• Ramin Shokrizade, a level 0 monster with 107 posts — 6 months, 4 weeks ago:

    How to Become a Game Monetization Expert
    By Ramin Shokrizade
    3-1-2012

    The role of the monetization expert in a studio is to translate the game into a multiple price point service package with the highest retail value that can be handed to the marketing department. The monetization expert is not a marketer, but serves as the bridge between that group and the rest of the studio.

    Monetization experts require a complex and rare combination of skill sets, since they act as the nexus for the entire game production cycle. As such, this is the most technically demanding position in a studio and is the highest “value adding” position currently in the industry. If you are not prepared to spend ten or more years acquiring these skills, and are not the sort of person that can be trusted with millions or even billions of dollars, then it is advisable to try an easier career path within the industry.

    Every company producing and deploying online games is going to need a monetization expert. The larger and more complex the product, the greater the need. Since these positions are just now appearing, and the time required to acquire all of the involved skills is so high, it will be several years before companies can expect to fill these positions with any qualified candidate, let alone an outstanding one. This means that the market value of individuals filling these roles will be extraordinarily high for a some time.

    If you are looking at all of the new “Director of Monetization” positions opening up across the industry, and seeking to acquire the skills listed in those jobs descriptions, I would advise against this. The positions are so new, and so poorly understood, that the skill sets listed for these positions are not the skill sets you will need by the time you are ready to step into this role for the first time. Describing the actual skills involved is the purpose of this paper so I would recommend following the advice here to end up in the right place at the right time with the right skills and experience.

    Quantitative Skills: This is the most mathematically demanding position in a gaming company. Many of the decisions you make have the potential to earn or cost your company millions of dollars. Math must come naturally for you. I recommend you earn a degree in economics (first choice) or mathematics. You might want to do this fairly early in the process so you can self-assess if you have the skills to continue. Education in the areas of psychology and sociology can be supplementary. An MBA does not imply the quantitative skills required.

    Understand Games and Gamers: In order to sell to a target consumer group, you must understand the demands of that group. For this reason, some of the best stock for monetization experts comes from those with experience as game reviewers. Game reviewers have the advantage over people with experience in QA and cyberathletics in that they generally have to cover a wide range of game genres, and thus have a more comprehensive understanding of gamers. If you only plan to monetize one genre of games, this may not be such an advantage. Those without game reviewer experience should spend between 1000 and 2000 hours doing similar activities. Spend 20 hours on each of 50 top ranked online game titles, paying special attention to how the game is monetized. Ask questions of other players while you are there to gauge what they like and don’t like about the product. After at least 20 hours, write a quick review of the game you just played. Then read several reviews by “experts” and see how their assessment matches yours. Do the same thing with 50 poorly rated online games (5 to 10 hours should be sufficient) so that you become adept at recognizing the difference.
    Game design experience is going to be extremely valuable here, and the more the better. In order to assist your studio’s game designers with how various design decisions will affect monetization, you have to understand the myriad possibilities in game design first. This is why managers and producers that were designers first will have good prospects moving to monetization, and those that were not will tend to under-perform.

    Learn Monetization Theory: This is going to be the tough part, since there are essentially zero academic sources of information on this subject other than my blog, which you already know about if you are reading this. Learn the differences between “whales” and “non-whales”, casual vs. hardcore gamers, men vs. women vs. adults vs. teens, and those that play on social networks vs. those that do not. Understand the difference between co-op and PvP play, know the difference between consensual PvP and forced PvP, and how this affects monetization. Can player assets be attacked while offline? Learn how this affects monetization and retention.

    Are you going to allow trade and chat in your game? Become expert at the positive consequences of trade (increased retention, etc.), versus the negative consequences (real money transfer attacks, various exploits). Understanding how the time metric in games affects monetization on many levels, and begin learning how to control and monetize the time metric. If you want to get fancy, you might learn how to gamify your monetization model, and how to monetize higher social functions (like guilds) in games.

    Learn the differences between microtransactions, subscriptions, and content purchases. Figuring out which ones work best where based on your game design is the greatest challenge and greatest fun in this field. Note that the best monetization designs will likely have a combination of all three, and applying them randomly can have unpleasant consequences. Work closely with your game designers to identify your coolest content and target that content for special monetization attention.

    Be clear about the strengths and weaknesses of analytics apps. If you are doing your job properly, monetization will be 90 to 100% done by the time the first analytics data starts pouring in. If the results are “you are doing great!”, then your options are a bit limited since customers don’t tolerate price increases in this space. You probably under-monetized the product. Oops. If the results are “sales are low”, then you can start discounting the weakest converting components of your design. Discounts show weakness to the consumer, and they will tend to withhold spending knowing that they will be offered a sale price if they hold out. Note that all virtual goods lose value over time in all but the best designed products (which don’t exist yet), so if your product depends heavily on virtual goods sales, you must account for this.

