Selling someone a product that you have already given them for free is not easy. In the mobile space (the primary focus of this paper) conversion rates are typically < 2%. Thus we are failing to monetize 98% of our actively participating customers. Unlike many of my other papers, this one is not about how to improve our industry, ethics, or conversion rates. The objective of this paper is to explain the mechanics of threat generation, the most commonly used technique in the mobile space for generating conversion. This paper sets the foundation for game-specific discussions (in my next paper) on how these techniques can create negative feedback loops in your game that inhibit revenue generation.

Threat generation is the act of generating anxiety in a consumer while also offering to “protect” them from the anxiety you just created, for a fee. Early iterations, like fun pain, have been around for several years. Current techniques, which I will detail here, have become much more complex and sophisticated in how they generate threat.

Threat Deflection

The biggest problem with threat generation is that if a player feels sufficient anxiety they may just stop using your product. The key here is to maintain the anxiety but obfuscate the source of that threat so that the developer or platform provider will not be blamed for their actions.

Premium Currencies

The European Union has implemented regulatory guidelines requiring the publication of the most common types of in app purchases (IAPs) in games likely to be played by children. Seeing exactly what might be sold in-game might generate threat that cannot be deflected to a source other than the developer or platform provider. So the very first line of deflection will be to require all IAPs be made with a premium game currency. This not only makes the consumer less conscious of the cost of in game purchases, but also allows the platform provider to hide all IAPs. Instead only the purchase costs of premium currencies will be made public.

Let me use an analogy here. Let's pretend a government outlawed the commercial sale of kitten or puppy petting to children without full disclosure of these activities, so that parents could protect their children. We know children are helpless before the seductive power of these baby critters and would quickly lose all their money. So the “petting industry” reacts by requiring all petting activities to be paid for in “tokens”. So when adults ask what is being sold in these “petting parlors” the proprietors answer smugly “we sell tokens!”

Problem solved, threat deflected. When you go to the Apple App store, there are no IAP's disclosed there. Only premium currency sales (“tokens”) are disclosed. In my opinion, this is an attempt to skirt the law, using language that may confuse regulators as well as consumers.

Threat Deflection in Multiplayer Games

Threat deflection in multi-player competitive games is fairly straight forward, using a technique called Threat by Proxy. Cooperative multi-player games, despite intense consumer demand for them, largely don't exist in the F2P mobile space. Presumably this is because industry does not know how to monetize them.

Threat by proxy involves encouraging your players to attack each other, while you stay “neutral” and offer protection from these malicious actions. Imagine you are thrown into the Roman Coliseum along with some hungry lions. You can blame the lions for your fate, but it is your Roman masters that have engineered your demise and who are to blame, not the lions. The lions are trying to survive this situation just like you are. But in a game using threat by proxy, the game language and mechanisms will be carefully crafted to keep your attention on your fellow players and what they might do to you next.

The most popular mobile games that use threat by proxy are in the Tower Defense (TD) genre. These games have you build up a base that generates resources for you over time. You can then use these resources to improve your base, which is a slow process. Other players can raid your base, and steal those resources. This is very effective at generating anxiety because it uses the technique of reward removal. Removing a reward that has already been acquired is much more painful to the player than if they didn't get the reward at all.

Resources generated can be spent to improve defenses to repel the actions of other players. Allowing players a free way to avoid threat would be disastrous so as players raise their defenses the program is designed to send more advanced opponents after them. Thus any feelings of improved security caused by building defenses are illusory. The only reliable ways of defending against reward removal will cost real money.

Typical purchases are “instant builds”. In TD games, any building you attempt to improve will go off-line while it is upgrading (which can take days). Presumably you need that building to help you defend yourself, or to help build something that will defend you. So even attempting to defend yourself increases the threat against you further. Instant building reduces this threat.

