Keynote: Maximising IAP Revenue Through Localised Pricing & Promotions

[Music] [Music] and now i'd like to introduce ted verrani from wapia with his talk maximizing in-app purchases reven purchase revenue through localized pricing and promotions so hi my name is ted ronnie i'm head of business development for wapier welcome to my talk maximizing iep revenues through localized pricing special offers or how i like to think you know making 20 to 40 more incremental revenue just by pricing your products right a little bit why is this important topic i think it's i mean maybe it's incredibly obvious right you know pricing is kind of a pillar in terms of you know how you make revenue within your game but also as we know in this

mobile gaming space it's just incredibly hard to acquire players for your game you know and it's increasingly so right and it's you know we know that a third of your players you know are going to come once and then not return your game so whenever someone's at that point of considering a purchase it's critical like what's the right price right time right the quotient for like the right location for someone get the price right and i'd say now it's even getting all the more important too with what apple's done around data privacy making even harder now to acquire players in the game you know it's even more critical it just it's you get people in that point of purchase to get the right and i mentioned because right now we're living in a world really where most developers game developers you offer a one size fits all approach to pricing we know that different people respond to different prices differently but again it going saying earlier if we can get pricing right you know that's going to be the key to maximizing your profit and revenue for the game right let's fa making a game that's hard you know this wants to pay and monetize you know and then live ops you know from the

best performing games a huge amount of time effort money invest in it but one small change just to a number and you're gonna make can make all the difference on whether someone makes a purchase a little about a company whap here right so um fundamentally we're an ai company you know we have a it's a robust technology built around machine learning algorithms that allows us to predict and understand player behavior um processing about four billion events you know a day that expertise we have is within built on top of some closed loop end-to-end solutions around pricing optimization today's topic you know primarily but also engage in application solutions that we built on top of this ai engine too and then now going forward we're taking a lot of what's worked in mobile gaming and applying them to nft gaming you know as well you know and they even created some you know nfc only type solutions around even a marketplace unfortunately work a lot of really great companies and some great young games out there so it's kind of experiencing shares and so this is you know less commercial about us but you know i'm going to talk about what we're doing but

also trying to emphasize some areas that you guys should be doing this yourself so two main things that we do typically with a customer first things we want to do is global pricing basically want to auto adjust prices on a per country basis according to local market demand once you fix your prices on a per country basis then you want to consider promotional pricing right that's usually the next phase we have with uh partners to where now we're moving beyond just sort of you know per country pricing to think about per user pricing but just for special offers and that's important point special offers within i'm going to get that in a little bit deal so again these are solutions that we offer to customers but again something you can do so first global pricing why is this important i guess that's using this question do you localize your game right i mean do you localize it for different languages you know for you right so i mean that's hard you know so you're going through the time and effort maybe paying some money to actually localize your game for another language even some people going further you know even like making distinguishing between the castilian spanish versus mexican spanish or even going you know further and i

encourage it you know localizing some of the content some of you know the best performing games are doing that and yet pricing you know is not localized right you know and so why aren't you localizing your pricing because you know simple truth is there's no one-size-fits-all approach to pricing but that's what most people are doing you're pricing your game for the united states and then you're letting app stores do currency rate conversion for other countries simply put you're mispriced the world and not just like mexico or you know brazil you know right here it's like that but also even like the uk germany you know the higher income countries you know it's just because the price is correct in the united states it's wrong to think that even for high-income countries that's necessary the right price everyone has a different notion of willingness to make a purchase within there that said you know you know pricing you know to the demand curve interesting local price elasticities and takes a deep understanding of local markets going further now creating hundreds or even punching thousands of price skus you know for a

game that's you know that's a challenging requirement right you know because it's not just about changing your prices you know once but then it's actually about managing your prices on them ideally on a monthly basis before your game but again in adventure early i'm just gonna repeat this probably a couple times today but you know country-specific pricing is a fast and easy way to drive incremental revenue literally we have you know you know we have customers be live in days with us and then you know they spend probably an hour a month working with us in terms of getting reports i like to say you can be involved as much as little as you want in terms of pricing so you know our our job we'd like to think in terms of revenue optimization everything we do is try to help people make more money outside of the core gameplay and it starts with pricing for us so i get this question a lot like so ted is it a big mac index like is somebody like someone like this zeroed in on some sort of secret recipe for you know how to get pricing right i don't know where that came from frankly but you know we're you know even like saying like it's a big mac in some parts the united states is 99 cents very cheap you know type thing again high income country and you go to some countries and

