Advanced user targeting, such as Facebook custom audiences and retargeting are being used to make user acquisition and retention more effective. Commercial sophistication increases
At Scientific Revenue, we see this trend towards commercial sophistication increasing, and extending far into the game itself. This is especially true for games that leverage in-app purchases for a significant percentage of their revenue. To understand this a little better, think of the free-to-play model in a slightly different way: free-to-play really means that the point of sale is located inside the game (not at Amazon or Gamestop) and the game controls what happens at the point of sale. The following major trends are all simple logical consequences of this point of view:
LiveOps as a Service. Companies such as PlayFab are increasingly enabling special in-game behaviours, limited time events, behavioral incentives, and offers targeted at individual players or segments of players. Think of them as in-game concierge platforms, helping to enable better experiences but also targeting specials and offers for increased revenue. Dynamic pricing services and revenue optimisation services. Companies like Scientific Revenue leverage data and machine learning to tune and optimise monetisation models and thereby increase revenue. Revenue tuning and control services. Advertising and mediation layers have been around for a long-time, and have been leveraging predictive analytics and machine learning for targeting. What’s new is the increasing sophistication around ad control – companies are now segmenting based on “likely to buy in-app purchases” and then making a decision about whether to show ads at all. The coming wave: Different offers and types of offers
Thinking of free-to-play as really being about the location of the point of sale is, it turns out, a very helpful way to think about monetisation trends in mobile gaming. Mobile game studios are gradually coming to grips with their new role (running the checkout aisle), and are adopting best practices from retail as they do so. The next wave in this trendline is offering increasingly differentiated products for in-app purchases. Five years ago, most IAP oriented games had some variation on the following items for sale:
One or two virtual currencies. Usually there was a “hard” currency (that players bought) and sometimes there was a “soft” or “earned” currency that players earned in game. Some DLC or content packs
A few items related to gameplay that were sold for real-money. “Ad blockers” and “Coin Doublers” were the most common. Some games were more commercially sophisticated, but the above list came close to defining generally accepted best practices. Nowadays, most new games come with:
Two or more virtual currencies with different roles in the game. Multiple points of sale, including a coin store, a splash-screen while the game is loading, and interstitial ads. Special purpose purchase flows depending on game context (for example, a “more currency needed” flow that offers a simpler purchase experience and restricts the user to a subset of the available coin bundles). Bundled merchandise and currency packs sold in real-money transactions. Special offers carefully designed for segments of the population
For example, if you look at the most recently installed game on my phone (nWay’s Power Rangers: Legacy Wars), it has:
Two currencies: Power Crystals and Power Coins
An always-populated special on the main page, which has either characters (available for power coins or crystals) or bundled merchandise deals for real-money transactions. A “Special Offers” tab in the coinstore, with evergreening specials that go away (and so have a special call to action)
“New player” offers that are only available for the first 24 hours. And so on ... Figure 1. nWay’s Power Rangers: Legacy Wars is a well-designed example of current in-game merchandising trends. Generally speaking, more things are for sale than in previous generations of games, there’s a greater variety of merchandise, and there’s more awareness of contextual offers and bundles. (And, of course, managing this properly, presenting the right offers to the right players, requires a substantial amount of server-side machinery and expertise. It’s a good thing we’re entering the era of machine learning). An annuity is a purchase of currencies or goods that is offered at a steep discount and delivered over time. Annuities: A different type of offer
Annuities are an increasingly popular, and important, type of highly segmented and user-specific offer that fits perfectly into this line of thinking. An annuity is a purchase of currencies or goods that is offered at a steep discount and delivered over time (the “annuity payments”). The actual purchase is a lump sum, paid at the beginning of the annuity. Here’s how an annuity is defined :
"An annuity is just a sequence of payments that a person receives in exchange for an initial investment. Interest payments by a bank into a savings account are a common kind of annuity. Insurance companies usually offer another type of annuity where you pay a large sum now (say $100,000), and then receive a guaranteed amount – say $5,000 a year – for the rest of your life." Here, for example, is an annuity from Marvel Puzzle Quest. Figure 2 The VIP Pack from Marvel Puzzle Quest is an Annuity
It delivers 1000 Iso-8 and 100 Hero Points every day for 28 days (so, 28,000 Iso-8, and 2,800 Hero Points, over the lifetime of the annuity). For comparison, the smallest Iso-8 bundle is for 1,200 units of Iso-8, and costs $1.99. So, the annuity represents an amazing deal, but one that delivers its value over time. As you might guess, annuities tend to split the population between more impulsive players and those players who value the items being sold, but can wait to receive them (in exchange for a discounted price). In short, annuities appeal to “planners” who are affluent and have good impulse control. In short, annuities appeal to “planners” who are affluent and have good impulse control (these people often become “grinders” otherwise due to their ability to suppress their impulsive buying decisions). Note that annuities also have a very strong retention component. Much like daily login rewards, the presence of an annuity tends to encourage users to log in on a regular basis. And, of course, once the user is in the habit of playing daily, the user is much more likely to be a long-term player. In conclusion
In this article, we talked about IAP monetisation trends and about the increasing sophistication of the offers being made to players inside modern mobile games. Players are increasingly being offered a wider variety of options, and offered a wider variety of offer types, inside games. Done properly, this increases monetisation significantly while also increasing player happiness (if you’re a “planner”, you want to be offered an annuity). But it also increases the amount of work involved in game design and implementation: someone has to design the offers, and then they need to be displayed to the right players at the right time -- the last thing you want is to present every player with an overwhelming set of alternative purchases to make at every step of the game. In a future article, we’ll make this more actionable by walking through the nuts-and-bolts of annuity design. Tags:

The future of in-app purchase monetisation in mobile games

Above: Chukong and Scientific Revenue are teaming up to help developers make more money. Another partnership. But this alliance between Scientific Revenue , a revenue optimization company, and China’s Chukong Technologies , the maker of a popular game engine, could actually help game developers make more money without a lot of hassle. That’s important in the cutthroat mobile game industry, which is forecast to grow to $45 billion by 2018. Above: Bill Grosso, CEO of Scientific Revenue. Image Credit: Dean Takahashi
Scientific Revenue is going to integrate its service for dynamic pricing of virtual goods and revenue optimization into Chukong’s services. Chukong is the owner of the popular Cocos2D-x mobile game engine, which is used by more than 450,000 game developers who make 2D mobile games. Chukong is making something called SDKBOX, or a collection of pre-certified mobile services that are built to work out of the box with Cocos2d-x. The Cocos2d-x game engine is used by developers such as Big Fish, DeNA, Square-Enix, Bandai Namco, Mixi, and Social Point. These developers have access to the freely downloadable SDKBOX, which makes it fast and easy for developers to integrate a pre-certified third-party software development kits into their games through a single, unified SDK. From VentureBeat
Customers don’t just get irritated when you screw up cross-channel personalization. They jump ship. Find out how to save your bacon on this free research-based webinar with Insight’s Andrew Jones. This saves a lot of hassle, said William Grosso, chief executive of Scientific Revenue, in an interview with GamesBeat. That’s because it saves the developer the time and work it takes to certify and integrate the Scientific Revenue SDK. Now Chukong will do the work once and maintain the integration as needed. That means the developer can make use of Scientific Revenues service without much effort, Grosso said. “The problem is that developers have SDK fatigue,” Grosso said. “They have too many SDKs to manage. If one crashes, the game crashes. So game developers have to be diligent about auditing their third-party services so they don’t ship something bloated.”
Grosso’s company tweaks prices and maximizes revenue for companies, and that’s crucial because many companies are having a tougher time surviving because user acquisition costs are rising steeply for free-to-play games. A  study by the Harvard Business School said that a 2 percent change in prices can lead to 10 percent more revenue. As an example, many companies have a virtual currency that they sell for real money. That currency can buy a wide variety of goods in a free-to-play game. If a player has a history of spending a lot of money in games, you might want to offer them a $100 bundle for a lot of currency at a discounted price. But if a player is new or hasn’t spent much before, you might want to show them an offer of a $5 bundle. In this case, both players could be paying vastly different amounts per unit of virtual currency, just as airline ticket buyers might be paying different amounts for the seats on a given flight. Business travelers, for instance, will pay a lot of money for last-minute seats with a lot of flexibility for cancellation. Chukong is taking the various SDKs and combining them into one “über SDK,” Grosso said. “And it is tied to the Cocos2D-x engine, the No. 2 game engine in the world” behind Unity. Chukong does the quality control, tackling the problem of SDK fatigue head on. Other services in the Beijing-based Chukong’s SDKBOX are Chartboost and Google analytics. “Scientific Revenue’s dynamic pricing technology is a huge win for developers. We’re very pleased they are now pre-integrated into SDKBOX and can easily be added to any Cocos2D-x game or application.” said Kai Zhao, general manager for Chukong USA, in a statement. “Chukong has been working with Scientific Revenue for 2 years, and we’re excited to take the relationship to the next level.”
SDKBOX is already being used in over 4,500 games. Developers using SDKBOX can now access Scientific Revenue’s dynamic pricing service, which Grosso said typically boosts payment conversions by 15 percent. Grosso said the company can lift overall revenue by 20 percent to 40 percent. Typically, the vast majority of mobile game revenue comes from in-app purchases of virtual goods. But less than 5 percent of the player base will buy something. Scientific Revenue said it is integrated into games with more than 100 million total downloads. Mobile games are forecast to become a $45 billion market by 2018. However, since the vast majority of revenue stems from in-app payments from less than 5 percent of the total player base, and payments vary wildly at different times in different parts of the world and from player to player, game studios leave billions of dollars on the table every year. Grosso said Scientific Revenue has closed a lot of clients in the past few months. Although the Silicon Valley area has seen a lot of layoffs among mobile game companies, Grosso said he believes that mobile gaming is still “incredibly healthy” as an industry. User acquisition costs are rising, but that means companies would do well to generate more revenue from their existing users.