    Learning monetization theory, in the absence of a mentor or a school, takes two to three years from my experience. This will take even longer if you are doing other things at the same time, so on your resume this period will look a bit like you “dropped out” since our whole system of hiring does not accommodate those self-educating in exotic skills. Try to form relationships with studios during this time, if you have not already, to let them know you are “in the pipeline”. I would imagine at some point that due to the rarity of those with these skills, some companies will eventually sponsor people they like and who they feel have the talent, to send them through this process in return for an oath of fealty. This is the equivalent of the Army putting you through medical school so that they can get you when you come out the other side. The downside to this is that with studio volatility so high in this industry, only the largest and most stable companies will ever do this.

    Social/Managerial Skills: Note that there are already thousands of people filling these roles in China. There, they only need to know how to stock and discount a microtransaction-based virtual goods store, so the job is much more simple. The other big difference there is that this is not considered a managerial position in China. It might be better to describe those that just fill this limited role as “Microtransaction Techs”.

    In the West, especially on big projects, the situation is very different. The fact that you will be directing almost everyone at the studio at some point, that you will have control over the financial fate of the studio, and that your pay rate alone implies you are managerial level, means that companies are going to expect that you already have managerial experience.

    I think to some extent, this is an artificial construct. Anyone that goes to all of the work to spend 10 years acquiring this skill set is going to be extraordinarily self-motivated. Their understanding of the industry is probably fairly high by the end. The character “Pete” fills this role in the movie Moneyball without having an ounce of managerial skill, and this makes for some funny scenes since he is elevated to assistant manager on the merits of his analytical skills. The key thing is that they have to at least be pleasant and be willing to say things that they know others will not necessarily want to hear. If you are the rare monetization expert with superior social skills, well then congratulations, you have it all. The key is to be an adviser, because everyone is going to know how to do what they do better than you do. Don’t tell artists how to do graphics, don’t tell programmers how to code, and don’t tell managers how to organize. Just teach everyone all the time how their actions matter in the grand scheme of making the product a commercial success.

  • Avatar ImageIgor Glinsky, a level 0 monster with 3 posts — 6 months, 2 weeks ago:

    Ramin, you fail to disappoint (doesn’t sound like a compliment at first sight does it??;)) You are a bottomless well of valuable knowledge, and I thank you once again for taking the time to water our brains with it

    igor

  • Avatar ImageRamin Shokrizade, a level 0 monster with 107 posts — 6 months, 2 weeks ago:

    Igor, thanks for the kind words as usual. I wanted to mention in that original article that the ultimate preparation for monetization work would be expert virtual goods sales (RMT2). The problem with mentioning this is that since the rise of microtransactions (RMT1) and industrial virtual goods sales (RMT3) made RMT2 all but impossible, if you did not get this experience prior to 2004 you are out of luck there. The only possible exceptions that I know of would be RMT2 activity in Second Life or in the Entropia Universe.

  • Avatar ImageKurt McClung, a level 7 monster with 22 posts — 5 months, 2 weeks ago:

    I really enjoyed this post. Thank you, so much, Ramin. It made me think. I’ve met a lot of would-be monetization experts, and very few of them have your positive perspective on the role.

    It reminds me of the explanations I give to people about the role of story and the positions of writers in modern game design and interactive entertainment theory. I can tell that you are all about making the best game possible and recognizing the talents of everyone else on the project. I learned very quickly that the more I’m paid to do my job, the easier it becomes. My “creative opinions” gain economic weight and its far easier to tell the stories I think the players want. Monetizers have more gravitational force right now than anyone else in the industry.

    It’s not easy to get people pepped up, though, in an industry where self-confidence on every level is surprisingly low. We all seem to be conditioned to believe that whoever is getting paid the most makes the most important decisions not only on financial levels but also creative ones. We sort of expect it, and have a tendency to hide behind our lower pay scale. Taking a creative risk is just as scary as taking a financial one, and in the good games, they are often highly linked decisions.

    How do you deal with that? Which color cape for the hero? Doesn’t monetization have an answer for that? Should her hair be black or blue? Or are the players willing to pay for the possibility to choose? I find your statement that you are not a marketer optimistically naive, though I completely agree that you shouldn’t be given that role all by yourself. We need to get a marketing man to step up here and explain how they define their job in video games. They used to make all the money… What happened?

    Thanks again, it was great, and it was incredibly scary!

  • Avatar ImageRamin Shokrizade, a level 0 monster with 107 posts — 5 months, 2 weeks ago:

    First off, before I forget, let me say that I am a huge Heroes of Might and Magic fan, and that I am currently playing #6. I’m going to go against inertia and say that #4 was my favorite, though 6 is pretty good too. I know I am supposed to say 3 :) I actually like the DRM meta game system in #6 also, it was a step in the right direction imo (though I could have spiced it up!).

