lafs marketing and monetization lecture 8: monetization and metrics
TRANSCRIPT
MONETIZATION AND METRICS
Level 8
David MullichMarketing and MonetizationThe Los Angeles Film School
Some Definitions Call-to-action: An instruction to an
audience to provoke an immediate response
Conversion: Getting someone to respond to your call-to-action
Monetization: Convert to money Metrics: A method of measuring something
or the results obtained by doing so
Conversion Rate (CVR)
The number you get when dividing audience by call-to-action responses.
Call-to-action: Install gameConversion: Visitors converted to PurchasersMetrics: Visitors, Purchasers, Conversion Rate
Purchasers--------------- = Conversion Rate Visitors
Not All Conversions Involve Monetization!
Let’s take a closer look at each!
Exchanging
Gain: Short-Term
Connection: Not Personal
Example: User filling out a form
Downloading
Gain: Long-Term
Connection: Not Personal
Example: Installing an app
Sharing
Gain: Short-Term
Connection: Personal
Example: Sharing a screenshot
Connecting
Gain: Long-Term
Connection: Personal
Example: Interacting on a
message board
Back To Economic DefinitionsTracking: Measuring metrics on a daily basis
Cost: The value of money used to produce something
Revenue: The income a company receives from its business activities
Profit: When revenues exceed costs
Business Model
The way in which a company makes revenue and makes profit from its operations.
We need to track our revenue, profit and other metrics to make sure our business model is valid.
1950s-60s Business Model – Priceless
Early 1970s Business Model - Rent
Early video game machines were placed along side pinball machines, pool tables, foosball and air hockey
Late 1970s Business Model - Buy
Early 2000s Business Model - Rent
You licensed mobile and online games, but you didn’t really own them
NOW Free To Play Business Model
How do you earn a profit if your product is free?
FREE TO PLAY
Free To Play Sell premium features or additional levels
(velvet rope) Sell items or services individually (micro-
transactions) Sell eyeballs (advertising) Blend two or three
Pokémon Go
Made $200M its first month!
Pokémon Starting Items
You start the game with a decent number of Pokéballs and some Incense (to attract Pokémon). You can get more through play, but the idea here is that you’ll have to pay if you want to really stock up.
Everything in the game costs gold, and you start with 0 gold.
Pokémon Virtual Coins
Here are some items you can buy in the store, but what do they cost in real money?
Pokémon Real Cost
20 Pokéballs—likely the most common transaction—will run you $0.99.
But if you want to buy 14,500 Pokécoins, be prepared to spend $99.99!
THE CORE GAME LOOP
Core Game Loop
The heart of your game, and what makes it fun.
It is the primary action(s) players perform, and the rewards that allow progression.
Core Game Loop
Intrinsic RewardsWhen the player is having fun subconsciously or are unaware that a fun event is happening. These events are simple and the emotion lasts a very short time. Jumping Killing Enemies Picking Up Coins Exploring The World Finishing A Level Making Discoveries
Extrinsic RewardsThis is the type of fun where players are focused on accomplishing something for personal satisfaction. This rewards are more difficult to achieve and involve more time. Completing a level on the first try Getting a good score Finding all the coins in a level Unlocking a power up by gaining XP Unlocking item to max level Completing all game levels
Virtual Goods
The most valuable virtual goods are ones that speed up or bypass activities that are only extrinsically rewarding.
Dual LoopsTwo loops enables players to either stop their session after the first loop or continue playing through both of the loops and thus extend and deepen their session.
Multiple LoopsEnabling and rewarding short sessions encourages players to play the game on the go, increasing overall engagement and setting players up for the metagame.
Short Loop Rewards
Intrinsic: Jumping on bad guys Collecting coins Using a power-up
Extrinsic: Finishing a level on
your first try
Medium Loop Rewards
Intrinsic: Mastering game controls
Extrinsic: Collecting enough coins
for a new item Getting 3 stars in a Level
after a few tries Leveling up your XP
Long Loop RewardsIntrinsic: Discovering new enemies Seeing new artwork and
backgrounds
Extrinsic Max out power ups Find all the secret items in the
game Getting 3 stars on all levels
THE RIGHT WAY AND THE WRONG WAY
Making Games Engaging Mutually Beneficial Relationship Short Session Lengths Metagaming Disproportionate Feedback Illusion of Control The Peacock Effect Never-Ending Content
Let’s take a closer look at each!
Mutually Beneficial RelationshipTake an approach with monetization that is about providing value to the player. If you respect the players and don't try to trick them into getting out their credit card, they'll be a more loyal customer and they'll do it again.
Short Session Lengths
Risk, reward and opportunity combine into a smooth and cohesive system, so that we're getting constant pleasure hits, and therefore constant cravings for more.
But if every session demands several minutes of uninterrupted attention, it tends to result in retention problems. If players don’t play the game several times during short brakes around a day, the game won’t turn into a habit.
Metagaming
The metagame is the invisible part of the core loop that you have to experience. The part where players don’t actually earn or consume any resources, but simply stay engaged in the game with a simple goal to optimize their progress.
Disproportionate Feedback
Successful moves will often trigger a sequence of subsequent onscreen color matches, which multiply the effect. The game congratulates us for our skill, even though such "combos" are often simply fortuitous – but our brain gets a pleasure rush anyway.
Illusion of Control
Providing lots of nudge buttons and other input options – together with flashing lights and sound rewards for successful implementation – fools us into thinking we are skilled players rather than victims of a very clever system.
The Peacock Effect
Allow players to spend money on customization options like new outfits or building blocks: the more you purchase and show off, the theory suggests, the richer feel in comparison to friends.
