5 Tips to consider when building a Game Economy

With most mobile games being free to play, developing a well-established in-game economy is essential to earn revenue. According to a recent study from 2019, 95% of apps in the Android Play store are free to download. For this reason, it is the game developer’s duty to get creative and apply monetization strategies accordingly.

As of 2017, in-app advertising (rewarded video ads) was the most effective monetization method for mobile apps. This works by creating ad “placements” within a game (between levels, at the top or bottom of the screen or when the game loads, etc.) and advertisers then bid to have their ads displayed in one of those placements. Lately, in-app purchases took over advertising and is now the most effective monetization model. In this model, players are enabled to purchase additional features, such as extra lives, digital goods and virtual currency within the app. Even if the available data shows that only a small percentage of players make in-app purchases, optimizing for them can make you a lot of money. Therefore, if a game is not sold at a fixed upfront cost and the main goal is to reach commercial success, a strong economy must be implemented.

Here are a few tips to keep in mind when planning and implementing a game economy.

1. Clearly define your game’s style

The type of mobile game developed usually determines the monetization strategy to begin with. For casual games, such as puzzle games or crosswords, monetizing through advertising tends to be the primary model. On the other side, hardcore games like RPG’s or shooters are more complex and monetizing through in-app purchases proves to be more efficient. However, it is important to keep in mind that casual or hardcore games should not rely on a single model. Both in-app and advertising models can be used together, but the primary one should be used based on the game type.

2. In-game Currencies

Since game developers opt to give their games away for free and alternatively charge through in-game currency, choosing the right one is essential to turn a profit. In-game currencies are mainly used for cosmetic purchases (a new design for a character), pay-to-win (users spend money to purchase advantages in the game) or loot crates (boxes with random items that give players an advantage).

Soft Currency and Hard Currency

Soft currency (virtual currency) is earned by completing levels and winning battles within the game. As users advance through the game, they receive a steady flow of soft currency in exchange. A popular one using this type of currency is Candy Crush and it rewards its users with gold bars. On the other hand, hard currency (real money) is more difficult to get, since it has a greater value. Many games provide players with a limited supply in the beginning and they can’t earn more of it by just playing the game. In some cases, the fastest and only way to earn hard currency is by spending real life money. Basically, the most valuable items that give players a good advantage require hard currency in exchange.

Most free to play games tend to implement a dual-currency mechanism (soft and hard). The ones using this dual mechanism are identified as top revenue-generating games. Using a single currency type has a negative impact on the user’s spend flexibility. For instance, games that only use hard currency force users to pay out-of-pocket (real money) for purchasing items within the game. Besides that, a recent study concluded that only about 2-7 percent of users are inclined to invest real money. Therefore, developers can retain their players and contribute to a better user experience by implementing a dual-currency mechanism.

3. No Zero Balance

Even if we were taught that ‘zero’ is the ultimate starting point, in the context of game economies things are different. While experiencing a game for the first time, users must not be required to purchase currency from the very beginning. Alternatively, start them with a positive balance and get them familiar with your game. It is important to let them browse through your game’s store and allow them to purchase a few items by spending the complementary currency. Afterwards, try to identify where “tension” is created within different stages of the game – it shouldn’t be too early nor too late. After finding out the perfect stage where players are fully engaged with your game, introduce them to key features and in-game advantages that can be earned by purchasing the in-game currency. Make them feel like they’ve accomplished something quickly!

4. Nothing Lasts Forever

As we all know that almost nothing lasts forever in the real world, game economies should be no different. However, there are many games out there offering goods that last forever and it seems to be a common mistake. Well, if a user buys items that don’t expire, there is no reason for him to further invest in your game, limiting your profits. To get a better understanding, let’s take the example of a racing game. In the game store, you have a special power that increases the speed of your car for five seconds. By completing more levels, you can upgrade that power and make it last longer, let’s say for ten seconds. If by default that special power lasts ten seconds for all players and can’t be upgraded through game play, they will lose interest in your game and leave it behind.