    Okay, back on subject. First off, I think what separates me from many in my vocation is that I don’t see the consumer as my adversary. I am a gamer making products for gamers. I see what I do as a merging of IM domain expertise and quantitative skills. Most people doing monetization right now don’t really have either mastered, they just kind of fake it with a marketing background. That works because those hiring are not sophisticated enough to know what skill sets they need. This will change over time, but it won’t be a fast process.

    In the original article I wanted to say that the ultimate preparation for monetization work is a background in RMT2 (hopefully you have read my Real Money Transfer Classification paper on page 2 of this group and know what that is) but I did not mention it because RMT2 was killed by the combination of RMT1 and RMT3. Thus that skill set is extinct, you either grabbed those skills when you could before 2003 or you missed the chance. I would like to bring back RMT2, I have models that monetize it that I think are worth the complexity.

    Monetizers have gravity for good reason right now, because they are in the most important position on a dev team. One bad decision and they can pooch the product, and they will have to make hundreds of decisions. Because there is no place you can go to study monetization, the pool of qualified people is going to be much smaller than the demand for at least 5 and probably 10 years. The worst part about the situation is that monetization is so poorly understood that those hiring do not understand the position well enough to know what to look for or what questions to ask. I’ve started training some of the major recruiting agencies, so perhaps things will get better there, but as you can imagine some feel awkward admitting they could use help understanding the roles they are trying to fill.

    I think the low self-confidence you speak of is also attributed to the fact that the decision makers in this industry are often in one of two groups: young people with weak social skills (made worse by smart phone dependence), and older people with business backgrounds that tend to not understand gamers. Worse, the latter group tends to look down on them. A big part of the problem is the super high turnover rate in the IM industry. 3.5 years on average I am told. This in itself creates a leadership vacuum.

    I don’t see myself as a marketer, but I realize that to function optimally on a team, I need to pair up with a good one and get in sync right away. On my last project the marketing team tapped me heavily on how to word their press releases related to the novelties in the game and monetization design, so I guess I wear that hat on occasion.

    Yes customers are willing to pay more any time you give them a choice. A real choice. My most advanced monetization model, what I call gamified monetization, is strongly linked to this concept.

    What happened to the old school marketers I am guessing is that they got promoted into leadership positions if they stayed in the industry. The new people entering those roles from other contracting industries are trying to sell games like you sell soda cans or cars. That does not work. I talk about that at length in my “How (Not What) To Charge for Games” paper.

    Wow, thanks Kurt, your excellent post and feedback really got me going!! :)

  • Avatar ImageKurt McClung, a level 7 monster with 22 posts — 5 months, 2 weeks ago:

    Let’s keep it a secret, but I liked HIV most of all as well!

    I agree with your analysis of the evolution of the industry, and I’ll read up on all of your papers. I’ve been working in China lately, and they talk monetization shoptalk like the marketers used to talk about Point-of-Sale, Promise-on-the-Box and Shelf-Life. It’s not only adding value but it is changing the way we work.

    They lately asked me if I could work “frustration schemes” into the story to generate “paypoints”. At first I was flabbergasted. I felt like I was supposed to be writing a story with flaws… as you so wonderfully put it, treating the client like an enemy, or prey. Then I just realized that they wanted cliff-hangers. Now that I could do. I think suspense makes for great stories.

    Once we figure out this new terminology and the way it affects process we’ll be able to go back to doing what we all got into this industry to do in the first place. “Make great games for a great and growing public!”

    Talk to you soon,

    Kurt

  • Avatar ImageRamin Shokrizade, a level 0 monster with 107 posts — 5 months, 2 weeks ago:

    I just got back from Beijing myself. Interestingly enough, I went there to teach the Tuyasoft studio how to NOT use microtransactions, and how to NOT make a “pay to win” game. I didn’t think a Chinese studio would be open to this considering the universally predatory monetization models used there as you mention. Nonetheless, they seemed to get it and really WANT to learn how to do it differently. I had to watch them like a hawk though, since they would fall back to old ways with every patch.

    You would love my analysis of Chinese monetization models in my proprietary 35 page “Sustainable Virtual Economies and Business Models (2009)” paper :)
    They really get the importance of monetization in China, they just don’t know HOW to do it yet. But… that’s job security for me as they say.

    Btw I would really dig the new Heroes of Might and Magic browser game if it didn’t have one of those Chinese Pay to Win monetization models on it…. sigh. Not that China has a monopoly on them. I’m also playing the new Command and Conquer Tiberium Alliances game and it is VERY hard holding onto the #1 spot (out of 25,000 players) without spending money. I’m using every dirty economics trick I can think of. If they just charged me $40 a month I would be all in. I just feel tainted if I pay to get an advantage.

  • Avatar ImageKurt McClung, a level 7 monster with 22 posts — 5 months, 2 weeks ago:

    Are you talking about Heroes Kingdoms?

