New venture development through
customization in the mobile gaming industry
Master Thesis
Master of Science in Entrepreneurship
Amsterdam, August 11
th, 2016
Supervisor: Mirjam Leloux
Student: Raphael Santana Seabra Costa
UVA ID: 11088230
Table of Contents
Abstract...1
Chapter 1 - Introduction
...2
1.1 Background ...2
1.2 Problem Description ...3
1.3 The Research Questions & Hypothesis...7
1.4 Methodology...8
1.4.1 Case Study Design... 8
1.4.2 Case Study Protocol...10
Chapter 2 – The Fieldwork (Capita Selecta)
... 13
2.1 About TFJoy ... 13
2.2 The Survey ... 15
2.2.1 Gamers’ profile and gameplay behavior...15
2.2.2 Impacts of customization over the gaming experience...17
Chapter 3 – Data Analysis
... 19
3.1 General Figures ... 19
3.2 Strong World D. ... 22
3.3 Mighty Warriors... 31
3.4 The Lost Tower... 38
3.5 Haypi Monster ... 44
Chapter 4 - Conclusion... 49
4.1 Findings ... 49 4.2 Limitations... 51 4.3 Implications... 51Bibliography
... 53
Annex... 55
1. Case Study Protocol... 55
2. Figures ... 56
Statement of originality
This document is written by the Student Raphael Santana Seabra Costa who declares to take full responsibility for the contents of this document. I declare that the text and the work presented in this document are original and that no sources other than those mentioned in the text and its references have been used in creating it. The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.
Acknowledgements
First of all I would like to register my gratitude to my family, in special to my mother who always supported my dreams unconditionally, even if they brought me to worlds far away from home. Old and new friends were also a source of joy in times of hardships throughout my student life in The Netherlands.
Second, I would like to gratitude my supervisor, Mirjam Leloux, for supporting my ambitions in doing a research internship for this master thesis. Her support allowed me to approach the fieldwork without reservations, a trust that I strived to translate into quality for this study.
Third, I would like to thank TFJoy for receiving my project and giving me the resources needed to approach the subject. The company understands well the benefits that academic research can bring to the business world.
Finally, I would like to thank Christian Weijers, my partner, for being my safe haven in times of need.
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Abstract
The mobile gaming industry is growing in a fast pace in the past few years, creating several opportunities for new ventures to enter this market. Nonetheless, there is a fierce competition with big companies to acquire players, which demands new ventures to find ways to monetize their games. Product and service customization can generate the loyalty sense in players by improving their perceptions of value and satisfaction, ultimately spurring in them a higher willingness to spend. However, this process is very sensible to inconsistencies in the value delivery process, with players halting the construction of the loyalty sense when disturbances constantly impair their gaming experience. Therefore, the customization of mobile games can be difficult for new ventures to enact since it demands high levels of resources to successfully implement it over time.
Keywords: entrepreneurship, new venture creation, mobile gaming industry, technology,
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Chapter 1 - Introduction
1.1 Background
Usually associated with the launch of the first coin-operated videogame machines in the 1960s, the game industry has grown from a niche market in its early infancy to become today a thriving blockbuster industry (Marchand & Hennig-Thurau, 2013). However, it was not the computer games inventors who forged the gaming market but Nolan Bushnell, an entrepreneur who identified the opportunity of turning this technology into a business. He foresaw the potential of games in the entertainment market so he strived to find investors to fund Atari, creating therefore the first gaming company in the world (Zackariasson & Wilson, 2010). This paved the way for the emergence of several gaming companies like Nintendo, Sega, Sony and Microsoft, which shaped the contours of this billionaire industry.
However, new technological developments are increasingly changing the way people experiment games. While not so long ago it was necessary to purchase a Personal Computer (PC) or a dedicated gaming platform1, nowadays it is also possible to play games on
smartphones and tablets. In other words, while in the past people who considered themselves as gamers were the ones who drove this industry, nowadays mobile device users who have little experience with videogames are also experimenting this form of entertainment, expanding the market size to a whole new level.
This new trend is challenging the foundations of the videogames industry. The traditional value chain was composed of three major players: the hardware manufacturers, responsible for creating the dedicated game platforms; the software developers, in charge of developing the games; and the software publishers, responsible for dealing with marketing and retailing processes. Developing both hardware and software require a vast amount of technological, human capital and financial resources, conferring a rigid oligopolistic nature to this industry. The publishing chain also mirrors this dynamic, with the major hardware developers competing among themselves to secure the support of key publishers who detain strong Intellectual Properties (IP) (Zackariasson & Wilson, 2010).
Nonetheless, the advent of the mobile gaming segment is increasingly confronting this establishment. It is disrupting the hardware segment because mobile games reach more potential customers than dedicated machines; it is disrupting the software development cycle
1 The so-‐called videogame consoles. It is comprised by the home consoles, which are attached to a TV display, and by the handheld devices, which have their own screen display and energy supply, thus considered as portable device.
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because it introduces more accessible Software Development Kits (SDKs) that increase game development financial viability; and it is changing the publishing chain because it allows developers to directly deliver games to customers through online app stores.
Mobile gaming only became a reality with the introduction of new business models that maximized the peculiar characteristics of mobile devices. The Freemium model is one of the most used solutions, which allows players to download for free a functional version where in-game activity is restrained by a quota. After players spend their quota they must either wait for a certain time to get it replenished or perform paid transactions to access more gameplay freedom that improve the gaming experience (Marchand & Hennig-Thurau, 2013).
The Freemium model is monetized when a certain amount of players realize paid transactions, covering those gamers that do not purchase any content and generating the cash flow necessary to sustain the project (Communications MDR, 2014). The average proportion of payers in mobile games is around 5%, which is sufficient to monetize most of Freemium games (App Annie, 2015). Therefore, monetization prospects increase concurrently with the expansion of the player base, which sustains the game’s free components and the possibility to reach new customers, thus generating a virtuous cycle (Leaver & Willson, 2016). Therefore, successful mobile games are those that identify this critical threshold in which content giveaways attract players while constantly building a core group of payers (Marchand & Hennig-Thurau, 2013).