Never Ending Content
You never actually finish the game. You can always come back for more.
Make Games For Everyone
Young, old, male, female. When you make games that appeal to everyone, the small percentage you can monetize will still be able to earn you sizeable revenues.
USAGE METRICS
The Player’s Journey
Daily Active Users (DAU)
The number of unique users that start at least one session in your game on any given day.
Monthly Active Users (MAU)
The number of unique users that start at least one session in your game during any given month.
DAU/MAUThe ratio of Daily Active Users to Monthly Active Users shows how well a game retains users and is often referred to as the stickiness of a game.
This metric shows you how frequently users log in to your app.
Values closer to one, mean users are opening the game on a higher percentage of days.
Popular social networking apps like Facebook have reported DAU/MAU ratios as high as 50 percent. But most successful gaming apps have ratios closer to 20 percent.
SessionsEvery time any user, not just a unique user, opens your app, that counts as a session.
Focus on the average number of sessions per DAU, as this metric can tell you about how engaged users are with your game.
An app’s genre does have an effect on Sessions/DAU, as some game styles lend themselves to more frequent sessions.
RetentionRetention is arguably the most important metric in a free-to-play game. Successful free-to-play games create long-term relationships with users.
To calculate retention, separate your users into cohorts based on the day they download your app. The day that the download occurs is Day 0. If a user opens your app the next day (Day 1), they are marked as retained. If they do not open the app, they are not retained.
RetentionRetention = (PR/PD)) X 100
PD = number of players who downloaded the game
PR = number of players retained during period
This calculation is performed for user cohort on each day after they download the app. Common days used for retention are 1, 3, 7 and 30.
ChurnChurn is the opposite of retention. How many players that downloaded your game are no longer playing?
With a subscription service, churn is black and white. Either a user is paying or they are not.
In a free-to-play game some users may play multiple times per day, while more casual players log in once or twice a week. To generalize for these differences between users, we measure churn as a user who has not played in 28 days.
PROGRESSION METRICS
Flow
Flow is the mental state in which a person performing an activity is fully immersed in the game.
Over time, game challenges increase as the player’s skills increase.
FlowMost games tend to build up each level to a boss battle of some type to test if they are ready for more difficult challenges.
When players pass this test, they progress through the game.
Start, Fail, And Complete
Whether or not the user has to explicitly start a new level, many game types have a leveling component.
Starts: the number of times players start a new level.
Fails: the number of times a players start a level but doe not complete it.
Completes: the number of times players complete a level.
Analyzing Progression
Are your choke points appropriately difficult? Are users getting stuck on certain levels unexpectedly? Which levels are users having the most fun playing and repeating?
REAL-WORLD ECONOMIC METRICS
ARPDAU
The Average Revenue Per Daily Active User allows you to understand how your game performs on a daily basis.
This is a great metric to track before and during user acquisition campaigns.
Before acquiring users, make sure you know the range of your ARPDAU and how it fluctuates normally.
ARPPUAverage Revenue Per Paying User (ARPPU) measures only the subset of users who have completed a purchase in a game.
This metric can vary dramatically based on game genre.
Hardcore games tend to have higher monetization metrics like ARPPU, but they also lack the mass appeal of more casual games.
IN-GAME ECONOMIC METRICS
In-Game Economies
it is important to measure and balance the game economy.
If it is too easy to earn virtual currency, users have no reason to monetize. But users still need enough currency to enjoy and explore the game.
There is a happy medium somewhere in between, and the following metrics can help find it.
Source
Faucets are places where users can earn virtual currency.
The Source metric measures the amount of currency a user has earned. It also includes any currency he or she has been given at the start of the game.
Sink
A sink is the opposite of a faucet. These are the locations in your game where users spend their precious currency.
Both faucets and sinks can refer to premium (hard) and secondary (soft) currencies. Keep these different types of currencies separate during your analysis.
Flow
Subtracting sinks from the faucets gives you the flow. Flow is the total balance of currency that your players have spent and earned.
FlowIf the chart skews upward like an exponential curve, your player base will have too much currency and no need to monetize.
If the chart slopes negatively to zero, players won’t have enough resources to do anything in your game.
ANALYSIS
Regular Popular Game
The first graph shows the daily installs for a typical popular game.
Why are there peaks and valleys?
Regular Popular Game
The peaks might occur during holidays or weekends.
Also, a negative review might have a bad impact for a couple of days, and the game is saved by a positive review and downloads increase again.
Game In Need Of Boost
This install graph shows a formerly popular game that now has declining installs.
What could be done to boost its numbers?
Game In Need Of Boost
Now may be the time for a price-reduction or promotion such as the release of a new feature.
Trending Game
The game is in the flow. The app store heavily favors downloads.
What could account for so many downloads so quickly?
Trending Game
Downloads trigger ranking, which in turn triggers downloads. An game like that ranks highly in popularity lists, and keyword ranking will become broader and more generous.
Also a paid install will give an additional 1.5 organic installs.
Game In Aftermath of Hype
This install graph shows a game with a huge hype in the beginning, and then an extreme decrease in downloads.
What could account for the sudden decrease in installs?
Game In Aftermath of Hype
One reason for this might be a large number of bad reviews, having a long-term impact. The disastrous fall will affect search engine ranking negatively.
Group Quest
Put together a Monetization Plan presentation for your game. Monetization Strategy 4 Retention Methods Monetization Metrics
Away Mission
Calculate the following metrics based on data provided in the LMS: Conversion Rate Stickiness and Engagement 1-Day, 3-Day, 7-Day and 30-Day Retention 30-Day Churn Virtual Economy Flow and Analysis
