One of the most frequent questions we are asked by developers and publishers seeking to add Live Ops capability to their games is how much will live ops cost? Given that almost all developers and publishers are price sensitive it is vital that we are able to answer this question quickly and simply. However pricing for a complex SaaS (Software as Service) platform such as ChilliConnect isn’t as straightforward as you might think. We have just made some significant changes to our current pricing plan and therefore I felt this was a great time to explore what considerations have informed our current pricing structure and why Live Ops pricing isn’t always straightforward.
Please bear in mind that I’m just going to cover the costs of Live Ops tools in this article. Running Live Ops will also require people to analyse data, create content, tweak configurations and moderate tournaments amongst many other ongoing activities. The cost of your Live Ops team is likely going to greatly exceed the cost of your Live Ops toolset so do remember to include them in your budget.
Before we dive into pricing in detail I think it would be helpful to provide some context behind our motivations. Like most game service providers Chilli is a business and therefore it will come as no surprise to you that two of its main objectives are to grow revenue and increase profit. However as underrated 1980s UK pop act Fun Boy Three sang with Bananarama “It ain’t what you do (it’s the way that you do it)”
Wise words indeed! Having previously founded and grown a successful games studio I believe the team at Chilli have a special insight into the unique challenges of game development and have an empathy and understanding with our games industry peers that informs a vastly different approach to that of our larger, corporate competitors.
Our mission is to democratise Live Game Management, that is to ensure that developers and publishers of all shapes and sizes, financial means, experience, location or chosen technology platforms have access to a class leading Live Ops toolset which enables them to make commercially competitive games. We want you to continue to innovate, create and disrupt our amazing industry and keep delighting players across the globe. We can help by building long term partnerships built on trust and mutual benefit. We won’t do it by making a fast buck and then leaving you high and dry!
A Clear Manifesto
Trust is often difficult to establish in the short time period between assessing Live Ops solutions and making a final decision. It’s a tired cliche but trust IS earned, not demanded, therefore one of our first challenges in growing ChilliConnect is demonstrating that you can trust us. There are various ways in which we demonstrate our trustworthiness, one of which is sharing our pricing manifesto with you. Please do hold us to account on these points as we continue to evaluate our approach to pricing and make future changes:
- We must always provide fair value for our services.
- The price of our services and the methodology behind them should be transparent at all times.
- The service should be accessible – no long tie in periods, no large upfront fees.
- The service should be flexible – upgrade at any time. Downgrade/cancel with only a months’ notice.
- Educate the partner and help them pick the right solution for their needs (even if that isn’t ChilliConnect)
As ex-game developers we’ve come to realise we really struggle when it comes to predicting which games are going to be successful and which aren’t. Game development is a high risk, high reward environment so it’s very important that Chilli can support you as your games grow, but can also scale back should things not work out so well.
It’s not just a consideration of the price you pay for the service you receive, it also matters how flexible that service is across a variety of different future scenarios for your business and games.
Off The Shelf or DIY?
One final point I’d like to cover before we get into the detail of what you are actually paying for is the question of whether you should build your own proprietary Live Ops toolkit, rather than use an off the shelf one from a third party such as ChilliConnect. This is in itself a large topic and one which we will certainly cover in much greater depth in a future blog, however for now I just want to take a quick look at how the cost of DIY compares to off the shelf costs.
First lets assume that you are developing a midcore F2P mobile game with a number of social and connected elements and a development cycle of 18 months to soft launch, and a minimum soft launch period of 6 months. A conservative estimate would be that you’d require two backend/live ops engineers to build out just the functionality and infrastructure you’d need to support that game. No wider vision, or plans for reuse, just built it once for that single game. Taking a conservative average figure for a UK server engineer salary over the 24 months you’ll have sunk £160,000 before the game has even launched and you have a chance to recoup.
You’ll still likely need to bring in some external tools such as data visualisation and a messaging platform and it’s quite possible you won’t have the time to build everything you need in time, to the quality you need. Having been in game development as a game designer and manager for over 20 years I’m very much aware that despite best intentions, without the pressure of external end users the quality of execution and on time delivery of internal tools often leaves a lot to be desired!
Oh yes and I also forgot that you’ll still have usage costs to pay for your server infrastructure and the responsibility of managing that yourself. Without a third party monitoring, optimising and negotiating the best deals on your behalf someone else within your organisation will need to take on that role. It’s another plate to spin.
