Growth Stage by FastSpring

Hello everyone and welcome to Growth Stage by FastSpring where we explore how digital
product companies can increase the value of their business.

I'm your host David Vogelpohl supporting the digital product community as part of my role
here at FastSpring and I love to bring the best of the community to you here on Growth

Stage.

In this episode, we're going to be talking about pricing and packaging for gaming web
shops and joining us for that conversation is someone that knows quite a bit about that.

like to welcome Chip Thurston.

Chip, welcome to Growth Stage.

Thanks for having me.

Happy to be here.

Awesome.

Well, glad to have you here.

And I know this is a topic that a lot of folks are curious about, especially with the rise
of direct-to-consumer and web stores following the recent Apple and Google rulings.

So really interested in unpacking this one a little bit on the pricing and packaging
front.

And for those that are watching and listening, what we're going to be talking about today
are Chip's thoughts around how pricing and packaging strategies differ between game and

web store.

What are the top considerations when forming your pricing and packaging strategy, the role
of creators in driving web store value, and how to strike the right balance in rewarding

players while increasing your profitability?

It's pretty deep topics, but I think we can get through them here today.

Really excited to learn more about this from your perspective, Chip.

But before we get started, I wanted to ask you a question that's similar to a question I
ask other guests on the show.

But what was the first mobile game you remember spending money on?

That's actually a tough question for me to answer because I am notoriously frugal when it
comes to purchasing on mobile games.

And I realized the irony of that, given that I used to manage monetization strategy and
offer strategy on mobile games.

uh I think it was Pokemon Go, but it was only after years of playing the game and only
after my kid got into it.

And that was really like pushing me to get this one like limited time ticket to this
little...

event that we were doing.

So yeah, I'm tough to monetize, I will say.

that's interesting.

I remember in the early days of mobile, I just went nuts on buying, but they were premium
games, not really in game items, but I would easily spend seven, 10 bucks or whatever on a

game.

you know, that's a great point.

I do remember buying uh Mega Man X on mobile as a premium time.

You just drop a few dollars and get Mega Man X.

It's one of my favorite games.

So when they put it on mobile, I had to get it.

Now I have all kinds of questions about Mega Man X, but that's not why we're here today.

So we'll pause that conversation for later.

But I was wondering if you could tell me a little bit about FastBring, what you do there
and what your background is in pricing and packaging games and in-game items for mobile

games.

Yeah, absolutely.

And I would say let's make sure we put in the calendar a separate podcast about Mega Man
X.

We can do a full deep dive on that one.

Yeah, so FastBring is a direct-to-consumer payment platform.

We facilitate the checkout on a global scale to enable publishers to sell globally.

And so in the case of gaming, this often means web stores.

And so it's really enabling them to sell outside.

of the common platforms like Apple and Google and sell directly to their players.

And for me personally, my experience is coming from the game development side.

So I've joined FastSpring as the head of gaming to help our sellers market and monetize
direct to consumer.

And that means everything from understanding what's going on with the latest regulations
to understanding the FastSpring product, to making sure they have the scalability and the

tools that they need to succeed.

uh And where I come from in game development is most recently leaving Scopely where I was
for a few years.

And before that, I worked at SciPlay for a few years.

And over that time, uh more than a decade in the industry, I wore a number of different
hats.

I oversaw LiveOps and monetization strategy.

So basically responsible for day-to-day revenue of the game and event strategy.

I was also a marketing lead.

for mobile games, and so overseeing our community engagement strategy, user acquisition
strategy, managing the teams that would help facilitate all of that, and everything done

with the configuration management of how are we actually setting these up in the game and
getting them executed on a day-to-day standpoint.

And what that culminated in at Scopely was the opportunity to take on the web store
strategy.

for a mobile game and being responsible for its growth and its goals and what we expected
from our web store and how we were going to make it succeed, uh even knowing that there

were these Intel-steering policies in place from platforms like Apple and Google.

so taking a lot of time to iterate and understand that landscape and drive it to success
was what then led me to join FastSpring and say, OK, I want to drive this conversation

more broadly in the industry.