    I wrote quests for that game and have played it much more than I should have. The model evolved from a free-to-play (3 heroes) with a 5 euros a month subscription based game for all features (10 heroes) into a mixed monetization model in the quest to find its economic stability.

    I loved the subscription model and I would have paid more… but the mix being tested is very different and seems more viable. A lot of people do claim that you have to pay to win, but the hardest thing for me is that it has become more time consuming. (Even if you pay.) The system is encouraging us to become whales. The change was a customer request, but I liked the old system where you could play an hour a day or so. You could even miss a couple of days without the game losing its interest.

    I keep hoping that the “Free-to-play” pure monetization models will pan out and we’ll go back to a Free demo, buy to play model with a proper ending to the game. I think it allows us to make better games and give a feeling of closure to them. Right now the experience is more like, “I play until I get bored of the game”. I miss the final levels and the giant boss at the end of the game. The current monetization schemes seem based on “never getting to the end”, but as long as we can “get you to play for 6 to 8 months”, we’ve got a winner.

    How can I get a hold of your 2009 paper? I’m super curious.

  • Avatar ImageRamin Shokrizade, a level 0 monster with 107 posts — 5 months, 2 weeks ago:

    Sustainable Virtual Economies and Business Models is proprietary, I had it authenticated in 2009 by having Professors Mike Zyda (founder of USC Gamepipe Lab, the top IM school in the world) and Henry Jenkins (arguably the most reputable media professor in the world) read it. I would let any large company that put me on a 1 year+ contract have access to all of my proprietary work and have unlimited use of it, as long as they didn’t make me sign something that transfered ownership away from me or prevented me from using it at another company at the end of employment.

    That said, the 2009 paper describes how to build a sustainable inflation-free economy that is 99% RMT3 resistant, and also introduces both the “fair” and the “advanced hybridized” monetization models. Next to the Army Rage game I just monetized, I consider World of Tanks the most advanced model in play, something pre-2009 I would call ” fair simple hybridized”. In 2011 I developed the Randomized, Dynamic, and Gamified monetization models. The latter is quite hot but requires the game be built around it instead of the other way around.

    Check out Army Rage. If you go into the store you will see that it is essentially “microtransaction free”. I have a number of microsubscription services disguised as microtransactions in order for players to understand them, but still have the game be fair. Heroes Kingdoms would be a very different game with an advanced monetization model. WIthout a game at least being fair, in my opinion it is not even a game, as I explain in my “Game Monetization Defined” paper. But fair is an elusive beast and requires attention to the time metric also, as described in my not yet published Supremacy Goods microeconomic model.

    I don’t think you can effectively monetize a game without understanding what a game is, and this is unfortunately the sad state of monetization in the industry at present. You understand what it is, at least intuitively, because you likely have been playing them all your life. You know when a game isn’t a game, you can feel it. Ante games as described in my “How “Pay to Win” Works” are not games, as explained in my “Game Monetization Defined” paper. No offense intended, but your game has become an ante game. It would have failed to monetize also as a flat subscription, as explained in my Supremacy Goods microeconomic model because of the uncontrolled time metric.

    I offered to let the two companies who’s products I used as positive case studies in that paper read it while I watched at GDC.One, RIOT Games, flatly ignored my offer. The other, Wargaming.net, had their VP of Global Operations (Andrei Yarantsau) read it while I watched. That led to an hour long discussion. Since then they have asked me if I have published it yet (answer is no) so that they can use it to explain why their game is so successful to potential investors, and to train their employees. As you can guess, the Supremacy Goods model is much more advanced than the models in my 2009 paper, but does not discuss how to create virtual economies.

    I love this industry, and am waiting very patiently to see how it ends up :)Microtransactions was not the way I wanted it to end up, which is why I became an applied virtual economist back in 2005.

  • Avatar ImageFindlay, a level 3 monster with 13 posts — 5 months, 2 weeks ago:

    Hey guys, been a while since I’ve done much contributing [or had much time to!] to any of the threads on here.

    Quick side-note @Ramin been reading up on all your many many threads here and you have been posting some very thought provoking stuff! Keep up the very good work!

    From some experience of being in Social Games the whole field of Monetization has become a very barren field, in the case that [in the majority] Zynga refines their methodology for squeezing their players, and other people [Wooga, EA] then breaks down Zynga games and implements their methods.

    Id quite like to get some more opinions on this next point, as even though I am currently a social games designer/developer by trade I am super opposed to the principles of Monetization and Gamification in today’s online and social games. As in nearly all implementations of them always pushes towards blocking a users progression [or fun] with monetary boundaries, or using psychological techniques for getting users addicted and used to purchasing credits. It has always been my personal opinion that with the games that I design, any monetization would be built deep into the mechanics of play, and if it wasn’t critical or a boon to the overall feel of the game – it wouldn’t be included.

