The impact of user interactions on freemium game performance

Abstract

Company A’s Project R is a freemium-model game business wherein the company makes money by (a) obtaining a large number of users who play its game essentially for free and (b) converting a small number of them into paying users. In Project R, paying ability boosting items were added to increase profits. Doing this initially increased monthly sales by 20%; however, after two months, the playing time of existing non-paying users declined, and more new non-paying users abandoned the game as well. It seems that the addition of paying ability boosting items could shorten a game’s life span by destroying the balance between (a) and (b) and causing a long-term decline in revenue. This paper runs a simulation to verify this.

Keywords

• freemium business model
• user interactions
• product performance
• simulation analysis