Getting back to our simple model, how much would ChilliConnect cost across those 18 months? Let’s assume the developer signs up at the start of development for our free trial and likes what they see. That first month is free. Then to receive the basic level of support during development they sign up for the Indie pricing tier at $49 per month until two months before soft launch. Two months before soft launch they upgrade their account to the Studio model to ensure they have access to the full Live Ops toolkit ready for launch. That’s then $249 per month thereafter. It breaks down like this:
Month 1: Free trial
Months 2 -16: Indie Pricing Tier @ $49 per month = $735 / £570
Months 17-24: Studio Pricing Tier @ $249 per month = $1992 / £1547
Total Platform Fee: $2,727 / £2,117
*pricing data and USD/GBP conversion rate correct of 16/1/19
In this simple example using ChilliConnect costs 1.3% of building a proprietary solution, saving the developer a whooping £157,883 which they then have available to spend on making a better game, buying paid user acquisition or hosting a kick ass launch party!
It’s also worth noting that if you do it yourself there is the added danger you’ll be distracted from your core competency – making games. It’s going to take you longer and almost certainly cost you a lot more. Perhaps the only tangible benefit is one of control. For some developers and publishers it’s a price worth paying, but we believe for that for most it just doesn’t add up.
What Are You Paying For?
Generally most Live Ops tools use a standard Software as a Service (SaaS) monthly subscription payment model at their core, however unlike many other SaaS offerings Live Ops tools have a variable usage element to manage, along with the potential for bolt on functionality, or increased capacity that sometimes gives the impression pricing is complex and more than a little obtuse. That really shouldn’t be the case however. If we break down the current Chilli pricing model it looks like this:
Almost all cloud based Live Ops tools use a 30 day free trial period during which a potential customer can try out the various features either through a quick integration with an existing game, or in a demo game. This initial “try before you buy” period helps to ensure the developer is fully aware of the various pros and cons of a particular solution and is therefore able to make an informed choice. In almost all cases the amount of usage is capped during the trial period.
Once the trial period is over a developer is presented with various options with regard to the monthly platform subscription fee they wish to pay. Think of this as a fee to cover the use of the software features. Chilli starts with a basic package of popular tools for $49 per month and adds functionality and data storage capacity as the monthly price increases. This approach allows us to offer customers the functionality they need at a fair price without having them pay for functionality they aren’t using.
I remember a few years ago using the Salesforce CRM platform in our games studio for managing sales targets and customer accounts. After a while it was clear we were only ever going to use about 2% of the functionality we were paying for and with no way to pay for just the part we needed we ended up moving to another solution called Pipedrive. This tool provided all the stuff we needed for a much cheaper price. It was also much easier and quicker to navigate the user interface as it wasn’t cluttered with functionality that wasn’t relevant to our usage patterns. This is just one example that shows the biggest and most expensive solution isn’t always the best solution.
Beyond access to additional functionality and data storage capacity moving up pricing tiers also opens up a higher level of customer support. On the Studio and Enterprise tiers this includes an more extensive Service Level Agreement and direct support channels should you need us in an emergency. We also give higher priority to new feature requests from customers on the highest pricing tiers.
Usage costs are incurred depending upon the amount of times your game contacts the ChilliConnect servers. We felt this was the fairest and most transparent way to price usage compared to some of our competitors who use monthly active users (MAU) or a complex hybrid model of users and API calls.
We see a huge variation in how many API calls different types of games will make per player session, and therefore how much it costs us to support such a range of games. Trying to cover the wide range of use cases in a single MAU based pricing model, while at the same time as keeping the cost of entry low and avoiding the need for long term commitments seemed almost impossible. The API based model we have decided to use ensures that what you pay is closely correlated with what your game uses. Each pricing tier includes a bundle of API calls per month (1-5 million) to see you through the initial launch of your game, however should you exceed the bundled usage additional charges will of course be due.
Given the way in which usage costs are calculated it is therefore important to optimise your game to reduce the number of server calls made per player session. This can be achieved by increased use of caching on the client device and other techniques. There is more information on this subject in our recent Best Practise blog covering Preparations for Soft Launch.
Each game will have unique player behaviour and server usage patterns and therefore ahead of soft launch it is very difficult to estimate what actual usage costs will be. It is however possible to model a variety of possibilities depending upon the genre of game, target demographic and connected functionality being used. Once in soft launch data from real world players can be extrapolated to provide a far more accurate understanding of likely server usage and therefore costs.
If you have already visited the ChilliConnect pricing page you will no doubt of noticed that the cost per million API calls reduces as you step up through the pricing tiers. This is quite simply because it costs us more to manage the server infrastructure for clients using the entry level tiers. The Enterprise tier enables us to offer cheaper costs per million as you pay more per month. On an Enterprise plan where we charge upfront for a year’s platform fees we can book dedicated infrastructure and take advantage of cost savings of up to 50% on the Studio usage fees. This is then passed on to you the customer.