That's a cool perspective.

And it sounds like your scope at Scopely was quite broad.

But do you feel like that gave you like a holistic picture of the player's journey and
experience and how that fed into pricing and packaging?

Yeah, absolutely.

Because uh one question I got a lot throughout my career there was the common thread
between the marketing lead role and the monetization lead role, because they're under two

different disciplines, right?

There's the marketing vertical and the product vertical, and those are typically pretty
bifurcated.

There's not a lot of uh overlap between those two.

But for me, the common thread was player empathy.

For me, it always started with

What is the player thinking?

How will they perceive this?

What are they doing when we reach them, whether it's with a user acquisition ad or a
starter pack offer in the game?

At the end of the day, it's rooted in the player.

And so, yeah, guess, circling back to your question, it really did, I think, give me that
holistic perspective where now I'm thinking of the player.

before they reach the game, when they install the game.

When they first install the game, what do they see?

Or if they've been playing the game for five years, what is their experience in the game?

And how do we do that?

And then what's that player journey outside of the game as we drive them to something like
a web store?

Yeah, that holistic view.

I often, when I talk to folks, particularly in marketing context, I always say, what was
the person doing right before they experienced what you're building?

And I feel like coming from that perspective allows you to build better messages, more
compelling information and experiences.

Um, so it's interesting to hear your perspective there.

Now, when I asked you about fast spring though, and what fast spring enables, said
something interesting that I just wanted to kind of dig in a little bit.

You said that often means web stores with direct-to-consumer.

What's an alternative path to direct-to-consumer than a web store?

interesting.

Well, this is something that's really emerged this year, which is the option to surpass
the web store entirely and go directly to a checkout page.

So this is something in line with recent regulations, which we can get more into later.

But the short version is for Apple, or for iOS in the United States today, publishers have
the option to steer players directly into a checkout page, meaning there's no store

needed.

It's the most frictionless path available.

We've actually recently launched a solution with Asprin called Steer Safe, which is a
great visual example of how publishers can do this.

But it's an interesting option where, OK, maybe we don't need to build out this entire web
store and have our players go from game to store to checkout page.

We can remove that intermediary and say, just go from the mobile game to a web-hosted
checkout page and then go right back into the game.

So pretty seamless experience.

Yeah, it seemed like that was a big eye-opening moment for folks as steering became
available.

It was like, well, wait a minute.

Why do I even bother to go to the shopping experience in this other place when I can just
present the option to buy the item or whatever in the game and then link directly to a

place where someone can do a direct checkout?

I think a lot of people hadn't really thought about that paradigm prior to steering
becoming available.

And I think it was this like light bulb moment for a lot of folks.

So thanks for picking that apart.

But let's get back to the store for a minute here.

um And we have this kind of divergence of experiences for the player a little bit.

And of course, there's a financial incentive for the publisher to drive the player to do
the transaction on the store to make higher profits and have a more direct relationship

with those players.

So earlier when I was asking you about your experience with pricing and packaging, you
rooted it in player empathy.

understanding what their experience is like, where they're at in the journey of the game.

But help me understand more about that process.

What does it look like to set pricing and packaging strategy between a game and a web
store based on your prior experience or even the experience you're having these days?

Yeah, I think the first thing I think of and really the umbrella for me that that would
all sit under when it comes to pricing and packaging for a new web store initiative, say

for a mobile game, is really game economy.

It really boils down to that and managing the economy effectively because most commonly
what we see is uh the purchases made on the web store give more value to the player than

the purchases made on the mobile store.

you need to be able as a game to accommodate that in the game's economy.

And what I found was the most uh layman's way of looking at this was basically looking at
your source versus your sink and saying, source is what we're giving out to our players,

whether it's they can play this game mode and win this currency in that mode and win these
prizes.

And this is what basically the output is from the game to the player, what we're giving to
the player.

And that includes purchasing too.

