Gaming

Balancing game economies is an art and a science


Game economies are a delicate thing. It doesn’t take much to break them. If players perceive a greedy cash grab by developers, as has happened with controversies around loot boxes, they may boycott the game. But if developers don’t price the items in a free-to-play game correctly, they may be stuck with escalating costs and insufficient revenue.

From Electronic Arts’ Star Wars Battlefront II to Blizzard’s Diablo III auction house to Bethesda’s Fallout Shelter, we’ve seen the consequences of failing to get this right.

How can developers spread the monetization of game economies across larger numbers of players? Are subscriptions the answer? Or can blockchain help? And what role does account and credential fraud play in further disrupting game economies? Akamai recently sponsored a GamesBeat breakfast that we held in Anaheim, California, to address these questions.

I moderated the session, and our panel of experts included Nelson Rodriguez, Akamai; Spencer Tucker, senior vice president of Scopely; and John Linden, CEO of Mythical. We had a couple dozen game industry CEOs and executives in the audience.

Here’s an edited transcript of our panel.

Spencer Tucker is a senior vice president at Scopely.

Above: Spencer Tucker is a senior vice president at Scopely.

Image Credit: Scopely

GamesBeat: I think everyone knows that building game economies is important. The times when you notice it are usually when something goes horribly wrong. There are a lot of lessons that come out of that, and that’s what we’re going to try to convey today. [Former Blizzard developer], I guess you know about Diablo III’s auction house [laughter]. The original disaster of game economies. But there have been plenty of others, like Battlefront II. All kinds of things related to loot boxes these days. We’re going to talk about the future as well, things like blockchain games.

When we proposed this topic, did you guys have some things in mind that you wanted to bring up about what balanced game economies are?

Spencer Tucker: One that we’re focused on that I think is going to become more important over time is the concept of personalized game economies and that value is a relative thing. Looking at various behaviors on a segmented basis — how much, for instance, on a 30-day rolling period, does somebody spend? And then determining value relative to the amount of money that they’ve spent over the past 30 days on a particular piece of content.

That’s something we’re looking into. It’s a good jumping-off point for conversation. The idea being that historically, if you’re familiar with mystery boxes, things like that, typically it’s an expected value system. This thing is worth whatever amount of money, and that’s some sort of calculus based on either historical aggregate-level spend, or some sort of calculus between the power of an item relative to the amount that we want to charge for that item, and then we apply that against an entire population. But there aren’t a lot of companies with semi-durable and durable goods that look at the actual player behavior on an ongoing basis to stretch the behavior beyond its natural threshold on a relative period of time.

For instance, if we looked at the distribution of spend over the last month and said, “Hey, someone spent between $1 and $50,” that’s a bucket. We want to determine content to push them above that $50 threshold over a certain period of time. Maybe we price it as a percentage of their last 30-day spend, instead of a fixed actual cost. We do that differently against that entire distribution of the population. The goal there is to move people up in terms of spend velocity between buckets over time and get them more engaged in the purchasing experience, and ultimately treating purchase activity as a retention funnel.

GamesBeat: Some of that sounds like pricing airline seats, different prices for each passenger.

Tucker: Price discrimination is one thing. You could offer the same good at different prices. There are other ways to do it too. You treat value as the relative thing, aside from price. This might come into play in an MMO. You have a lot of people having conversations about how much something costs. If you do price discrimination, you could say, “Hey, I’m going to sell you this sword for $100, and sell this other guy the same sword for $20.” But then those two people meet online and ask, “Why am I paying this much while you’re paying that much?” They don’t have the context to understand it, so you have a negative reaction from that level of transparency.

If you treat the value as the relative thing, the distribution for that value is more probabilistic, like mystery boxes are obfuscated in some fashion. Then you can keep that value exchange behind the scenes. They’re paying the same price, so you attack a price point on a relative basis that moves a lot of volume, but the number of times they have to make the purchase to ultimately acquire that good is variable based on how much the spend over that 30-day rolling period.

Audience: So you’re talking about shifting the odds.

Tucker: Shifting odds, or shifting the–in a practical sort of example, one thing we do is we say–we’re doing this now. We’ll say, “Hey, we’re going to create a mystery bag. We’ll call that bag the same thing regardless of what bucket you fall into.” From a player-facing standpoint, the bag is called A. It’s A for everyone. The price of A is 99 cents. But the thing that varies is the quantity or the range and probability of the range of items within that bag.

The idea there is to optimize around pushing people beyond their natural threshold. If you look at the median value for the spend buckets and divvy up your population in a way that makes sense, you can push people to stretch beyond their natural limit. The goal is to move them over time to become more inelastic, versus being out-priced by attacking just the top spectrum of spend, which is more typically what we do. We push very hard on the very top segment.

John Linden: Are you guys able to publish odds, then? Because if the odds change per player, what’s the legality in Belgium and other countries with new regulations around that?

Tucker: We do publish odds. It depends. Right now we have a number of approaches there. We can class content. We’re publishing odds based on a class. Rarity and things like that.

Linden: But that would still shift per player too, right?

Balancing game economies breakfast attendees. John Linden is speaker. Seated to his right is Spencer Tucker.

