One Price Does Not Fit All

A few days ago I gave a talk at Evolve 2011 (part of the Develop Conference in Brighton, England) titled “One Price Does Not Fit All”.

The main idea of the talk was the importance of “flexible pricing”: Letting players spend as much money as they want to get more enjoyment out of the game and customize their play experience. Flexible pricing can result in revenues much higher than the traditional fixed price approach (derived from manufactured goods). It’s also orthogonal to the concepts of freemium and social games, and we’re only scratching the surface in ways to effectively implement it in games.

Here’s the official conference abstract:

Did the biggest fans of your game spend more money on it than someone who played it just a few times? If not, you’re leaving a huge percentage of money on the table. This session will talk about how digital distribution has made fixed prices obsolete and how you can take advantage of flexible pricing through in-app purchases in your games. We’ll also talk about the consequences (good and bad) of making a game free to play. The session will present hard data from iOS platforms, but applies to all digital distribution platforms. Continue reading

The Power Of In-App Purchases

I finally managed to get through the hotel wifi and upload the slides for this morning’s 360iDev talk: The Power Of In-App Purchases. Thanks everybody who attended for the great questions and feedback!

Session description

The common-sense approach to make money on the App Store used to be to do anything to get on the top charts. In-app purchases changed all of that. Good in-app purchases can make your app profitable without being anywhere on the charts, and are the best hope for the independent developer. Come to this session to learn why IAPs can be so effective and how to leverage them effectively: what makes a good IAP, how to increase your user involvement, how to present IAPs in an attractive way, what things attract users, and what things turn them away. We’ll go through lots of detailed real-world data from Flower Garden and other games with strong IAPs.


Presentation slides: [Slideshare] [pdf]

IAP Bundles: More Than Just Good Deals

fg_bundles.jpgIn-game point bundles are nothing new. Even before the time of in-app purchases, Zynga was famous for releasing “points” apps to increase your game reputation or other stats. The fact that they released not just one way of getting points, but many different apps at different price points, was something I dismissed as a marketing tactic to try to get noticed on the charts.

Fast-forward to now, and as more companies are jumping into the bandwagon of games that need “points” to make progress, we’re still bundles. Again, I chucked that up to legacy reasons and doing what worked with the standalone apps.

Discovering Bundles

It was at the last 360iDev in San Jose, that Mark Johnson said something that really stuck with me. I can still hear him say it with his fine British accent: “I think we might be underestimating how much people are willing to pay for in-app purchases”. Really?

As soon as I had a chance, I looked at the best-selling IAPs for some popular games. The screenshots below were taken today, not back when I looked at them, but the results are very much the same. I let you guess which games these IAPs came from.


I was very surprised with what I saw. The top-selling IAP was never a $0.99 one, and there were bundles of $49.99 or higher towards the top! That was crazy! I was indeed underestimating what players are willing to buy by only offering a measly $0.99 fertilizer bottle in Flower Garden!

Bundles In Flower Garden

As part of the next Flower Garden update, I decided to run a little experiment and add two more fertilizer options: A $2.99 one and a $5.99 one, each of them giving you a slightly better deal on fertilizer (20, 70, and 150 doses). That was still nothing compared to the price tags I was seeing in those other games, but I didn’t want to alienate users by slapping some ridiculously high bundle prices.

The results?

The most popular item by number of sales was still the single fertilizer bottle for $0.99. But a lot of people took advantage of the the other two bundles as well. This is how fertilizer sales for Flower Garden Free have been for the last two months:


But now, let’s look at that same period by plotting revenue (again, only Flower Garden Free, the full version is very similar but it wasn’t easy to combine the two to display them here):


Now the two bundles are a lot closer to the single bottle, especially the larger, $5.99 bundle.

More Than Meets The Eye

In the end, were bundles effective, or are people buying the same amount of fertilizer and leaving less money in the process? Unfortunately I can’t answer that question from a pure data point of view. Looking at fertilizer sales before and after I introduced the bundles is no good because the number of users increased dramatically at each update. I can’t even normalize them by the number of sales, it would have to be by the number of daily users, and unfortunately that’s not a statistic that I’m tracking.