5. Focus on Lifetime Value (LTV)

Leaving behind the monetization strategy, you want to make sure that your players come back to your game over and over again. Concentrate on making money over the long-term vs the short term. LTV is designed to estimate the overall monetary value of an individual player towards the game. There is no standard way to calculate LTV, but most developers approve that is centered around these two values: lifetime (dealing with user engagement and retention) and monetization (number of transactions).

In theory, the term ‘lifetime’ means the entire life of a person. However, when calculating LTV, developers choose a specific period. It can range from 90 days, 180 days, 1 year, 2 years and so on. When deciding on a specific period to calculate LTV, developers decide based on internal (type of game, company resources, available data) and external (audience demographics and competitors) factors. 

April 7, 2020 Economy as a Service, Oveit Features, Technology, Uncategorized No comments yet

Using Oveit for Local Experiences

Vacation rental or short-term properties have been around for quite some time. These accommodations range from exclusive properties to extra bedrooms in other people’s houses. Some of these include homes, apartments, villas, condos and even tents, tree-houses or caravans. Hosts listing their properties might offer full services and experiences (similar to a hotel or resort), while others don’t even have contact with guests, besides the online booking process.

People that seek to spend their holidays in this kind of properties can find offers through OTAs (online travel agencies). Online booking platforms like Booking.com or TripAdvisor offer a variety of alternatives in terms of accommodation. However, the one platform that caters exclusively to this type of lodging is Airbnb. The home rental platform based in San Francisco was founded in 2008 and it has done a great job in changing the way people find places to stay away from home. In 2007, two of the founders were trying to find a way to cover their rent in San Francisco. Unemployed and broke at that time, they decided to rent out air mattresses in their own apartment to attendees of a conference, since all the hotels were fully booked. They called their service “Air Bed and Breakfast.” 

Like many successful businesses with little to no hope in the beginning, Airbnb is among them. As we speak, the privately held company lists more than three million lodgings in almost 200 countries. To give you an idea of its success, it is valued at $35 billion, which is more than Hilton and Wyndham combined. In late 2016, Airbnb decided to move beyond accommodation with the launch of Airbnb Experiences.

Airbnb Experiences

Airbnb launched Experiences with the purpose of bringing together where you stay (Homes), what you do (Places) and the people you meet (Experiences) in one place. The concept is designed for those travelers that want to benefit from authentic experiences and places, guided by their local hosts.

How does it work?

Instead of finding experiences on third party platforms, Airbnb recruits hosts that can provide more than just bed & breakfast. This way, travelers can simply book their accommodation and daily activities in one place. These activities are led by locals who love where they’re from and what they do, showing great passion. Ranging from cooking classes to music history and culture tours, travelers have plenty of choices available and they can find the perfect one based on other’s previous experiences. For example, in Barcelona, travelers can make paella based on an old family recipe in a private garden. Compared with experiences offered by commercial tour operators, these come with behind-the-scenes access that guests couldn’t typically find on their own.

As expected, travelers spend money on authentic experiences, creating a win-win situation for local hosts and communities. It is a great way to promote and contribute to the success of smaller businesses. The most authentic offerings tend to come from individuals with limited resources and little to no exposure. 

Oveit for Local Hosts and Communities

As we mentioned in previous articles, Oveit can be a great solution for local communities. As experiences tend to be fragmented, our solution enables the host to create their own local economy (currency), inviting local vendors and experience providers to be part of it.

Using Oveit to improve Local Experiences

Even if travelers pay for their trips in advance, local hosts and service providers can use our solution effectively. Our smart NFC enabled wristbands act as digital wallets and enable economy owners (local hosts) to pre-pack experiences for their guests.

Hosts are not always in charge of providing the full experience. Some of them depend on strategic partnerships with local vendors that have a key role in delivering it for travelers. For instance, hosts that are passionate about the brewing industry might offer local pub crawl tours, taking the role of a guide rather than a service provider. With our solution, they can pre-pack various experiences and enable travelers to claim them in partner locations (pubs) with a simple tap of the hand.

On top of that, they can use our solution as a payment tool and create a single currency accepted in their network of partners. Travelers can simply top up their digital wallets (NFC wristbands) online and purchase goods and services in the defined economy.