Above: Balancing game economies breakfast attendees. John Linden is speaker. Seated to his right is Spencer Tucker.

Image Credit: Dilan Yuksel

Tucker: It does, but the class is a bucket. Think of it as rarity tiers. Orange rarity has a bunch of stuff in it, but there’s a range within that tier, and you’re publishing the percentage of that range, of the total range. That’s one example. Another example is, if we talked about mystery boxes–this is something we haven’t done yet, but I think in the future there’s alternatives to mystery boxes that are effectively very similar, but function in a very different way from a player-facing standpoint.

If you’re familiar with PvP stores, where you get currency and go and–Galaxy of Heroes has one. You refresh the store to refresh the content in that store. If you were to take the concept of a mystery box, right now they function as a probabilistic system where you know what the range is, but you don’t know the outcome until you make a purchase. If what you did was you took that sort of random probabilistic piece of it and put it behind what populates in the store–imagine a PvP store where I know exactly what I’m going to buy every time, because I pay a fixed cost for any particular item that shows up in the store. But when I refresh, what shows up in the store is determined by a table.

That becomes the mystery box. The table itself generates a range of possibilities, and you know if you get that chase item, it’s going to be 99 cents, the same price as everything else. But you don’t know when it’s going to show up. Then you have an incentive to refresh. If you build an added value on the refresh, like progress toward some ultimate goal–it could be a jackpot mechanic. Then you’ve incentivized people to refresh so they’re not losing value. They’re only buying things that matter.

The good thing from a game economy standpoint is, rather than people getting stuff that has “no value,” but does have value earlier in the experience, or for a different population, you’re basically preventing people from getting that content as junk payouts. What they’re doing is only buying the stuff that they actually care about. I’m only paying 99 cents for this consumable item, because I actually need that item, rather than being given thousands of those items over many, many purchases.

Audience: You’re effectively training them to keep going back.

Tucker: Refresh until you see what you want and buy the thing you want. Chasing the thing you want becomes chasing the refresh, and refreshing that box also gives you progress against some sort of milestone.

Audience: Is this all theoretical still?

Tucker: We’ll be building that. We haven’t built it yet.

Scopely

Above: Scopely’s Star Trek Fleet Command

Image Credit: Scopely

Audience: Does the reset cost money?

Tucker: The reset will cost money, yes. That’s the key. We’ve done other things. There are other plays on–things that we do have, that we have built. For instance, rather than a mystery box–one thing to understand, in a lot of mobile games they’re not really true MMOs. Economies are individual things. Saturation hits individual demand, because there’s no concept of an aftermarket. There’s no trade, no real inflation in that sense unless you have a true aftermarket.

Part of the problem there is, how do you account for demand and decaying demand over time in a system like that? These mystery boxes, we adjust odds and so on based on aggregated point view, but not on an individual basis, because we don’t really have demand on an aggregated basis. We have it on an individual basis. If we built something that was less of a mystery box and more of a finite pool, so you control the quantity and effectively create scarcity–for example, if you’re familiar with capsule machines, you put in a quarter and there’s a fixed number of items in there. Maybe you want one thing. Imagine doing that and then pooling the finance segment of the population. We’re going to say, “These two factions, or these 300 players,” and you pool them all against that fixed pool, now they’re all competing effectively for the same content pool. Then you adjust relative price based on the expected value of that pool. There’s a fixed number of people who get that chase item. You’ve created a social competitive purchasing mechanism.

Audience: Do you go as far as something like an auction for that item?

Tucker: It’s not an auction. It’s a system where you buy content, and as that content is purchased, it’s removed from the pool. The idea there being that because you have a whole bunch of people competing for that finite pool, that demand is going to be higher and you’re going to create more spend activity.

Breaking the ice is the challenge there. We have what I call a social network and externality component. Let’s say that this table is faction. You’re all individuals playing the same finite pool. We’re all competing for the same content, but we’re in a faction. For everyone in that faction, to incentivize both faction participation and encourage the behavior of participating in this particular monetization mechanic, what I might do is say, “Any one of us who makes a purchase, everyone at this table gets a fraction of a free pull, regardless how much they’ve spent.” For every purchase there’s a fraction of a free purchase being built up.

If you have a bunch of free purchases built up, what you want to do as table–we all want us as a group to have a competitive advantage for that piece of content. We want to coordinate when we spend our money. We’re going to pay attention to the pool. We’re going to pay attention to who within our group is making the purchases, how many free pulls we have, and then try to coordinate a burn to acquire that content before the box resets.

Those sorts of mechanics are things that we’re going to see more of — the social component, the proxy spending pressure. You’re pushing people to stretch beyond their normal capacity to spend by spending more on behalf of other people in the group. Then the dynamic that exists there is, people who don’t spend will apply pressure to people that do spend, because everybody benefits from that activity.

Then you’re controlling the amount of content you give out, so there’s true scarcity in that sense. We know that once that box has been drained, somebody will have everything that was in that box, whereas with a mystery box currently, there’s no guarantee that anyone will ever get something in that box unless they happen to roll the right way. We base that on the probabilities of that box, but there’s no guarantee.



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