Growth October 22

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The K-Factor, “Growth” and Going Viral

Although relatively young in comparison to other business models in gaming, the Free To Play marketplace is already fiercely competitive. Many games, apps and services fight for your time and want to be the next big thing in not only your life, but those that you know too. As such when designing a F2P game or app, we often talk about “Growth” and the ability to go viral. There are spectacular success stories like Facebook and Twitter that have insane amounts of users and that have managed to grow from very few users to becoming ubiquitous every-day services that millions (billions in the case of Facebook) use every day.

In this post, I’m going to look at the basic principles involved with Growth and going viral, how to measure it and how best to apply it in games.

The K-Factor Calculation

Calculation

In the world of F2P games (and online web services), viral growth is measured using the “K-Factor co-efficient.”

As an example, let’s imagine I release a game and want to acquire new players through viral growth. Through in-game functions and features, it’s possible to add friends and send requests to players who have not yet played the game. By adding these features, if my game is well designed, the goal is that some players (we’ll refer to this set of players as Set A players) will like the game enough to use these features and will send invites to several of their real-life friends. Some of these people will try the game for themselves (Set B) and if they too like the game, will also start inviting their friends to join, some of which will be people that were not part of Set A. This cycle can potentially go on ad-infinitum, bringing lots of new players into the game.

Looking at the equation, we apply it as an average amongst all players playing the game. We measure the average number of invites each player will send and multiply it by the conversion rate IE the number of new players that decided to play the game as a result of receiving the invite.

Let’s work through this calculation using example values:

Variable Name Description Example Value
PlayerSetA Initial set of Customers 10
i No of invites sent out be each new customer 10
c The percentage of invites that convert into customers 20%

 

Applying this to the K-Factor calculation, we get 10 * 0.2 = 2.

As we go through the first cycle of viral “growth”, our initial 10 customers will each send out 10 invitations, and successfully convert 20% of those (i.e. 2 new customers each). So the total customers after the first cycle will be equal to the starting 10, plus the new 20, which equals 30.

ViralCycle_a

If you follow this example case through, we can see that after 10 Viral Cycles (more on that in a minute), we have gone from 10 players to 20,470 players! All without spending any money on marketing to attract these new players. This cycle would be self-perpetuating meaning that my game would grow at a phenomenal rate attracting millions of new players over time. In terms of talking about going Viral, this would be viral growth in action!

Now let’s adjust the values and change the conversion rate to a more reasonable 5%, which changes the K-Factor from 2 to 0.5:

ViralCycle_b

Working through cycles this time, we see that after 5 cycles, the number of players stops growing. This means that to achieve true “growth,” a K-Factor of greater than 1 is the target. Even a K-Factor of 1.01 is a good K-Factor as it means that a game will keep spreading, even if it takes a long time to so.

Technically speaking there is no reason why a paid game / app can’t also go viral. But because each time a new player wants to come in they have to pay to do so, the K-Factor is generally destroyed. This is why Free-To-Play as a business model has some massive advantages over traditional pay-first models.

Viral Cycle Time

So a game with a good K-Factor (Candy Crush Saga by King is an obvious example) has the ability to acquire many new players over the course of time. But how long does it take to ramp players? That is measured as the Viral Cycle Time. The best way to understand this measurement is to understand how a new player gets to the situation of inviting / sending requests to new players in the first place:

ViralCycle

This is the general flow for a game in which it’s possible to send and receive invites. The thing we must consider is how long this takes a player to do and how long is it repeatable for. For example, most games first job is to make you like it and want you to play. Spamming the player with many pop-ups and requests very quickly is a bad way to do this! Instead you want to gently ease in a player and make them play a game because it genuinely is fun first. Then at a later point you’ll want to ask them if they want to spread the word. This could take 1 day, a couple of days, or even a week depending on the way a game is setup.

Candy Crush Saga uses it’s lives system to send requests. A player can do so everytime they run out of lives, but notice that players won’t always run out of lives. Usually they will play for a bit and only when they get stuck ask for more. Also note that even though it’s possible to keep requesting from other people, after a while players stop doing it as they don’t want to annoy and upset their friends!