    Which brings me back to what originally started this thought process, which was the term “Monetization Expert”, in the similar way there were the “Gamification Expert / Designers”. Its been my opinion that it has been the sharding of the overall game experience into these separate sections of “addictiveness” and “lucritivity” which has reduced the overall quality of games to what they are today: effective slot machines where the majority of content is simply a pull handle get extrinsic reward mechanic.

    And again to try and wrap up my very segmented thought process here: Due to how deep rooted monetization is in the overall game design, which is something you seem to have missed off your original post [if I didn't miss it - in which case I apologise]: the ability to see and work to the bigger picture, which is what kills most games with these monetisation models, they just simply aren’t fun when you take away the Pay-To-Win aspect or if you take a break.

    Personally, I would say I am close to being qualified [personally, not necessarily so well on paper] as a Monetization Expert, however in regard to all the points listed above: I don’t consider them at all half as important [of-course they all bare some relevance] as simply understanding the aforementioned bigger picture and working within that, not as an external bolt-on.

    Re: HOM&M: Sentimentality puts II at the top of my list, however I did enjoy playing III, however 3DO’s IP was acquired by Ubisoft the quality of the games suffered significantly: VI was an improvement: but mainly because I felt it was pushing more towards the RPG side of the spectrum, but they could have done the class / hero development much better then they did.

    Will definitely come back to this point later on [Currently mid moving house] and add more and start to pick you guy’s brains on a few topics I’ve been mulling over for the past few months or so!

  • Avatar ImageRamin Shokrizade, a level 0 monster with 107 posts — 5 months, 2 weeks ago:

    I would add that I first became aware of the industry’s monetization woes (though back then no one called it that) in early 2000 and I went to the Los Angeles Times and wrote this article with Ashley Dunn that appeared on the front page:http://articles.latimes.com/2000/apr/20/news/mn-21581

    Lee is my middle name.

    From 2000 to 2005 I waited patiently for someone smarter and more motivated/connected than me to solve the problem. That person never stepped forward, so in 2005 I got tired of waiting and stepped forward myself. Stepping back into industry with the needed solutions has become just as difficult, which continues to amaze me.

  • Avatar ImageRamin Shokrizade, a level 0 monster with 107 posts — 5 months, 2 weeks ago:

    Findlay, the games you describe on Facebook are all ante games, and the way I see it they are entertainment products, not games as described in the relevant aforementioned papers. When you say this:

    “It has always been my personal opinion that with the games that I design, any monetization would be built deep into the mechanics of play, and if it wasn’t critical or a boon to the overall feel of the game – it wouldn’t be included.”

    You are intuitively understanding the path I am on, which I am at the point that I can articulate it qualitatively and quantitatively, which was a 7 year process. When I look back at how I was approaching these problems even a couple years ago, my own work seems very primitive to me.

    If you spend the years trying to develop models that meet your criteria that I just quoted from you, I think perhaps at some point you would reach something very much like my gamified monetization models. Which are proprietary so don’t ask :)

  • Avatar ImageKurt McClung, a level 7 monster with 22 posts — 5 months, 2 weeks ago:

    Please, write a book, Ramin!

    Your take on ante-up games not being games is a brilliant subject for debate. For example, Texas-Holdem turned Poker into a game for many people because it meant that everyone started with the same amount of initial money (points) and there was only one winner once everyone else was eliminated. For other people I know, Poker is the ultimate, only game. No pure game designer I know wants to build a game that is automatically won by the richest player with the most time to spend. Whether dealing with money rich or time rich players, or all the rest of us in between, a good game has rules that give everyone a fair chance to win. I also think that a good game gives everyone a fair chance to learn something. The best games teach us something useful, fascinating or inspiring.

    Here is another way to phrase the debate!
    A game that says you need to be rich in order to win is useless for democratic society. The lottery is a better game. Everyone has a fair chance to win, and at least it teaches us that a world with random rules is far better than a frozen, stagnant, class society. What would be your take on that? Can you build a monetization model that would allow us to invent a society with built in social elevators that are fair and immune to corruption? If you can, I’ll vote for you for the next elections for President of the World!

    Keep our world from becoming a version of the Hunger Games!

    Write your book!
    Your rhetoric is fascinating and well structured. AND you’ve got something to say. Publish a comic book, a play, or even an educational game that explains the social aspects of the models you are inventing.

    I wasted a lot of my early years protecting ideas that I thought needed protecting from the big bad wolves. I really don’t know of any company that will hire you solely for access to written materials no matter how brilliant you are. It’s hard for them to understand their potential because the industry is reacting now, not acting. But I know a dozen that will hire you once you have published your work, just to get you onto their resource list when they have their next shareholders meeting.

