Hi, I'm Anthony Peccarella,

I'm the director Virtual Goods Games at kongregate.com and I wanted to give you

kind of a quick overview of how you can make money with free games.

So this presentation is called Don't Starve.

It's an overview of the business of free games.

So you're a talented game developer, you've got this great idea,

you know how to make it, but how do you also buy food?

So there are a lot of different ways that you can make money with your games.

Sponsorships are when a game portal such as kongregate.com

would pay to have their logo and link prominently f eatured on your game.

This is primarily for browser-based games, of course.

This was really a great revenue model up until around 2012 for a number of reasons.

It has fallen off more recently, partly because of the shift to mobile gaming,

partly because some of the big portals getting smaller and less competition, but

it's good to understand how that model did exist but it is much smaller now and

should not be something that you count on at this point.

Ads are a very common way to try to generate revenue with a game.

The issue with it is that they have a very low value per player,

you have to have a very large audience in order for it to make up,

because ads don't pay particularly well on a per-view basis.

Video ads are worth a lot more than just the still ads or banner ads,

so finding ways to put video ads into the game will generally do a lot better.

And something called opt-in ads or incentivized ads are the best of all.

This is where the player decides, voluntarily starts watching an ad and

as a reward for the ad, gets something in the game.

It is a little more difficult to design correctly,

but actually is often the best of both worlds.

You get paid better, the players have a great experience, and they convert well,

so the advertisers are happy too.

In terms of the types of ads that are run, pre-roll ads,

kind of like what you see on YouTube, run before the game starts and

then once their ad finishes they can start playing the game.

The ads called interstitials will run during the game play, usually between

levels or after you've lost a few times and before you start the next round.

Those work all right, but they do interrupt the game play and

can be kind of annoying to users.

But of course, everyone's going to watch them, because they want to keep playing.

Then, finally, the opt in ads that we talked about are ones where,

usually the user actually chooses to start the ad.

The reward is they might get a bonus in the game or things might speed up for

a little bit.

Finding that right balance of something that is valuable to the player but

not overly valuable,

is really, really great, and generally leads to the best user experience.

Another model is the one time purchase.

You're probably very familiar with this, and the simplest one would be the retail,

go to the store, pay for the game up front, and take it home.

Another variation of that is the demo, where you might give 10%

of the game away for free, and then charge for the rest of it.

And then the, but there's something that's a very different model that

I like to call the premium edition.

This is a lot more common on browsers, haven't seen it much in mobile yet.

But the idea is that you give away about 95% of the game for free.

So really the entire game, you can beat it.

But there might be a few extra features,

a few extra levels that you can't access without buying the premium version.

And this is a really nice model because you let your game get out there for free,

everyone gets to play it, but those who really like the game can support it

with an extra purchase, usually in the $5 to $15 range,

that gives them some cool stuff that they couldn't have had otherwise.

It's interesting, the demo versions, and the premium editions often have about

the same percentage of players converting over.

So one of them gives you a better experience for

players while both of them generate about the same amount of revenue.

And finally, in-app purchases.

So this is a very complicated topic, but the general idea is that players can buy

things in the game, usually permanent upgrades or

maybe consumable items that they can use while playing.

What's interesting about in-app purchases is that unlike a one-time purchase,

where you have a single amount that the player can spend and

that's it, this actually raises the spending cap.

So if someone who really likes your game and really wants to get into it,

and can't afford to support it and support you as a developer can actually

spend a lot more than maybe the $5 buy-in that a one time purchase has.

This is, by far the most challenging to do right.

But, it also has really the highest ceiling.

There is a, it's a very complicated topic and we have, if you check out developers

at www.Kongregate.com, we have a number of other talks that we've given on it.

But, in short, it really requires the game to be fun and compelling.

There's this idea that people who run in-app purchases in free to play

games try to pull as much out of a player as quickly as possible.

And that's really not what works.

Instead, it's players who really like the game,

who stay with it long term who are the ones that end up supporting it.

So you still have to have a great, fun,

compelling game that players want to play for long term.

And the other thing that's really different is that it's more of a game as

a service.

So unlike a one time purchase where you release a game and

you're pretty much done with it.

You might have a couple of patches to fix some things, or maybe even a DLC later.

When you're doing a free to play, in-app purchase based game,

you really need to be generating more content and updating things regularly.

So again, it's a lot more difficult.

It requires you to stay with the game over the long term.

And usually it requires a bigger team.

But it also is how a lot of the biggest games are really succeeding these days.

So that's just a quick introduction on how you can make a business out of free games.

If you'd like to find out more, check us out at Developers.Kongregate.com

where you can see some of our other presentations.

As well as information on how you can use our APIs to get your own games

on Kongregate.

"An Overview of the Business of Free Games" by Anthony Pecorella, Virtual Goods Director, Kongregate.com

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