What are we sourcing from the store?

What are we giving to the players for the dollars that they're spending versus the sink,
which is where players are sinking that currency.

What is the input that we're getting from those players?

And that's constant balance that has to be regulated.

And the best games out there have very flexible uh sink options so that they can be more
flexible on the sourcing side.

And so when I think about a web store, it's saying, OK.

we're going to launch this web store and therefore we're going to incentivize players to
go there, which means we're increasing our sourcing.

And that could be through lower pricing, it could be through more value per store, it
could be through other ways that we can talk more about.

uh But if we're increasing our sourcing through having this direct-to-consumer program, we
also need to increase our syncing.

So how are we going to do that?

What modes in our game are we going to tweak?

or what incentives are we going to put for our players inside the game to sink those
currencies such that things continue to stay in regulation.

Are those, is that the totality of key differences when pricing and packaging between
in-game and app stores?

mean, what about profitability?

You kind of alluded to more value.

that like discounts for more in-game currency?

Help me understand what the variables are that are going, do go through your mind when you
think about pricing and packaging between stores and web stores and in-game.

Yeah, more tactically, I would say I would look for what our players want.

Again, going back to player empathy and say which method will be most compelling to them.

So typically it would be maybe more per purchase is where I would start more gems per
dollar.

If gems are your currency, more hard currency per dollar when spent on the web store
versus on the mobile store.

So say I spend a $10 purchase on mobile and get a hundred gems.

Well, maybe if I go to the web store, that becomes a $10 purchase for 110 gems or 120
gems, whatever that right percentage could be, again, depending on your game's economy and

flexibility there.

Or instead of more per dollar, it could be a discount.

It could say, OK, that $10 purchase on mobile that gets me 100 gems is now $9 or $8 on the
web store for the same 100 gems.

either discounting it or giving them more.

And you could even A-B test or run some side by side to see which one is more compelling
to your players.

And it's not just compelling to your players, but also which one is better for your game's
economy.

Maybe you find that uh the 120-gems or 110-gem option is a little difficult to accommodate
from a game economy standpoint, so you opt for more of the discount route.

There's several different variables to evaluate as you try to run those.

But beyond the core...

I think those are the base two options that most people jump to.

But there's more you could do, too.

You could have exclusive items or exclusive bundles when you think about pricing for your
web store as ways to incentivize players to go there.

So you could put some cosmetics if your game has cosmetics, just visual items that have no
impact or consequence or actual uh utility in the game.

but you put those where players can only get them if they purchase on the web store.

So you buy that $10 for 100 gems on mobile, or you can buy the $10 for 100 gems on the web
store.

But if you buy it on the web store, you get this little Hawaiian shirt that you can put on
your avatar.

And so players say, well, I might as well go purchase there because I get this cosmetic.

Or it could be non-cosmetic.

It could be a power item if you want to be even more aggressive and say, OK, this is a
boost that you only get.

by purchasing on the web store.

You could bundle it with other things.

You could put it as a standalone item.

And your players would understand if they really want to get that edge, that competitive
benefit, they need to go purchase on the web store to get it through this exclusive item.

And so there's uh all these different options.

Basically, all the tools in the game economy and monetization toolbox are available.

And it's thinking about how you allocate those between the mobile game and the web store.

With player empathy though, like how do you balance that without like, you know, obviously
players will often get agitated if there's like play to win options in multiplayer and

things like that.

But how do you balance that with people that can't or just don't want to purchase outside
the app store, just like live with it or like, how do you balance that with player empathy

in mind?

I think it's just giving players choices, uh empowering them to make the decision they
want to make.

so if a player, as long as you're transparent with a player and they know that they have
this option to get this other item elsewhere, and they're choosing to purchase on the

mobile store where you're not forcing them to do that, you're not putting them into the
competitive disadvantage, they're choosing to put themselves in that place in that case.

uh So I think it's more just...

making sure that you're communicating actively and not having someone say, I purchased
this on mobile, not knowing that had I purchased it over there, I would have gotten more

for it.

