When a huge audience isn’t enough: how Punch Quest tweaked a free-to-play economy into profitability
My name's Kepa Auwae, I run Rocketcat Games. In 2009, a couple of friends and I decided we wanted to make videogames. We had no previous experience, at all. We decided to give the App Store a shot because it has a very low barrier to entry. Our first game made enough that we could work part-time on games, and our second game let us go full-time. Most of our games are considered strange niche games on the App Store, with our first few being precision platformers based around swinging on grappling hooks. But we made a good living off games for years, most of them selling for $3. Our last game was Punch Quest, which was our first try at making a free-to-play game. The launch was a failure in that it didn't make money at first, but it was also a success in a lot of ways. It ended up being a comprehensive months-long lesson in the pros and cons of the pricing model. I'd like to share this story to other developers considering it, and anyone else interested in the reasons why you'd want to give a game away.
Why not just sell your game for $3? Or better yet, $1?
The big reason why we wanted to go for a free-to-play game is that we don't see a great future in selling things for $3, for us. We still recommend that price for new developers, either small teams or solo developers. Recently, 10000000 was a big success story for that price point, at 50,000 copies in the first month.After that first month, for a vast majority of iOS games, there's a very steep drop in daily sales. Many games can have an extremely long tail before they bottom out to ten copies a day, but it's nowhere near that first month. There are of course some games, at 99 cents, that never leave the top charts. The problem is that blundering into an evergreen top paid spot has become even less likely than it used to be. Over the years, the charts have become gradually more cemented with angrier and angrier birds, making the 99 price point even more of an awful gamble than ever. Let's say that you have a small but devoted base of fans, and you can expect about a minimum of 70,000 copies sold of a game before it bottoms out. Apple's cut reduces that $3 a game to $2.10 per game. Non-pushy, cosmetic-only IAP might bring in an extra 10% profit or so. Let's say $160k per game, if nothing goes terribly wrong. Now divide by how many people worked on the game, and keep in mind how long it took to make. Great if you're a solo developer, or a small team that can still make a game every three to six months. The previous numbers are mostly hypothetical because we didn't want to give ours (or anyone's) exact profits, but it's not too far off from our earlier games. It takes three people to make one of our games, in about nine months. As our production values and desire to make better games increases, so does the time taken to make the game. More time and more people means less pay for everyone, until we can't really continue to work. We've made enough money to keep making games for a long time, but conditions on the App Store slowly change. What if it becomes impossible to crack the Top 20 paid chart with a new game, which leads to a lot of extra sales? What if we just have a couple bad game launches in a row? What if a game just mysteriously doesn't sell many copies at all?
Weighing the options
We decided that we needed to do something, before a problem came up. We had four options. We could try to expand our audience a lot, greatly cut down the time it takes for us to make a game, charge more per game, or fire our artist, Brandon. To cut down the time it takes for us to make a game, we'd have to make different types of games. We like working on complex games, we try to come up with original mechanics, and our games aren't very casual. This all increases development time, but we did not want to switch over. I enjoy some casual games, but it's not what we got into game development for. We were thinking about trying the $5 price point for a long time. If we could sell 100k copies at $3.50 a game, that would be great! Then this post by Tiger Style Games sorta freaked me out. Also, after looking at other developers using that price, it seemed everyone having success with that also had enormous press before their launch. Sworcery had a 2 year marketing campaign before their release. Infinity Blade, being a subsidiary of Epic Games, had all the resources that comes with. It seemed like a bad idea to point to either example as proof that $5 is a good idea for a smaller or less established developer. I can't draw very well, so we went for trying to expand our audience. We were encouraged by other developers such as Nimblebit to give making a free game a shot. Brandon and I collaborated with Paul Pridham, who develops under the name Madgarden. Madgarden was responsible for games like Saucelifter and Sword of Fargoal. The plan was to make a game that could appeal to a wider audience than we usually aim for, and to make it free. We came up with Punch Quest, a game similar to an arcade beat-em-up like Final Fight, but controlled with just two buttons as your character automatically moves.
Well, Valve seemed to do it right
A big thing I wanted to do with Punch Quest was to experiment with a game that's free to download, but doesn't mess with the design of the game. Usually the idea with a free-to-play game is that you can grind for progress, but doing so is slow. There will be a small percentage of people that like your game, but hate the grind you placed in it. So they pay up, while the people that don't mind grinding end up playing longer and hopefully recommending it to more people. I was hoping we could avoid doing this. It seemed really strange to design a progression system that people could pay to skip entirely. Even though some games can manage to do this in a respectful way to the player, it still seems like some sort of unintentional commentary, pointing out how arbitrary the entire system was in the first place. I looked at examples of games I thought did the system right. League of Legends is a notable one, where they mostly don't let you pay to skip level progress. All you could get for money were classes, customization options, and temporary boosts. What I ultimately wanted to try, though, was something inspired by Team Fortress 2's hat system. Most people will hold up TF2 as an example of a free game done right, that makes a lot of money off key purchases and cosmetic hats without putting you at a disadvantage if you don't pay. For Punch Quest, we launched with every ability you could unlock being very quick to get. You could literally play one or two rounds, each lasting 2-3 minutes, and unlock something new. The only expensive item was a way to change your hat into a random Ultra Hat. You could reroll them for a new hat with rare appearances, maybe even one that conferred an extra ability. After about 9 months of development, we released the game. It got a big Apple Editor's Choice feature right away. The reviews were glowing, many talking about the extremely fair IAP system. It got about a million downloads in a week, and a lot of press coverage in places we've never been mentioned in before.
