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Unlocking Games Monetization In Emerging Markets With Behavioral Science

  • aster.cloud
  • February 4, 2020
  • 7 minute read

Successfully launching and monetizing titles in emerging markets has been one of the hot topics in the gaming industry for the last few years. And rightly so — the player base is growing strongly in markets like India, Brazil and Russia. In fact, 4 in 10 players are coming from emerging markets for most top grossing apps on Google Play. However, the growth in the number of players doesn’t translate into the number of purchases. For the same app only 1 in 10 orders on Google Play is coming from emerging markets.

Pictogram of Androids and shopping bags

With traditional barriers to spending in emerging markets weakening and players opening to the idea of spending on mobile games, developers have an opportunity to increase the number of buyers and transactions for their titles. Of course, we have to be realistic here and accept that we can drive that ratio only to a certain extent — there’s no solution to get every player in emerging markets to start spending on mobile games. But what developers can achieve is reaching those players who can spend — those players who have no problem in buying a treat for themselves, but might find it hard to spend on digital treats.


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Why behavioral science?

Together with Rodolfo Rinaldi Rincon and our friends from The Behavioural Architects we decided to look into ways game developers can increase the appeal of their IAPs in emerging markets with the help of behavioral science. Behavioral science describes at a high level how the majority of people will behave in specific circumstances, taking into account a variety of psychological, emotional and social factors. This field has seen rapid growth in recent years, using insights about human behavior to help explain how people make decisions. We have selected three relevant principles that can help game developers optimize their price & promotion strategy for emerging markets.

Step 1: Secure locally relevant price points

Generally, across the world consumers expect prices to reflect their local context. If players feel the price isn’t reflective of their reality — they might decide not to spend it at all. In fact, 62% of Brazilian players we interviewed, at some point of time considered spending money on mobile games, but felt the cost was too high and decided not to (source: Google Consumer Survey, Mobile Gamers, n=1000, December 2018, T2B).

Gaming is relatively new to localized pricing compared to other categories that have been doing this for years, like fast moving consumer goods. That’s why we’ve decided to look at one of the most known pricing indexes out there: the Big Mac index. Then we created our own digital treats index by taking a basket of games IAPs available worldwide and compared how these are priced in more than 50 countries. And we’ve compared the 2 indexes, our Digital Treats index with the Big Mac index, to assess if in any given country the 2 were not aligned and wherever that could lead to a pricing opportunity. We found that compared to the Big Mac Index, digital treats were overpriced by a median of 40%. Furthermore, we’ve spotted that it’s not just India or Brazil that should be at the top of developers minds for adjusting price points. There are several emerging markets where games could see a significant revenue uplift from making their prices more locally relevant — like Mexico, Poland, Malaysia and Indonesia.

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Map of markets discussed

So how can developers respond to this? In order to secure locally relevant price points for your game:

  • Consider introducing sub-dollar pricing to reach more price sensitive players. It can open up doors to an audience of players that’s willing to spend ‘a bit’, but so far the prices might have been out of their reach. While the number of apps that currently offer IAPs below a dollar is still limited, in several markets they are a significant part of orders. In fact, just in Mexico 23% of purchases on the Google Play store are below a dollar, followed by India with 19% and Indonesia with 14%. Think strategically about the portfolio you offer and identify specific IAPs that have a potential to attract a new audience through a lower price point.

Bar graph of countries

  • Secure multiple price points across IAP portfolio to cater to players with different wallet sizes. Currently the majority of apps offer less than 5 significantly different price points, but they struggle to attract buyers. Successful apps tend to offer more choices to match the needs of their players across the world. According to Google Play internal data, games that offer multiple price points are also the apps that capture most of players’ spending.
  • Anchor players through the first price point they will see in the game. Developers need to think about what price point their player will see first as this will influence their perception of “how expensive the game is” and can change purchasing decisions further down the line. In behavioral science this is called anchoring and the concept refers to the tendency to rely heavily on the first piece of information offered when making decisions.
  • Anchor players both internally and externally. Players will compare the price of offered IAPs to other goods. Firstly, internally — to other products being offered in the game. Developers can introduce starter packs with lower price points to overcome the initial barrier to spend on IAP. Secondly, externally — to non-digital goods or to culturally relevant price points they have as a mental reference — like coins or banknotes they use each day. Ensure the price points reflect them.
Read More  9 Tips From APAC Game Developers In COVID-19