It's just uh making sure that they're aware and making the right choice that suits how
they want.

Yeah, I see.

So give them the choice and the opportunity to take advantage of it if it's a good fit for
them.

uh One of the interesting things that happens to me at every holiday and birthday for my
kids is they come in with like a giant stack of like Visa gift cards and cash from

relatives and things like that, but this really like sophisticated plan to use some of
this money in their favorite games.

And then they asked me to help facilitate it.

And many times the answer is I need to do the transaction through their web store because
in app doesn't support this, that, or the other and how they might've gotten that money

from a relative.

And so it makes me just think about like an additional benefit to a web store is taking
advantage of payment methods, different card numbers and things like that that might not

be able to be used.

through the app store for whatever reason for an individual player.

I'm just curious, are there other advantages for players or publishers for transacting in
web stores other than just like more money or better value for the player?

Yeah, yeah, absolutely.

Well, first I want to reflect on your kids getting a giant stack of gift cards.

I want to make sure to send my kid to your Christmases.

Maybe not giant giant, but enough to be complicated, yeah.

Yeah, think the benefits are numerous.

Everyone tends to reflect on the profit, right, which is very significant.

You pay 30 % of your purchases on Apple and Google uh to Apple and Google for the usage of
their platform.

And there is a lot of value in that.

And so uh that continues to be a critical part.

I would certainly not suggest forgoing that entirely.

But when you drive through a web store, it might be closer to 5%.

So you just get a lot more profit per dollar spent from your player for all the revenue
you're getting.

And that is important.

But there are benefits otherwise too.

There's the uh control that you have over the pricing and the flexibility you have.

These uh platforms like Apple and Google have a lot of guardrails on what you can do, how
you can operate within them, how frequently you can update things, or even

to some extent the price points you can offer your players.

When you're on a web store, there's no guardrails for better or worse, right?

You have as much control and as much flexibility as you want in how you're communicating
to your players and what you're pricing things at, what your strategy is.

And so we've seen publishers find some value in that and taking advantage of the freedom
that they have on a web store, even a website versus what they have on the mobile

platforms.

And another big one is the data.

that's available to them.

uh When we've seen in recent years that Apple has really cracked down on privacy and the
amount of data that they're sharing with publishers.

And that's been detrimental to user acquisition efforts and how laser targeted game
publishers can be in acquiring valuable new players.

Well, on a website, you're getting that data.

It's not as protected.

And so you have a lot more

information at your disposal that then you can use to target more players and grow your
games.

And so there's this really nice flywheel where you're getting more profit from it, you're
getting more margin, which then you can use to put into your UA and your UA is now better

informed because you have this great data.

And so it can be this really healthy growth cycle for games.

Assuming people are being compliant with their data on their website, of course.

Yeah.

What about for the player?

Like what's in it for them?

Like the example I gave was like, well, I can use more payment methods more easily.

Um, what, what else is in it for the player to transact other than money or value?

Yeah, I uh think it does boil down to one, the transact how you want with the methods at
your disposal, whether it's a credit card or Apple Pay or uh gift cards or whatever you

have and being able to do that.

I think there's a nice global scale to it where being able to reach maybe different
regions and different things with those local currencies.

in a way that certain merchants will be able to provide.

And so if I'm someone that might be in one of those more remote uh places, maybe that's
more appealing to me and a bit more accessible than it would be otherwise.

uh But the main benefit for the player really is the incentive that the publisher is
putting on there.

It's saying, I get more out of my purchases by purchasing on a web store.

And so...

uh That's really nice for me as a player because I have maybe those extra power items.

So we're just getting a little bit more hard currency than I would be getting otherwise
that then I can use in the game and engage with.

I'm a publisher and I hear someone say, know, oh, well, direct to consumer is a way to
have a more direct relationship with your players instead of always going through the

intermediary of uh app stores or marketplaces.

uh That makes sense, right?