However, I think we can argue two really good points about why bundles are great.

1. More choice

Having different levels of bundles give players more choice on how they want to purchase something. From what I’ve read about buyer psychology, people love having choices when buying something (just don’t give them too many choices!). They are more involved in the buying process, they evaluate it, and they feel better about the decision they eventually make. So that seems to indicate that more people might buy fertilizer if there are a few bundle options than if there’s only one.

2. Commitment

This is the biggie. Whenever a user purchases a $5.99 bundle (or a $49.99 one!), they became more committed to your game. You can also guarantee they will come back again to get their money’s worth from that purchase. Even if they had the intention of coming back to your game without the purchase, having spent that money is a nice reminder to do so. And having people come back to your game is what this is all about: They will explore more of the game, get hooked more, make more in-app purchases, show it to more of their friends, and send more bouquets to their family.

I have no doubt that I’ll be using bundles in the future. Players get a good deal, and you get committed players. It’s a win-win situation.

This post is part of iDevBlogADay, a group of indie iPhone development blogs featuring two posts per day. You can keep up with iDevBlogADay through the web site, RSS feed, or Twitter.

The Power of Free (aka The Numbers Post #3)

It has been two months since the last “numbers post”. It covered the Valentine’s Day promotion, spike in sales, and subsequent settling out at a very nice level. Here’s a recap of what things looked like at the beginning of May (revenue was about $1500 per week):


The Plan

Mother’s Day happens at the beginning of May (in the US and Canada anyway, I’m afraid I was too busy in April and I missed Mother’s Day in a lot of European countries). I figured it would be the perfect time to do another push.

If there’s something I learned from past experience, is that the more you manage to concentrate any kind of promotion, the more effective it will be. So in preparation for Mother’s Day, I created a new update (with iPad support), a couple of new in-app purchase items (new set of seeds and some fertilizer bundles), and sent out the usual announcement on the Flower Garden mailing list, Facebook page, and Twitter.

But in addition to all of that, I tried a new strategy: I gave Flower Garden away for free. Yes, completely for free.

The idea sounded really scary at first. After all, I would be giving away my baby for free. Would I lose a lot of money doing that? Would it depreciate the perceived value of Flower Garden? Would it annoy loyal users seeing an app they paid for given away? Fortunately it appears that the answer to those questions was no.

The reason I decided to give Flower Garden away for free was mostly to get it into more people’s hands. I was thinking I would lose some money initially, but then more than make up for it when I turned it back to paid because of all the extra users and word of mouth. There is already a free version with a limited number of pots and seeds, but people are hungry to download paid apps for free.

To add extra impact to this price change, I had Flower Garden featured as the free app for Mother’s Day weekend in Free App Calendar. Unlike other free app web sites, the folks at Free App Calendar are very developer friendly and are not out to take a cut of your profits or charge outrageous fees. It was an absolute pleasure dealing with them.

Mother’s Day

On Saturday May 8th, a few minutes past midnight the day before Mother’s Day, I switched Flower Garden over to free. Now I was committed!

Right away there was a lot of positive reaction around the announcement. Everybody on Twitter and Facebook were responding really well and spreading the word. Major sites like Touch Arcade and 148Apps covered the Mother’s Day promotion and got lots of extra eyeballs on the sale.

After the first day, the data was in: Flower Garden had been downloaded 12,500 times. That was great! As a reference, Flower Garden Free was usually downloaded between 800 and 1,000 times per day, so that was a 10x improvement.

On Sunday, Mother’s Day, things got even better. News had time to propagate more, and people were sending bouquets like crazy, so by the end of the day there had been an additional 26,000 downloads. That’s exactly what I was hoping for!

As a matter of fact, it was doing so great, that I decided to leave it for free as long as the number of downloads was significantly higher than what the free version was normally getting. After Mother’s Day downloads started going down, but they were still pretty strong the following Sunday. Here’s what the download numbers looked like for those 9 days:


The important question is how much revenue was there during that time? I was giving the app away for free but it had in-app purchases. Would they make up for it? The answer was a resounding yes!


