Game publishers often strive to build expansive worlds with fluid economies, yet many publishers are finding that player experience and real-world profit potential are often stifled by rigid, “cookie-cutter” web store strategies that don’t take into account the global nature of modern gaming.
For example, using a one-size-fits-all approach to pricing and packaging tends to be less fair for players located in countries with lower disposable income, which also limits your ability to increase revenue and profit driven by players in those countries.
We know there is potential to make things more fair for players and increase profits at the same time — but how can we localize pricing without making players angry at a lack of pricing parity between countries?
In this article, we explore how optimizing global pricing and packaging is a delicate balance between driving transaction volume, profitability, and pricing parity. We’ll take you through a crawl-walk-run approach to finding the best formula for your game’s global P&P strategies that can deliver the most value to you and your players — without making them angry.
The ROI of Global Flexibility
Optimizing for profitability with your global P&P strategy is a fairly straightforward concept. The lower your price is in any particular country, the more transaction volume you’ll have, but with a lower profitability per transaction. If your transaction volume increases enough, your total profit for that country will increase, even if your profit per transaction is lower. Easy peasy.
The more complex part of global P&P is when pricing parity across countries is considered.
For example, gaming is a global and social business. Your players are everywhere and likely interact with each other on Discord, Reddit, or other social media. If you offer players in India a lower price than you offer to players in the U.S., then your U.S. players may learn of your lack of pricing parity between countries and get angry with you. They may even try to game the system by using VPNs or other techniques to try to get access to the lower pricing. Not so easy… peasy.
So how do you localize your P&P globally to maximize profits without making players angry?
I like to recommend a crawl-walk-run approach to price localization, starting with the least aggressive options and testing into more aggressive options over time.
Global Pricing and Packaging Strategies
(Ordered by Least to Most Aggressive)
- No Localization: You offer the same currency and price globally.
- Localized Currencies: You charge the same price in all countries, but offer local currencies pegged to the current exchange rate for that currency.
Pro tip: Changing prices frequently due to shifting exchange rates can be confusing for players. I recommend evaluating exchange rates about once a year to set prices instead of changing prices frequently or dynamically. That said, you should take note that exchange rates can change quickly depending on the country and world events, so prices that make sense in January might not make as much sense in March.
- Localized Discounts and Promotions: You offer the same products at the same list price (adjusted for local currencies) in all countries, but you offer a limited time discount for that country (e.g., “We’re celebrating our growth in India with 20% off our June battle pass for India-based players!”). Players tend to be more forgiving of celebratory regional discounts causing a lack of price parity vs. a lack of parity for everyday list prices.
Pro tip: Use geo localization on your web store to gate offers to only show to players located in the countries you’re targeting. You can use IP addresses or the player’s billing address (for logged in players) to power geo localization on your web store.
- Localized Products: You offer slightly different products for a lower price in specific countries (e.g. “Buy BattlePass Lite for a 50% discount. Excludes bonus skins included in the main battle pass.”). The logic behind this strategy is that if players in one country notice a cheaper price in another country, you can point out that this is because those players get less for that price. Lower price = less entitlements.
Pro tip: Try acknowledging that you’re offering players in certain countries cheaper options with less entitlements to help all players enjoy your game regardless of their access to disposable income. There’s nothing sneaky or wrong about trying to be inclusive and fair.
- Localized Pricing: You offer the same products globally, but price differently per country. This is the most extreme example, in which your battle pass costs maybe $20 in the U.S., but only the equivalent of $5 in India. This comes with the greatest risk of player dissatisfaction due to the lack of price and value parity between countries for the same product.
Pro tip: As the most aggressive approach, this should be the last option you experiment with; however, this approach also offers the highest degree of control when optimizing for profits within a specific country. Additionally, if you are monetizing a casual game where players rarely if ever speak with each other, you may have lower risk of localized pricing causing players to be angry at a lack of price parity between countries.
So, What Is the Best Approach for YOUR Game?
The best global P&P strategy for your game — and your players — depends on a near-infinite number of variables, from your type of game, the type of in-game items for sale, player concentrations, and so on. This means that the true best approach is to iteratively test, measure your results, and listen to your players at every step of your journey.
My advice is to take a crawl-walk-run approach, starting at the top of the list of strategies above, and making your way down the list until your ability to drive profits clashes with your ability to keep players happy. Once you find the right global P&P strategies, the result should be a more fair experience for your players and higher profits for you.
If you’d like help with monetizing your game D2C including advice on your global P&P strategies, request a FastSpring demo or check out FastSpring for gaming.