i think it's a date night food or something it's more expensive than say the local food versus frank i'd rather have the local food than a big mix so fast answer no it's not a big mac index you know here for you um that said response i mean if you're gonna do nothing else you know for your game probably lowering your price for some countries like india russia brazil indonesia you know we have a lot of bookers makes it's better than just charging u.s prices you know if that's what you're doing so that would be something to consider here's what we do and what you can do too because this is publicly available information right you know this is so what you know what we want to do is we're going to look at gdp data you know we want to look at you know when there's also you know currency rates understand exchange rates we want to monitor that we want to like look idea of how it's changing you know over time definitely on a monthly basis and not just macroeconomic data microconnect data we're getting a notion of household purchasing power you know there we own that also but really then becomes more important than his game statistics information we want to like layer in on top of so it's not just gdp you know

with you know on for population so gdp on the the gamer population within your country so that's actually what's really more important too how you get there also the fluent signals you know device information smartphone penetrations affluent signal your ratio of of you know ios versus android but even you know these all come together we just saw this data because it's not about data from your game it's about a lot of data outside your game first to get the global pricing but even genre can actually make a difference we've seen on different countries so some countries you know role-playing strategic middle east north africa for other reasons strategy games are very popular social casino games you know those are actually really popular in more english commonwealth you know countries out there too so that's an opportunity to maybe make some considerations for price on that one our case what we're going to do is we know some econometric models we want to run data we're going to do some multi-armed bannon tests it's not just a b testing your way to get price but doing some multivariate testing framework on top of it but making those changes directly so you can do this you within particularly in google play and you're very granular on

a per country basis you can make changes yourself we have a platform that allows us to do it in a very scalable way because we're talking making hundreds of thousands of changes on a hurricane basis a lot of games right now you can also do this in ios so it's not just some people think that you can only change prices in google play that's not true if that said i will say android you know it's probably the first place to go because you can get more grain there within there you get an opportunity to have a um better impact in price also greater diversity devices in android right you have your low end to in funds there too so that's important so you can you know influence let's face it iphone no matter where you are in the world that person has money so um less than a fluent signal though there are other signals that are important you can do ios and we do get good impact also in ios 2. we do you obviously have the tier system you need to take consideration i apple's supportive of this they have alternate price tiers available that's the only reason that you know so yeah some people excuse me some people say oh you can't do that you know apple they won't let you know that's not true they got alternate price

tiers out there they wouldn't you know they would have these alternate price tools if it was not something that's an option you do need to add a couple lines of code into the game it's literally two lines of code that we have our developer partner in case we work with people on android zero engineering is involved so that's that's great but in case of with ios you're probably you need an identifier for the country so you need to know that someone's coming in from the uk to serve whatever alternate price tier you might be sent to that because then you pull so it's within the apple system it works fine when you need game data you will need game data rather also yourself so what um but it's just transactions data because you're going to then make because what you need once you start doing some tests different price points you need to know whether it's working or not right and that's where understanding the transactions at the end of the month you know measuring the impact on the price changes becomes very important and time permitting i can talk about how we do that with you know out in sdk we have a platform again you know to do this because it's still works but you know my point here is that you do need to find a way to manage your price skus because you know pricing is not a set it once and done proposition needs to be

something that you know you go back to and you know revisit because even in the beginning when you set your prices for the u.s and currency rate changes so actually it doesn't adjust with currency so even so it starts off bad it gets worse over time during how long you've been as the game has been live within the game so so one so one point point you can say is that reality is that you know those some of those high spending folks in some countries will now get a price discount right you know you're suddenly doing you're going to lower the price across the board on a per country basis that is okay the what you're going to see is a big increase in payer conversion big increase in the number of transactions so you have a lot more people converting you know over into a payer you have a lot more people you know now they're making you know more transactions smaller purchase amounts on a negative basis but that's going to translate to a big increase in overall ib revenue in fact i would say it's actually not going to make your game healthier you're not going to be less dependent on this handful of whales and they're worried that they're going to leave your game right you actually