Mother’s Day went on to become the biggest day in terms of revenue since Flower Garden was launched. Bigger even than Christmas or Valentine’s Day! Things started going down after that, but still at a very high level. The little bump towards the end of the week is a combination of the weekend (which always results in more sales), and the feature of Flower Garden on the App Store across most of Europe.

These numbers took a bit to sink in. It really shows that in-app purchases are definitely tied to the number of downloads. If you manage to give away twice as many copies, you’ll probably get close to twice as many in-app purchases. That effect is amplified if you have multiple in-app purchase items available.

It’s also interesting to notice that revenue didn’t follow the same drop-off curve as downloads. It wasn’t nearly as sharp. I suspect two things are going on in there:

  • Some users downloaded Flower Garden during the sale weekend and weren’t interested in it at all. Downloading it was a knee-jerk reaction to any app that goes free, so that never translated into an in-app purchase. Users later in the week however, probably downloaded it because they received a bouquet or were interested in it, so they had a much higher likelihood of buying something through the Flower Shop.
  • Fertilizer. Fertilizer is the only consumable item available for purchase in Flower Garden. Unlike a non-consumable item, the number of sales is not tied to the number of new users, but to the number of current, daily users. The more users launch your app every day, the higher the sales of consumable items. Some of the new users of Flower Garden went on to buy fertilizer later in the week, making revenue higher than you would expect from the download curve.

Flipping The Switch

The number of downloads on Sunday May 16th was slightly over 2,000. At that point I decided that it was close enough to the number of downloads Flower Garden Free was normally getting, so I flipped the switch back to paid. Things were going great, so messing with it was a pretty scary thing to do. Even scarier than it had been setting it free in the first place.

During that week, Flower Garden rose up on the charts. It reached #73 in the top games in the US and was charting very high in all the subcategories and on the iPad charts. As soon as I flipped the switch back to paid, it dropped out of sight from the charts. Fortunately, within a couple of days it came back to its position before that crazy week.

Most importantly, Flower Garden Free, which had dropped quite a bit during that promotion, immediately went back up to the top 100 in the Kids and Family subcategories like before.

As you can expect, as a result of giving it away for free, the ratings on the App Store went down quite a bit. While it was a paid application, the ratings were around 4 stars, but they dropped down to 2.5 stars after that week. It seems people love a free app, but are very quick to criticize it and give it a low rating (especially if it has in-app purchases).

Fortunately bad ratings can be easily fixed with a new update, and some encouragement to users to leave positive rating on the App Store. Now it’s back up to over 4.5 stars.


Now it’s two months later and the dust has had a chance to settle down. Apart from the very nice sales spike during the sale, was it worth it? Again, the answer is a definite yes.

Here’s the revenue since the start of the promotion:


As you can see, it quickly went down, but it settled at a reasonably high level. In fact, compare this two-month period (highlighted in blue) with the previous sales:


Before the promotion revenue was hovering around $1,500 per week, now it settled down to about $2,400 per week. An average day today is bigger than Christmas day! Very nice change!

I think the reason why it settled at a higher revenue level than before is because it got more exposure during that week. Lots of people sent bouquets, which introduced new users to Flower Garden. It’s the viral effect I was hoping for from the start, and although it never reached epidemic proportions, it has been enough to keep Flower Garden alive and well.

Adding iPad support as part of the latest update probably helped too. The iPad market is smaller than the iPhone one, but a lot of early adopters are eager to find good apps for their new toys. The smaller market size also allowed Flower Garden to appear in the iPad charts more easily, increasing exposure that way.

Here’s a breakdown of where revenue came from in the last month (I’m excluding the period where Flower Garden was free to get a more accurate view):


As you can see, consumable items (fertilizer) account for almost half the revenue. Consumable items are a factor of your current userbase, so getting a large influx of new users can result in a permanent revenue increase instead of just a sales spike. It also shows what a small percentage actual app sales are, which explains why even while Flower Garden was free, revenue was still up.


