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SAN FRANCISCO — For Emily Greer, the cofounder and CEO of indie game portal Kongregate, microtransactions is a misnomer to describe the in-app purchases that gamers make. The revenues that it has derived from the sale of virtual goods have been anything but minor.
Greer shared how Kongregate transformed itself into a lucrative free-to-play gamesite at GamesBeat 2015 in San Francisco.
When Kongregate had first come up with a business strategy to sell virtual goods from within games that could be downloaded for free, the company had expected transactions to be too small.
“I heard microtransactions. We all did,” Greer said. “And we thought 50 cents transactions, $1.50 transactions. We were worrying about how much the credit card fees would be.”
But the company almost immediately realized its mistake. In reality, its free-to-play games were generating transactions of $20 or more. Some gamers spent as much as $5,000.
“I actually went around like a Nazi for the whole company and remade every label,” Greer said. “Everybody stopped using the word microtransactions because it was giving everybody the wrong impression.”
Kongregate has over 100,000 games available, ranging from simple games that hobbyists made to more sophisticated MMOs and collectible card games.
“Our audience is not the stereotypical casual game audience,” Greer said. Casual gamers refer to men and women 18 and older, with female players representing 44 percent. At Kongregate, the players skew male. Greer also said the average age for spenders is much higher than the players’ average age of 26.
Kongregate’s next challenge is to find new ways to bring in revenue. Microtransactions have been successful on mobile devices but seem to be less effective on other platforms.
“I don’t think the problem right now is what consumers will pay,” Greer said. “It’s what they have been conditioned to pay on mobile relative to other platforms.”
In 2013, Kongregate started publishing third-party mobile games, launching two new titles on mobile devices every month. However, Greer said it wanted to expand its platforms to Facebook and Steam among others to publish to as many platforms as possible.
“Over the next few months and years we are going to be expanding to take our games and publish to as many platforms as possible,” Greer said.
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