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Who will bring physical goods to mobile games?

By on December 2, 2013
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From Deputy Editor Zoya Street

Video games really are great. They light up and make joyful noises when I do things to them. They tell me interesting stories, and make me feel like I made those stories happen. They start conversations and swallow days of my life at a time. And then they vanish from my life, leaving no footprints but an entry on my bank statement and a list item on Steam.

A handful of companies are looking into how to connect the thrills of gaming with the tactile wonder of physical objects. It’s tempting to see this development as a result of technologies such as 3D printing, but sometimes it has more to do with using metrics to give someone the right coupon at just the right moment. It’s also about curve pricing — physical objects promise great possibilities for the quest to allow people who love what you do to spend lots of money on things they truly value.

One project that is trying to crack that nut is Major League Wizardry (MLW), a card game being developed in Copenhagen. Though still only in alpha stage, the game made it to the finals of the Global Game Stars competition at GMIC last month in San Francisco. It’s a mobile multiplayer card battler for schoolkids, with a twist: you can level up your cards by photographing them side by side with modifier cards. This simple action aims at bringing the game out of virtual space and into the playground, the user-acquisition channel for players too young for Facebook.

Physical cards make the game more cooperative, allowing friends to borrow cards from each other in order to improve their virtual deck. And the cards themselves have a freemium strategy: players can print them at home for free, but they will also be able to order deluxe packs to be delivered to their door. Developer David Reeckmann told me that he hopes this will give parents a greater sense of confidence in their purchases, knowing that they can expect a physical good to arrive in meatspace.

MLW’s success relies on a lot of ‘ifs’. If they can get into schoolyards, and if players care enough about deluxe physical cards, then they might be about to prove that physical is the natural home of premium goods. A lot of question marks remain, however: for example, how do you build a successful whale strategy when your IAPs are not ephemeral and consumable?

Perhaps the solution is to treat physical goods as rewards, rather than purchases. San Francisco-based company Kiip is a service provider that integrates apps with ‘real rewards for virtual achievements’. They began in mobile gaming, but have branched out into other app categories that have been struggling to motivate the same levels of player engagement and spending. At key moments, users are ‘rewarded’ for their engagement with the app with a coupon to redeem in the real world.

Kiip position themselves as an alternative to interstitial ads, with developers making money on a CPE basis for every reward claimed in their app. While developers are drawn primarily to the monetisation side, Kiip promises its brand partners a way to bring the joyful bells and whistles of gaming to advertising. While TV advertisers have a reputation for seeking users in a passive, relaxed state, Kiip takes the other tack, seeking out ‘moments’ of serendipity that match a user’s game experience to the brand’s desired message.

The goal isn’t just monetisation — though Kunaal Arya tells me that developers using their SDK should expect an eCPM of $10, which compares favourably with major mobile ad networks — Kiip also aims to increase engagement through its rewards. Reward coupons are delivered no more than once a day, introducing a chance element that encourages players to keep coming back for multiple sessions. An in-house study found that users who claim Kiip rewards spend 68% more time in-game.

Somewhat similar brand-integration rewards have been integrated into myVegas, a Facebook game that recently launched on mobile. Players spin slot games with various Las Vegas strip-themed designs to earn various in-game currencies, including ‘loyalty points’ which can be redeemed for real-world rewards in actual Las Vegas. The business model is slightly different to that proposed by Kiip: the game is monetised entirely through in-app purchases of ‘chips’, the virtual currency that is spent on the slots themselves, rather than through buy-in from brand partners.

The core gameplay loop of myVegas is so simple that it is hard to understand the appeal: you just press a green button and shapes appear on the screen, and the player has no control over the outcome. But the simplicity of the game’s tactile action conceals a complex exchange between virtual currencies that seems designed to confuse and compel. In theory, the game is free to play forever, and players could fund an entire holiday in Las Vegas just from pressing that green button, but they have to contend with a variable friction curve that determines how many chips they can win from slots alone. At present, its 100,000 players have redeemed over $10 million in physical rewards.

myVegas‘s developer was unwilling to divulge details about the level of IAP spending, so it’s unclear if the promise of real world rewards is motivating users to spend more — or conversely, how much users compelled to pay in order to get at the high-value coupons.

The promise of physical rewards is not easy to turn into success. Kiip’s competitor Pocketchange no longer focuses on rewards for actions in games, and instead sees itself as a ‘universal virtual currency’. There are many different ways to bridge virtual rewards and physical products, and time will tell which bridge is the most stable.

About Zoya Street

I’m responsible for all written content on the site. As a freelance journalist and historian, I write widely on how game design and development have changed in the past, how they will change in the future, and how that relates to society and culture as a whole. I’m working on a crowdfunded book about the Dreamcast, in which I treat three of the game-worlds it hosted as historical places. I also write at Pocketgamer.biz and The Borderhouse.