Like every business wants to have a direct relationship with their customers.

What's the player's benefit from a direct relationship with the publishers and studios
that make the games they love?

Yeah, I think it's having a more personalized experience.

You can uh get served offers that are more relevant to you and something that may be more
appealing to you or maybe even more valuable.

um The publisher can better grow those games and develop the games that you love.

And so ultimately it should be good for the industry when games inherently become more
profitable through direct to consumer, just becoming more more commonplace.

That can mean more uh development.

for the games that you have.

And ultimately, think more creative concepts getting greenlit because the threshold for
success is lowered a little bit because games are more profitable.

And so I'm getting a bit beyond the direct relationship piece, but I think there's so much
more benefit to gaming as a whole that players writ large will benefit from uh just by

virtue of direct-to-consumer on this upward trajectory and

increasing the profitability of the entire industry.

Yeah, it feels like on a personal level, the strongest relationships I have with brands in
my life, or when I have that direct relationship and my experience transcends the devices

that I'm having that relationship or an experience on.

And so for games, for me, it personally means things like Fortnite and Rocket League in
that, in the Epic universe in particular, and having that connected experience through my

Epic account and all these different

places.

And then non-gaming, it's things like Netflix, where I'm really transcending between
devices.

But my relationship is with Netflix, and that's a very fluid experience as I flow through
there.

So these kind of things are on my mind when I think of player value uh outside of the
monetary piece of it.

uh So let me switch gears a little bit here.

uh

Before steering, you talked about how with steering now we can just link to a checkout
instead of like a whole store.

But before that, outside the US, the only way to bring players there without additional
fees is to market outside of your game.

And I know uh creators play a really big role there, but I'm just curious what you view
the role of creators and influencers are.

with web stores and are they important or secondary or like how do think of their
connection?

Yeah, I want to underscore one point you made there, which is that steering is still
somewhat limited in just geographically where it can be implemented and even by platform.

mean, it's really iOS in the United States is where I've seen the most readily available
opportunity unlocked for steering.

And that's what's driven so much of the recent conversation in the industry.

And even the presentations I've been giving and the talks I've been having have been
really focused on steering because that is the hot topic of the day.

But when I look at a global scale, there are still these anti-steering policies in place
to say, we can't directly steer players outside of the US to these stores.

so the question there is, OK, well, then how do we grow the web store?

What are the methods available to us?

And I think that that strategy still needs to be considered and really optimized as well.

And circling back to your question, yes, that's where creators can come in.

I would start by saying we need to identify what are the growth vectors available for our
web store?

We know we can't take players directly from the game into the web store steering.

We know we cannot do that under certain regions outside the US.

And so if we can't do that,

What can we do?

What are the ways we can get players into our web store?

And this is the exercise I did when I was at Scupl.ly of really trying to understand how
we could grow.

And so depending on the game, that could mean content creators, it could mean social media
channels, which again, since you're not inside the game, you can talk more openly about

your web store there, regardless of what country you're in.

It could mean an email.

program where you're reaching your players directly via email.

It could mean community like a subreddit or a Discord channel.

There are all these different places that you can talk about it.

And why I think content creators are such a critical channel, critical growth vector to
identify there uh is one, they're great about developing a meaningful relationship with

your players.

Your players will trust them and understand what they're saying.

Two, you're giving your...

content creators a pretty compelling reason to talk about it because they have a clear
case to make to their players of whatever that incentive is that you've built into your

web store.

So they're advocating for, hey, players, make sure you purchase on that web store because
you get 10 % more there.

the players are happy because they're learning about this and they're getting to go this
other platform where they're going to earn more.

And the content creators are happy because they're giving value to their audience in that
case and developing a more meaningful relationship there.

So I think it is mutually beneficial.

And I think at the end of the day, it becomes a really effective way to grow your web
story.

And the best part is that it's rolling agnostic because the anti-steering policies are
really specific to what you can say inside of your game and how you can route players

inside of your game.