Besides the pre-purchased experiences, guests will most likely spend money on other activities as well. Our closed-loop payment solution is designed to avoid fragmented experiences and it contributes to a commonly accepted currency. While enjoying outdoor activities, travelers won’t have to worry about their wallets or withdrawing cash. They can activate the ‘Auto top-up’ feature and if the remaining balance falls under a defined amount, the digital wallet (NFC wristband) tops up automatically. Transactions are simply processed by tapping the wristband to a reader. 


March 31, 2020 Economy as a Service, Oveit Features, Power to Community, Technology, Uncategorized No comments yet

Empowering local economies through Tourism

The beginning of 2020 brought us the Madeira Startup Retreat, a wonderful program that supports startups that brings together startups that aim to use their technology for the Travel and Hospitality industry. It helped us better understand how our solution can help communities develop their own local economies.

But as I write these lines, the world is totally different from what it used to be just a few months ago. The coronavirus pandemic made governments impose total lockdowns on communities, a measure designed to keep us safe until these hard moments pass. All industries took a big hit, but Hospitality and Travel are probably the ones that suffer the most in these hard times. Travel bans and lockdowns transformed our once vibrant communities into “ghost cities”, making us understand that we shouldn’t take anything for granted.

Image by Magdalena Smolnicka from Pixabay

The last few weeks gave me time to think of the importance of local communities and their role in the reconstruction of the global economy. And how Tourism can empower local economies. Because although we all suffer together, the power must come from within: individuals, small businesses, local communities. We are strong together, but firsts we must be strong as individuals.

The future of communities

The idea of local economies that are globally interconnected is not new, but today’s hard times force us to better understand the importance of each chain link in our interconnected world. And that the fall of one piece can create a chain reaction that will affect us all. While some communities are created around powerful manufacturing industries or financial centers, many of them are 100% dependent on the industry that took the biggest hit these days: Tourism. 

Overall, 1 in 10 employees work in tourism, making it one of the biggest industries in the world. But for some communities, it means more than that, making it the only way that allows them to attract external funds. However, taking a deeper look at the Tourism Industry allows us to see the day-to-day challenges. Challenges that affect both the Tourism Industry and the community. Tackling these challenges could mean a stronger, financially independent community that has the power to attract more tourists and offer better experiences. The key members that create these experiences, which have the interest but also are required to work together. 

Current main problems

We will take a look at how Hotel Chains, small businesses, and local authorities could better work together. But first I want to list some of the problems that affect the small communities and Tourism operators.

  • Especially in developing countries, tourism inflates prices. Tourists afford to pay more for existing products and services, making it harder for locals to access them. In the long term, this makes the area lose its initial inhibitors and its cultural heritage, affecting tourism in the region.
  • Most of the money leaves the community/country. Although tourists spend large amounts of money, a big percentage leaves the local economy within just a few transactions because of the lack of strong local businesses.
  • Lack of data. Each stakeholder has access to part of the data (tourist information, purchasing habits, preferred experiences, etc) making it almost impossible for them to offer the experiences tourists crave for
  • Fragmented experience for the tourists. Different currencies, different payment methods or divided registration processes can become daunting. Often enough, tourists choose to skip different activities because of the mentioned reasons, affecting both the local economy but also their own experience – a lose/lose situation.

Sustainable Tourism

At first, it may look that these problems affect just the local communities, not the powerful Hotel Chains that operate there. But a weak community will discourage people to visit a specific area, forcing the Tourism Operators to take a big hit as well. Distributing part of the money to locals is an investment that will help the area flourish, having an impact on all the mentioned stakeholders. And with millennial travelers valuing local experiences and pushing the trend to experiential traveling, any support offered to the local community becomes an investment into the industry itself.   

At Oveit, we have developed an Economy as a Software solution, aiming to help communities to create their local economy. Having such an ecosystem means that the money tourists spend on their vacations stays within the community that works to create these wonderful experiences. It’s a way of making sure that the wealth is distributed amongst those that put the hard work in creating beautiful memories. It’s a way of making Tourism (more and more) sustainable.