This was a wild ride again! It was definitely worth doing the promotion and it definitely brought home how powerful free can be. However, I’m trying to decide the pricing scheme for my next game, and even though free plus in-app purchases is very tempting, I’m not sure it’s the way to go.

What do you think? Are new games better off being free with in-app purchases, or can indie games be successful being paid (and still having in-app purchases)?

This post is part of iDevBlogADay, a group of indie iPhone development blogs featuring two posts per day. You can keep up with iDevBlogADay through the web site, RSS feed, or Twitter.

Paying Off: The Story Behind Unearthed

Today I have the pleasure to introduce the first-ever guest post in Games From Within, Joey Chang. Like me, Joey worked for many years in the game industry, and finally took the plunge last October to become an independent game developer. Unearthed is his first iPhone project and it’s a very unique free to play, augmented reality (AR) game with an X-Files-like theme.

Joey was kind enough to share the story behind Unearthed, some of the decisions leading up to the final game, and the initial reception and sales numbers. Thanks Joey!


Nine months ago, without warning, a gnome crept into my head. It was an idea inspired from a friend’s chance mention of an activity called geocaching, where participants use a GPS to hide and seek containers across the world. Within hours, I had envisioned a global cross between geocaching, the Amazing Race, and online travel agency representatives. The idea didn’t look much like the resultant product nine months later, but it formed the most critical ingredient to any venture: the obsession to see it completed.

I spent my evenings for a few short weeks hammering out a design, scoping and cutting features, and beginning a prototype, but it didn’t take long for me to admit to the unavoidable truth that such a project would take months working full time or probably 3 to 4 times as many months working nights and weekends. I had to sit and carefully consider the pros and cons of leaving my job to pursue something I desperately wanted to create.

Half-Hearted Dissent

UnearthedPoster.jpgFor two weeks, I debated with my wife and close friends with startup experience. I drafted a list of pros and cons to quitting my job to pursue an iphone project and stared at it for hours. Those of you who have made the leap or considered it may recognize some of the points or have more of your own to add:

Advantages of quitting to work full time on an iphone idea

  • Focus effort, complete project 3-4 times faster
  • Gain valuable unique experience of running solo
  • Avoid coding burnout, alienating loved ones, loss of sanity
  • Resume padding

Advantages of keeping day job while working on iphone idea

  • Steady income in a scary economy
  • Not having to job search in a scary economy
  • Peace of mind (in a scary economy)

You can see where a large portion of the dissenting argument forms its basis. After two weeks of listening to unanimous encouragement (bordering on persistent nagging) to quit my job, two weeks of trying my best to convince myself why I should not quit my job, I did what my gut knew from day one was going to be best for me. I marched to my boss’s room and quit my job. Ok, I had maybe two false starts where I turned around and went back to my seat.

The Project Unearthed

Over the next 8 months, scoping and an inclination to appeal to a casual segment evolved the project into a global paranormal investigation titled Unearthed. I tried my best to figure how to maximize the success of the product, and compiled a list of all the ways I could imagine increasing the product’s exposure:

  • Banner ads
  • Spamming blogs and websites to review my product
  • Spamming friends on facebook
  • Writing a blog
  • Viral app features

I had trouble justifying the cost to pay for banner ads, and I had too much urgency to implement the product to devote time to a blog, so I focused on occasionally talking about the app on facebook, compiling a list of potential blog candidates for the day the app released, and devising viral features.

Screen1.jpgApart from typical facebook posting and email-a-friend features, I decided to employ a “refer-an-agent” feature which would enable users to invite others to join their network, essentially a grouping of users that correlated with how effectively their app could process scanned creature data. The larger the network, the more credit users would receive for uploading data, and the better they would perform in leaderboards and achievements. The approach was an “everybody wins” style where anytime any user in the network gained a referral, every single person in the network would benefit from the growth of the network. The hope was that this feature would gain a viral quality.

