Monetization: F2P vs. Premium

The first thing to define for any game is an evergreen core mechanic: a type of gameplay that feels fresh and new each time players come back to it. This should be the go-to mechanic that quests and events default to, even if there are other game modes / mechanics that are just as interesting. It should be fun on its own, despite how it’s connected to the rest of the game (be it accessible via a menu, a main hub, random encounters, exploration, etc.). It's good practice to define how much time it takes a player (payer or otherwise) to reach the top level and design the experience for that endgame, then split that progression along a curve.

This core mechanic should provide visible, tangible rewards, the most important of which should double as a currency to spend into improving the player’s performance, thus renewing gameplay (coins, experience points, etc. with which to buy upgrades, items, skills, stats, resources, characters, cards, etc.). Rewards provide a sense of achievement, while their use as a currency provides a sense of progress. It is also important to progressively unlock new features to grind for (new characters to level up, new equipment to improve, new skills to master, new crops to plant, new houses to furnish, etc.).

Thus the mechanic becomes a core loop that feeds into itself. Farming vegetables rewards you with coins with which to buy more seeds to farm more vegetables or to improve your tools to farm faster. Winning battles rewards you with experience with which to upgrade stats and better fight, minerals with which to enhance your weapons, etc.. The more complex the game, the more mechanics it can incorporate as core (exploration + fighting + gathering + farming), and the more currencies each one can yield.

The aspect that distinguishes an F2P game from a premium one, is how the currencies in this loop of action => reward => action are obtained. In a premium game, all currencies are obtained via player action within the game, while in an F2P game, they can be obtained partly in the same way, but can also be purchased in the store. This way, the player is able to buy their progress in the game, and shorten the amount of grinding time. The goal is that players who are unwilling or unable to spend can still play and simply spend more time grinding (they probably have more time than money on their hands), while players who are able and willing to pay can get the full rewards for the grind. It is important for the grind not to feel like it gives too much to payers in contrast to free users, or that it gives them a competitive advantage, i.e., Pay-to-Win. Purchases should also not feel coercive, in other words, that the game is intended to hinder your progress unless you pay (i.e., “paywalls”).

Lots of small purchases over a wider span of time is a safer business model than fewer but more expensive ones in short amounts of time (players that drop off don’t represent as much of a loss). This is why it’s important that the core loop feels fresh day after day, in order for players to keep logging in and keep them aware of future and present content as well as time-limited offers and events via in-game announcements, mail, etc.. This can be incentivized via daily rewards (increasing along with log-in streak), as well as daily rotating bonuses or content (daily quests, etc.). A social aspect to the game is useful to turn free users into promotions, thus expanding the core audience, and among them, payers. Rewards for sharing and following on social media are a good way to achieve this.

Once a store has been set up with the currencies needed for progress in the game, the store can also include aesthetic purchases, further incentivized if the game has a multiplayer component where players can show off their avatars. Some games even go as far as only selling cosmetic items, leaving the grind solely at the cost of the users’ actions and time.

Of course, not all F2P games follow this model. Some have no microtransactions at all and instead use a subscription model, a monthly or one-time purchase that unlocks the core loop rewards; while others rely entirely on ads (the more players, the more likely they’ll click on an ad). When relying on ads, it is important for the ads not to interrupt gameplay, lest the user feel frustrated. They should be placed at beginnings or ends of quests, rounds or sequences where player input is not expected, which is not to say chapters shouldn’t end in cliffhangers or in suspense. Additionally, watching ads can be an option that rewards in-game currencies. Narrative games, on the other hand, rely on churning out content as fast as possible (via UGC or eschewing on art and relying more on text) and maintaining an audience, locking out special content (special choices, special chapters) behind paywalls.

Translated to a production point of view, the most important KPIs to look for in an F2P game are Engagement KPIs. Daily / Monthly Active Users, returning users, as well as their growth rate. Other important engagement metrics include session length, interval between sessions, and player actions per session.

Of course, it’s still important to check user growth and installs, but players could be installing the game and not coming back to it for days, uninstalling only when they’re out of space, so even if those KPIs look promising, they could also be misleading.

After each version release, one should keep an eye out for Quality KPIs such as Crashes and ANRs, reviews and daily ratings, as well as user losses and uninstalls, as they could be indicators of game-breaking  bugs.

One should also make their own KPIs in order to improve the product. Are people completing the First Time User Experience / New User Flow? When exactly are they dropping off? There may be a perceived ANR or a design bug that these metrics tell us how to find.