The Problem
A producer of casual computer games historically made the bulk of their revenue through ads, but wanted to diversify their revenue by bringing in a greater portion from game subscriptions.
Before launching a premium game subscription, they needed to first understand what perks players would most want from the subscription bundle. Additionally, our client needed to understand demand levels and price sensitivity for different pricing models.
The Approach
We developed a survey-based study fielded among our client’s existing players to effectively measure perk preference and pricing. The study includes several key dimensions:
– A MaxDiff prioritization method to measure the preference and relative utility of fifteen unique subscription perks.
– A price sensitivity testing approach (e.g., Gabor Granger) to understand product demand and elasticity. Further, we split the sample in two to measure these dynamics for monthly versus annual subscription options.
– A series of demographics and player-behavior questions to facilitate data segmentation by desired player groups.
The Results
Most-Desired Subscription Perks
We identified four subscription perks with high positive utility for all respondents and segments, providing our client with a clear roadmap for development and subscription promotion.
Opportunities To Target Unique Segments
By segmenting the data and looking at findings across unique groups, we identified secondary perks with particular interest among Millennial / Gen Z players as well as players who skewed toward heavy subscription service usage. This provided our client with additional opportunities for targeted messaging and perk merchandising.
Ideal Pricing Model & Price Points
By splitting our sample to measure demand and price elasticity for monthly versus subscription pricing, we uncovered a significant demand improvement when players were shown annual pricing.
Additionally our analysis identified the revenue maximization point, allowing our client to find the price point that maximized revenue potential by balancing price and demand.
Did You Know...
It is okay to choose a price point that results in demand drop off. Because higher price points help build more revenue per customer, these gains may off set the losses that come from decreased demand. By measuring revenue optimization points, organizations can find this sweet spot to earn the most from their products.