Friends placed immense pressure to release the product as soon as humanly possible under the theory that doing so would reveal the 70% of my design that was wrong, so I divided Unearthed into three releases. The app itself has three game modes, each incrementally accessible as a given region “levels up” from users’ data uploads. I would have time to release the latter modes while the first mode of the game, the most casual mode where users look around where they stand and scan for anomalies, was being played.

In App Purchases and Ads

Screen0.jpgConsidering the App Store was flooded with free apps and that I had no name in the industry to immediately convince users to immediately pay for my app, I concluded that the most likely approach for success was to release a free app with In App Purchases. This appeared to be the best way to get as many users to at least try the app and decide how much they wanted to spend to access more functionality. Initially, I offered the following items:

  • All content, present and future ($5.99)
  • Scanner upgrades level 2-3 ($1.99)
  • Scanner upgrades level 4-5 ($1.99)
  • Bounty Mode (coming soon) ($1.99)
  • Blitz Mode (coming soon) ($1.99)

However, I hit a snag with Apple’s terms which did not permit me to even mention any features that were not yet implemented. The first item was intended to be a bulk pricing investment in the forthcoming completion of the app, and the ‘coming soon’ items were just client-side displays to tease of the future modes (not actually registered products in the IAP servers). Because I had to remove them, I revised my IAP content to the following:

  • Scanner upgrades level 2 ($.99)
  • Scanner upgrades level 3 ($.99)
  • Scanner upgrades level 4 ($.99)
  • Scanner upgrades level 5 ($.99)
  • Scanner upgrades 2-5 ($2.99)

The app essentially gives users access to all features of the game, but with a lowly basic scanner that doesn’t boast the speed, range, and creature clearance levels of a fully boosted scanner.

I added Greystripe’s ad system as a means to offset the cost I might incur from using Google App Engine as my server solution. Considering the large amount of rank tracking required by my app, I estimated the revenue from ads to break even with the cost of using App Engine.

Release and Reception

The app was approved in the early afternoon of June 21st, a Monday. Excited, I quickly moved up the release date and it hit the stores later that afternoon. One week later, the sales are dismal, with about 400 total downloads and only a handful of purchases.


I considered possible contributors to this could be the following (in order of impact):

  • Requiring 3GS
  • Releasing 4 days before the iPhone 4 (dropping off New Releases)
  • Requiring OS 3.1.3 (instead of 3.1)
  • Releasing the app in the late afternoon (dropping off New Releases faster)

Without knowing the specifics on the sales of the 3GS versus the 3G and the iPod Touch, the fraction of 3GS users able to even see my app in the store might be a small fraction. Unnecessarily releasing under an OS that prevented users from installing unless they went back to iTunes to update their OS was likely a dealbreaker for browsing users (quickly remedied but days later). And considering how many of the 1.5 million users would be browsing the App Store for free apps Thursday, releasing a few days too early may have been the biggest avoidable mistake yet.

Moving Forward

As uninspiring as it was getting only a few hundred downloads and enough revenue for lunch, I had heard that word of mouth was a powerful vehicle, possibly the best vehicle, for an unknown developer, so my plan is to continue giving it more time and implement the GPS-enabled Bounty Mode which will take considerably less time, possibly a short 1-2 months. One week is certainly not a large enough measure of success, and already I’ve received a few responses from blogs willing to write reviews, so I’m hopeful of seeing the userbase grow and eagerly anticipating the next big server issue. In the coming weeks, there will definitely be no “sitting back while the cash rolls in”, as I recently had the blessing/curse of another inspiring must-create iPad app revelation and am sweating bullets designing and scoping while scheduling in work on Unearthed, all the while keeping a grave eye on the lifeline of my business.

Looking back at the struggling decision I made to quit my job, I’m reminded of some advice that was given to me beforehand. “Quitting your job will be the hardest decision, but it will make you feel great.” And like an enormous burden lifted from me, it did. And to this day, with earned lunch money in hand, it continues to.