have a broader reach of people and more engaged your improvement in retention we see that across the board people your retention is also going to improve as you've now correctly priced your product on a per country basis okay i said we work with a lot of people so share some examples of facebook i like this example it's one of the earliest games you know and this i guess it speaks to my point about it's not set at once and done proposition we launched with this game in 2018 it's a popular poker game so excuse they're part of a part of a billion dollar corporation is real money gaming you know great reasons let's name them um but what you see there is that as i said earlier it's like you know peru 138 percent increase in revenue hungry you know remaining over 100 increased revenue again we kind of would expect maybe some lower income countries to see some you know sizable increases and it's true but check out germany 81 sweden 22 you know japan 45 again taking that off that peg of u.s dollar can have a real impact in high-end competitions in canada right you know which is you know lower percentage increase but this game had a really high canadian

dollar revenue base to begin with 19 on pretty good revenues it was quite substantial and it's the same effort right you know essentially here as i was talking about earlier about um localization right this for for them they great game hitting on chains very popular there's really one high in the charts but they you know they saw they kind of felt like they really saturated the us market on um during the ua side of things so for them the growth initiative was like hey let's just you know localize other countries and this is every content text oriented game too so but then we help them on the pricing side of things too and again across the board you know good revenue increases you know for this game i think we've driven out you know a couple million dollars you know straight to the bottom line you know for them just by making the prices correct you know for the game harry potter congressman so very large game james city um i get this question again what size game you know the truth is that it does work better with the larger game with a higher larger you know revenue base i mean the

truth is that you know in order to measure effectiveness i do need a certain number of unique pairs number is 25 and you need any 25 new payers on a per country basis that's enough data for me to from you know data science to do what you need to do in terms of measuring the impact on that but you know for them it's just like you know again they're focusing on the more important monetization aspects of the game and now we work with like 14 different you know jam city games but you know across the board you know again similar story in chile you know 101 increase in revenue you know indonesia 94 but again you know you know it's in the european countries there too 62 percent increase in famine the high income country you know there but you know we're driving more revenue there too ip-based role-playing game champions this is um i like this example too because this is a game that is um very social and seventy percent of its revenue is in the u.s so sometimes i get this question of like oh what am i there's gonna find out but the biggest change you're gonna do to prices right now like it's if you're live for a while will be in the first month

and it's in truth in the first month maybe some people might notice some price change but you know we're talking about trying to lifetime value here in the next month so big change in the first month another change in um you know second month after that after three months we consider three-month kind of calibration period that's when you're kind of like excuse me normalized right that point you feel like yeah we feel pretty good we got that we're optimal pricing there too again like i said earlier the poker example not done you want to still on a monthly basis go in manage prices so how is it working how to measure performance results because it's actually at that point probably more 5 10 change if at all may not you may not make a change to a price there but it's probably more around currency rate changes between countries so you want to be alert you know if a country say devalues you want to be on top of that you know almost right away and responding to that all right so we fixed prices in the global ways to get this thing in the beginning presentation we like to first those fixer prices on a per country basis across all live skus everyone in that country gonna see the same prices right

next impact and positive impact in terms of pair conversion overall revenue are you still leaving money in the table fast answer is yes right and this is where promotional pricing you know comes into consideration we want to do here is so about 30 40 percent of your revenue and your gain is different i guess you know is from special offers special offers those are tend to be event based or time based right you know so it by definition they're impulse buyers right you've put them up for some reason up for someone the player is going to make a very fast decision on whether or not to make a purchase it's a great opportunity to move to per user pricing for that i caution say don't don't start doing dynamite pricing on the full storefront offers have experience doing that it's not you know we all we want to be careful about creating an overall good player positive experience so i think that's where people might have a negative sort of feeling special offers we all expect sort of something different within the special that's why it's a special right it goes away at some point so i'm going to share so this is you know this is more about behavioral economics meets psychology so again some stuff that for you to consider and what you can do

within the game you know we work in partners many of people do this make it more effective some of the machine learning you know comes in to understand what's the right price but first thought around personalized is personalizing of the special offer itself okay first we what we do know as a truth is that free time means more engagement more engagement means more likely to make a purchase right okay we all know that that's true true because that's why we know that you play more on the weekends children pay more after school we hope so yeah we have like you know i don't know do we commute anymore i don't know some people might commute now if we do commute and that's the time when people play merry christmas holidays so like so actually capitalizes seasonality right you know that's like not just black friday day you don't think a lot of people kind of well known because you have to do something that's mostly because everyone else is doing something good but just think deeply about holidays summer months because those are times when people have more time in the hands more engagement great opportunity to get people to make that first purchase within the game so give someone a special offer optimize the content for that around the