But for content creators, there's not really uh a firm regulation of what you

they can and cannot say about the existence of a web store and the value of a web store.

And so it's something that can drive growth regardless of where these regulations go.

You know, this reminds me of a conversation that you and I had with Justin Sacks of Nexus,
nexus.gg for those watching and listening, which operates a creator program platform for

game companies.

And one of the things I remember Justin talking about, he's actually a guest on this show
before too, uh was how publishers are thinking about creator attribution.

Are creators actually driving players to spend more?

oh Are the creators getting credit for purchases that were going to happen anyways?

And I thought one of the really interesting things Justin had pointed out about all that
was that with web stores, you often can have a great degree of confidence that that was a

unique purchase.

And of course you get the additional profit from that, from going around the marketplace,
if you will.

But it was a very strong attribution signal when players were using creator codes in the
web store.

I don't know if you remember that conversation very much or have any thoughts, but in
general, what do you think about the role of attribution web stories and creators?

Yeah, I think it's a very compelling business case because I think the concern there is
cannibalization.

It's saying, if I'm going to pay a percentage of the revenue to these content creators for
the purchases that they drive, well, who's to say they wouldn't have already made that

purchase without me paying that percentage of revenue?

And so that's the number one concern I've heard when it comes to considering content
creator strategy.

And for anyone with that concern.

I would encourage you to go to Nexus because they have some really compelling data that
illustrates that those purchases are incremental, that they are either someone who was

purchasing, but now they're purchasing more, more frequently or at a higher price point,
or it's taking someone who's never purchased before and is now purchasing because of that

advocacy.

There's the word I was looking for, because of that advocacy that's coming from that
content creator that they trust.

So yeah, I'm a firm believer in the value that they add.

And frankly, that's true beyond the scope of direct to consumer and web stores.

It's just the value of content creators overall and their ability to drive growth for a
game.

Yeah, anecdotally, getting back to my kids here, because that's the most important topic
we're talking about today is I definitely my 13 year old will come in and say, I saw this

creator and they were talking about this and Roblox and we need some Robux to go achieve
this strategy.

So you can like see it directly, but there is that question.

And I think the web store plays an interesting role there.

um So, well, I wish we had time to like.

talk this out to the nth degree, but I'm just curious out of everything we talked about
today, Chip, what is the one thing people should remember about their pricing and

packaging strategy for their web store?

Oh, everything, every word I said.

uh I think I touched on a lot of different tactics about how to grow a web store, whether
it's on the monetization side and how you incentivize your players, whether it's on how to

grow what channels, what growth vectors you identify and leverage to drive more traffic
into your store.

I think it can be

a bit overwhelming for someone who's new to direct to consumer to say, all right, I want
to build this web store, but man, I don't know where to start.

There's all these different ways I should consider to grow it.

How do I even incentivize that?

How can my economy handle it?

Where am I going to sink this extra currency?

You can start asking all these questions.

so the one thing I would say to take away from this conversation is to not let the perfect
be the enemy of the good.

Don't feel the need to get it perfect right out of the gate.

I didn't really touch on this earlier, but web shops don't just launch and have 50 % of
revenue of your game coming through the store.

They grow over time.

And so I shared a lot of strategies, but I would say pick one, try it, move forward,
iterate on it.

The important part here is just to get started and move forward.

Affection is the enemy of progress.

And I think the number one thing I'm going to take from you today is the focus on player
empathy.

I think that was such a great place to root on.

But I really love your idea of launch quick, iterate, and learn.

Such an important piece.

Well, this was awesome.

Thank you so much for joining us today, Chip.

Yeah, thanks, David.

It was a pleasure.

If you'd like to learn more about what Chip is up to, you can find him on LinkedIn, Chip
Thurston of FastSpring.

And you can also visit fastspring.gg.

Thanks everyone for joining us for Grow Stage.

Again, I've been your host, David Vogelpohl.

I support the digital product community here at FastSpring.

And I love to bring the best of the community to you here on Grow Stage.

Thanks everybody.