The App Store Evolution Making the Most of Apple’s Pricing Upgrade - Ted Verani, Wappier.

[Music] [Applause] [Music] thank you [Music] so we're out on to um another talk and it's our good friend Ted varani from wapia who is here to talk about the App Store Evolution making the most of Apple's pricing upgrade so please welcome to the stage Ted hello come on in oops can you take a couple pictures of me yeah oh yeah of course yeah I can do it on my phone good all right so yeah um great last talk I thought you know now we want to you know we're gonna talk about pricing so specifically um the where the Apple did in terms of a big upgrade that we had with uh guards

to the biggest upgrade that they've done on the app store since it's gone live and specifically kind of zero in what it means for you in terms of how you can now better use pricing as a way to approve your Revenue I think it's actually fitting that apple is because like you've lost in the news we've been talking about you've even last presentation talking about oh what they're doing with idfa and certainly the Apple's you know allegedly for data privacy have been trying to you know make it harder for us I guess to acquire people so to make negative it's challenging for us too but even even past that you know retargeting and everything else so in general but I think they've actually finally done us a favor here too so we'll thank them for that now what I want to do is talk first is well first let me just say a little bit about you know who we are you know WAP here I work for WAP here and I'm head of Business Development you know for WAP here um fundamentally we're an AI company you know we how we get data we get deep insights into player Behavior we understand the relationship with the wallet and spending patterns and then really what we help is primarily gaming developers to make more money from their

games right you know so we get those insights we do most people know us really for pricing optimization here's some of the good folks that we have the privilege to work with so a lot of big top games and I'll even have some case studies from some of these games that I can share with you at the end so but I really don't I don't want this to be a commercial you know I'm not happier in what we're doing too so um first um let's talk about what is the Apple so they announced this last year um you know at the end of last year the announcement that first became available for subscriptions but then just a couple months back um they did the big update to the um to the App Store what is it what do they do specifically they you now they're added like 700 different price points for skus for you to do there are 100 also for available upon requests so now you have 900 different price points to work with also some more granularity within the 900 you know they brought it all the way down to 29 cents being now the lowest price all the way up to ten thousand dollars I'm not sure exactly what you would buy that in a game but you know I

guess uh perhaps there but even granularity within there so at the lowest level 29 cents up to I think is it's ten dollars incremental increases of 10 cents from 10 up to you know 50 you can now go 50 Cent increments to and so on up to the highest range about 99.99 up to 999 is 100 increments but really what we're meaning here is now some more flexible granularity more prices that you can choose from related that you're no longer locked into this ending 99 Cents right sort of you know the left order effect trying to think oh we just saw the first number no one knows that it just one penny more is one dollar instead conventions of you know maybe you just want to end double zero you can add in just zero you like the look of it bottom line is a marketer now has more control at their disposal like 95 cents you know something just because maybe you decide that looks better you can also schedule now schedule time changes with that time I think I'm changing standing in front of this so

you know again thinking of a marketer you can promote you know your event you're planning your big promotion say Black Friday day you know instead of worrying about getting into the prices beforehand you can put it well in advance and I think most importantly and really what I want to get in a lot deeper for the rest of this presentation is set local territory pricing you know within your game tune that's a particularly I'm going to get a little more detail about what I mean about forgetting for Country specific pricing there but it's no longer impact of automatic price adjustments so previously you would set pricing according just a tier Apple then would decide what that was in different countries periodically doing adjustments for taxes or for exchange fluctuations which in some ways a nice service but now you can actually get into the granule level on a per country basis decide what is the right price on a per country level and then related is you know now you can keep your local currency current you know constant right so not worrying about it now adjusting on the fly with you is for any surf on your choice even as foreign exchange and taxes fluctuate

so for instance maybe your home country is Japan right you know and you want to you know so you don't let you you know most your purchases are in Japan you know you don't want to worry about it you don't really care that the Yen might be fluctuating against the Euro or the dollar so you can set that as your home country and be and be good you know with that so of course with now what does this mean there's a lot of changes in there both opportunities as well as challenges first opportunities a lot more flexibility in pricing a product so now across 45 different currencies you know 170 different you know storefronts out there for us too so again in a country specific more Grand the control now allows developers to better compete with other apps on price accordingly so now you know you know the marketing literature talks about pricing as being one of the four Ps you know too so but really when you think about game development we really haven't used price to Great impact or effect or certainly most game developers not we're helping a number to do that um so that's another thing and then also

