I’m really thinking of going over my Diablo Immortal review and updating it. Playing in the Paragon levels and interacting with the game’s economy more and more has me split on the game. I was mentioning the Daily Rewards (even the paid ones) to a friend and just how “scummy” their cumulative ones are and I realized we never talked about why games have daily rewards on this blog. So let’s fix that. Why do games have daily rewards?
Your Answer Upfront:
Games use Daily Rewards mechanics as a way to boost retention and have more users playing the game in the first 7 or 30 days by essentially bribing them to come back. The more time a user plays a game, the more chances the developer has to monetize the user (via ads or in-app purchases). An average game that makes money with ads has to keep a user in game for 5 to 7 days to make a profit from that user.
In this article we’re going to take a look at Daily Rewards and Daily Bonuses offered by most Free2Play mobile games. I’ll explain what they are, talk about how they influence monetization, explain what retention rates are and explain just how exactly Daily Rewards play on your fear of missing out. By the end of this article you’ll have a pretty good idea why games have daily rewards.
What Are Daily Rewards In Games?
Daily Rewards are an instant gratification and retention mechanism through which a player is offered an incentive (the reward) to return to the game in the following days. The rewards themselves can vary from in-game currency, to in-game items, spells, abilities, characters (or skins) and even grant access to new content.
Daily Rewards are usually set to follow a 7 or 30 day schedule with the highest (most valuable reward) set on Day 7 or Day 30. They are done specifically to incentivize the player to play as the developer intended in order to ensure that the revenue generated per user is more in-line with the projected plan. What do I mean by this?
How Daily Rewards Help Developers Make Money
In the article titled “How Do Free Mobile Games Make Money” I mentioned that retention data, especially Day 1 and Day 7, is an extremely important factor when it comes to supporting a game further. If I spend $10.000 on marketing a game, I want to make $15.000 back in order to turn a profit (I’m not as greedy as other mobile game devs, so take that sum with a grain of salt since I’m trying to keep things simple).
Let’s say my games is perfectly average in terms of how the players interact with it. People play the game for 5 minutes at a time and up to 4 times a day. That means they spend about 20 minutes with my little mobile game.
If I display an ad twice per session that means that players get to see 8 ads. At an average worldwide revenue per advertisement displayed of $0.09 that means I can make up to 8 (ads) * $0.09 = $0.72c/day/user. Now, let’s say it costs me $3, on average, to bring 1 user into the game (user acquisition, I wrote more about it in this article called “How Do Mobile Games Get Popular“). That means, I need to make >$3 from that user in order to make a profit.
At 0.72c/day, playing 4 times per day that user will need to spend at least 4 days in the game for me to break even. If he would spend 7 days in the game I would turn a profit. I wonder if I can do something to make sure he’ll want to come back on day 5, 6 and 7. Maybe something like a big reward to incentivize him to return. Something like a Daily Reward? 🤭
What Is Retention?
Retention is a term that measures what percentage of users returned to your game in a given time period. The time period is split up into days and most developers measure retention for 1, 7 and 30 days with the Day 0 (the day of install) having the retention start at 100%. In Day 1, there’s going to be less users returning to your game than Day 0 and in Day 2 there’s going to be more than Day 1.
In the previous chapter I used the term Retention and mentioned just how important Retention is when it comes to making your money back from User Acquisition. I’ve given a pretty good definition of Retention in the bolded paragraph above but let’s talk a bit more about retention and see how exactly it’s calculated.
Let’s say you make a game and send it to 5 of your friends: Jack, Jill, James, Jonah and Jeff. Day 0 is the day where all your friends receive the link to the game and install it on their device. They all start playing the game and at the end of the day you turn to them for feedback on it.
Jack and Jill love it and mention they couldn’t put the phone down the entire day. James and Jonah said it was okay and they’ll keep on playing it. Jeff said that he didn’t like it that much but he’ll keep playing in the future.
The next day you meet up with your friends at a coffee shop and you notice that Jack, Jill, James, Jonah and Jeff are on their phones when you get there and they’re playing something. You have your coffee, talk about your day and plans. At the end of the day you reach out to them and find out that Jack, Jill, James and Jeff played the game again today and they got much further into it. Jonah admits he hasn’t tried it today due to <reasons>. Your Day 1 retention at this point is 80%, aka 80% of your friends played the game.
On Day 7 you meet up with them again and find out that only Jeff has been playing the game and everyone else dropped it for various reasons. On Day 7 you have a 20% retention rate.
What Is A Good Retention For Mobile Games?
The most best retention for mobile games on Day 1, 7 and 30 is a 100% retention however that is impossible to achieve. Really good mobile games have a 50% Day 1 retention and a 25% Day 7 (it’s normal to lose about 50% of your players from D1 to D7) with the game retaining about 3 to 10% of their users on Day 30. Any D30 retention above 6% means you have an amazing game that’s performing extremely well.
Most of my indie games have a decent D1 retention of about 20% however the drop to D7 is pretty steep with less than 4% playing the game after a week. This speaks to my ability of having pretty fun gameplay but not be able to provide enough content to keep them engaged. And for my own things, I usually stay away from “incentivizing” users to return to my game via Daily Login mechanics (and more semi-predatory and highly addictive tactics).
However, for games that I make for my clients? I have a few games that pay real money (advertising revenue share is what I affectionately refer to these kinds of games) that have a D1 of 45% and a D30 of 12%, however I know that these retention rates aren’t due to the game itself, or the game’s content, but due to the intoxicating facts that those game actually pay out real money (I wrote an entire article titled “Do Games Really Pay You Money” that explains how real money paying games actually work and what the catch is).
Why Do Games Have Daily Rewards?
Games use Daily Rewards mechanics as a way to boost retention and have more users playing the game in the first 7 or 30 days by essentially bribing them to come back. The more time a user plays a game, the more chances the developer has to monetize the user (via ads or in-app purchases). An average game that makes money with ads has to keep a user in game for 5 to 7 days to make a profit from that user.
Where To Next?
I write extensively about the mobile gaming industry, their tactics and how greed influences a game’s design, subjects which were brought up in this post.
I believe that you might be interested in more articles on game monetization. So if you want to stick around, you can check out “How Do Free Mobile Games Make money“, “Why Do Mobile Games Have Fake Ads” and “Why Do Mobile Games Have In-App Purchases“.
There’s also a monster post (about 4000 words) that answers the question: “How Hard Is It To Make A Mobile Game“. It goes in depth with actual examples on how Experience, Resources and Financials affect the difficulty of developing and releasing new mobile games!
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