Rafa Bernabé, monetization expert: “If we wanted to eliminate loot boxes for good, we’d have to ban chance”

September 17, 2018

At twenty-something years old, Rafa Bernabé had a good job in a big multinational company. However, what may have been a dream for many was for him merely something monotonous and repetitive that had nothing to do with what he’d dreamt of since he was a child. “I’ve always been an enterprising and creative person. I got to a point where I said either I spend my whole life here or I throw myself into fulfilling my dream, and I opted for the second”, he tells us.  

Having completed a Master’s in videogame design and creation in Barcelona, he began working for Pyro. After several years he made the jump to Digital Legends, just when the first iPhone came out, although it didn’t take him long to convince a colleague to leave and found their own company, Pocket Puppet.

Since then he’s created games like Mugs & Bugs, a casual game in which you have to collect the necessary ingredients to make a coffee whilst dodging bugs, and Undead Planet, an RPG for mobiles set in a post-apocalyptic world, at the same time helping dozens of studios to improve the monetization of their free-to-play games. 

We couldn’t miss the opportunity to ask this real expert in the industry a few questions. 

F2P Campus (F): In your opinion, why choose free-to-play as a business model?

Rafa Bernabé (R): I don’t really subscribe to seeing business models like a war. I think that all business models are suited to different platforms, genres of game, and audiences. When choosing a business model you have to know what platform you’re going to release it on, what your target audience will be, and then you can see which one best suits your project. 

In the mobile case, what fits best is F2P, as much for the type of user as for the platform. But, for instance, if I were to set up a company making games for console or for Steam I would probably opt for another type of business model. 

Interview with Rafa BernabéF: What’s the most common problem you encounter in your monetization consultations?

R: The most frequent problem I tend to come across is that most people aren’t aware that 90% of income comes from a very, very small number of users. If you don’t allow this small number of users to spend a lot of money you’re not going to be profitable, because the F2P model relies very heavily on this type of user. 

If in your game, for example, the most powerful weapon you can get costs €100 and there’s nothing more powerful than that weapon, that means that at best you’ll have a fraction of users who will pay €100, but you won’t have users who pay more than that because they already have the best object in the game. In this way you’re greatly reducing the potential revenue that your game can generate. 

This concept, which when put like this seems simple, is something that many developers find difficult to understand when they’ve never made a free-to-play game. It’s a very common mistake, I made it too, and I think I’ve yet to advise a company that hasn’t made this mistake in their first game. 

F: How do you convince someone to pay for something they can get for free, or that they don’t even know if they need?

R: It all comes down to monitoring supply and demand. In other words, normally the scarcer or more difficult to get something is, the more value is attributed to it. It’s a basic law of economics and it applies to games too. 

The harder it is to overcome a challenge the more people want to do it. Time will tell how many people can, but people want to. So, when monetizing, since you know that that demand is there you can use it to your advantage. Maybe there are people who can’t do it because they lack skills, they lack experience…and you sell them everything that they lack. An object that makes you stronger, one that gives you the experience you need… I sell you all those needs that I know you have. 

F: In your talk you spoke about not putting limits on what players can spend. Don’t you think that there could be an ethical and moral problem in letting someone spend €10,000 on a game?

R: That’s one of the main reasons that most studios make the mistake of limiting the money a player can spend on their games. If you look at it from the perspective of making someone who earns €1,000 a month make that purchase, then maybe you have an ethical problem; but that’s not usually the case.

Normally, most users who spend these amounts of money do so because they earn a great deal more. In my experience, users who spend €10,000 on a game do it because they earn €1 million a year. So, for them, that €10,000 is like €100 for a normal person. That’s roughly the ratio. 

Then there are people who maybe don’t have that purchasing power but they really like the game. For example, there are people who earn maybe €1,500-2,000 a month and spend €600 on clothes or going out at the weekend, because they really like doing it; and I’m not saying that’s good or bad, just that they enjoy doing it. Just like there are those kinds of people, there are also people who don’t like buying clothes or going out but do like videogames, so they spend that €600 there. 

F: I ask because in the last few months several countries and the EU itself have been considering starting to regulate in-app purchasing like loot boxes, because they see it as a kind of gambling and it can lead to gambling addiction.

R: It’s a very good question and it’s a subject that I’ve thought about a lot. It’s a very complex debate. I’m a supporter in general of legislating things that are dangerous, but if you set about legislating chance in games, where do you draw the line? Parcheesi and la oca [a Spanish boardgame similar to Snakes and Ladders] are games of chance, for example.  

Another thing is that people talk about legislating against loot boxes, but in videogames there are millions of mechanics that are as random as, or more so than, a loot box and nobody talks about them. There are games like Diablo where every time you kill an enemy they release an object based on a probability that the developers establish. The probability that this action will get you a good object is the same as or lower than you usually get with a loot box but, even so, nobody complains about that. 

Interview with Rafa BernabéF: Maybe the difference is that in one case you’re paying with money, which can lead to compulsive gambling, and in the other you’re paying with your time which might lead you to becoming a gaming addict. 

R: Sure, but if you analyze it at the level of how human psychology works, the process that players are going through is the same. One is killing wolves until they get the object they want, and the other is opening boxes. But the psychology is the same. Starting to legislate there is very complicated; it will probably need, above all, to be done bearing in mind that all kinds of people play videogames. 

Until now the most we’ve had are the PEGI guidelines, but that’s all they are: guidelines. If my game says that it’s for over-18s and a parent buys it for their 10-year-old child, is that right or wrong? Where do you draw the line? It’s a very complex subject but one that we need to debate at a governmental level and as an industry. 

If it comes to be regulated I won’t see it as a bad thing, but I think there’s a very fine line because videogame design is very flexible. You can ban loot boxes specifically, but developers can disguise them as random rewards for killing an enemy and then sell you weapons that break to do it with. If you wanted to eliminate these practices completely you’d have to ban chance, and that I don’t agree with because it’s a basic thing in all games.   

F: There are ‘traditional’ games like FIFA which, despite being pay-upfront games, have elements of F2P monetization like FUT that generate a lot of income. Do you think that sooner or later this type of game will move to the F2P model?

R: It’s a topic that I often talk about with my partner. Obviously we can’t do it because we’re a very small company, but if you had a company with 100 employees and a powerful development workforce, I would do an Uncharted, a FIFA, a God of War or a Gran Turismo as a game-as-a-service.

Instead of releasing a new title every year or two and selling it for €60, you have your God of War, for example, and I keep releasing content that you can pay for or not, play or not, and you enjoy it however you want. Using the free-to-play model or subscription, whichever fits best. 

I think that’s the way of the future, but I can see a problem with it: traditional companies use game launches as a way of rebranding to gain visibility. And it’s complicated shifting that to a simple update. 

There are games like Heartstone where, every time they release new content, the retention and monetization go up; but that’s not the norm. The usual thing is that, once it reaches critical mass, the volume of players decreases over time. In a traditional game, selling for €60 doesn’t happen so much. 

F: What advice would you give someone starting out in the industry?

R: My recommendation would be to make the game that they want to make, and focus on publishing it to get data and the maximum knowledge that they can from the experience. Measure all the key data of the game like retention, monetization… Look at players’ comments and feedback and learn as much as possible.  

And also, that they do it as fast as they can: between six months and a year. I know a lot of people who start making games and never end up finishing or publishing them. 

Many thanks to Rafa Bernabé for coming to Vitoria-Gasteiz to answer our questions and advise the F2P Campus teams.

Until next time!