Scientific Revenues teams up with China’s Chukong to help developers make more money

Dynamic Pricing & Revenue Optimization for In-App Purchases Now Available to Developers of Thousands of Games Using SDKBOX
SAN FRANCISCO, CA and MENLO PARK, CA--(Marketwired - Dec 8, 2015) -   Scientific Revenue , a dynamic pricing and revenue optimization service, today announced it has officially integrated with Chukong's SDKBOX, a collection of mobile services pre-certified to work with the popular Cocos2d-x game engine. Joining already integrated third party services including Chartboost and Google Analytics, Scientific Revenue is SDKBOX's first and only SDK for in-app purchase price optimization. "Scientific Revenue's dynamic pricing technology is a huge win for developers. We're very pleased they are now pre-integrated into SDKBOX and can easily be added to any Cocos2d-X game or application," said Kai Zhao, general manager for Chukong USA. "Chukong has been working with Scientific Revenue for 2 years, and we're excited to take the relationship to the next level. "
The Cocos2d-x game engine is used by over 450,000 game developers, and top publishers including Big Fish, DeNA, Square-Enix, Bandai-Namco, Mixi, and Social Point. These developers have access to the freely downloadable SDKBOX which makes it fast and easy for developers to integrate a wealth of pre-certified third party SDKs into their games through a single, unified SDK. SDKBOX is already being used in over 4,500 games. Developers using SDKBOX can now access Scientific Revenue's dynamic pricing service, which typically boosts payment conversions by 15 percent, and overall revenue by 20-40%, into their own Cocos2d-x-based games. "SDKBOX is an amazing win for the Cocos community," said Scientific Revenue co-founder and CEO William Grosso. "The lowered barriers to integration and the fact that Chukong puts every SDK through an exhaustive set of acceptance tests means that developers can easily integrate innovative third-party technology with confidence. We're excited to be part of the SDKBOX initiative with Chukong. "
Mobile games are forecast to become a $45 billion market by 2018. However, since the vast majority of revenue stems from in-app payments from less than 5% of the total player base, and payments vary wildly at different times in different parts of the world and from player to player, game studios leave billions of dollars on the table every year. Developers using SDKBOX now have access to a powerful new way to monetize. Created by a team of data scientists with decades of experience in game economics and analytics, drawing on insights from the world's most successful publishers, Scientific Revenue's dynamic pricing engine creates customized, targeted in-app payments for each player, enabling game developers to maximize price monetization while maintaining integrity over their gameplay experience. ABOUT CHUKONG TECHNOLOGIES
Chukong Technologies is a leading mobile entertainment platform company that drives and maintains a healthy development ecosystem, provides users with excellent digital content, and pushes the digital entertainment experience forward. Chukong has helped some of the world's largest mobile developers navigate the complexities of the Chinese mobile market, as well as published many of the most popular mobile titles in China, such as the Fishing Joy franchise. Chukong Technologies aims to become a leading digital distribution company and is currently expanding its infrastructure and partnerships to facilitate new business opportunities. Headquartered in Beijing, China, the company also has operations in Tokyo, Seoul, Taipei, and Menlo Park, California. For more information, please visit  http://en.chukong-inc.com  and follow the company on Twitter at  @CocoaChina . ABOUT SCIENTIFIC REVENUE
Founded by a team of game industry veterans, economists, and data analysts, Scientific Revenue is dedicated to maximizing the money mobile developers make from their creative work. With an SDK already integrated in games with over 100 million total downloads, Scientific Revenue's dynamic pricing engine for in-app purchases typically boosts payment conversions by 15 percent, and overall revenue by 20-40%. Based in San Mateo, Scientific Revenue is backed by Walden Venture Capital. Visit us online at http://www.scientificrevenue.com . Follow us on Twitter @SciRevenue. Contact Information

