Measuring the health of your online game
Because people frequently ask me how to measure the health of their game, I figured it made sense to post of few of my thoughts on the topic.
Sure, many online game companies are already experts at analytics. But as the cost of marketing increases and the margins decline to the point where even well-known companies like RockYou and Kabam! find themselves downsizing their teams, perhaps it is time to take a wider perspective.
The short answer is that there is, of course, no single solution. This is because online games and their economics can vary greatly, from a sophisticated sci-fi universe like EVE Online to more modest games that feature micro-transactions. Based on conversations with many of our customers, however, there exist several best practices that help both make for a more worthwhile experience for the players and increase conversion rates.
Designated Team
Generally speaking the premium engineering talent–aka the people that can successfully aggregate and slice all the user data–is almost exclusively focused on product development. This makes sense, of course, because you want to have your best people making the best possible game. As a consequence, a lot of data gets stored onto a server somewhere, without assigning any priority to examining and analyzing it. We’ve seen examples varying from marketing interns wrestling with enormous excel spreadsheets (pivot tables anyone?) to CFOs being told to “pay attention to the user data.” None of this is very effective, mostly because it is not their primary task. Here traditional publishers can learn a lot from their online counter-parts, and assemble a team of people who’s objective is to monitor the data, analyse it and make it a standard part of the development cycle.
Metrics
No doubt most of us in the games industry have familiarized themselves with key terms such as ARPU, ARPPU, LTV, retention, conversion and so on. The big insight here, of course, is that rather than tracking more, one should be tracking fewer metrics. Generally speaking, we recommend companies focus on the big three: frequency, average spending, and lifetime. Granted, this is geared towards the monetization part, but a game that generates income is one that can afford to innovate and evolve. Moreover, keeping your metrics simple allows you to compare different development efforts and genre based on the same key performance indicators.
Drop Offs
Like any business, you are of course making the best, most awesome product. Ever. But this is only part of the equation. The other half involves figuring out why people aren’t spending, and why they are not playing your game. In the midst of a creative process it is never easy to confront failure, but dealing with it openly and effectively allows you to improve your product, and enjoy success. Don’t mistake this for a plea to cater to the largest common denominator. What’s clear about new media economics is that they are more akin to fan economics rather than mass media consumption. After all, it’s only 2% of users that actually pay. And, given the enormous availability of digital games today, you often don’t get a second chance. So find out why people are leaving, and fast!
External Data
Once you’ve assigned a team, track user behavior and have solved the mystery of why people would not want to play your game, you’re likely to reach a plateau in terms of performance. This is because you, your game and your players don’t exist in a vacuum. Like any business you are part of a larger eco-system, and you’ll need to find out how you relate. For instance, if your user base is growing 5% every month, that is great. But if the rest of the industry and your competition is growing at 20%, you’re need to address this. So far, many publishers have only seen increasing numbers across the board. This is normal in nascent industry, as early innovators can quickly grab a large market share. However, as the online games industry begins to mature, it becomes more important to compare your own efforts to those around you. But don’t make the mistake of collecting anecdotal evidence from a group of peers or scour the internet for free information. You’re in the business of making games, not market research.
As usual I’d love to hear your thoughts.
