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Worked in this industry for quite a while (too long, in retrospect). The amount of micro-targeting towards "whales" was insane. People would essentially pay for

Worked in this industry for quite a while (too long, in retrospect). The amount of micro-targeting towards "whales" was insane. People would essentially pay for the experience of feeling like they were in Vegas, and a certain small percentage of them would have latent gambling addictions that we'd unlock. Economically you only needed a single-digit percentage of whales in your player base, simply because the LTV of those users was so incredibly high. Even at $10+ CPI's, you could still make tons of money, and sell in-game coin packages at a straight-faced price of $99 (or even $199!) Additionally, there is no reason that these games had to be "fair" (unlike a regulated casino). You needed to know your payback percentages, but that was just to avoid destroying your economy. People start playing a new game, and get tons of wins and bonuses, and then it slowly settles down to ~85% RTP and sucks all their cash away.

GaryNumanVevo 6y ago
I’m not super familiar with the industry what are LTV, CPI, and RTP?
- nicoburns 6y ago
  Long Term Value, Cost Per Install (I'm assuming this includes things like ad spend), and Return To Player (avg. percentage of stake that players get back) I believe.
- drchopchop 6y ago
  LTV = lifetime value, how much $$ a player is expected to spend (usually expressed in cohorts) CPI = cost per install, needs to be lower than LTV or else you have a failed product RTP = return to player, which means on average how much a game pays back to the player over time. In Vegas, this is regulated and is generally in the 85-93% range for slots. Unless you stop playing after a lucky winning streak, you will lose money long-term. The house always wins. For a non-regulated online game it can be whatever the devs want.
  - GaryNumanVevo 6y ago
    Any reason the RTP doesn’t approach zero?
    - drchopchop 6y ago
      Zero wouldn't be fun. You need to allow people to win, just not over time. Slots is a random series of losing, small wins, bigger wins, and very occasionally big bonus rounds (every ~100-200 spins) which is the dopamine hit. The key is that over time, the losing needs to happen more often than the winning.
    - hunterloftis 6y ago
      Would you continue paying for a game where you lost 99% of the time?
tuna-piano 6y ago
Interesting, thanks for sharing. Not sure how these games work, but what do you mean "destroy your economy"... Are the coins people win used to buy other in game products, so too much winning would lead to in-game inflation? But what would be the problem with that? Also, any idea who these games pay to get the installs? Mainly Facebook, Google... or others? Trying to think of where the money is flowing from these more nefarious apps... how wide is the economic benefit from these clearly troubled whales?
- drchopchop 6y ago
  Inflation is the main problem, and will kill your app if your math is off. When people run out of coins, they spend real money to get more. However, let's say you have a broken game that pays back 150%, because you didn't get your math right. Your player coin balances suddenly start climbing, and your revenue dries up. This is bad, because even once you fix the broken game, you may need to introduce money sinks to try to get things back under control. Installs are regular ads, just like any other mobile game. You pay Google, Apple, Facebook, etc. Facebook Canvas used to be a big source of revenue, but most people have drifted over to mobile. Demographics are female, 35+, so these are not early tech adopters.

GaryNumanVevo 6y ago

I’m not super familiar with the industry what are LTV, CPI, and RTP?

nicoburns 6y ago
Long Term Value, Cost Per Install (I'm assuming this includes things like ad spend), and Return To Player (avg. percentage of stake that players get back) I believe.
drchopchop 6y ago
LTV = lifetime value, how much $$ a player is expected to spend (usually expressed in cohorts) CPI = cost per install, needs to be lower than LTV or else you have a failed product RTP = return to player, which means on average how much a game pays back to the player over time. In Vegas, this is regulated and is generally in the 85-93% range for slots. Unless you stop playing after a lucky winning streak, you will lose money long-term. The house always wins. For a non-regulated online game it can be whatever the devs want.
- GaryNumanVevo 6y ago
  Any reason the RTP doesn’t approach zero?
  - drchopchop 6y ago
    Zero wouldn't be fun. You need to allow people to win, just not over time. Slots is a random series of losing, small wins, bigger wins, and very occasionally big bonus rounds (every ~100-200 spins) which is the dopamine hit. The key is that over time, the losing needs to happen more often than the winning.
  - hunterloftis 6y ago
    Would you continue paying for a game where you lost 99% of the time?

tuna-piano 6y ago

Interesting, thanks for sharing. Not sure how these games work, but what do you mean "destroy your economy"... Are the coins people win used to buy other in game products, so too much winning would lead to in-game inflation? But what would be the problem with that? Also, any idea who these games pay to get the installs? Mainly Facebook, Google... or others? Trying to think of where the money is flowing from these more nefarious apps... how wide is the economic benefit from these clearly troubled whales?

drchopchop 6y ago
Inflation is the main problem, and will kill your app if your math is off. When people run out of coins, they spend real money to get more. However, let's say you have a broken game that pays back 150%, because you didn't get your math right. Your player coin balances suddenly start climbing, and your revenue dries up. This is bad, because even once you fix the broken game, you may need to introduce money sinks to try to get things back under control. Installs are regular ads, just like any other mobile game. You pay Google, Apple, Facebook, etc. Facebook Canvas used to be a big source of revenue, but most people have drifted over to mobile. Demographics are female, 35+, so these are not early tech adopters.