Local Economies. From concept to implementation

If you think the theory sounds good you will be happy to find out that the implementation is easier than you would imagine. Our solution allows the main stakeholder of the ecosystem (let’s put the Hotel in charge) to easily onboard external vendors and experience creators into this local payment system. 

The integration with the PMS means no complicated onboarding is required. Guests from the hotel can use their room key ( or even their mobile phones or customized NFC wearables) to pay or claim different benefits. It can be used to open the room, access the spa, pay at the hotel’s restaurant or gift shop. But by onboarding local vendors it also means that they can use it to pay at a local shop or to access the local museum. By partnering up with the local entrepreneurs and authorities, the Hotel can encourage its guests to spend their money within businesses that add value to the region. It can create better experiences for the tourist, allowing them to pay using the same NFC wristband that they use to open their rooms.

Tourists will no longer need to carry cash around. So often, small local businesses do not afford to onboard the existing banking system, making it harder for them to sell their services and products to foreigners. Tourists can use the same wearable for all the activities they want to join – a simple thing as an NFC wristband can become their room key, wallet, access to the museum or even transportation pass.


Photo by Satoshi Hirayama from Pexels

Data becomes available live – purchasing habits and experiences are all processed through the system, allowing involved parties to better understand the customer journey.  And, of course, to use this information to better understand who their customers are and how they could improve their stay. 

Local authorities can support the industry by making sure that part of the money generated by the Tourism industry is spent within it. For example, for spendings within local businesses users can receive extra Perks – free entrance to local attractions, discounts, and many more.

Conclusions

We live in an era where technology shows us the power of decentralization, empowering individuals and communities. Looking at today’s biggest companies like Airbnb and Uber we see the effect of giving power to individuals and small communities. Not only a better wealth distribution but also improved services for the consumer. And better experiences mean better client retention.

Leading Tourism companies have the opportunity to use their resources in creating powerful economies around their businesses. To empower the communities that empower the tourism industry.


March 30, 2020 Economy as a Service No comments yet

Improving outdoor activities through technology

Even if the word ‘glamping’ is relatively new, the concept behind is not. In the 16th century, the Scottish Earl of Atholl prepared a lavish experience in the Highlands for the visit of King James V and his mother. Here, the Duke prepared luxurious tents and filled them with similar goods served at his own home palace.

Nowadays, glamping has become a popular trend that arouses the interest of more and more people. The word itself is a hybrid version of the words ‘glamorous’ and ‘camping’. It is an upgraded style of camping, with amenities and resort-style facilities that are not associated with traditional camping. Glamping locations tend to be isolated and closer to nature. It is designed for those who love the idea of camping, but are not so comfortable with the process behind it (setup labour; food stocking; sleeping conditions).

As technology changes our daily lives and interactions, glamping businesses are doing their best to keep up and adopt it in different ways. For example, eco giants such as Tesla with their tiny house off-grid technology. It is a compact home on wheels that is fully powered through 6 solar panels located on the top of the roof. This means that the mobile home can be towed in the middle of nowhere, while charging its batteries from the sun. Glamping businesses seek to adopt eco-friendly technologies designed to protect the environment and its travelers.

Glamping Experiences

As expected, travelers want to be entertained during their glamping getaway. In this environment, businesses offer a variety of activities that form a connection with nature, without having to harm it. Some examples include:

  • Canoeing
  • Fly-fishing
  • Guided Tours
  • Horseback Riding
  • Hiking
  • Rafting
  • Mountain Biking
  • Spa & Yoga
  • Wine Tasting

Based on individual preferences, these experiences might be purchased in advance (prior to arrival) or at the location.

Glamping with Oveit

We think that our solution can be among those eco-friendly technologies adopted by glamping businesses. To give you a better understanding of how it can be used in this environment, let’s go back to those experiences mentioned above. Our smart NFC enabled wristbands act as digital wallets, meaning that guests can fully customize their experiences as desired.

Who wants to carry a wallet or card while rafting?

I hope none of you are willing to worry about important belongings while having a great time. With our solution, travelers claim those experiences with a simple tap of the wrist.

