TwoDots case study: A more effective IAP model for mobile gaming

While I was abroad for about a month, I found that with my limited access to the Internet, I started playing offline-compatible games that were still on my phone that I hadn’t played for some time. The game that I went back to most, almost obsessively, during my travels was TwoDots.

For anyone that doesn’t know about TwoDots by now, it’s the more grown-up version of the original Dots game, which took the casual mobile gaming universe by storm. It takes less than 30 seconds to understand the game and the interface (for both games) is both elegant and clean. The team beefed up elements in the game where, perhaps, a lot of developers wouldn’t pay much attention to otherwise (See NYT’s piece on TwoDots’ charming soundtracks).

Since the Playdots team launched TwoDots, they’ve spruced up some of their pay walls. Here are some examples:

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When you’re about to start a level, the game gives you the option of starting with a boost. I’m pretty stocked up in terms of boosts, but for users that have already run out of boosts, they are available for purchase.

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If you get very close to finishing a level but fail, the game usually gives you the option of purchasing a boost and a couple more moves.

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If you run out of lives, you can either wait 20 minutes for another life or refill your lives for 99 cents.

I’ve briefly written about TwoDots before, and how for a fairly casual game, they’re putting in a lot of effort to seamlessly monetize without being too pushy. I have to admit, it’s pretty effective. I’m not bothered at all by the pop-ups because they combine both helpful information (e.g. number of lives/boosts I have left) and chances to make a purchase. Though occasionally the placement of the “Refill lives” or “Buy more boosts” buttons are a little tricky (I find myself accidentally pressing them all the time).

But here’s the thing – I haven’t paid a single penny. Yet at the same time, I wouldn’t mind coughing up some cash for the game either. What gives?

As much as I talk about games and love reading news about gaming, I am not a devout gamer. I’ve taken gaming personality tests in the past, and each time, my results identify me as a very casual gamer. I am not a whale – I will not spend money unless I have to upfront for a game like, say, Monument Valley. I download freemium games to get a sense of what the games are like, but rarely do I ever stick with these game for more than a month or so (there are exceptions).

When I come across a game or app I really like, the more I use it, the more I get comfortable with it. And the more comfortable I get with an app, the more I feel ok with spending money on it, since it’s already served me well. The problem with a lot of freemium apps (especially for mid-core/hardcore games) is that their monetization strategies are geared heavily towards getting whales to pay up. It’s not a bad strategy, especially when whale users, who make up 0.15% of mobile gamers, bring in 50% of the revenue.

Monetization gets a little trickier though when it comes to TwoDots, a game that’s not mid-core or hardcore, but pretty casual.

It’s worth noting that TwoDots hasn’t done too bad in terms of grossing, but it’s nowhere near Clash of Clans or Candy Crush status.

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iPhone stats for TwoDots within the past year via App Annie.

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Google Play stats for TwoDots within the past year via App Annie.

As I mentioned previously, the more I play TwoDots, the more I would be ok with paying. However, I’d prefer to not pay 99 cents every time I need lives because it does add up over time. On the other hand, I wouldn’t mind paying $5 to play as much as I want. Obviously, this is not a new revenue model at all – in fact, it’s how games have been sold since they were created. Buy so-and-so game for Xbox, and you can play it as much as you want.

So I’ve been thinking – whales bring in a lot of money, but they only make up a small portion of the gaming audiences (note: this doesn’t mean that non-whales DON’T pay – they just don’t bring in nearly as much cash as whales do). It’s true that you can’t directly use users’ UDIDs, but most major gaming companies have found a way of going around UDIDs by giving users their own ID numbers/codes to be able to define cohorts and gather data. Why not use the data you already have on users to make the gaming experiences slightly different? And I’m not just talking about tailored push notifications (which is already being done) – I’m talking about tailoring the ways to get users to pay up.

For users that are loyal to the app but have yet to spend anything, change the experience for them – send out a *limited time offer* to spend $5 for infinite lives (just don’t tell the whales). By doing this, it’s true that once the users opt into the $5 deal, they will never spend money in the app again… but hey – would you rather get $5 from a user or nothing at all?

At the same time, this kind of customized monetization experience can be slightly risky – the obvious factor being that people start finding out and getting angry that they’ve already spent a bunch of money on the app while the non-payers only have to pay $5 for infinite lives. Since this is a difficult situation, it might be best to roll out a “differentiated experience” like this when a company/developer(s) realizes that the game either is A) tanking or B) is not monetizing at all, since at that point, there aren’t too many options left to save the app.

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