Growth or Spam? Case Study: Farmville by Zynga

I don’t think it’s unfair to say that Farmville by Zynga changed the western gaming world forever. It’s explosion of growth to 70M DAU in no time at all was insane and was the reason why the company became the darling of Silicon Valley for a short-time. Playing, analysing and understanding this game is something I recommend every person in Social / F2P gaming to do because although many people hate the game, it literally is a text book masterclass for how to create a successful viral product.

Spamming Feeds

Farmville_Feed_Spam

The painful memories of Farmville and Facebook…

Rewind the clock by 5 or so years and you may remember logging into Facebook and seeing something very familiar to the above. Millions of people around the world had their feeds inundated with posts from Farmville and other Facebook games, whether they played it or not. At the time, Facebook did not really restrict the ability of apps to post to the Facebook Open Graph in any way, shape or form. This meant that every action in a game could send a story to a player’s timeline and as a result, it would appear on all of their friend’s feeds. Although incredibly annoying the sheer volume of stories posted mean that the overall conversion rate made the Farmville K-Factor much higher than 1 for a while, creating explosive growth, and resulting in many people around the world Googling these terms:

HideFarmville

Send and Receive Invites and Gifts

send-gifts

As part of the core loop, Farmville allowed you to send gifts to friends. When a potentially new player logged into Facebook and saw that a friend had sent them a “Gift” they were curious to find exactly what it was they were sent. After all we all love presents!Inevitably this meant that new players downloaded and played the game and got hooked. Ingenious.

But this wasn’t the only trick Farmville pulled off well. In it’s core loop, players were actively encouraged to send gifts to each other and could ask frends for help when they ran out of certain resources. I’ll explain why these two things are so powerful in terms of growth in just a minute, but the end result was that players were achieving two highly important things for Zynga:

farmville-ask-friends

A classic example of player re-engagement through a session stop / lack of resources. Here I have tried to feed my Puppy but do not have any more food left. I can either pay to get more (real money needed) or ask friends to send me some.Unsurprisingly, not wanting to spend real money I am more than likely to ask my friends meaning that all of my real life buddies are about to receive a sizeable helping of requests.

Player Acquisition: Through feed spamming and gifts, new players were joining the game every day to see what the fuss was about, saving Zynga marketing dollars and fueling crazy growth.

Player Re-Engagement: By making a core loop that allowed players to continue playing by either paying or asking friends for help, it meant that Zynga either made a ton of money or made their own players re-engage other players, making everyone who was already playing Farmville play even more. And as so many people kept playing Farmville, it meant that through the aforementioned techniques more and more people were joining the game too.

Facebook Responds

I don’t think anyone in the world foresaw the explosion of gaming on Facebook in quite the way it happened. For a long period, it was in fact the companies primary source of revenue and it resulted in Facebook and Zynga being best buddies. However, Facebook (correctly) identified the way games like Farmville exploited their platform as a reason why Facebook itself was slowing down it’s own growth. As a result they instigated many changes, the primary one being a filter on news feeds meaning that even if a game spammed a crazy amount of user stories, only a few would actually show up friend’s feeds.

Interestingly, Facebook is seeing a case of history repeating itself with the success of many newer games such as Candy Crush. These games offer the ability for players to send requests to ALL of their friends with a select-all button. If a user has 1000 friends, this means an absolute shit-ton of invites being sent around and a lot of potential spam to deal with. As a result, as of January 2014, they will not allow apps to use their services that include a “Select All” button.

Is Spam a Good Thing?

Farmville2_Invite

What Farmville effectively proved to the world is that Spam = Growth, or at least a form thereof. The question to ask is if this is actually a good thing to do? After all after a while it leads to pissing off a massive amount of people and can result in players stopping playing a game after feeling guilty!

At the moment, firing off many requests is definitely a great way to attract new players and re-engage existing ones. As the F2P market becomes more mature, I think this method will begin to wane in it’s effectiveness, and good old-fashioned word-of-mouth and games of high quality will be the ones that spread the fastest. However, as this industry is so fledgling, I don’t expect to see the true ramifications of this for many years yet.

Farmvilleprivacy

Be wary of upsetting the players that play your game. It’s important to keep them happy because as quickly as a game can grow, it’s also possible to fall from grace at an astonishing pace too when players are fed up.

