Don't build mobile games for whales

Gamesbrief recently polled some gaming gurus about the wisdom of placing a singular monetization focus on whale behavior in game development. Chasing whales / dolphins / trout / what-have-you is, in my opinion, the wrong approach to take when designing a game (or, for that matter, any product): for one, this assumption presupposes a type of behavior inherent in the user and relies on that to drive product use. But secondly, I don't believe "whales" (or any other type of player segment) can effectively be targeted in this mobile gaming acquisition environment. And, as I've written about before, I think every freemium title needs non-paying users to thrive.

The biggest logical loophole in building the fundamental game experience specifically for whales is the assumption that whales can be acquired precisely; they can't. No acquisition network offers targeting filters that can accurately identify whales. Before I elaborate on this, I'll concede that two schools of thought exist relating to whale behavior:

  1. Whales are "made", not "born". That is, a person spends a lot of money in a game because that game inspires him to do so, not necessarily because that person is predisposed to spending lots of money in a game;
  2. Whales spend prodigiously in multiple games at a time, and holding these players' interest above and beyond competing games automatically unlocks their revenue streams.

I belong to the first school of thought. But regardless of the conceptual beliefs underpinning a particular studio's development efforts, I still hold that whales cannot be targeted, for three reasons:

The first is that a temporal element exists in whale behavior, just as it does in any spending pattern. I may love games and spend freely when I have the money to do so, but I don't always have the money to do so: perhaps I'm saving for a vacation or my car just died and needs to be repaired. The fact that I can and will spend lots of money in a game doesn't mean I will do so immediately upon downloading it; my disposable income isn't constant. So for this reason, whales cannot be targeted based solely on past behavior: previous spending patterns don't necessarily mean those spending patterns will remain consistent. I very well may spend lots of money in your game, just not as soon as I download it — so if you design your game to discourage me from playing if I won't spend money, you miss out on those future purchases.

The second reason is that users are acquired "blind", without any insight into how much money they might potentially spend. Let's say, counter to my first point, that past spending patterns could be counted on to persist consistently into the future — how can a game developer target a "whale" based on those patterns? Game developers know exactly three things when they acquire a user from another game: 1) that the user plays games; 2) that the user clicks through on the banner ads she sees in games; and 3) that the developer of the game the user came from was willing to sell that user for some amount of money. Points 1 and 2 don't offer any insight into how much money that user is willing to spend in a game, but point 3 does: it means that, if the developer has any sort of analytics backend, the user acquired was worth less to the original developer than the amount paid for her. Clearly, this user was not a whale in that game.

And the last reason I believe whales can't be targeted is that whales are a new species: I believe that most whales in most games right now are spending large sums of money in-game for the first time in their lives. Why? Because whales only really exist in free-to-play games, and very few free-to-play games — especially in mobile -- have properly monetized their user bases. Gaming studios are learning and mastering the behaviors in players that predict their becoming whales, but those behaviors can only be tracked in-game, not from another game. How do I profile a whale in another game to target that user? I have no idea.

So given that behavior is the only valid indicator of a player becoming a whale, building a game to optimize the experience for whales makes no sense: I can't tell if a player is going to become a whale until they've first started spending money in my game, and most whales become whales over an extended period of time, not through one or two large purchases. And all of this ignores the fact that whales aren't exclusively introduced to games through paid acquisition; they also learn of new games virally, whether that virality is engineered or realized through word of mouth. Creating a game with an experience tailored to whales restricts the extent to which a game can go viral because it limits the number of people that will enjoy the game to the 1-3% who will ever spend money in it.

The best way to monetize a game is to cast as wide a net as possible with regards to user enjoyment and build a very long-tail monetization curve. Giving everyone the opportunity to be entertained by your game means higher relative virality and free installs (which in turn delivers more whales), and building a continuous monetization curve means the users who glean enjoyment from in-game purchases are given every opportunity to make them. If the 1-3% freemium conversion rate is held as a rule — as I believe it should be — then building an experience that's only accessible to whales is a less viable monetization strategy than scaling the userbase and building a deep experience with a very long-tail monetization curve.

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