1.2 Problem Description
The emergence of the mobile gaming segment allowed new ventures to enter the gaming industry and develop new game IPs through the Freemium model. However, this process also generated a drawback: the easiness to develop mobile games has generated a flow of poor-quality games that can negatively impact players’ perceptions of poor-quality, dissuading them to invest time and money in mobile gaming (Games Industry International, 2006).
Although there is a great potential for business development, successfully launching a mobile game that pays off all necessary investments can be a daunting task for new ventures. According to a study carried out by MobileDevHQ (2014), 86% of apps purchased by iOS users were positioned within the top 10 entries for a specific keyword. The first entry was downloaded more than eight times than the tenth entry, which indicates that users pay more attention to apps that rank well. This also occurs on the Android system because users are constantly flooded with new games, only experimenting those that are popular in the online app stores. Big mobile gaming companies commonly spend large amounts of advertising budget to push their games to the top positions (Gamesbrief, 2015). For small developers,
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which commonly have limited financial resources, this approach is virtually out of reach (Mobile Dev Memo, 2015).
In light of this, what can a new gaming venture do to capture the attention of players, retain them in the game and build a core group that perform paid transactions? In search for more answers academia has sought to comprehend the mechanisms of game loyalty, the phenomenon where players build strong attachments with a game to the point they keep playing it indefinitely, performing paid transactions throughout their gaming experience.
The sense of loyalty is usually associated with brand recognition, which generates the feeling of commitment to repurchase a product or a service despite competitors’ efforts to induce substitution (Oliver, 1999). A brand that possesses a strong identity nourishes an exchange relationship between the firm with its customers, addressing their needs for distinction and prestige (He, Li, & Harris, 2012). Therefore, loyalty takes place when customers develop emotions and trust towards the brand, a feeling of satisfaction that is not easily emulated by the competition (Ercis, Ünal, Burcu, & Yildirim, 2012). Although brand loyalty has been widely studied in a general perspective, when it comes to mobile commerce and services its empirical validation has yet to be further investigated (Lin & Wang, 2005).
Experience-centric services, including mobile games, are designed with the goal to engage with customers in a personal manner (Zomerdijk & Voss, 2010). The game aesthetics are an important component of the experience, shaping perceptions of usefulness, ease of use, and enjoyment, which impacts the loyalty formation towards a mobile service (Cyr, Ivanov, & Head, 2006). In order to maximize this process, it is crucial to customize customer relationship management practices, delivering superior values that address customers’ individual needs and raise their commitment to continuously repurchase the service (Cheng & K.H. Ching, 2007). However, firms should approach customization in a cost-efficient manner in order to deliver benefits that are perceivable by customers, thus paying off investments (Zeithaml, Berry, & Parasuraman, 1996). Therefore, it is crucial to identify a customer group to which the company can deliver a superior value and spur the loyalty sense. Customization may render ineffective if the company focus on customers who are likely to defect (Reichheld, 1993). In addition, customer involvement prove to be functional if the company performs well, but if it fails to consistently deliver value this closer relationship can actually amplify overall dissatisfaction, which shows that satisfying customers’ needs for differentiation is a sensible matter (Goodman, Mark, Lerch, & Snyder, 1995).
According to (Ching-I, 2010), the motivation to play games is connected with the possibility of creating an avatar2 in a distinguishable manner. This permits players to enhance
the feeling of self-identification, satisfying their desire for immersion into an environment
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that constantly provides pleasant experiences. This satisfaction stimulates the development of a loyalty sense which retains the interest in playing the game indefinitely.
Jen-Her, Shu-Ching and Ho-Huang (2010) refer to the “Uses and Gratification” theory (U&G) to find more insights about the motivations to stick to a game. According to this theory, what retains players is the extent to which their initial expectations are successfully gratified throughout the gaming experience. This gratification can come in several ways like experimenting a game mode, completing a goal or interacting with other players. Those games that consistently gratify players’ expectations can awaken in them the loyalty sense, retaining them in the game for longer periods.
Besides this need-satisfying component, it is also possible to identify a process-experience dimension in the game loyalty formation by referring to the Flow theory. The act of playing can be considered as an experiential state which generates a feeling of fulfillment, prompting players to perpetuate this condition as much as possible (Csikszentmihalyi, 2008). This sentiment, however, is only generated when players receive in-game contents that constantly satisfy their need for entertainment. Therefore, developers must generate this optimal experience point where players reach this maximum level of gratification, increasing their willingness to spend money in order to sustain this experience (Ying-Jiun and Lan-Ying, 2011).
Driven by the motivations to understand better the mechanics of loyalty formation in the gaming industry, Dongseong and Jinwoo (2004) introduced a theoretical model that analyzed customer loyalty by assessing the factors that shape the flow state. According to this model, players keep on playing a specific game because they have developed a high sense of loyalty towards it, which in turn is generated by the configuration of the gaming flow state. This point takes shape in two levels: the personal interaction factors and the social interaction factors. The first level is formed by three factors that generate a meaningful personal experience:
(1) Setting up in-game goals that reward gamers’ efforts, gratifying their gameplay experiences and desires for challenge;
(2) Introducing operators (instruments) that assist players to accomplish in-game goals in an entertaining manner;
(3) Appropriate feedback from the game system when using operators for achieving in-game goals.
The social level also plays an important role in gratifying experiences because it brings a space for social interactions that complement their personal experiences. Social interaction factors can be classified in two categories:
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(1) The place for communication, where players virtually meet other players and coordinate in-game multiplayer actions;
(2) The communication tool, which can be an in-game function that allows players to convey messages to other players or external tools, like Facebook.
Therefore, when both personal and social interactions are maximized they generate an optimal point where players’ gaming experiences are consistently gratified. The perpetuation of this state leads to the configuration of the gaming flow state, the precondition for the generation of the loyalty sense.
Another strategy to generate customer loyalty is the customization of product and service delivery. As elucidated by Coelho & Henseler (2012), customization is the process of addressing heterogeneous customers’ needs in a tailored way, satisfying customer’s desire for quantity, variety and quality. Customization is connected with 3 value perceptions:
(1) Higher quality perception: customization signals the quality of the product/service, highlighting its added value over the competition.