Scientific Revenue Integrates With Chukong Technologies SDKBOX Mobile Games Service

Pricing Cloud™ Delivers Customized, Targeted Pricing for Mobile Game In-App Purchases
SAN FRANCISCO, CA--(Marketwired - Oct 7, 2015) - Scientific Revenue , a dynamic pricing and revenue optimization service, today announced a 20-40% lift in overall in-app purchase revenue and an average 15% increase in payment conversion for games using its dynamic pricing engine for in-app purchases. Launched with select partners in 2014, Scientific Revenue is already deployed in games with over 100 million total downloads, and now supports the top eight gaming engines. "We're thrilled to share the success we've had with many of our mobile game partners," said Scientific Revenue founder and CEO, William Grosso. "They are not only pleased with the extra revenue we're generating for their various titles, but they've helped us make our dynamic pricing engine more powerful. So to every other game developer and publisher out there, we say: 'Focus on making great games, we'll focus on making you more money. '"
Mobile games are forecast to become a $45 billion market by 2018. However, mobile games leave billions of dollars on the table every year, since the vast majority of revenue stems from in-app payments from less than 5% of the total player base, with their payments varying wildly at different times in different parts of the world and from player to player. Created by a team of data scientists with decades of experience in game economics and analytics, drawing on insights from the world's most successful publishers, Scientific Revenue's dynamic pricing engine creates customized, targeted in-app payments for each player, enabling game developers to maximize price monetization while maintaining integrity over their gameplay experience. Core Scientific Revenue Features
The Scientific Revenue Pricing Cloud™: Cloud-based monetization platform combining predictive analytics and machine learning with real-time segmentation, rules-based pricing, and a robust testing framework to enable targeted per-user pricing. Multi-Platform: Complete support for Android & iOS games, and compatibility with all major gaming engines, including Unity, Cocos2d-X, Unreal, Corona, Moai, Apportable, and Adobe Air. Dynamic Pricing Engine: Analyzes hundreds of pricing signals to continually optimize pricing, applying customized models and asynchronous machine learning to user data to surface new pricing opportunities. Engine automatically sends ideal price points on targeted per-user basis. Customized price offers: Engine supports customized messaging, including specials, splash screens, interstitials, and payment wall price optimization, plus advanced merchandising techniques like strikethrough pricing, and time-based discounting. Client-side SDK: Easy-to-integrate plug-in collects data and connects to the Pricing Cloud. SDK architected for zero end user impact, with communications sent to the pricing engine in the background, server-side caching, and message queuing. The Pricing Console™: Web-based price management tool that provides ability to manage price changes, and connects to app storefronts for easy updating. Also gives developers and publishers total visibility into how their game pricing is impacting revenue, engagement and retention at all times. Console also enables user segmentation, multi-variate testing, and promotion creation. ABOUT SCIENTIFIC REVENUE
Founded by a team of game industry veterans, economists, and data analysts, Scientific Revenue is dedicated to maximizing the money mobile developers make from their creative work. With an SDK already integrated in games with over 100 million total downloads, Scientific Revenue's dynamic pricing engine for in-app purchases typically boosts payment conversions by 15 percent, and overall revenue by 20-40%. Based in San Mateo, Scientific Revenue is backed by Walden Venture Capital. Visit us online at http://www.scientificrevenue.com . Follow us on Twitter @SciRevenue. Contact Information