we have a wide range of pricing options to come at different business strategies and and pricing models so you know net net that's what you know this flexibility update of Apple does done for folks there are challenges all right so thank you as you think about going down the path towards making optimization using price know that managing multiple price points storefronts across different currencies can be complex time consuming if you think of your game if you have a 100 price skus you have thinking about pricing for 50 different countries right now you have 500 skus to manage so you're going to have to think in advance about a system so we have a platform that does this but a system and how you are going to manage because optimizing for price has not really just said it once and just ignoring it you know that's kind of what most people have been doing so far but really thinking about it on managing and making it much more dynamic new pricing system also will lead to increased competition so that you know I'm suggesting that you can now start using price as a way to compete more effectively so fully expect and plan for

your competitors to be thinking the same thing so now you you know instead of worrying about having the best content or other things you know features functionality watching competition in that front now watching to see what they do in price right because that is now a lever in which people can pull and of course now staying competitive in Global Market requires some careful consideration to what impacts price sensitivity right so first what should be the right price so complexity in terms of managing a lot of price skus but understanding what is the right price you know until now we get it's monitoring inflation you know it's getting idea for exchange rates on you know changes daily but at least on a monthly basis take a look at that see how it's optimized too but of course consumer Behavior you know and what that means so that is the control so those are some of the challenges to think about so you can do this stuff why does it matter right so why does really just thinking about price matter we kind of obviously I'm kind of biased I talked about you know one of the four

Ps it's my background is in marketing two but first it's you know what you know one reason it matters is right now most developers have a one size fits-all approach when it comes to pricing right most game developers you've priced the game for the United States it's probably your largest market 50 to 60 of your Revenue and you let the you know the app stores just do currency conversion simply put you're mispriced dick has been people respond differently to different prices to different locations right in general prices you know will be differently but definitely on a per country basis people are going to respond differently in terms of how they will make a purchase and adjusting the price you know for you know power increases the price and willingness to purchase so just really what's great is a small change just to the number you know that someone sees has an outsize impact you know I mean make think about what you do and you know live Ops you know creating new content new features right that's hard right you know and pricing somebody's hard too but you know when you think about just one small

change in terms of development resources is what it takes to make someone willing to make a purchase but pulling all together if you do this getting your pricing right kind of the fastest most effective way to really increase the bottom line and that's Apple's done so apple is now is actually giving us sort of their update allows now developers to better use pricing in order to maximize Revenue I'm going to talk a little bit more about thoughts on how to so rest this conversation in one touch so that's what Apple's done give us these tools we're going to talk about global pricing and I'll start with the question so like why does it matter like you know the question is for you guys do you localize your game right and we all kind of take it for you know expectation that of course you know at least you got you know I can't just expect everyone to play a game that's in English you know around the world we localize it for language first some people go further and they you know make some cultural you know changes to the game and localizing better which is good if you're doing that

why aren't you localizing your pricing because there's no one-size-fits all when it comes to pricing right and that's again that's why I said earlier was that most people are pricing on just as if everyone is a an American around the world you know it's agree that most Americans have a higher average income than most places around the world not just that greater willingness to spend right I always like to joke with then so in Germany also High income country you know just because they have a high income doesn't mean you have same willingness to spend as as as an American right because in currency rate conversion in app store is not sufficient so it's not just about what is it according to the euro but even within the Euro you have a Eurozone right you have we're in Finland it's a high income country you know less low income there's also Southern European countries with not as high income you know within Euros actually one of the areas we have the greatest impact you know for for players being optimized on a per country basis but past that not just currently pricing

the demand curve tapes deep insights into local Behavior local purchasing power pass that managing now hundreds or potentially thousands of price queues depending on the the size of your game you know is a big task of something to kind of think about but again you know getting to specific as fast as easy to drive incremental Revenue too I get this question a lot you know I'm sorry hey are you guys are you guys doing a Big Mac index as if they're kind of zeroing in on some sort of like you know secret you know out there too I don't know I mean people talk about I don't know where that first you know came about but um first of all the fast answer is no you know we're not doing a big back index um which you know for the price of meat actually fluctuates on a per country basis so if you think about digital good is something with no marginal cost the right price is what someone's willing to spend for it right and whereas a Big Mac in some parts of the world like it's very inexpensive right you know it's it's cheap food other I've been in some parts of the world where it's a date night you know it's like you know compared to say the local food local