(2) Higher sense of trust: customization reduces uncertainty because it fosters a sense of commitment that cannot be easily salvaged.
(3) Higher customer satisfaction: customized services satisfy the desire for uniqueness that standardized competitors do not offer.
Therefore, when customers have a high perception of quality, trust and satisfaction they start building a sense of loyalty towards the brand. Since mobile games have both product and service components, this model can also be also applied to this case. However, considering that the Freemium model allows players to enjoy the mobile games without having the obligation to pay for it, what are the motivations that drive players to voluntarily cross this border and purchase in-app contents?
Hsiao & Chen (2016) argue that when players have a high level of perceived value about a game their sense of loyalty emerges, ultimately increasing the interest to perform paid transactions. Perceived value refers to the assessment of the game utility, the price necessary to acquire exclusive content that improves the gaming experience. Therefore, the loyalty sense is affected by the way players evaluate the game and to what extent they are willing to purchase in-game contents. The authors identified four dimensions of perceived value:
(1) Emotional value: the playfulness affective state players develop when building their game profiles.
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(2) Quality value: an increased perception of quality comes forth when the game’s performance exceeds initial expectations.
(3) Social value: refers to the enhancement of one’s social connectedness through the multiplayer modes and communication tools.
(4) Value for money: refers to the perception of monetary utility and satisfaction from the paid contents.
Finally, another crucial point that new gaming ventures must take into consideration is the customer behavior related to the mobile device they use to play. While the Android devices generates twice as many apps downloads as what iOS does, when it comes to earnings the iOS devices generates 75% more revenue than Android (App Annie, 2016). Therefore, deciding on which device to develop a game is also a strategy that new venture gaming companies must carefully consider in order to maximize investment returns.
1.3 The Research Questions & Hypothesis
As seen in the literature review, studies on loyalty formation in the gaming industry focused on understanding the factors that generate it and some implications it can bring to the monetization of Freemium games. However, the mechanisms of game loyalty formation are still not well understood in the entrepreneurial context of new mobile gaming ventures. To uncover more insights this study pursued the following research question:
“How does game loyalty spur the business model of new mobile gaming ventures?”
Considering the fact that new mobile gaming firms have limited resources to compete on heavy advertisement campaigns with large mobile companies, it is crucial for them to devise cost-efficient strategies to build a loyal player base that spends in the game. Customization can be a tool to achieve such goal and for this reason the sub-questions of this study are:
1. How does customization enables a new mobile gaming venture to deliver an entertaining gaming experience?
2. How does customization enables a new mobile gaming venture to spur the game loyalty sense?
3. How does customization increases the willingness to spend in the game?
Therefore, this study aims to understand how new mobile game companies can employ product and service customization features to their games as a way to generate the following
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causality in their business model: (1) the optimal gaming experience; (2) a core group of loyal players; (3) a higher willingness to spend (Figure 1). The current hypotheses are:
1. Hypothesis (1): customization allows tailoring the gaming experience to the individual level, thus increasing players’ gratifications.
2. Hypothesis (2): customization allows increasing customer satisfaction in a cost-efficient manner, thus generating the loyalty sense.
3. Hypothesis (3): customization allows transmitting the game’s values to players, thus increasing their willingness to spend.
1.4 Methodology
This study’s empirical verification was based on the case study approach to identify real-life evidences between the gaming flow state, game loyalty formation and increased willingness to spend in the context of a new mobile gaming venture.
According to the United States Government Accountability Office (GAO, 1990), case study is a method used to comprehend a complex phenomenon and analyze the factors that shape it. Case studies aim to imbue the researcher with an analytical generalization power (Yin, 2009), allowing for confirmatory and explanatory findings (Hyde, 2000). Academia has increasingly employed case studies for building theory because they are rich empirical descriptions of a phenomenon that is based on a variety of data sources (Yin, 2009). This process occurs “via recursive cycling among the case data, emerging theory, and later, extant literature” (Eisenhardt & Graebner, 2007). In sum, cases studies are “well-suited for extensive and in-depth descriptions of complex social phenomena” (Baškarada, 2014).
According to Eisenhardt & Graebner (2007), theory building from case studies takes place through a recursive process of data analysis, correlating the extant literature with the emerging theory, and uncovering qualitative evidence that leads to mainstream deductive research. In other words, data collected through case studies allows researchers to empirically test current hypothesis and indentify new developments for the existing theoretical framework, making it a prolific approach for theory building.
1.4.1 Case Study Design
According to (Yin, 2009), the case study design is a ‘blueprint’ which structures the logic that connects research questions with the data collected in the fieldwork. The main objective is to avoid the situation in which the identified evidence does not address the
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questions, thus maintaining the methodological consistency and the relevance of findings. The research design has five main components: (1) The research questions; (2) Research propositions; (3) The unit of analysis; (4) Linkage between propositions and data; (5) Criteria for interpreting data.
The research questions are the cornerstone of the study because they guide the phenomenon observation, data collection, and data analysis by centering the methodology to be operationalized. As elucidated by Yin (2009), there are three ways for empirical verification in case studies: the exploratory, the descriptive, and the explanatory.
The exploratory approach can be considered as an initial fieldwork research that aims on collecting data before the formal theorization and elaboration of research questions. The descriptive case, on the other hand, aims on simply producing a description of the phenomenon, tracing down the correlated events and depicting it as a process rather than actively seeking for answers. Finally, the explanatory approach focus on understanding why and how something happens. It examines the collected data in several levels so as to uncover patterns that elucidate the course of events and identify the causality between variables (Yin, 2009).
The second component of the case study design refers to the proposition making. Propositions are assumptions that direct the researcher’s attention towards an aspect that is connected with the study’s scope, guiding to the right direction. By stating propositions during the design elaboration the researcher can properly operationalize resources for data collection and data analysis, uncovering evidences that improve hypothesis verification and thus uncover relevant findings (Yin, 2009).