content itself from creative tube but then going further what's the right price for someone at the time games are fully leveraged for at least for example is the holiday season right so holidays when obviously you see a lot of special opportunities if you were fully engaged fully taking advantage of that holiday season opportunity when and which is also a perfect time because a lot of people got new phones anyway so people like trying things checking things out you know 81 83 increase in revenue we've seen on against annual average from people actually you know taking advantage of some holiday special to maximum impact right rule number two make a special offer timing move along what i mean here is that um pinpoint prime time prime time because prime time is popularized by we brought tv broadcast right so that's what you know and that's fine episode 6 pm to 10 pm you know so you know decades ago funny enough that still holds true for mobile gaming so again kind of it's the free time so people tend to play more there we want to go further than that so if we want to pinpoint prime time on a per user basis because not all players

are created equal we have different work schedules different life schedules working on people with kids and prime time enough people 10 pm at night you know we don't know but analyzing behavioral data from your game can help you to pinpoint that prime time and spectacular specific time game so that's the you know the data like how many sessions per day how long are you people playing for the you know when did someone make you know a purchase you know what time you know day of the week you know all that data kind of helps inform you then as someone new player comes in who exhibits similar characteristics of those previous players that you already analyzed that helps you to deliver the right offer machine learning models can also help to optimize special offers on a per pricing basis speeding along at the time rule number three final effort yeah i got 10 rolls i don't get three um the makes new special offers feel special like you know so we do know you know i just said like i said in the very beginning the presentation you know a third of your players will come download once not going to come all right what's your job convert into a payer as quickly as possible right you know so like and that's like things like a first purchase discount so really that first three days

is your window when it's critical to get someone over the hump to maybe make that first purchase it's key for building loyalty it's key for driving spend and overall lifetime value so leverage they make let's make a first purchase discount i'm going to have to go quicker through some of this stuff the um you know set an ip promotion to run once a user hits the first time so you know your game if you can identify where certain challenge like when someone hits a certain challenge level or some levels in your game that is also going to be a kicker of joy for someone within their game right and so they're having more fun right so you whenever whatever that point maybe it's level 10 you're in your game ideally you've identified sequential levels beyond that right so we know that if someone gets to level 10 for instance you know they're going to actually make a purchase for instance at the time again they've made a purchase everyone gets to level 20 and they already are pairing the game that's going to be you know key for you know dramatically you know driving lifetime value for within that game whatever it is you want to create promotions that are driving to people the next level bundles are negatively correlated goods let's explain this one a little bit this

is pretty cool um well here what we're doing is so you know is we're packaging upgrading a bundle of two goods that someone would not purchase together for instance the um you know medieval fighting game you know someone who buys a shield may not buy an armored breastplate right okay put those two items together you know let's put them off at a steep price discount right then we're gonna put these purchase these things anyway separately so they know they wanted one thing as long as you're making a little bit more the player gets super excited because you got a great deal again we're talking about impulse buy here early in the player's life cycle they're gonna make that purchase now they're more engaged in your game and you're ahead anyway because you weren't going to sell that second item to them anyhow message user directly to alert them for a virtuous parameter this is in the earlier part so with key here is that in-game messaging within itself too you don't want to annoy them with the push notification stuff right away comment push notifications a little bit later you know when lifecycle can be good right you know we make predictions around churn when someone's on the way out so when is a player game pulling someone back into the game um with the

push can be good key point give them something special right don't just hey i missed you come back that's lame you know give them something special offer something to reward them for coming back right i always think reward you know players deserve to be rewarded but earlier cycle in-game messaging is some sort of special offer determine low friction high-value you know 71 of all purchases are for single-use items but 65 percent of revenue comes from lifetime items right so let's we want to approach promotions around some of those lifetime items is what we want to get people now word of caution is don't be too generous right you know where we're talking about trying to get people together without to make that first purchase you don't want to give them so much so they don't make a purchase because the most important thing is that you know d7 retention we want that above 10 we want like within those folks you know 10 of those folks to be pairs within your game if it's not hitting those marks then you may be giving maybe too much stuff away you know within the game itself and i think i'm

out of time yeah thank you very much [Music] [Music] you