Bolt on Functionality and Increased Data Storage Capacity
The final aspect of ChilliConnect pricing is to provide some flexibility to support developers who have specific use cases that sit outside the standard pricing tiers, or require functionality that might only be relevant for a small proportion of our customers. It is also possible for us to support customers with bespoke functionality. We can also increase data storage capacity on a per account basis. These special cases are priced on demand and “bolted on” to the monthly Platform Fee. The increased fee reflects the additional costs incurred by us and any development work required to support these requests.
What we understood from our time growing a mobile games studio is that as you start out on your Live Ops journey and prepare to launch your first game you need a low cost solution with great flexibility and no upfront costs. At this stage you have no idea if your game will achieve the KPIs it needs to be commercially viable and much of your early work will be to make swift, decisive and hugely impactful interventions in your game to achieve and exceed those targets. At the start you aren’t interested in the granularity that comes later once you have achieved initial success and move to making smaller and smaller adjustments to your game configuration and content. As you achieve growth the focus starts to shift away from flexibility and immediate cashflow, to long term economies of scale. We believe our model helps you achieve this. ChilliConnect therefore should have no barriers to entry for even the smallest developer, growing with you as you embark upon what we hope will be a successful game launch.
Choosing the Right Pricing Tier/Live Ops Cost for you
Hopefully by now you’ll have a good idea of how our pricing works and what you are paying for. You should also understand why we (and of course we are rather biased) feel that using an off the shelf solution like ChilliConnect is a much better option for most developers than building these tools yourself. The final aspect we will cover is which pricing tier makes most sense for you?
The appeal of our pricing options is that all tiers except Enterprise operate on a monthly rolling basis so if you find you need to step up, or down, it’s not only quick, it’s easy to make that change.
The following example provides a useful example of when it makes sense to step up and down tiers based on cost, however it is also worth remembering that a developer may chose to remain on a higher tier at greater cost if for example they wish to access functionality only available at that higher tier, or to retain the higher levels of customer service and support that tier offers.
In our example we consider two different mobile games, one a casual title with a large potential number of MAUs and a small number of API calls per game session and the second a midcore game with smaller potential user numbers, but a much greater use of the server per game session. All costs show BOTH monthly platform fee and usage costs.
*note we have used an indicative Enterprise platform fee of $5,000 per month, 5m inclusive API calls per month and $0.13 per million additional API calls. Actual Enterprise costs vary upon specific customer needs. Please do contact us for more information.
|Casual – 25 API calls per session|
|Midcore – 75 API calls per session|
In the model its clear to see that when player numbers are low in both cases the Indie pricing tier offers the best value, however once player numbers start to rise the cheapest option shifts to the higher pricing tiers. This is most evident for the Midcore game with 5m MAUs where the Enterprise tier costs almost half as much as the Indie tier.
Reviewing the ChilliConnect costs for each of these games it would be easy to assume that the casual title with its large userbase and low server use is going to be the most profitable title, however that isn’t necessarily the case. The midcore game could of course have a much higher ARPDAU (average revenue per daily active user) and much lower long term churn rates. There are other factors such as the user acquisitions costs to take into consideration. So although a midcore game might have higher Live Ops costs it might actually provide a much larger ROI (return on investment) for the developer than the casual game with it’s tens of millions of players!
Is Running Live Ops Worth It?
When considering whether to bite the bullet and dive into the world of GaaS and Live Ops the big question is whether all the effort is worth it? Surely saving all the trouble and complexity and long term commitment of Live Ops by just launching a premium game is a better plan?
This might have made sense a few years ago, but its now clear game players (especially on mobile) have embraced F2P games and it’s hard to start charging upfront for content that was previously free. It’ s also clear that the potential commercial returns from a F2P game run for years using effective Live Ops far exceeds that of a similar premium game. The major drawback of the Premium model is that the maximum revenue you’ll ever earn from a player is that one time, upfront, purchase. Hugely successful developers such as Space Ape claim that over 2/3rds of their revenue now comes directly from Live Ops activities. The fact is that no developer can afford not to take Live Ops seriously.
Developers now have a large selection of great tools to choose from in the Live Ops space. The early pioneers Playfab and Gamesparks also have excellent offerings and have been acquired by Microsoft and Amazon respectively further validating the case for using off the shelf solutions. In a future blog post I’ll be taking a look at how ChilliConnect stacks up against these competitors and highlighting which solution works best for a variety of developer and publisher profiles.
Based on our experience with both the mobile game studio and directly with ChilliConnect’s customers we have estimated that generally developers should expect to budget between 2-5% of their monthly net revenue on their Live Ops tools. It’s our belief that is a very small price to pay for the value it provides!
Thanks for reading and do get in touch if you’d like more information on this subject, or to find out more of what ChilliConnect offers.
Preparing for Soft Launch blog – overview of API call optimisation
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