The third component refers to the unit of analysis, which can be an individual, an entity or an event. According to Yin (2009), the case study design can be classified in a 2 X 2 matrix based on units and subunits. Single-case studies focus on analyzing one single case topic while multiple-case studies can have two or more cases in a comparative analysis approach. Nonetheless, study cases can also have subunits if they have are relevant for the comprehension of the phenomenon as a whole. Therefore, the four possible combinations are: (a) Single-case holistic design: one analytical unit with no subunits; (b) Single-case embedded design: one analytical unit with one or more subunits; (c) Multiple-case holistic design: several cases with no subunits; (d) Multiple-case embedded design: several cases with one or more subunits.
Regarding the fourth item, propositions can be linked with data through the pattern matching technique. Pattern matching is the process of linking observed patterns with one that has been empirically tested, building a set of causal links that predicts how and why things happen by comparing with the reference theoretical framework (Baškarada, 2014).
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The last point refers to the data interpretation criteria. Yin (2009) clarifies that there is no universal analytical framework to interpret case study findings. A proper operationalization of the case study protocol gives coherence to the design, allowing the researcher to successfully ascertain the hypothesis and reach conclusions.
1.4.2 Case Study Protocol
This study was operationalized under the single-case embedded design. In other words, it analyzed how customization affect the configuration of the gaming flow state, game loyalty formation and an increased willingness to spend in the case of Tap For Joy Limited3, a young
mobile gaming venture based in Rotterdam, The Netherlands. In order to uncover more empirical evidences for this causality the following proposition was raised to guide data collection and data analysis:
“Product and service customization of games can improve players’ experience”
The objective was to identify evidences about the effects of customizing the product and service components of a game. By product it refers to any customization done in the game software, while service refers to any customization done in the way the firm delivers customer service. In addition, it was also relevant to embed the case with an analytical sub-unit covering the role of customer communication management to the generation of an optimal gaming experience:
“The role of customer communication management for an optimal gaming experience”.
This allowed verifying how TFJoy interacted with players in a more personal way, delivering contents that gratified players’ experiences and driving them through three analytical frameworks: the flow state framework introduced by Dongseong and Jinwoo (2004); the perceptions from customization framework introduced by Coelho and Henseler (2012); and the increased perception of value and spending willingness framework introduced by Hsiao and Chen (2016).
The rationale for selecting TFJoy follows what Yin (2009) described as “critical case”. This approach is used for testing existing theoretical frameworks through a case that cannot be completely explained by the current theory. Since TFJoy is a young gaming mobile company that has implemented product and service customization elements to differentiate its
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games, it is a case subject that can bring relevant insights for the verification of game loyalty formation in an entrepreneurial context.
In order to have full access to TFJoy’s business reality, this study was carried out through a research internship program at TFJoy under the Capita Selecta course offered by the University of Amsterdam and VU University Amsterdam’s conjoint MSc Entrepreneurship program. The results from the fieldwork done during the Capita Selecta program are summarized in Chapter 2.
To be able to find evidence about customization as a driver for game loyalty, a qualitative survey was conducted with players to collect perceptions about TFJoy’s customization efforts through the three analytical levels. According to Jansen (2010), while statistical surveys analyze frequencies in members’ characteristics of a certain population, qualitative surveys focus on uncovering the diversity within this population, bringing to light relevant dimensions and values. It is important to evidence this difference because the three models employed in this study were originally operationalized through a statistical approach. As explained by Eisenhardt & Graebner (2007), qualitative data is the most suitable for theory-building, furnishing the researcher with rich data that allows inducting theory from case studies, thus becoming the most appropriated methodology for this research. Therefore, the original models were replicated in this study to uncover rich qualitative data, making adaptations whenever necessary to properly suit the entrepreneurial context of the mobile gaming industry.
Qualitative surveys can be conducted through two basic approaches: the open or the pre-structured approach. The open approach aims to acquire data in a non-predetermined manner, changing according to the needs identified during operationalization. On the other hand, the pre-structured approach establishes main topics that guide the identification the desired data so as to verify which of the predefined characteristics exists empirically in the studied population (Jansen, 2010).
Taking this in consideration, this case study employed the pre-structured approach with a mix of closed-ended and open-ended questions. Concretely speaking, this survey was divided in two parts: an introduction with closed-ended questions and the main part with open-ended questions. While the first part furnished this research with data to ascertain the basic characteristics of gamers’ profiles, it was in the second part where it was possible to capture rich qualitative data to comprehend the gaming experience through the three analytical levels.
For this objective, an online survey was employed to capture a representative sample. Just like interview, online qualitative survey also brings a deep level of data abstraction but it has the benefit of covering larger samples in a more cost-efficient manner. Notwithstanding, it is important to note that the coding process of open-ended questions is more susceptible to subjectivity, which may generate room for bias. In order to avert this problem, researchers
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must treat data collection and data analysis of online surveys with control and transcription (Jones, Murphy, Edwards, & James, 2008). In light of this, this study referred to the case study protocol4 to assure consistency and reliability of data collection and analysis.
Yin (2009) also draws attention to the fact that specifying the time boundary of the research strengthens its design. Taking this into consideration, this study was operationalized throughout the research internship at TFJoy. From April to May it was conducted business responsibilities as a Country Manager of TFJoy, having an on-the-spot interaction with the firm’s customization activities and customer communication management. This allowed improving the survey’s design and drawing analytical patterns for data analysis. Data collection spanned from June 2nd to June 9th while data analysis took place from June 10th till
early August.
For the construct validity this researcher performed several consultations with Jim Bowman, the General Manager of TFJoy, in order to triangulate information and raise coherence and cohesion of the survey’s design. Regarding external validity, Yin (2009) clarifies that assuring it in case studies is a constant challenge due to the difficulty of replicating models in different case settings. However, he also argues that academia should expand its perception of model replication to also pursue a mindset of identifying correlations among studies’ findings and confront their differences, contributing therefore to theory development.
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Chapter 2 – The Fieldwork (Capita Selecta)
2.1 About TFJoy
In 2013, Rui Wang, Shawn Hou and Peter joined forces to enter the mobile gaming market by founding in Rotterdam a new company called TFJoy. Driven by the goal to make it an international endeavor, these three Chinese entrepreneurs established representative offices in Hong Kong and in Beijing to settle partnerships with Chinese mobile game producers and publish their games in western markets.