When thinking of the middle of nowhere, I bet that some of you relate it to internet limitations. While this is partly true, the good news is that our solution does not depend on a stable internet connection. Our hybrid model allows travelers to claim experiences, complete transactions and access restricted areas offline. Operating offline has no impact on the user experience or processing speed.

Want to know more about your guests and their purchase behavior within your glamping resort?

Our solution is much appreciated because it has an important role in the decision-making process. The available reports enable you to market products/services with high demand, stock up accordingly, send out newsletters to your most loyal guests and allocate staff strategically. The faster transaction speed will also have a positive impact on your revenue.

March 26, 2020 Economy as a Service, Oveit Features, Technology, Uncategorized No comments yet

Smart wristbands used within famous Ibiza establishments

Well-known establishments, part of the famous Ibiza island are stepping up their game in terms of adopting unique technologies to enhance guest experiences. The so-called ‘smart very important bracelets’ (VIB), successfully passed the trial period and convinced decision makers that it’s the way to go. Even if these smart wristbands were introduced a while ago on the island, the Hard Rock Hotel and Ushuaia Ibiza Beach Hotel take a different approach by using it in their hospitality and event environments.

These properties are known as the places to stay, party, dine and relax during the summer season in Ibiza. The Ushuaia Beach Hotel, also called ‘The Unexpected Hotel’ because of its unparalleled entertainment offering, events production and technology initiatives, presents the ideal opportunity for such exclusive solutions to be implemented. It all started with the introduction of a biometric technology that enabled guests to complete purchases with their fingerprints. In 2014, these two famous establishments, part of the same hotel group, decided to replace the biometric PayTouch  system with the so-called ‘wearable technology’ or VIB. This wearable technology takes it a step further, replacing the need of carrying a room key, a wallet or a mobile phone on site.

How is this technology impacting the user experience and purchase behavior within the famous Ibiza establishments?

Room Access

The radio frequency chip incorporated inside the smart wristband is replacing the traditional room key. It is nearly impossible to lose it or forget it, since guests wear it all the time. To unlock the room, guests simply place the bracelet against specially enabled readers. The technology is already there. Most five-star hotels and resorts have these special readers already incorporated right under the doorknob.

Access to different areas (VIP)

Ibiza is the type of destination where influential people, such as celebrities, famous actors and artists choose to spend their days off. Celebrities seek personalized experiences and value their moments of privacy, especially during their time off. The smart wristbands are designed to store access credentials for individual guests. Access to restricted areas such as the VIP lounge, spa or pool is simply verified with a tap of the wrist in a matter of seconds. There is no need to assign hotel staff in those areas, since the process is fully automated.

Payment Tool

The famous establishments use smart wristbands as a payment tool, replacing cash or credit/debit cards. Fancy a drink at the pool or in a club? The bracelets are waterproof, and guests can shop their favorite cocktails even while taking a break from swimming. How does it work? Upon arrival, the hotel sends out a newsletter to individual guests and instructs them on how to sync their PayPal account with the bracelet. From then on, the smart wristband works in a prepaid fashion, automatically topping up every time the balance goes below 10 EUR.

Tracking (footfall)

To find out behavior and preferences regarding hotel services, the adopted technology by Ibiza establishments proves to be very efficient. The smart wristbands can track individual guests around the hotel premises, enabling decision makers to allocate staff accordingly during peak hours.

Discounts at on-site facilities

The tracking feature is also used to offer personalized promotions and discounts. Since decision makers have access to purchase behavior and preferences, identifying the loyal guests is fairly easy. For example, if an individual is using the spa facilities quite often, a special discount or even a free massage session might be offered in exchange.

Here at Oveit, our dedicated team believes that its ‘Economy as a Service’ approach could revolutionize the hotel and hospitality segments. The hospitality environment is among those that can take advantage of our extended features, designed to shape a different kind of relationship with its guests.

foto presenting an NFC chip wristband branded with Oveit
March 23, 2020 Economy as a Service, Events, Festivals, Oveit Features, Technology, Uncategorized No comments yet