Scientific Revenue Announces 20-40% Lift in Revenue for Mobile Games Using Company’s Dynamic Pricing Engine

Image Credit: Dean Takahashi
Setting prices and running a virtual economy is complicated. But most game developers don’t have degrees in economics. Scientific Revenue wants to offload the task of dynamically pricing virtual currency in mobile games. The result is a new expert source for dynamic pricing decisions that can make a significant difference in the money generated from the same base of players, said Bill Grosso, the chief executive of Scientific Revenue. His company tweaks prices and maximizes revenue for companies, and that’s crucial because many companies are having a tougher time surviving because user acquisition costs are rising steeply for free-to-play games. Grosso said the revenue lift can be as much as 20 percent to 40 percent, depending on the game. Scientific Revenue gets a cut, but only if it moves the revenue needle more than 10 percent. As growth in the $30 billion mobile gaming market slows down to more mature rates, that kind of uplift is a big deal. A  study by the Harvard Business School said that a 2 percent change in prices can lead to 10 percent more revenue. From VentureBeat
Get faster turnaround on creative, more testing, smarter improvements and better results. Learn how to apply agile marketing at our roadshow in SF. As an example, many companies have a virtual currency that they sell for real money. That currency can buy a wide variety of goods in a free-to-play game. If a player has a history of spending a lot of money in games, you might want to offer them a $100 bundle for a lot of currency at a discounted price. But if a player is new or hasn’t spent much before, you might want to show them an offer of a $5 bundle. In this case, both players could be paying vastly different amounts per unit of virtual currency, just as airline ticket buyers might be paying different amounts for the seats on a given flight. Business travelers, for instance, will pay a lot of money for last-minute seats with a lot of flexibility for cancellation. Airline pricing isn’t a precise model for virtual currency pricing, but it shows that it can make sense to be smart about tailoring prices to different customers, based on who they are and their capability or willingness to pay. By contrast to airlines, game companies have different economics since their virtual goods carry zero additional cost to make more of them. They don’t expire, and can be instantly created. Yet you don’t want to flood your game world with virtual goods and cause deflation. This makes sense in the world that has emerged. The game industry relies on real-time exchanges that bid on user acquisition. Attribution companies tell game companies where the users came from. Analytics providers do deep segmentation and predictions. Game developers have to optimize user acquisition, improve engagement, and prevent user churn. Above: Scientific Revenue dashboard. Image Credit: Scientific Revenue
“People were very recently focused on ad monetization,” Grosso said. “It’s only with the rise of cost-per-install (CPI), or user acquisition costs, that it has become very painful. People are now focusing on revenue optimization as an idea. When we started this in 2012, we were ahead of the curve. When I mentioned it to people in 2013, not many people said that they needed it immediately. Now the battle for users and eyeballs is more expensive.”
Scientific Revenue believes that pricing is complicated because people are complicated. People respond in different ways to prices at different times. So why should game companies offer the same prices to everyone? To maximize revenues, Scientific Revenue employs user profiling and tailored pricing. Geographic pricing is one of the company’s specialties. In India, for instance, players are more price-sensitive. Game companies should sell virtual goods for lower prices in that market, compared to other territories. “If you don’t price correctly, you don’t have access to a market of 1.3 billion people in India,” Grosso said. “A good side effect is retention. You have someone who now spends in a game, and they hang around longer. It’s not about raising prices to gouge people, but lowering prices because they have less disposable income.”
It’s also worth noting that people with high-end Samsung phones are much more willing to spend than people who are using less-expensive Indian phones. Grosso’s team of 15 people — including two economists — has put together a cloud-based infrastructure that provides personalized, profit-maximizing prices for a company’s users. It handles complex functions such as player behavior data mining, data analysis, and real-time segmentation and per-user pricing so that developers don’t have to do it. At his previous job, Grosso was the chief technology officer at Live Gamer, which did payment processing in free-to-play games. In watching companies launch on Live Gamer, Grosso believed that most weren’t doing their pricing right. He left the company, and while on a vacation, he cooked up the idea for Scientific Revenue in 2012. Chris Carvalho, the former chief operating officer at Kabam, is on the company’s advisory board, and former Sony Computer Entertainment America president and CEO Jack Tretton is also on its board. Scientific Revenue raised a seed round in February 2014. Rivals include New York-based Gondola. Grosso’s team is focused on mobile, as that’s the market where it wants to win first.