This configuration mirrored the business opportunity identified by the founders. The Chinese mobile game market is growing in a remarkable pace: in 2015 it generated revenues of US$ 5.5 billion, from which US$ 1.32 billion accounted to exports. This not only allowed big mobile game companies to thrive, but also small and mid-sized firms have captured a chunk of this market and consolidate their businesses (Takahashi, 2016). As a consequence, the Chinese gaming industry is not only growing strong within its own borders, but also becoming an international reference for mobile gaming.
Nonetheless, Chinese games are products very specialized to local consumption standards, demanding several adaptations in order to become acceptable to western preferences. TFJoy identified the potential of selecting Chinese game IPs and making the necessary product and service adaptations to publish them in the West. To build up its portfolio, TFJoy developed two categories of products: the small games and the core games.
Small games are designed with the intent to deliver instantaneous and accessible gaming experience to both experienced and non-experienced players. These games do not have paid contents so they have no impact in the company’s income generation. Hence, their role is essentially for product diversification and branding of TFJoy’s portfolio. There are 9 small games published by TFJoy: Revolution Rush Elite, Limitless Fly, Wizard Run, Finger Tiles Elite, Ridiculous Breakout, Swingers, Arctic Adventure, Draw Path Elite, and Get Sum.
The focus of the company lies in the core games. While they are also designed with the intention to be played in micro-sessions like the small games, their content is higher and denser, offering players mechanisms to customize the character development in several ways. These games offer several game modes that explore single and multiplayer experiences, employing chat systems that allow players to interact with each other. They follow the Freemium model so they are monetized through paid transactions made by some players. There are seven core games published by TFJoy: Strong World D., Mighty Warriors: Rise of
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the East5, Haypi Monster, Haypi Monster: The Lost Tower6, Sea Adventure, Bash Your Lord,
and Throne of Spirits.
In order to successfully monetize the core games, TFJoy identified the need to differentiate them from competitors by focusing on product and service customization. While majority of big mobile gaming companies aim to reach economies of scale through standardized game IPs, TFJoy approached this industry the other way around by designing ways individualize the experience. In other words, while competitors are striving to get the same game running on as many devices as possible, TFJoy opted to explore the idiosyncrasies existing within the gaming industry and capture neglected markets through customization.
In terms of product customization the company translates its games to eight languages: English, Dutch, French, Italian, German, Spanish, Portuguese and Russian. In addition, it also offers continuous product adaptation in the form of seasonal contents. While the core game is similar across markets, the company develops temporary contents that exploit local traditions. For instance, in the Haypi Monster series the Dutch version counts with a seasonal event based on Sinterklaas, while the English version receives the Santa Claus version. The rationale is to build a closer connection with each local market by delivering contents that increase identification and attachment with the game.
Relative to service customization, TFJoy found a solution for integrating its customer support service with Facebook, contrasting with hotline services commonly used by bigger companies. Although hotlines permit problem solving in a more cost-efficient manner, they create more impersonal customer-firm relationships. According to a survey conducted by Startek (2014), 72% of consumers only want to interact with a brand through social media channels. In addition, 82% respondents use Facebook to communicate with a customer service representative. This shows that the point of contact between companies and customers are increasingly shifting to social networks, opening ways to exploit them not only for marketing purposes but also for customer support services.
For this reason, TFJoy embraced Facebook’s potential as the main channel for delivering services related with community management. Players can use their Facebook accounts to send private message to the games’ official accounts in order to have a problem solved, as well as interact with other players on posts published on the wall page. Therefore, Facebook can become an affordable solution for delivering customer support services but also social media marketing content.
Another service customization resource is the expert system. Experts are highly engaged gamers that collaborate with the company in two ways: first, they collect players’ feedbacks
5 In other to assure textual fluidity this game is hereafter mentioned solely by its main title, Mighty Warriors.
6 Haypi Monster: The Lost Tower is the second game in the Haypi Monster series. Hereafter it is mentioned solely by its
subtitle The Lost Tower so as to differentiate from the original Haypi Monster since both games still coexist in TFJoy’s portfolio.
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from the game, helping to identify ways to satisfy specific needs. Second, they play the role of spokesperson, helping to transmit important information from TFJoy to players and raising their connections. As payment experts receive special benefits in the game. Experts can also help in with other functions like debugging7 or content development.
2.2 The Survey
As presented in the case study protocol, this research employed a online survey among TFJoy’s players with the goal to verify how customization impacted their gaming experience and led them through the configuration of the flow state, the game loyalty, and an increased willingness to spend.
The survey was operationalized through an online platform called SurveyGizmo8 and divulgated in three ways: through the games’ official Facebook pages, in-game board messages and expert players. This allowed increasing its visibility and reach, building a wide sample of respondents.
Players received clear instructions regarding the research objectives of the survey, as well as standard anonymity guaranties. They were asked to answer the survey only in English to keep data collection consistency and grant full descriptions and reasoning behind their answers. Players who agreed with these terms and fully completed the survey was rewarded with in-game money to one game of choice.
The collected data was coded through cross tabulation on Microsoft Excel, replicating the same coding criteria originally employed in the three analytical frameworks. Adaptations were made whenever necessary to properly adequate the coding criteria to the dynamics of mobile gaming and new venture creation, always striving to keep consistency in the pattern matching process.
In total it was collected 665 responses, but due to the occurrence of invalid responses the pool of responses were reduced to 496. More details about this deviation and the impacts it brought to this case study can be found in the limitations section in Chapter 4.
2.2.1 Gamers’ profile and gameplay behavior
The first set of questions aimed to depict players’ profile. It was asked the gender, nationality, and age, basic information that allows delineating players’ core characteristics.