    Theory is one thing, but the cooking is in the cake. From this exchange, I get the feeling that you are ready to help us revolutionize the industry, helping us find a way to build better games with more intelligent and just economic models. This will mean in the end a democratization of games, meaning that the good games will win and the poor ones will lose. Am I right?

  • Avatar ImageFindlay, a level 3 monster with 13 posts — 5 months, 2 weeks ago:

    Definitely an interesting topic.

    I think based on when I first noticed the distinction in games and started working towards this understanding myself was a number of years ago myself, would be interesting to know how different our models are from each-others.

    I am very confident that I currently have developed a Game/System where the Monetisation of the game is the centric model of the game-play/feel/experience – which is something I am very excited about and something I, hopefully, will be allotting more of my time to in the near future.

    “Can you build a monetization model that would allow us to invent a society with built in social elevators that are fair and immune to corruption?” – Very interested in that sentence – as I feel like my concept does actually cover this. Would be very interesting to talk more on this.

  • Avatar ImageKurt McClung, a level 7 monster with 22 posts — 5 months, 2 weeks ago:

    I’m all over a discussion on that.

    One thing that I’ve come to learn in games as an artform is that “the rules are the message”.

    Monetization is now a big part of the rules.

    Kurt

    • Ramin Shokrizade, a level 0 monster with 107 posts — 5 months, 2 weeks ago:

      While I learned to articulate my work when I went back to school to study formal economics, I learned a lot more when I later read “The Wealth of Nations” by Adam Smith. See here you have a man that had to start from scratch, he had no school to go to to learn economics, he was creating it. His book was a collection of papers and lectures he produced over 40 years (he lived a long time for that era). Obviously the man knew math, but his work set the foundation for the study of economics by suggesting what I would say is a more sociological foundation.

      Now if you look at just the 25 public papers I have here on Gameful, you can see I am trying to do exactly what Adam Smith did 200 years ago, with a new branch of economics. So yes clearly I am writing a book. The 2009 35 page paper was almost a book in itself :)

      As far as making democracy in games, well my 2001 Shattered Galaxy game I helped design for Nexon had the first functional election system. The system was widely copied in Asia after that. More recently, I created a very complex virtual economy based monetization model for End of Nations that would have created a social economy that has never been attempted in “real space”. I actually started a thread on the TRION Worlds End of Nations forums to discuss it:

      http://forums.endofnations.com/off-topic/1277-proposal-no-pay-win-m...

      The thread had more views than everything else on the first page combined and caused enough discomfort at TRION that they moved/buried it in off topic right before it hit 20,000 views. All attempts by me to have a conversation with them were rebuffed.

      You can lead a horse to water but….

      You should check me out on LinkedIn, I have some 40,000+ readers there, gameful is a relatively small (but awesome!) audience.

      As Adam Smith would say, if you give consumers a choice of varied products, market forces (consumer demand) will elevate superior products and eliminate unwanted ones. The problem right now is that consumers are only being offered one product (microtransactions/”pay to win”) so this model can’t become extinct until a better model enters the market. This is why the push for analytics lead by Zynga is so silly, because you can’t do A/B testing when all you have is A.

      Small progress has been made with games like World of Tanks and League of Legends (discussed in my Supremacy Goods model) because they are “fair” or at least “fair enough”. You can see how both Wargaming.net and RIOT Games are reaping just amazing profits from even this very small step forward in the monetization process.

    • Avatar ImageRamin Shokrizade, a level 0 monster with 107 posts — 5 months, 2 weeks ago:

      In my most recent article in these forums about EA’s new Command and Conquer TIberium Alliances browser game, many of the same themes come up as with Heroes Kingdoms. Someone on the team thought there should be an upper limit to how much a player should be allowed to spend per day, to keep things “fair”. I ran the math and found out that that upper limit is around $1000 per month in the first month and goes up rapidly after that. Whoever was on that team that thought the game should be fair clearly got overruled by their monetization guy, who was Possessed By Zynga (PBZ).

      Interestingly enough, they have a combination of subscriptions and microtransactions so I would classify this model as “simple hybridized unfair”. An awkward combination but clearly Chinese inspired.

    • Avatar ImageAlan Au, a level 7 monster with 30 posts — 5 months, 1 week ago:

      Thank you Ramin for the excellent discussion! I suspect there’s a lot of accumulated wisdom being generated by yourself and others in the space, but ‘m still disappointed that there hasn’t been more of an effort to formalize the understanding of monetization. That is, individuals are still relying on personal experience, but that institutional wisdom is not always captured or disseminated as widely as it could be.

      The unfortunate side-effect is that new designers will continue to experiment, which is good, but they will also continue to repeat the same mistakes of the past, which leads to stagnation.

      I agree with your assessment that the market will eventually self-correct, provided that players are savvy enough to know when they are being taken advantage of, and provided that there are enough developers out there to ensure that “fair” alternatives are always available.

