From Dimes to Dollars

Posts tagged compulsion

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by Ben Lopez

Jason Calacanis recently interviewed Neil Young, founder of NGMoco Games, and the man behind massively popular iPhone titles such as We Rule, Godfinger, and Eliminate.  Maybe you’re one to scoff at iPhone games, and consider developers like NGMoco to be minor league, but that’s hardly the case, as the App Store marketplace is a particularly lucrative venue to distribute games.  I was stunned when I heard some of the figures people were spending on in-game items using real money: how does $10,000 within a month sound to you?  You read that right: TEN GRAND.  There are folks that don’t earn that in a year, yet the geniuses at NGMoco have convinced folks to spend that much to grow magic cauliflowers.  So how do they manage to empty your wallet at such an alarming rate?  Micro transactions and compulsion loops.

Micro transactions, such as a .99 purchase in the app store is a “why the hell not?” impulse buy.  These unplanned purchases can add up quickly, of course, and that’s what more and more companies are banking on.  Expect to see this sort of add-on/in-game pricing become much more widespread.

Compulsion loops are nothing new.  They’ve been around for decades, long before the original Nintendo Entertainment System in the 1980s in the form of PC role playing titles.  Some of the earliest compulsion loops consisted of the same model you see within numerous titles today, allowing a player to “level up” and become stronger, acquire new abilities, and access to new content within the game as a result of putting in time and/or skill.  This is an especially enticing model for players, and is by far the most widely used for good reason.  Let’s say you just put in another 2 hours on a role playing game, and despite playing through several battles, you don’t make any progress in the storyline.  You’ll still feel as if you’ve accomplished something because your character has gotten stronger, or perhaps you found a valuable new item while exploring.  In other words, you never feel like your play time is wasted.  Other incentives to continue playing include leaderboards, public award badges for completing specific tasks, or real/virtual prize money for placing in events.  So in a shooting game, maybe you’ll earn an award on your profile page letting other players know that you played through a match without a single death.  It may sound petty, but given the large investment of time involved, people begin to pride themselves on these honours.  Eidos recently offered a real money prize for a stunt contest in their open-world game Just Cause 2.  This was an innovative spin on the cookie cutter “highest score” or “quickest time” challenges, even if the contest itself was marketed rather poorly!  Social obligation is another huge factor, something any Farmville player should know; if someone helps you tend your crops, you probably feel obligated to return the favour.  

You’ll also notice that NGMoco has a range of difficulty in their games; some you can make progress in by simply putting in time, and others are more hard fought skill-based titles, such as the first-person shooter Eliminate.  They are effectively covering all the bases for differing potential audiences, and it’s certainly paid off for them.

Chances are, the majority of the D2D readers aren’t game developers.  But that’s not to say you can’t develop compulsion loops for your area of business.  Reward loyal customers, find smaller bite-sized payment methods that are easier to swallow, and give your top contributors recognition for their work.  Get creative!  If NGMoco can earn millions off of a model developed decades ago, just think of what you might accomplish with new, innovating compulsion loops.


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