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A few months ago, Yoshiki Watabe, a producer at Japan's DeNA, was looking to draw attention for the company's hit mobile game. He introduced a spiky-haired hero armed with an outsized sword - then gave players a mere four days to bring down an evil megacorporation.
It worked. Final Fantasy Record Keeper climbed in download and revenue rankings. It's an example of how Japanese publishers have become the best in the world at making money from free mobile games. They use psychology, art and big data to get customers to come and play.
"It's bit like running a bar," says Watabe, head of the company's so-called live ops. "You're always on, hustling to get the customers in and to keep them happy. Otherwise you have no business."
Smartphone games, unlike traditional video titles, don't come as a completed product. What you download has a simple mechanic for play, like manipulating sweets in Candy Crush or toppling towers in Angry Birds. That's the foundation on which people like Watabe build new narratives and play modes.
From Tokyo, teams at DeNA, GungHo Online Entertainment and other companies watch players around the world to see what's catching on or falling flat. They roll out new features when things get dull and, just as importantly, ease up when things are too crazy.
DeNA may be the most quantitative of the bunch. It uses about 50 data analysts to track engagement by looking at metrics such as daily-active-user and how people play after they log in. The data helps figure out how to keep users from getting bored.
GungHo, whose Puzzle & Dragons is the world's second-best earning mobile title, has only one data analyst on staff and is less numbers-focused than DeNA. Its live ops are centered on the release of new levels, or dungeons, that offer playable monster characters as prizes. Events can last a week or only 24 hours and those bearing the rarest rewards appear at irregular intervals.
"Numbers like average revenue per user, retention and monetisation rates are of more interest to our marketing folks," says Hiroyuki Hashimoto, a general manager in charge of the president's office at GungHo. "For the operations team, it's a combination of listening to users' opinions and trusting their gut feeling."
The approach works. Puzzle & Dragons generated $1.3 billion for GungHo last year. Half of the top 10 mobile game publishers worldwide ranked by revenue in 2014 were Japanese.
The reason Japanese companies can generate so much revenue from free games is because monetisation is built into play. Say you are making your way through a Puzzle & Dragons dungeon, defeating baddies and collecting rewards, only to be bested by the final boss. The game-over screen will offer a choice of paying to continue or losing all the loot and time invested. Other mechanics include charging users for inventory space and making progress without pay difficult.
The challenge is keeping free-to-play from degenerating into pay-to-win, says Ramin Shokrizade, a former game economist at Wargaming. Aggressive monetisation is the number one reason gamers stop playing, according to a report by Electronic Entertainment Design and Research.