Cuisine and I'd rather have local cuisine in most cases instead there's a lot of that you know what you'd really want to care about is I'm going to give you some insights a little bit to how we do things too but it's absolutely you know some things you could do yourself is you know data collect this is publicly available data I'm not standing in front of some information so macroeconomic data so what is GDP you know it's publicly available you know with exchange rates as I mentioned it's one of the bigger indicators watching and monitoring how that fluctuates in between different exchange rates too it's also microeconomic data really want to get an idea of a household purchasing power for um within a per country basis but then overlaying that with game statistics right you know so we want to get sort of you know so that's also available too so taking games it takes understanding gamer growth what is the growth of different games within markets too device information what's the smartphone penetration what's the ratio of iOS versus Android all these are different indicators or signals rather that help us to get the price

we take all that data together even genre funny enough like some countries just you know Social Casino does really well in some commonwealth countries right you know very popular there too you wouldn't do Social Casino in the Middle East North Africa region really you know or it's just not as popular too so it's less you know impactful to think about you know per country pricing there too so all this day is available you want to adjust it we do we post together we call it a whapper index again it's available we then start working on it had some Revenue regression models we do it directly app source so again what I was saying earlier now Apple has now made it much easier to make this price stress you know we do this record we already do in effect actually what Apple's done is made the App Store flexible more easy to work with that Google Play Already is so this is something that you can already do you know when we do this for customers been doing it for years now we make the price changes directly into the App Store so again your account you can do this directly we'll take our index so again data outside of the game first that's the Baseline that's a starting point to give relative level of say discount

in most cases not always you know in most cases versus the US that's a starting point but then what we'll do is sequential price evaluations on a monthly basis it's important to measure impact on a per country level right you know so it's and it's not just change price once and tomorrow we're going to take a look at it see how it works right because when you're measuring performance on a per country level you are looking at data and small data sets right so it does take time in order for data transactions payers that flow through the system in order to see whether or not the price change was impactful I'll come back to that a little bit later it's not it's not about Behavior right you know I mean we do a lot of that stuff too with promotional pricing and so to other people as well but the data you need from your game is Just transactions and activity data purpose of that measuring the impact make a change to price what we'll do is we wait a month ideally a full month

measure it make another change the biggest change is to price that you will make probably be in the first two months during the bigger swings the price if you say if it's an older game you haven't made a change for a while first month we'll just first to what you know what is the correct currency fluctuation versus the dollar second month will be against the index that we've created already that we only already work with to whether thereafter small incremental changes five ten percent ongoing basis so directly to that we're lucky we have a platform we're like it's deliberate enough lucky we just by Design This is what we do so we have you know it's four million lines of code it processes five million events a day this is what allows us in a very scalable way to do that not to say that you can't do this yourself you know running you know spreadsheets and whatever you know down the road it works yeah you know so I can um you know share some results with you too what you'll say so as I mentioned in the

price you right away month one month when you see increasing Revenue but first thing you're going to see is a big increase in payer conversion right as I mentioned earlier more often not we're going to lower price right because again you're treating everyone like just a wealthy American around the world um we're going to lower price some cases might raise price so if you think small rich country so Switzerland some oil rich countries UAE Qatar oddly enough even Ireland we've seen some increases prices there every game is different on a per country basis so it's a starting point but you will see a big increase payer conversion about 10 to 24 increase per month that translates also a big increase in the number of transactions as we made it more affordable for that 10 10 to 45 percent increase per month and then increase resulting from that it's a big increase in overall IEP Revenue we asked you know be patient stick with it again don't if you once you change price tomorrow you've just given a better deal for all your current payers in your game right so expect