7 The process of finding and resolving defects that affects proper operation of software (Source: Wikipedia) 8 For more information, access: http://www.surveygizmo.com/
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According a study conducted by Flurry (2014), the presence of female mobile game players has increased considerably in the last years, spending not only more time and more money than men but also playing the games for longer periods. The genres more popular among women are Management/Simulation, Solitaire, Slots, Casino/Poker, Match3/Bubble Shooter, Bingo, Social Turn-based, Brain/Quiz, and Endless/Runner. On the other hand, Card/Battle, Strategy, Tower Defense, Sports, Shooter and Action/RPG are more popular among men. The genres Arcade, Platformer, Racing and Physics/Puzzle are equally enjoyed by both men and women. This fact builds upon the dismantlement of a stereotypical association of “gamers” with young men, drawing the industry’s attention to female players as a group to be targeted (Harwell, 2014).
Second, by understanding player’s nationality it is possible to uncover which markets TFJoy succeeds in capturing players. Considering the fact that the company offers customer support in eight languages and that nationality permits inferring one’s mother tongue, tracing down this variable permits to uncover what were the markets TFJoy succeeded to connect with gamers. Third, the age variable is also very important because it not only affects gaming preferences but also monetization strategies. For example, teenagers have lower financial capabilities to spend in mobile games when compared with young adults, which in turn have different gaming preferences and willingness to spend than older people.
To uncover gameplay behaviors, this survey covered questions that reconstructed the way players enjoyed TFJoy’s games. First, respondents were asked which of the seven core games they played, having the freedom to select as many games as wanted. Respondents could also register any small game they played whenever it was the case. The objective was to identify whether players connected with just one game or whether they had a broader interest.
In sequence, players were asked what were the devices they used to play. Since TFJoy’s games are optimized for iOS and Android, the possible combinations were: (a) iPhone, (b) iPad, (c) Android Smartphone, and (d) Android Tablet. This question allowed understanding how devices can impact gaming preferences.
The next three questions focused on understanding patterns that reconstructed the gameplay state. On question 6 players were asked how often did they play the game: (a) about six to seven days per week; (b) about four to five days per week; (c) about two to three days per week; (d) once per week; (e) once every two weeks; (f) once per month. The objective was to understand the gameplay periodicity.
Question 7 asked how many times respondents logged in during the day they decided to play. Respondents were asked if they connected: (a) one time per day; (b) two times per day; (3) three times per day; (4) four times per day; (5) five times per day; (6) five or more times per day. This question is crucial in the mobile gaming context because these games are
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developed to be easily playable in short sessions, encouraging players to frequently connect to them. The objective of this question was to comprehend the gameplay frequency.
Question 8 asked the average length of a play session. Respondents were asked if their gaming session was: (a) less than five minutes; (b) about ten minutes; (c) about fifteen minutes; (d) about thirty minutes; (e) more than thirty minutes. Although mobile games are designed to offer flexible gaming sessions, they also offer contents that require more dedication to be explored, depending on the player to choose their play style. The objective of this question aimed to comprehend the gameplay intensity.
Finally, question 9 asked how long players had been playing the game in total. The premise was to verify how long the game managed to retains player’s interest in five time ranges: (a) one week or less; (b) two to four weeks; (c) one to three months; (d) three to six months; (e) more than six months. Games that succeed in retaining players for a long period are usually more successful in building a player base which is more willing to performs paid transactions. The objective of this question was to comprehend the gameplay sustainability.
In this sense, periodicity, frequency, intensity and sustainability together form a nomenclature this study labeled as gaming state. The higher is the configuration of the four elements of the gaming state, the more likely is the gratification players’ gaming experience and their evolution through the three analytical levels, and vice-versa.
2.2.2 Impacts of customization over the gaming experience
The second part was divided in five main sessions: enjoyment, social interaction, customer support, reliance, and paid content.
The first session centered on comprehending the enjoyment factors. On question 10 players were asked the aspects, functions, or modes that they enjoyed the most, while on question 11 they were asked the reason why they thought so. Accordingly, on question 12 players were asked what were the elements they did not enjoy, while on question 13 they also had to explain the reason why. These questions aimed to understand players’ impressions about the game’s contents and how they gratified players’ gaming experiences.
On question 14 players were asked what part of the game they felt it was the most rewarding and on question 15 they were asked how often they experienced this rewarding feeling. These questions aimed to understand what were the aspects that formed the optimal gaming experience.
The second session was dedicated to explore the theme of social interaction. In question 16 respondents were asked about the in-game chat systems and social networks offered by TFJoy, while in question 17 they were asked to explain whether they believed social networks
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could improve their enjoyment with the game. These two questions aimed to understand whether TFJoy succeeded in offering communication tools that granted an entertaining social experience and a solid customer-firm interaction channel.
The third session focused on understanding players’ perceptions about TFJoy’s customer support service. In question 18 respondents were asked what they thought about the company’s customer services and on question 19 they had to explain if they believed it could help to improve their enjoyment with the game. The objective was to extract players’ impressions regarding the service customization level.
Accordingly, question 20 moved to the product customization level by asking players what they thought about the in-game events, while question 21 asked what would be the most enjoyable game event for them. These two sets of questions aimed to comprehend what worked well and what did not work well regarding product customization.
The fourth session addressed the topic of reliance, a way to verify the existence of trust towards the firm. In question 22 respondents were asked if the company could deliver a sustainable gaming experience over time. In connection with this respondents were asked on question 23 if they thought it was trustworthy to invest time and money on TFJoy games. This brought insights for understanding customer satisfaction, trust and value for money.
The fifth session continued on analyzing impressions of monetary value by covering the topic of paid content. In question 24 players were asked if they had done any paid transaction before and estimate how much they had spent when it was the case. The rationale was to identify those players that had acknowledged the monetary value of paid contents. In sequence, players were asked in question 25 if their were satisfied with the received content and if they were still willing to purchase again in the future, explaining the reasons why. This allowed extracting deeper information regarding monetary value, customer satisfaction and trust, understanding better the characteristics of increased willingness to spend.
One additional session was added for respondents to register their game profiles to operationalize the reward transference. In order to prevent players to respond the survey several times in the attempt to receive more rewards, respondents were also asked to fill in their Facebook account name and register their participation in TFJoy’s Facebook page with this same account. This allowed double-checking the identification of respondents and reducing the chances of duplicated entries, thus increasing reliability of data collection. Personal data were only used for the sake of operationalizing reward transference, having no effect over data analysis since all respondents automatically received identification numbers and were treated in an aggregated manner.