Scientific Revenue figures out optimal prices for virtual goods in games

KX provides analytics solutions within the technology sector, focusing on data management and analytics. The company offers a real-time and historical database engine, a cloud-native and on-premises analytics platform, and a vector database for analytics and AI. It serves sectors that require data analytics and management, including financial services, aerospace, defense, and manufacturing. It was founded in 1993 and is based in New York, New York.

- Kx selected as Scientific Revenue ' s real-time analytics platform for online dynamic pricing .

LONDON, October 19, 2017 /PRNewswire/ --.
Kx Technology Selected to Power E-commerce AI Platform for Scientific Revenue.

Seed VC

Seed VC - II

Scientific Revenue helps game developers and publishers increase revenue by improving the yield of paying customers. Scientific Revenue was founded in 2013 by Bill Grosso, the former CTO of Live Gamer, a leader in in-game payment infrastructure, along with a coterie of experts in finance and gaming.

Date	Round	Amount	Investors	Valuation Valuations are submitted by companies, mined from state filings or news, provided by VentureSource, or based on a comparables valuation model.	Revenue	Sources
10/9/2015	Seed VC - II	$1.5M	Walden Venture Capital	$XXM	0 FY undefined	1
4/30/2014	Seed VC	$XXM	Subscribe to see more	$XXM	0 FY undefined	10

Date	10/9/2015	4/30/2014
Round	Seed VC - II	Seed VC
Amount	$1.5M	$XXM
Investors	Walden Venture Capital	Subscribe to see more
Valuation	$XXM	$XXM
Revenue	0 FY undefined	0 FY undefined
Sources	1	10

First funding	Last Funding	Investor	Rounds	Board Seats	Type	Location
4/30/2014	10/9/2015	Walden Venture Capital	2 Seed VC, Seed VC - II (2015)		Venture Capital	California
00/00/0000	00/00/0000	Amicus Capital	Subscribe to see more		Venture Capital	California

First funding	4/30/2014	00/00/0000
Last Funding	10/9/2015	00/00/0000
Investor	Walden Venture Capital	Amicus Capital
Rounds	2 Seed VC, Seed VC - II (2015)	Subscribe to see more
Board Seats
Type	Venture Capital	Venture Capital
Location	California	California

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