Psychology 101 – Social Behaviors in a Nutshell

Taking into account all of the above, it’s worth stopping and asking the question – why do requests, sending gifts and other viral game techniques work? What is it that humanly posses people to look at a request and act upon it? It’s far beyond the scope of a blog post to cover this in the level of detail that is in my opinion important to digest. For this reason, I strongly reccomend a book called Influence: The Psychology of Persuasion by Robert Cialdini. Although a long read, it has some fascinating insights into how marketers use subtle techniques to make us comply with or feel obligated to buy certain products. For those that don’t have time, however, here are some examples of techniques used in games and my explanation of why I think they work so well.

Obligation (Reciprocation)

Do you send Christmas cards to other people? Even to people you don’t really know or even care about? If the answer is yes, then I suspect you will be able to understand the power of obligation all too well. If someone sends you a Christmas card, even someone that you don’t see often or know too well, you have a moral dilemma. You can not acknowledge the card and not send one back (potentially coming across as a jerk as a consequence), or you can do the “right thing” and return a card to them, just to make sure that no one’s feelings are hurt. This same principle is used when sending gifts of gift-like requests to other people. If you log into Facebook and see that “Natalie has sent you a gift in Farmville” for you to then not send a present back makes you… well a jerk. As a result millions of people around the world send back requests even if they have no intention on playing a game, and thus become trapped. In fact I personally often login to Candy Crush and send invites back to people even though I no longer play the game, which brings me to my next Social Behavior.

Altruism

Altruism is the act of giving away excess to those who need it for the greater good. I highly respect super wealthy individuals like Bill Gates and Warren Buffet who have pledged to give back the large majority of their fortunes to help the world out, it’s truly inspirational. As crazy as it sounds, every day in social games real people are also Altruistic and help others out. For example, when I started to play Candy Crush Saga, I spammed every one of my friend’s to gain access to key gates and more lives, and those friends graciously returned the favour. Now I am done with the game, I’ve had my fun and have moved onto other experiences, but yet I still feel the need to give. Why? Well because when I see newer players starting out and wanting a ticket I decide to reciprocate the favours that my friends showed to me when I first started. After all I’m not the type of person to take advantage of others and not return the favour myself. Or at least I hope so!

Achievement / Competition (Hedonism)

A very powerful social interaction in F2P games is that of boasting of achievements, especially in comparison to other players. For example when you beat another player’s score, you want to send that matter of fact to that other player and rub it in. The best example of this is with the way millions of people around the world follow their favourite sports teams. I live in London and after the recent Arsenal victory over local rivals Spurs, there would be an influx of posts on Facebook reminding every Spurs fan of what had just happened. Whether we are successful or just something that we identify with, we all love to share it in as public a way possible. In fact this principle is one of the core reasons why Guild vs Guild games work so well. Not only do we have the chance of being successful ourselves, but even if we don’t do much but the Guild or Faction does, we can still claim the personal glory for ourselves.

THE-6-BEHAVIOURAL-DRIVERS-OF-SOCIAL-MEDIA-e1363344367858

I’ve covered just a few of these 6 drivers, but it’s worth checking out each for yourself and trying to think about how they can (and do) apply to Social games.

There are many, many more behavioral drivers for social media and it’s something that I personally find fascinating and at times – somewhat scary. I recommend reading books and blogs on the subject as I think we are only beginning to tap into the power of Social Media.

Is the K-Factor Useful?

Before signing off an extremely long post, I wanted to leave you with one last question / thought. Is the K-Factor even of use when trying to achieve growth both in games and online products? You see as you have probably seen throughout this post, most of the ways in which K-Factor is measures is via “spam.” Things like Facebook requests / email invites / SMS messages / etc.  But aren’t there other ways to achieve growth?

This is a fascinating talk from Chamath Palihaptiya, who was a Product Manager at Facebook. He often refers to the redundancy in the K-Factor and how rather than focusing on it, instead at Facebook the company mantra was to get every new user to 7 friends within a 10 days of joining up. They did this by making it accessible, by making versions of Facebook slightly different around the world by employing smart local people and focused on all product development on a path to get new people to come in and to make the product great so that people would stick. I think it’s fair to say that Facebook achieved their goals in doing this.

So the morale of the story is this. Thinking about the ways that human behavior drives the way that we are social with each other is of paramount importance. But don’t look for cheap tricks and techniques to provide a quick-fix that will make your game grow at a phenomenal rate. Focus on building a high-quality game that is fun but that also has ways that players can be social with each other in it. If you can combine the three, then you have a great chance of achieving growth organically and have players spread your game for you.