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Chapter 3 – Data Analysis
3.1 General Figures
Among the 496 valid respondents collected in this survey, the vast majority of players played Strong World D. In sequence come Mighty Warriors, Haypi Monster, The Lost Tower, and Throne of Spirits. Sea Adventure, Bash Your Lord and Ridiculous Breakout had only 1 player. Respondents were given the freedom to choose more than one game if it was the case, which generated 515 answers in total (Table 2).
The fact that Strong World D. accounted for such a significant share is in line with the fact that it possesses the largest player base in TFJoy’s game portfolio. Mighty Warriors and The Lost Tower may not be as popular as Strong World D. but both possess a considerable player base on their own, fact reflected in this survey. The Lost Tower is the sequence game of Haypi Monster so it confirmed the expectation of collecting more respondents than the first game, although it was interesting to find respondents who still enjoyed playing it. Throne of Spirits and Bash Your Lord have been facing difficulties in getting players, which explains why they had few respondents. Interestingly enough, there was just 1 respondent who played a small game, Ridiculous Breakout. This indicates that core game players either have low interest in small games or they are not aware of their existence due to a lack of advertisement from TFJoy.
In terms of portfolio interconnection there were only 12 players who simultaneously played several games from TFJoy. This represents only 2% of the total respondents of the survey, which indicates a very limited portfolio interconnection. The game that had the widest appeal was Mighty Warriors, with 9 respondents playing it with one or more games. There were 3 players that played Haypi Monster and The Lost Tower, which indicates that these respondents were still attached to their profiles in Haypi Monster while enjoying the new contents provided in The Last Tower. The only 1 response of Sea Adventure and Bash Your Lord belongs to the same respondent, who also played the other 5 core games plus Ridiculous Breakout. He was the only respondent who showed a high level of portfolio integration. All Strong World D. respondents only played this game, fact that can be explained by the decision to separately advertise it, not connecting with the other games.
The gender distribution was remarkably uneven: only 5% percent of respondents were women. In The Lost Tower female players accounted for 10%, while in Mighty Warriors 8% and in Strong World D. only 4%. In the other games there were only male
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respondents. As explained in Chapter 2, the presence of female players in mobile games is getting stronger in the past few years. However, this does not account for all gaming genres: some are predominantly male while others are female (Flurry, 2014). Taking this into account, it is not a coincidence that men play more TFJoy’s core games since these their genres are precisely those more appealing to men.
Regarding the age distribution, respondents mostly belonged to the range of 19 to 24 years old (42%), 25 to 30 years old (34%) and under than 18 years old (12%). This snapshot indicates how predominantly young is TFJoy’s customer base, bringing several consequences to its monetization strategies. While “emerging adults” (those from 18 to 25 years old) are more open for exploring life experiences, they usually do not have sufficient income to fully enact their desires (Arnett, 2000). This demography is very interesting for acquiring new players but more difficult to monetize. In addition, it is interesting to see that the range of 25 to 30 also had a relevant weight: it coincides with the end of studies and beginning of the career life in many countries, suggesting that these players have better financial capabilities to perform paid transactions on mobile games.
In relation to the nationality distribution, the top five nationalities were Italian (34%), German (14%), American (7%), Filipino (6%), and French (4%). Although Italy does not figure in the top 5 European markets (Statista, 2014), it has a relevant weight in TFJoy’s player base. Germany is the second biggest European market and also one of the biggest sources of players for TFJoy. France does not figure in the top 5 but traditionally has a strong gaming culture and presence in TFJoy’s player base. The company has just entered the American market but considering the size of its mobile game market, it is expected to see a surge in the number of American players in the short term. Although the company does not have a specific strategy for the Asian market, it is interesting to see that some Asian countries are accessing its games in considerable numbers, which indicates that these markets are neglected by the major Asian producers (China, Japan, and Korea).
In relation to devices usage, 257 respondents played on an Android Smartphone device (44%), followed by 219 on iPhone (37%), 68 on iPad (12%), 31 on an Android Tablet (5%), and 12 on other devices (2%). Respondents had the freedom to choose more than one device when applicable. The predominance of Android among smartphone users validates the study conducted by App Annie (2016), which states that app download rate on Android is higher than iOS. However, the figures change considerably when seeing the device usage in an aggregated manner: Android smartphone and tablet together accounted for 49%, the very same share of iPhone and iPad. This suggests that for portability purposes Android smartphones capture more players than iPhone, while when it comes to tablet usage players prefer to play on an iPad, likely due to its improved high-definition screen.
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The next point verified in this survey was the 4 gaming states. In relation to the gameplay periodicity, it was found that the vast majority of respondents (95%) had the highest level of periodicity (6 to 7 days per week). This can be explained by the daily tasks offered in the game, where players collect special rewards. This formula is very common in Freemium games because it instills the habit of regularly checking the game so as to collect these daily rewards, therefore binding players in the game for longer periods.
Regarding the gameplay frequency state, there was also a considerable concentration of respondents to one pattern: 55% of respondents had the habit of connecting more than 5 times during the day they played, followed in sequence by 14% who said that played 4 times. Therefore, a good portion of respondents opted to spread their gameplay in multiple sessions instead of logging just one time, most likely to explore in depth all the games modes in different moments during the day.
There is less variation when it comes to gameplay intensity: 28% of respondents answered their average length of play session was more than 30 minutes, followed closely by 27% who reported an average of 15 minutes. In sequence come 22% respondents who played about 30 minutes, 18% who played about 10 minutes, and 5% who played for less than 5 minutes. Seeing this data from a different angle, exactly half of the respondents belonged to a category of high gameplay intensity, playing 30 minutes or more.
Finally, regarding the gameplay sustainability, 40% of respondents said they were playing the game for more than 6 months, 24% we playing between 3 to 6 months, 18% we playing from 1 to 3 months. Just 13% were in the range of 2 to 4 months, and 5% less 1 week or less. Considering the fact that maintaining player’s attention for a long period usually is a difficult task in mobile games, it is interesting to see that nearly half respondents had such high level of sustainability. The time frame of 3 to 6 months is no less important, it is the period where players discover all the possibilities and make the decision to keep on playing the game to become competitive. Therefore, 58% of respondents either were going through the process of binding with the game or already had settled it.