Punch Quest fails
The TouchArcade review was prophetic of what happened. They praised us for how we did the IAP system, and then wondered if that would outright kill the game. After Punch Quest was out for a few days, a lot of developer friends pointed out the big discrepency in how it showed up on the top charts. Though it was in the top 25 of the free charts, it was barely a blip on Top Grossing. We thought that maybe free games just take awhile to ramp up, but it became clear that no one was really buying anything. At this point, we started getting a ton of advice. A lot of it was about the menu of the game, which a lot of people said was too busy. The “Buy IAP” button wasn't obvious or glowing enough. The items you could buy weren't really enticing enough. Many people would write us saying that they loved the game and bought some coins, but then really had nothing high priced to spend them on. Others wrote that there was no coin doubler, which really should be put in because they'd definitely buy that. We worked on these things, and launched some updates. None of them really changed things. Even early on, I wondered if there wasn't something more basically wrong than these seemingly minor things. In an article on The Verge, I said that it's likely we should have just raised the prices to be eight times as high. I didn't want to make the game grindier, though, as that was against what I was going for. Here's a quick aside on morality. It turns out that no one truly cares about how nice you are with how your in-app purchases work. There are people that don't mind IAP, and people that hate the very concept. In the second group, it doesn't matter how nice you try to be, they'll still hate it by loose association with games that use it in a predatory way. You'll get no points for trying. We get occasional complaints - “IAP is evil” - about our games where you can pay 99 cents, one time, to get a functionally-useless hat. You really just may as well do whatever you personally believe is right. In November, the daily numbers for Punch Quest hit a very low point, and seemed to be sinking even lower. So, we gave up and made it 99 cents. It did better for about two weeks, and then started sinking harder than ever. What I said above still applies to 99 cent games: Like almost all paid games, your numbers plummet at some point after the release of the game. Also, there's a huge difference in download numbers between 99 cents and free. The download numbers sank to under a twentieth of what they were when it was free in November.
Punch Quest rises
At this point, it was about two months after the release of the game. We had thought a lot about the advice we were given, but few people suggested that the low in-game shop prices were the main issue. Even earlier on, we wondered if that wasn't the main issue. Talking to some other free game developers, we heard that on iOS, most purchases come from people grinding through the early parts of the game, as opposed to people that get everything except for one high-end item they want. We kept going for awhile simply due to a mix of charity and people that were really into the hat reroll system. Going back to Team Fortress 2, they don't provide a fast grind, either. In their system, they made it so you get a piece of loot every 50 minutes on average. The item is random, and most likely not the one you want at all. Some items are far more rare than others. It's easy to forget how stacked against the player this system actually is, when you already have an inventory stuffed with items from playing the game since its release. Even easier when your favorite TF2 map for awhile was idle_to_complete_your_pyro_set. So, we gave in and released a patch that increased store prices for early items by five times the amount. We also made it free again. Download numbers went up by 40 times, profits tripled and became much more stable. Tripling the profits isn't too incredibly impressive at this point, but it's enough to feel good about the game and put in new stuff every month or two. With these numbers, we also started to notice that updates gave a very positive boost. It's a misconception on the App Store that updates will lead to more sales, that if your game is failing you can just turn it around with updates. This is actually only true for games that have a lot of players, about 150,000 or more seems to be about right. Punch Quest has around 400,000 players that get every update. With the prices finally fixed and us able to mostly work on new content, we really noticed that game updates lead to more downloads, purchases, and stability.
Well, we sure did learn a lot about making a living off a free game. With our next games coming out in March or April, we have a bunch of options now. We could just use the same plan again, but make sure it's grindy enough when it's released. Having the system right at launch, instead of two months after the game is out, should be a huge difference. However, I don't think we'll use this skip-progression system again, unless we're also making a very casual, mass-market free game. Punch Quest has about 1.7 million downloads as of this writing, but that's pretty small time in the larger scheme of things. A simpler to play game could probably get more downloads, and ultimately I think you need a huge amount of numbers for the skip-progress system to really work. Funnily enough, we could most likely just make a future game $5 if we wanted. Punch Quest got a lot of new people to check out our games, and also helped us get wider review coverage than we've ever had before. For our goal of expanding our audience, the whole free-to-play thing was still a huge success. We're actually thinking about releasing some quick games that we don't really expect to make much money, just to expand our audience even more. It's actually pretty much what the strategy is for PC indie developers. Free games to get noticed, later funnel that awareness into a game with a price that lets you continue existing. What we really want to try out next is the League of Legends model. This is where you have a bunch of different character classes that you can buy, all offering a different way to play the game. I really like how this idea lets you avoid having to push paying real money to skip the progress system entirely. The model can also be adapted and used in a lot of different games, because really what you're doing is selling alternative gameplay modes. A good recent example of this method doing well on iOS is the game Extreme Road Trip 2, where you unlock different cars, each car giving you another set of goals to accomplish. There's definite appeal as an iOS developer to trying to make a free game work. On the very crowded App Store, it's hard to get noticed at all. Good games often slip through the cracks. A million or two downloads can really help you feel more secure that your next game won't get buried. We're going to try each of the above plans, matching them up with the games they fit the best. When we release our next game, I'll be sure to let everyone know what ends up working! Punch Quest is available now, and it's a whole lot of fun