      Oh, and I didn’t realize you were in involved with Shattered Galaxy back in the day! It was certainly an interesting game, although I don’t remember it gaining much traction in the U.S. market.

    • Avatar ImageRamin Shokrizade, a level 0 monster with 107 posts — 5 months, 1 week ago:

      Oh where to start! As far as I know, I am the only one attempting to formalize the science and art of monetization by establishing language and definitions. It is very hard work creating a new science from scratch! Despite a 3.95 GPA I was unable to get into a PhD program for 3 years because I could not find anyone that understood what I was doing well enough to mentor me through the process. I’m going to put an asterisk here and say that a few established virtual economists, such as Castronova, could have mentored me, but they were highly offended when I offered to collaborate with them. This seemed odd to me from a scientific perspective since I saw the whole point of science as man’s journey to understand the world around him (her). Since I did not yet have the PhD, the idea that I could interact with them as a peer was highly insulting (I have saved some amazing emails…).

      So that makes me alone on this path, and industry seems to view me with suspicion, perhaps because they just spent a couple years learning that Free to Play, Pay to Win, and Microtransactions are the way to deliver online games. No one wants to find out that they have to start over in a sense. I took a big gamble back in 2005 predicting that this technology would be needed in the near future, and it even cost me a long term relationship as even my closest friends wondered if monetization would ever matter to anyone.

      From an industry viewpoint, they would rather hire someone that has monetized 15 games than one that has monetized 1 game, even if those 15 were monetized poorly. This creates a substantial barrier to entry. Further, I think industry is still in the habit of looking at academics with suspicion, as they often feel that nothing useful or innovative in interactive media ever comes from academia. I would be inclined to agree, but in my case I was in the industry and returned to academia to gain additional skills I needed for my research.

      As far as “fair” alternatives causing a market shift, you have to realize that game developers don’t make games. Investors do. If investors look at the market situation and see that the trend is to use all of these broken mechanics, they will expect the dev team they assemble to use those mechanics. So even if some dev teams want to experiment, there will be investor resistance. Thus innovation will come from self-funded startups that likely will have to produce small products that will not have a large impact on the space.

      Yes I was the lead Western QA, Quantitative Game Designer, and Localization person on the Shattered Galaxy project, This means that I did all the balancing to combat and the economy, and contributed to many other aspects of design. I also made sure the game was fully English. I produced 1500 bug, localization, and design reports during an 18 month span.

      Shattered Galaxy WAS getting great traction, despite a strong anti-Asian media bias at the time. You can see that SG was the first Asian MMO to be made in English, we beat Lineage by a few months. Despite the popularity of Lineage, it got a 5.5 Gamespot rating (http://www.gamespot.com/lineage-the-blood-pledge/platform/pc/). Shattered Galaxy got an 8.0 (http://www.gamespot.com/shattered-galaxy/).

      What killed SG was a hack that I detected within hours of its first use that allowed Asian teams to prevent Westerners from joining battles on the Western servers. I contacted our hack expert and he isolated the hack and had a remedy within 24 hours. When Nexon announced they would be fixing the hack in the next patch, their player base in Asia said they would boycott Tactical Commander (the Korean version) if Nexon stopped the hack.

      Nexon, being much more loyal to their Asian customers, actually agreed and left the hack in! Here I was spending a year and a half of my life making this awesome MMORTS, and Nexon just basically pulled the plug. Within a month almost all Western subscribers (including myself) had cancelled their subscriptions.

      Realize the divide between East and West was pretty large back then, and there was a lot of racism among players. This was probably what motivated me most to work on SG, as I thought it would bring Asian games to the USA and allow Eastern and Western players to play together. Obviously a lot has changed in the last 11 years, but no one has made another MMORTS yet. TRION is working on End of Nations, which may be the first return to the genre. I offered to assist them but they refused to talk to me. I started a thread on their forums where I proposed an outline of a monetization model I made for End of Nations, and surveyed the player community to see what they wanted:http://forums.endofnations.com/off-topic/1277-proposal-no-pay-win-m...

      The thread became the most popular thread on their forums and they buried in “Off Topic” right before it hit 20,000 views. It is by far the most viewed non-sticky thread ever on their forums. No one wants to talk about monetization, it has become a dirty word. Players are becoming more sophisticated about products though, knowing that how a game is monetized will have a big effect on their play experience.

    • Avatar ImageAri Bancale, a level 7 monster with 38 posts — 3 months, 4 weeks ago:

      Ramin, I would like to know what you think of glitch.com where there is no PvP battle (except in the auctions). How would you tweak your model for a cooperative game such as this?

