How Kabam Makes Money - and What That Means for Players

StefffStefff Posts: 121
edited May 2017 in General Discussion
Kabam, the company that runs MCOC, is a business. That means they have one goal: to make money. Preferably lots of it. So what does that mean for us, the players?

There are many different "revenue models" , or ways to make money, for app developers. There's the advertisement model, the pay2play model, and of course, the IAP model, which is what MCOC uses.

Kabam is in a difficult position because the IAP model is really difficult to make money with, especially compared to the other revenue models. With the advertising model, every player is forced to see ads, so the game company makes money off of every player, as long as they keep playing, and with the pay2play model players spend money to get the game, so even if they hate it the company makes money.

Making money with the IAP model is way, way harder. To make a profit, Kabam needs to be able to check 4 boxes.

Box 1: Happy Players
Box 1 is the most important box to Kabam. If players aren't happy, they stop playing - or they continue to play, but they don't care enough to spend. So unlike with the ad revenue model, not only do players have to like the game enough to play it, they have to actually like it enough to spend hard - earned money on it. Unhappy players = no money.

Box 2: New Content
When new content isn't being added to a game, the game becomes stagnant. People run out of things to do, so they stop playing, and Kabam stops profiting. More on that later.

Box 3: Good Offers
A typical way that an IAP game works is that it has a premium currency which can be used to buy many things in game. MCOC has this - units. I actually think thatt Units are a well executed premium currency: you can get a lot of them without spending, but spending sure makes getting them easier. This makes the offers where you can buy units more desirable - or good. Now granted, many offers aren't meant for the general player populace, especially recently, which may be a risk for Kabam.

Box 4: Whales
Whales spend big money. The rule is that the top 20% of players account for about 80% of spending, so it's important to make sure that the big spenders are spending really, really big. More on this later.

These boxes are all relatively simple to check on their own, but when you try to check all four boxes, things get complicated. Some examples of this:

The 12.0 update was an example of Box 2 conflicting with Box 1. Kabam was trying to make sure new content could be added and new characters could be added and (actually used). They did this by changing from percentage stats to flat values and nerfing top champs down to the middle of the power curve. The problem was that players who worked hard to get these formerly God tier champions were upset. Kabam then tried to make those players happy, by offering compensation and re-improving the nerfed champs, to limited success.

Box 2 and Box 3 are always in conflict. Kabam wants to make good offers but if the offers are too good then progression becomes to easy, the players get bored and quit playing.

Right now Box 3 and Box 4 are in conflict. Kabam has been making offers targeted more toward the higher spenders, which unfortunately means that players that don't spend as highly consider the offer "bad".

As you can see, when the boxes conflict, there are problems. Big problems in some cases.

Right now if you read this far you're probably thinking "Well yes, but why do I care?" Good question, hypothetical reader. Here's why.

1. Kabam wants you to be happy. Sometimes it doesn't feel like it. In those cases, you need to let them know, and Kabam will probably try to fix the problem if enough people ask them to.
2. Kabam wants the game to last. So just know that they are going to try very hard not to break the game

TL;DR:
Kabam wants money. They will do anything to get money. That means that if you and the community want them to do something,myou can do a few things.
1. Complain on the forums
2. Stop spending money
3. Stop playing
And eventually things will work out.
Until the next outrageously long post,
Stefff

Comments

  • XMEN1994XMEN1994 Posts: 51
    Yawn.
  • Vdh2008Vdh2008 Posts: 968 ★★★★
    That was a lot of words to use to say, "businesses like to make money".
  • Pry22Pry22 Posts: 136
    I thought it was to say stop spending if you want change.
  • DNA3000DNA3000 Posts: 15,590 Guardian
    Stefff wrote: »
    There are many different "revenue models" , or ways to make money, for app developers. There's the advertisement model, the pay2play model, and of course, the IAP model, which is what MCOC uses.

    This looks like another research project of yours. Without commenting specifically, I will just mention that you should target your research towards "monetization models" because that's the real subject: not revenue, not making money, but specifically the subject of converting the game into money. The specific monetization model that MCOC uses is technically the freemium in-app purchase model.

    However I caution you. If you don't know how this works, this might be something it is better not to know. Its hard to enjoy hotdogs once you've seen the sausage made. Every bad thing that people on the forums accuse Kabam of? Highly unlikely to be true, and yet real companies have been caught doing things worse than anything the forum posters have ever dreamed up.
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