best suited to what type of weapon and what level of

expertise before the fight begins.

The aim of this crafting system is to reward responsibility, punish poor decisions and instill a

sense of harmony in the squad so that they work and think together as a team rather than as

isolated individuals jumping straight into war. The same could be tested through A/B testing to

study parameters like session length of each player, frequency in the change of weapon

combination, in app chat length between the players as all these help in estimating the

immersion level of the players.

Lifetime extensibility

There are many factors which I think would be important to study the lifetime extensibility of this

craft:

● Every player continues to play battles in order to become a leader of the squad: that’s

the 1st motivating factor for every player

● Once a player becomes a leader he would like to try out the different combinations of

weapon allocation in the squad while maintaining his squad’s winning spree so that he

continues to stay as a leader: that’s the 2nd motivating factor for every player

Determination of the lifetime extensibility along with certain assumptions and estimates is

shown in the spreadsheet : Game Spreadsheet

Test of the Crafting system

The effect of the Crafting system is an increase in the number of battles played by a player per

session. So if “S” is the session length for a player and the average battle lasts for “t” durations,

then a consistent increase in “S/t” for a player over a period of time would help us understand if

the player's engagement has increased.

Specification

Ideation: One spec that I would like to work upon is to create a potion which makes one

invincible for a short period of time while the game is on and gives one the ability to destroy or

create anything and everything that one wants - even make a dead player alive. The reason

why I want to do this is because through the abilities of the invisible player in that short period,

he could change the entire game’s dynamics that exists at that point and hence affect the entire

gaming experience altogether.

An e.g. of execution of this specification: A player upon a certain level of progression in a

game becomes eligible for a magic potion. Upon consuming that, he turns into a monster and

has power to make other characters in the game alive or destroy other players, characters,

objects and even landscapes. This power would be available for only 5 minutes after which the

player’s character would return to his original form. In a multiplayer game, multiple such

invincible characters won’t be able to harm each other but everyone else during that short

duration.

Liveops tool to be used

Notifications about offers & promotions is the most important Liveops tool in a F2P game. That’s

because it’s the prime contributor to sales in the game. This means coming up with offers and

promotions for your players that will enhance their experience, outside of standard gameplay.

Sending players notifications to alert them of new cosmetic add-ons in the shop – if they’re a

lapsed player, or a player who rarely spends money, try to win them back with a 10% discount

code. Such notifications can help in up-selling them on currency conversions by informing them

of new levels, or extra treasure chests that they can unlock if they buy larger amounts of game

currency. These add-on purchases, while not necessary for gameplay, offer a premium gaming

experience. This could be in terms of aesthetics, character strength or ability, extra time

in-game, exclusive levels or puzzles, and so on.

Game economy

I think the key to success in a healthy game economy is to focus on the player’s earnings and

not on the game’s sales. The ways in which players can earn currency in a game’s

virtual economy translates to a deep level of engagement. Once we have achieved that

goal of using currency collection as a way to increase engagement and loyalty, we can

focus on the game’s real sales by add personalised gain options (in-game purchases

like battle pass or via smart ads like Rewarded ads) per each user’s preferences,

interest and mindset, which increases the LTV.

PubG did exactly the same with its Royale pass.

Initially it was the basic reward layers (free + paid) + purchasable tiers for faster progression

and the main source of the progression comes from the daily / weekly missions you need to

complete. When you spend time in the matches for the duration of the season, you earn

battle pass progression points (RP) for every 100 mins spent in-game. It’s another way to

accumulate progression on top of the basic daily/weekly task system. On top of this, we

have RP EZ Mission license, an extra purchase on top of your premium battle pass

purchase. It unlocks weekly missions for you faster, earns you Mission Cards (used to

auto-complete tasks) every week, and you get more RP (battle pass progression points)

from Season Match Time rewards. The interesting point here is that it varies based on how

many consecutive seasons of the BP you’ve purchased. If you have purchased more than 3

consecutive BPs, you get the EZ Mission License for free. So, its primary function is to drive

the constant consecutive BP purchases and keep players’ purchase streak going. The RP

Activity pack is also an extra purchase that players can make. It includes vouchers for some

gachas + 20 tiers ranks for Battle Pass, however the interesting point comes in the form of

“Mission Activity Point Rebates.” When players purchase the RP Activity Pack, they get the

benefits mentioned above, but they also activate the rebate to get the used premium

currency possibly back! So, when the rebate is active, all the progression points (RP)

earned from the Battle Pass quests also convert into points for the rebate. When the certain

point threshold is reached, players get the used premium currency back. One needs to buy

the required amount of the premium currency with real money to get the pack first. So even

though you might get your invested premium currency back, you have already made a

real-money purchase.

Monetisation

● In App Rewarded videos

● In App purchase using Hard currency mixed with Virtual currency during player’s

progression

● Subscription model (e.g. Battle Pass)

Some games that use these monetisation techniques:

● Pickcrafter - Rewarded videos

● Clash Of Clans - In App purchase

● PubG - Subscription model (Royale Pass)

Link to spreadsheet: Game Spreadsheet

Pricing objects in the game

Any optimal price of any object in a game depends on the Average revenue per paying user

(ARPPU) which itself depends on the ARPU (avg. revenue per user) and the Paying ration

(which is the number of users who convert into actually paying).

Even though the gaming company might factor in the Cost of user acquisition, other operational

costs (like management & development cost and fee paid to App hosting platforms like Google

and Apple), the ARPU is actually a function of the perceived value of your product in the mind of

the player because the player doesn’t bother about the company’s costs.

So once ARPU is set, now simply estimate ARPPU = ARPU * Paying ratio.

So for e.g. if the paying ratio is 2% and the you are expecting a target ARPU of $5, then do the

math and it gives us ARPPU = 2% * $5 = $ 0.1 which may be an under monetisation for the

game.

To carry out sales in the game

I would look at two main metrics - (Earnings of user/Buying from user) ratio and session length

together to determine if the sale was a success.

The first metric - Earning of user/Buying from user - tells us how much did the user earn for a

unit level of spent, if this increases periodically in the analysis, it means the sale was a success.

The second metric - session length - tells us how the engagement level of the user got affected

as a result of the sale. If this rises periodically, it means more players are using Battle Pass to

progress in the game.

And finally, the direct metric of No. of battle pass unlocked periodically and the common metrics

like DAU, MAU and DAU/MAU should also rise to affirm the success of the sale.

My definition of success here would be : (Earnings of user/Buying from user) ratio