The sale of game resources is also fairly typical in TD games. It may be stressful to have your resources stolen, but if you can just have as much as you want by buying them, you are now immune to threat. Some games are combining instant building with resource sales to just sell instant building upgrades. No resources required. This streamlines the monetization process by removing one step. It also removes one purchase decision, giving the consumer less opportunity to consider the costs of their actions.

Total protection in the form of a “shield” can also be purchased, but typically only a limited amout of this is permitted, to allow threat to be reestablished. Some leading developers are experimenting with “no shield” games where there is always 24/7 threat against the player. If threat leads to purchases, why ever let it diminish?

The other popular genre of multiplayer mobile games using threat generation is the “Trading Card Game” (TCG) genre. TCG's allow you to play a match against another player as a test of “skill”. These games are a lot of fun as long as they remain a test of skill. Threat is generated by the knowledge that the other player could have purchased or otherwise acquired overpowered cards that will make skill of little importance in the match. Ideally the source of the threat will be deflected to the other players in the game so that they blame each other for the threat you have designed.

The developer then sells the threatened player the same cards that are threatening them, as a source of durable protection. Since the best cards do make the player all but invulnerable to players that have not spent similarly, this can lead to essentially a threat-less situation. Because of this the prices are extraordinarily high in the TCG genre. The only way to keep selling to a player that has bought all the cards you sell, is of course to make new cards that are so powerful that they again threaten players using the old cards.

Another way to generate revenue is to sell “fair” matches where both sides get a random deck and have to win with that. This is a genuine game of skill, but these sorts of matches are charged for. So the player can pay for protection from threat on a per-game basis like this, or pay for longer duration protection in bulk by buying top end durable cards.

Threat Deflection in Single Player Games

In single player games threat by proxy is not an option. So how to distract a player so that they don't realize they are being threatened? The goal here is to make the game appear so friendly, wholesome, and harmless that the brain kind of tricks itself into not realizing it is being threatened. I will call this the Comic Sans technique.

So when designing a single player F2P game with threat generation, using the Comic Sans technique involves making the game very cartoonish. Having characters with enlarged heads to make them look childlike is definitely advised. Because kittens, puppies, and babies can't possibly be threatening. It may help to use Comic Sans in multiplayer games also, expecially if you are aiming for a younger demographic, but it is most critical in single player F2P games.

The “match 3” genre is the most popular single player game available in the mobile space. Here the customer will face increasingly difficult maps that (later in the game) usually end up in a “loss”. But the program will not just let you lose. It will always attempt to generate threat first by saying it will give you some help if you pay immediately. This is akin to stopping the executioner's ax just above your neck and asking if you would like to pay for another chance. They even use language like “you have run out of lives” or “you are about to lose a life”.

The “running game” genre demands special attention here. Business intelligence is used to determine who plays a game, how, when, how much, and what they spend on. 60% of the players in these games are female. Many are children. This is a vulnerable time for this consumer group, where they are struggling to understand society's expectations of adolescent and adult gender behavior.

So when a developer makes only male gendered avatars available for free, they are forcing most of their consumers to “off-gender”. Off-gendering can create threat with vulnerable consumers that are not cis male. Offering to make female or gender neutral avatars available, but only for a price, is a way of using threat generation to induce spending. A Washington Post article gives more detail on this subject.

Consumer Reaction

It is understandable that consumers might become uncomfortable with software that is designed to make them uncomfortable. While some of them are adapting to frequent or even constant threat in ways that we have yet to study (outside of abusive or war time environments), others are calling for games that are not free to play.

To adapt to anti-F2P consumer sentiment, Apple has introduced the “Pay Once & Play ” section in the app store. Which is hard to find. With over 500,000 “games” being produced for mobile devices every year, it says a lot that Apple could not come up with even 100 products to put in this section. It also says a lot that the author cannot identify a single “featured” F2P game in the Apple App store today (with the possible exception of “remove ads for $0.99”, a possible COPPA violation) that does not rely on threat generation.

There seems to be no reaction to the proliferation of threat generating games by the industry other than to make more of them and to try to find even more creative ways to generate and deflect threat in F2P products.