giving your Revenue to go down right you know because you've you know but right now you're living in a world where it's a small number of people even paying in your game we are trying to make it more affordable what makes for a larger audience of people so be patient usually we will see generally increase in Revenue month one for that sometimes we see New Year we do expect in the first three months volatility as we zero in and try to get the optimal price on the demand curve but you will see then 15 to 40 percent increase in Revenue outside of the US on the per country basis so as they say you're mileage will vary and it can you know go up and down accordingly we just even higher on that benefits are more than just Revenue you know we did a study of you know about 60 different games we're live with see what that so we saw that also an eight to twelve percent increase in the average days of activity per month so engagement so like this is like now it makes sense there's people more people are spending and you're getting by you know you pay your conversion they're more you're engaged and more invested in your game so you also see increased activity so that's

great also a big increase so as you've now localized your price you're going to increase your payer conversion but also the speed towards that first purchase so about 12 to 24 increase per tank for increase in terms of time D sorry decrease time to get to the first purchase after that you know we're going to see is then 11 to 33 percent decrease in the time to the second purchase right so we now are increasing number of transactions we're also you know increasing the velocity of the transactions net impact overall IEP Revenue healthier game for you how much time do I have whoa minute okay a couple quick case studies um we're not named here but it's a social casino and we live with them many years since 2018 um part of a big big company with even though it does Real Money gaming so you know it's a billion dollar Corporation rely on us for the Social Casino game I like this site also because you know this one's actually 55 High I Pro right

so even higher than sort of you know we say to estimate 15 30 too but this has been higher also illustrates that's not just about your lower income countries so it's not just about Brazil Peru you would expect to see a pair of conversions but Germany 81 percent increase Sweden you know 22 percent Canada lower percentage but to Social Casino game so now a very large Revenue base to start with that so that's been good still look at that it's not specific to genre either sometimes they get that question it's a hidden object game big game dreams Journey you know from Wooga too we've been privileged to work with them for since October 2019. again price is not set at once and done you know just you know probably doing changing it once is probably better than doing nothing but you know if you're going to be serious about it you know the world is a dynamic place you know staying on top of your prices making changes with an ongoing basis this game we've seen our pool lifts of 10 to 45 43 average 12 percent are poof so lower percentage but larger Revenue base csr2 here's the 30 arpu uplift on average for

this game so again very large you know game out there Android only launching on iOS as I mentioned earlier just subjects conversation iOS is now easier this is both Android and iOS IP based role-playing game this game is also unique and interesting because 70 of the revenue is I get this question a lot you know oh all my revenues in from the US I'm like yeah no kidding it's self-fulfilling prophecy and this is what the WWE Champion so this is also very IEP specific to the us so you kind of expect that would be very heavy U.S but still it's a big game we're six hundred thousand dollars addressable Revenue it's like this is money straight to the bottom line you know and so it makes sense to localize it again same story you got your Germany's and your France also High income you know doing well but also your Chiles and Brazil's Malaysia you know Thailand doing well too that's it thank you very much that's great thank you uh now of course Ted's information is up on screen if you want to catch up with them but you know um uh we're a little

we're a little bit over but I don't want to miss a chance for Ted's on stage do we have a question from the audience let's take one oh there's one there can I can we get him right there we'll just take that one question and then we'll move on but I thought while you're here thank you is that okay no it's okay I got nothing else to do Hello thank you for your lection and my question is uh who exactly uh do this price changing it's on your side or you do you just uh give a recommendation for your clients and they they do they buy yours themselves sure yeah we do it it's a managed service so you know we do have technology that does it so we you know with their permission important point is that anyone we work with has they review and approve any price changes so we're not like willy-nilly sort of like monkeying around in there too so but we do have access to App Store it's not human being it's not myself you know certain definitely not myself um but it's we are platform communicates through an API that makes changes but again it's important point they review and approve they're very controlled

visibility including any guard rails to like change so every every game company is a little bit different and so um we think we're like extension of their live Ops or like the pricing team if you will too but again my presentation is also meant to you guys can do it you know you should do it you know too so just hopefully that was helpful for that too perfect thank you that's great thanks very much Ted appreciate it thank you very much [Music]