By crossing these four variables it was possible to visualize the overall gaming state of TFJoy’s players. In other words, the higher was the player in each of these four variables, the stronger was the configuration of their gaming state, ultimately impacting the way they built the sense of loyalty towards the game.
Considering the different natures of Strong World D., Mighty Warriors, The Lost Tower, and Haypi Monster, the 4 core games captured in this survey9, the analysis will be done separately per game. The objective was to identify respondents who entered the game flow state (Dongseong and Jinwoo, 2004), who reacted positively to customization efforts
9 Considering the fact that Throne of Spirits had only 2 respondents and both Sea Adventure and Bash Your Lord had only
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(Coelho and Henseler, 2012), and who perceived the game’s value (Hsiao & Chen, 2016), verifying what were the conditions for the development the loyalty sense and an increased willingness to spend in the games.
Since Strong World D. was the game with the highest number of respondents, the coding criteria utilized to analyze the three analytical frameworks in this game became a standard for the other games, permitting a convergent analytical structure.
3.2 Strong World D.
Strong World D. is a RPG game based on “One Piece”, a famous pirate-themed Japanese manga/anime10 series. Players must complete several game modes in order to collect
contents like experiences points, in-game money and items that help to customize their pirate party and achieve more difficult goals.
The main motivation that prompted respondents to play Strong World D. is the fact that the game was based on the One Piece IP, which acted as a legitimization factor because it reproduced respondents’ gratification experiences with the One Piece series. This connection had a deep impact in the way players relate with their game profile in Strong World D., not being present in other games from the company.
Strong World D. Gaming Flow State
In order to verify the occurrence of Dongseong and Jiwoo’s analytical framework, the responses were coded under the following criteria:
(a) In-game goals: actions that prompted players to achieve objectives like promoting characters, completing the gallery of pirates, getting a high position the ranking of Arena (PvP11 mode) or beating the game modes.
(b) Operators: in-game instruments related to character development and game modes completion, gratifying players’ experience when achieving in-game goals and collecting their rewards.
(c) Game system feedback: impressions regarding the game system that generated satisfaction upon enactment.
10 Anime is the acronym for the word “Animation” and it is widely used to represent any kind of animated cartoon made
in Japan. Manga is the name for the Japanese comic book style, also widely appreciated for its peculiar aesthetics and storytelling appeal. It is common for an IP to first be serialized in its manga version and if it meets commercial success later gets its anime version (Wikipedia, 2015).
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As a result, it was identified 197 respondents that demonstrated personal interaction factors in their responses. Accordingly, to code the social interaction factors it was employed the following criteria:
(a) Communication tools: the game’s chat system and the game’s official Facebook page.
(b) Place for communication: the direct and indirect multiplayer modes. The Facebook page was considered whenever it played the role of an external space for social recognition.
As a result, there were 183 respondents that showed the social interaction factors. By crossing both personal and social interaction factors it was possible to identify 92 respondents that demonstrated both factors, therefore entering the optimal experience state described in Dongseong and Jinwoo’s model.
According to this model, when players have their personal and social experiences constantly gratified over time they start to develop the sense of loyalty. Gameplay of 3 to 6 months can be considered as the window in which players enter the game flow state, while gameplay of more than 6 months indicates that players have reached the optimal experience point, paving the way for the development of the loyalty sense. In light of this, it was possible to verify 22 players who entered the game flow state by playing the game between 3 and 6 months and 42 players who entered optimal experience point by playing the game for more than 6 months.
Strong World D. Perceptions From Customization
The perceptions from customization framework introduced by Coelho and Henseler is composed of three variables: the quality perception, trust perception, and customer satisfaction, which were coded in Strong World D. as follow below:
Quality Perception
It was sought to identify how Strong World D. players perceived the quality component of TFJoy’s product and service customizations. The first step was to identify responses in which perceptions of quality regarding customization were mentioned as a source of gratification in the game.
As a result, it was possible to identify 4 major patterns of answers. The first refers to respondents who stated that had positive experiences with TFJoy’s product and service
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customization efforts, manifesting contentment through qualifier and intensifier words like “very good” that conveyed perceptions of quality.
In the second group are those respondents who did not have a clear opinion because they did not have the need to contact the company for customer support or did not follow the special events, mostly because they did not follow their advertisement on Facebook or did not pay attention to their in-game advertisement. As a result, these players were not aware of the added value that TFJoy’s customization efforts could bring to their gameplay experience.
Notwithstanding, the third group refers to some cases in which players had not experienced TFJoy’s service customer but had positive impressions collected from fellow players. These respondents positively perceived TFJoy’s customer service and showed satisfaction in having this resource in case of need. This did not happen with the product customization level nonetheless.
The last pattern refers to respondents who had negative experiences with TFJoy’s customization efforts, reporting dissatisfactions like a slow inquiry response and discontentment with the variety of special events. For these players the quality perception was low because they did not fully gratify these players’ experiences.
As a result, considering the first and third patterns as the source for the quality perception variable, it was identified 108 players that fit in it.
Trust Perception
Strong World D. players were asked if they believed TFJoy could continue delivering an interesting gaming experience for Strong World D. in the future. This question aimed to verify whether respondents believed the company was able to deliver customized content that gratified their needs for entertainment indefinitely.
It was also possible to capture the sense of trust by verifying whether respondents considered trustworthy to spend money in the game. In other words, it was sought to understand if players believed the company could continue to deliver experiences that also gratified their monetary investments in the long-term.
In this sense, it was identified 3 main patterns of responses. The first refers to respondents that showed clear signs of trust. Generally speaking, this feeling of trust took place when players demonstrated satisfaction by experiencing the customer support and the special events, showing satisfaction with the received contents and looking forward to receive more in the future.
The second pattern refers to respondents who showed conditional answers, stating that they trusted the company only if it addressed specific demands that would improve the game. These players showed some evidences of satisfaction but were unsure whether they