    • Avatar ImageRamin Shokrizade, a level 0 monster with 107 posts — 3 months, 4 weeks ago:

      @Ari: You will notice that the one thing I don’t specifically do here on gameful is discuss monetization designs and models in detail. All of that is very proprietary. I am currently working on an intense project so don’t have time to check out glitch.com for at least a few days, though it does sound interesting. I did note this from their home page:
      How much does it cost?
      Glitch is free to play. Some game items (like fabulous clothing and accessories for your avatar, and teleportation tokens) are purchasable, but none of these items impact your game play. To be good at Glitch—you actually have to be good at Glitch. Premium accounts are also available by subscription, allowing players access to additional avatar customization as well as monthly stipends of credits, teleportation tokens, and ballot votes

      I think this could be monetized more aggressively without reducing the fun factor or fairness, but I think using subscriptions based stipends is very smart (I do this in many of my models) because it is a way to let players pay for more resources without letting them buy an infinite amount of resources. Without this constraint, your economy can be destroyed very quickly.

      I also like that they monetized voting the way they did. I was a designer on the first graphical English language MMO to have voting, Nexon’s Shattered Galaxy, and am a big fan of this in games. It is hard for me to understand that while this was copied widely in Asia, it has not caught on in countries with established democracies.

      • Avatar Image
        Ari Bancale · 3 months, 4 weeks ago· REPLY · Flag

        I understand that you can’t discuss details of your models. I am just curious as to what factors and metrics are different when measuring the value of virtual currencies in PvP and PvE games. Do they affect their respective economies in the same way?

        PvP games use additional raids and discounts on consumables when there’s too much currency floating. I notice that in Glitch they create more expensive properties and community quests as sinks. In terms of virtual economy drivers, what are the differences in these two worlds?

        Just to validate my understanding, as long as the advantages of paid resources do not reduce the enjoyment of the other players significantly, then it’s all good?

        • Avatar Image
          Ramin Shokrizade · 3 months, 4 weeks ago· REPLY · Delete

          Well when you say PvE, if the game allows players to rank against each other even in coop or independent play (like many Facebook games), then the play is still competitive even if there is no direct PvP. This can be used as a motivator with a coercive ”pay to win” monetization model.

          So this all can be pretty complex in the end. If there is not ranking or competition whatsoever, the game is at best ”Massively Single Player” and as such will generally monetize poorly in any event. A good example of this is Star Wars: TOR.

          The answer to the last paragraph is probably yes, given what I said above is taken into consideration. If I didn’t answer any of your other questions, that was probably intentional :)

    • Avatar ImageAri Bancale, a level 7 monster with 38 posts — 3 months, 4 weeks ago:

      Sorry if I’m reacting to your articles in different threads. It’s just really exciting stuff to me. I’ve been studying EVE Online’s quarterly economic report, and every other virtual economy article I can find online for a few years now. I’m virtually jumping for joy to have someone to throw ideas with.

      This brings me to the article that led me to you.

      http://anomalousunderdog.blogspot.com/2012/05/why-level-up-in-multi...

      This article led me to Dylan Holmes’ article in Gamasutra where you made an eloquent comment. What’s your stand on level caps and grinding for the endgame? Can’t we just have end game from the beginning?

      If you notice Glitch’s skill learning is pretty much like EVE’s with a “brain cap”, should/could this limitation be monetized by allowing faster un-learning?

    • Avatar ImageRamin Shokrizade, a level 0 monster with 107 posts — 3 months, 4 weeks ago:

      If I was to say I have spent hundreds of hours contemplating this question in its various forms, I would be lying. I think it is fair to say I have spent closer to 4000 hours contemplating this question and much of my work is based on the results of that. How to keep a player infinitely engaged with a finite amount of content is one of the Holy Grails of game design (along with how do you monetize a free game without making it unfair). I think many feel it is mythological and cannot be found.

      I assure you it is not mythological, and once I started coming up with solutions that just led me to other solutions. Call me selfish, but I am not ready to share these secrets. If you want some clues, then I will give you that. Read my “Virtual Achievement” chapter carefully, I included it in my 2009 proprietary paper for a reason. Then maybe go back and study my 2001 game “Shattered Galaxy”, which some people are apparently still playing despite the design having been weakened a bit since I stopped working on it. Why are they they still playing it after 11 years? Nexon dumped the game almost immediately so that does not make sense. There is your riddle.

    • Avatar ImageAri Bancale, a level 7 monster with 38 posts — 3 months, 4 weeks ago:

      Thanks! I will get on that assignment immediately. ^_^

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Replies to This Discussion

Great Post I like reading your articles because while it may seem that most of it is just your thoughts it's is backed by so much experience. I may disagree with a point but as just a 21 year old my disagreement is just out of how I emotionally feel and your points are backed with actual logic. Thanks for sharing this knowledge with us it has improved my game so much. I would love to read your articles on Sustainable Virtual Economies and Business Models (2009) or Monetization Motivation (2012). And I don't even like reading for school haha I think your posts have a lure and hook system built in :)

Btw if you have a mailing list add me: jarreddavis09@gmail.com it would be nice to be informed of your new findings.

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