Presented by Xsolla
In a world of ever-declining revenue margins for game developers, direct-to-consumer is becoming essential. Cost-effective services, platforms and tools to build web shops are thick on the ground, and game companies of any size can afford to get set up, sell and rack up some astonishing numbers, says Artem Liubutov, head of monetization at Xsolla.
Across the 400 web shops Xsolla has launched, the minimum increase in game revenue has been in the range of 10% to 16% and the conversion rate, from logging in to the web shop to purchase, ranges between 40% and 60%, Liubutov says. And now 40 out of the top 100 grossing games in the world are working with them, including Tilting Point, Godspeed Games, Hyper Hyppo and Kefir.
“If a game has done things properly, if they transfer paying players and avoid spending marketing money on transferring non-payers, these numbers are totally doable,” he explains. “Big publishers, mid-size publishers, even relatively small mobile games can achieve that without spending a lot of money on marketing. You can do it very smartly with web shops.”
Adding player value
A web shop is really all about the value-add. It should be a place where players can find unique items that enhance the playing experience and offers valuable items. Thoughtful, high-value offers attract the most valuable players — the big spenders who enthusiastically spend beyond the $99.99 price point that traditional platforms are limited to.
“Web shops are perfect for whales and super-whales,” Liubutov says. “They’re willing to spend much more in exchange for additional value, which not only leads to increased average purchases, but also the number of repeat purchases, and as a result, retention and LTV, since they want to use what they bought.”
Web shops are also capable of re-anchoring players to a new price point — many developers have seen their price point go sky-high. As the new purchasing experience is entirely familiar to players, it increases their comfort in shelling out rather than to a shill inside their game.
So when a high price point is combined with a commensurate amount of perceived value, players can actually shift from one segment to another. For example, from dolphins to whales, from whales to super-whales.
“For some games, especially for core genres like 4X strategy and RPG games, these very expensive packages can bring more than 50 percent of all revenue in the game,” he says. “That’s something we didn’t expect three years ago, but now we’ve seen this happen more and more.”
Getting started for success
Setting up a web shop is easier than ever. Xsolla just launched Web Shop 2.0, as well as their Instant Web Shop, which can get you up and running in 24 hours. But doing it right demands some time and care right out of the gate. The analysis stage is particularly important, Liubutov says, and he identifies three major areas to dig into.
1. Analysis of already launched web shops, especially for games in similar genres. Pay attention to what they sell, their price tiers and what kind of promotions and live ops they’re using.
2. Analysis of the existing target audience and segmenting players — especially paying players, since they’re obviously your bigger fans and best customers. Break down which in-game activities have the most impact on every segment, and whether each segment responds better to discounts or to added value.
3. Analysis of items and offers in the game — determine which generate more revenue, and how each segment reacts to each price point.
And remember, there’s no limit to the price point in a web shop, and price experiments are easy to stage. A $10K package might sell, if there are enough dedicated players — and developers are often surprised to find that they have players who can and will spend far more than they thought.
“With web shops, the goal is to change behavior, to form a new spending habit — basically to make a paradigm shift,” Liubutov explains. “The new normal should be that mobile is where I play and the web is where I pay.”
The five golden rules of building a webshop
While Xsolla has partnered with developers of every size to build and launch successful web shops, they’ve arrived at five principles, or golden rules, for success.
Rule #1
Treat the web shop as an extension of the game. To form a habit, everything should be easy. For example, if the web shop’s UI is different from the game’s UI, a player will face a learning curve when trying to figure out how to use the shop, where to go and how to pay.
“In the first nanosecond when players see the web shop, you want it to feel completely familiar, with the same colors, same buttons, same flow, same logic, same types of offers, same events happening, which makes it much easier to start purchasing,” Liubutov says. “It may sound pretty obvious, but almost everyone that we’ve seen, including the biggest publishers in the world, they keep making this mistake. It happens when two very separate teams operate on in-game purchases and on the web shops, without communicating with each other.”
Rule #2
Continuous communication is key. It’s an endless cycle of telling players about the existence of the web shop, and then continuously reminding them that it exists. Yes, they’re endless tasks, but they’re crucial for success. Build a direct communication tool immediately, if you don’t have one already, whether it’s Discord, Facebook or a forum.
Rule #3
Friction is your biggest enemy, and it leads directly to churn. Authentication is a big sticking point, as is laboriously entering payment methods, and making it difficult to calculate the difference in value between in-game offers and web offers.
Rule #4
Value is king in web shops. Liubutov recommends a 10% increase in value or a 10% discount to start. The benefit should be much higher than the transactional cost of a new game experience.
Rule #5
Leverage the web shop’s live ops power. It’s possible to just sell evergreen virtual currency packages and see a 10% increase in revenue. But by leveraging all the live ops capabilities — by segmenting players and doing personalized offers, loyalty programs, targeted bundles and first-time offers — the increase is staggering, Liubutov says. And the best way to do this is by having the in-game live ops team work with the web shop live operations.
“If you follow those five rules, if you pay attention to your metrics and think about value and push live ops, the increase in revenue can be very substantial. The pure ROI on doing a web shop is very high,” Liubutov says. “We know billion-dollar games that have now fully embraced a web shop strategy. It’s a number-one priority for these games, because of the value they’ve received in the last year or two working with us or doing this on their own.”
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