Phone screen of a candy game

Step 2: Drive value perception of IAPs through the right promotional portfolio

Securing the right price points alone might not be enough to entice players to spend. There is much hesitation due to the lack of value perceived. This can manifest in different ways: spending on gaming can be judged as wasteful or frivolous and not seen as valid as spend on a physical item or other forms of entertainment. Value has a greater meaning in markets with lower disposable income and people want to be sure they are receiving the most out of their spending.

So how can developers drive better value perception of IAPs? Through building the right promotional offering — that feels locally relevant to the consumer:

  • Make promotions feel relevant through embracing local festivities & traditions. The affect heuristic shows that people tend to make decisions quickly and based on their current mood and emotions. Consider researching holidays, festivals and cultural events that will resonate most with players. Based on that calendar, think about how you can create locally relevant in-game items, events, promotions, bonuses and aesthetics.

Two phone screens with different apps open

  • Make the game more of a social experience through introducing reciprocity cycles. Eventually, humans are conditioned to repay, which means we respond to a positive gesture with another positive one. For many players in emerging markets, being able to invite family and friends to play and then enabling them to gift resources can drive a strong sense of gratitude and obligation to give back to those who have helped them in some way in the past.

Two phone screens showing reciprocity cycles in an app

  • Strengthen the range and visibility of durable IAPs. Finally, developers can also look to the endowment effect — as humans, we place great value in the things we own or we feel we have contributed to creating. As mentioned earlier, benefits of IAPs might not feel as tangible for players in emerging markets. Developers can create a greater sense of ownership through introducing or highlighting assets that are durable or accumulate over time. In particular this effect can be leveraged with cosmetics or characters, which are a long lasting and a visible reminder of investment.
Read More  Developer Tips And Guides: Common Policy Violations And How You Can Avoid Them

Phone screen of Spartan character customization

Step 3. Clearly show the value message in-game

The final step in increasing the attractiveness of IAPs is through ensuring that the value of the offering is clearly visible for players, as it can easily get lost in the clutter of the game or competing promos and offerings within the store. Too much choice, too many price points and communication overload can confuse the player and result in abandoned purchase.

Developers can strengthen the value message within the game through visual cues and simplifying the purchase decision and journey for them. So how can developers improve the store design to show better value to the player?

  • Make it cognitively easier for the potential buyer — declutter the promotional offering and the store. In this case quality over quantity. Ensure the player has the cognitive ease to make the right decision — present IAPs in a way that requires minimal time & effort to navigate it and make the decision. You can do this by prioritizing hero SKUs to the trends in emerging markets.

Two phone screens of in-app stores

  • Experiment with choice architecture through visual cues for the player. The number of choices and the way they are presented influences people’s final decisions. Developers can leverage the order effect — the first item in a list tends to be chosen more often by consumers. Depending on what you want to achieve and with which segment of your buyers, this could be the cheapest SKU, the most expensive one or a time restricted promotion. Remember that even simple visual primes (like bolding, highlighting, using colors) can drive the attention of the buyer to a particular option and as a result increase its popularity. Don’t be afraid to experiment and learn what works best for your title.

Phone screen of in-app store special boxes

Closing thoughts

It’s important to remember that embracing behavioral science principles to your title isn’t about completely scraping and redesigning the game design or economy. It’s about identifying opportunities for further growth and applying little tweaks to prices, promotions, and the way they’re communicated to the players. By taking these into consideration, you can reach new audiences and increase revenue from new growing markets.

Want to know more?

This article is part of a series drawn from Playtime 2019. You can find the full list of presentations here.

Zuzanna Dzieciątkowska

Source: Google Play Blog


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Related Topics
  • Apps
  • Game Development
  • Games
  • Google Play
  • IAPs
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