Most users seem to believe that microtransactions and episodic content are, at the very least, a pain to deal with (and are, at worst, a scam), but Miao is convinced that they're actually necessary to having a successful game -- he said that every developer, going forward, "will need to have them." Read on to find out why.
Miao told the story of creating the game for the iPhone -- early last year, EA Mobile came to Centerscore and asked for an iPhone version of their game, and asked that it be done quickly and cheaply. Quickly because, as Miao explained, EA is very intent on seizing new technologies fast. iPhone OS 3 had just been announced, and EA wanted a game with microtransactions to go up on the App Store quickly. And cheaply because Miao says both EA and Centerscore were worried that if production costs ran high, the game would need a higher price than just 99 cents, and wouldn't sell at all. So they had just a few months to put a successful microtransaction model together on a platform that they weren't sure their audience (teenagers using mobile phones) was even using.
The first model they came up with was a kind of virtual currency for the game, in which you'd spend real money on ingame coins that you could then spend on more content. But virtual currency isn't technically allowed in the App Store (even though some developers do it anyway), and EA didn't want to shake the boat with Apple. Miao says he was surprised by that -- he thought that EA, as a big company, could get away with whatever they want, but instead he found that the opposite was true: they had to follow the rules even more closely, since one game could upset the entire relationship with Apple.
So the next plan was to follow the Pocket God model, says Miao. His team noticed that the reviews on Pocket God loved the free weekly content, so his studio thought they'd develop weekly content for free, and then create exclusive content to sell separately as microtransactions. EA rejected that idea in a greenlight meeting, however -- they said that no, the studio couldn't give away free content that it could be charging money for.
The next idea they came up with was timed content -- they would give away that week's content, and if the player wanted any old content, they'd have to pay to catch up. But this model was rejected as well, and at the same time, development on the game wasn't coming along correctly -- EA executives visited to play the game, said the quality wasn't up to snuff, and threatened to end the project. Miao says this was surprising: it showed that not only is EA very interested in the quality of their games (despite doubts of some), but that they are very agile when it comes to dropping projects and distributing the resources elsewhere. Even if a game is almost done, if EA doesn't like it, they'll cancel and move on without a second thought.
So the studio went back to the drawing board for a ten day push last summer, and when they were done, they re-pitched the "timed content" idea, this time stating that the weekly content was actually "promotional," and offering up microtransactions both for past weeks' content and next week's content as well. Additionally, they emphasized hitting the top 50 paid apps as a goal, and this time EA approved them.
Miao says that he found EA's approach to microtransactions very interesting -- the executives he worked with, he says, firmly held the belief that microtransactions should be for extra content, not content that you originally planned with the game. In other words, you don't sell levels that should be released with the game via in-app purchases -- you make a solid game experience, and then make more levels after release to sell via microtransaction. If customers pay you more money, you give them extra content, not content that was in the original game plan. Interesting take.
Surviving High School for the iPhone released last November, and while the game floundered at first (causing anxiety at the studio), a listing in the "What's New" section of iTunes catapulted them out from obscurity and into the charts. Miao shared a few lessons from their sales. He says that the "TV model" they came up with worked: you can sell a game based on episodic content and charge money for the old episodes. He also says that ratings matter a lot -- the game had one bug that caused their iTunes ratings to drop (even though people liked the game), and that directly affected sales. Once the bug was fixed, the ratings rose back up, and sales followed.
And Miao had some interesting thoughts on microtransactions, too. He said that microtransactions actually drove sales peaks -- when new content is added to the game every week, the team sees a spike in both sales and in the chart listings on the App Store. He says that microtransaction revenue definitely translates to where a game is listed on the Top Grossing chart, and that directly moves games into the Top Paid chart, both of which drive sales directly. In other words, Miao believes that a successful paid game on the App Store must have microtransactions to stay successful. "With no microtransactions," he said, "your app will be at a disadvantage."
It was a pretty fascinating conclusion for those of us who have been watching the App Store from day one, and Miao's experience with EA Mobile showed a few good insights about how that big game developer thinks and works. Even he said he didn't agree with everything they did -- as "a startup guy," he says "it was often a pain" to deal with some of their rules and procedures. But big companies are trying to figure out the iPhone platform just like everyone else, in their own way.