How effective are discounts on bundles?
Discounts on bundles in shareware games give the user the opportunity to buy hard currency at a more attractive price. Isaac Roseboom from DeltaDNA analyzed the effectiveness of this strategy in an article for the company’s blog.
IAP are virtual goods, so they have no cost price. You can set any discount on them, and this will not entail losses, Rosenbum claims. However, if players are given too much hard currency for too low a price, they may stop spending at all.
Therefore, the question arises, how effective are discounts on bundles in general? Or, in other words, do they force players to spend more?
In order to answer this question, Rosenbum used statistical analysis. He researched 19 shareware projects. The games were selected according to the following criteria:
- lack of timers and “starter packs” of hard currency;
- the inability to buy one or another IAP for a large amount.
This was done in order to make sure that players would want to buy bundles for the sake of discounts themselves.
The selected games used a different system of the cost of goods and a different range between them. The price for a basic bundle ranged from $1 to $18, and the most expensive cost from $50 to $200. Therefore, the analyst of DeltaDNA brought both real and hard currency to the same denominator. As a basis, he took the price of the cheapest (basic) bundle in each game. This means that if the base bundle costs $2 for 100 coins, then a pack of 300 coins at a price of $5 equals 2.5 RC or 3VC, where RC is the real currency and VC is the virtual currency.
The effectiveness of the discount on the bundle, Rosenbum believes, is determined not only by the amount of this discount, but also by how much you have to pay to get it. A 10% discount for one extra dollar is likely to work better than a 100% discount for $100 (although it is less profitable). Therefore, the DeltaDNA analyst calculated each discount in relation to the RC unit (%Discount per RC).
The purpose of discounts is to increase the average transaction, Rosenbum argues. With the growth of the discount, theoretically, the size of the average transaction should also grow. For each of the selected games, the value of the average transaction (in conventional RC units) and the value of the average discount for RC (%Discount per RC) were set. Below is a table with the results.
There is a clear trend – the higher the discount, the higher the average transaction level.
If the game offered a 2% discount on RC, then transactions were doubled compared to the cost of the base bundle. If the discount increased to 6% of the RC, then the average user spending increased seven times compared to the base bundle.
Discounts on bundles work, Rosenbum sums up. They increase the size of transactions and make it possible to generally increase revenue from F2P games. However, the analyst of DeltaDNA warns: perhaps generosity has consequences, and in the future large discounts on large bundles can not only reduce the need for players to spend, but also scare off newcomers.
A source: https://deltadna.com
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