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LAFS Marketing and Monetization Lecture 8: Monetization and Metrics


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Level 8 of the Los Angeles Film School's Marketing and Monetization class.

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LAFS Marketing and Monetization Lecture 8: Monetization and Metrics

  1. 1. Level 8 David Mullich Marketing and Monetization The Los Angeles Film School
  2. 2. 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
  3. 3. Conversion Rate (CVR) The number you get when dividing audience by call-to-action responses. Call-to-action: Install game Conversion: Visitors converted to Purchasers Metrics: Visitors, Purchasers, Conversion Rate Purchasers --------------- = Conversion Rate Visitors
  4. 4. Not All Conversions Involve Monetization! Let’s take a closer look at each!
  5. 5. Exchanging Gain:  Short-Term Connection:  Not Personal Example:  User filling out a form
  6. 6. Downloading Gain:  Long-Term Connection:  Not Personal Example:  Installing an app
  7. 7. Sharing Gain:  Short-Term Connection:  Personal Example:  Sharing a screenshot
  8. 8. Connecting Gain:  Long-Term Connection:  Personal Example:  Interacting on a message board
  9. 9. Back To Economic Definitions Tracking: 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
  10. 10. 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.
  11. 11. 1950s-60s Business Model – Priceless
  12. 12. Early 1970s Business Model - Rent Early video game machines were placed along side pinball machines, pool tables, foosball and air hockey
  13. 13. Late 1970s Business Model - Buy
  14. 14. Early 2000s Business Model - Rent You licensed mobile and online games, but you didn’t really own them
  15. 15. NOW Free To Play Business Model How do you earn a profit if your product is free?
  16. 16. FREE TO PLAY
  17. 17. 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
  18. 18. Free To Play Games And Microtransactions
  19. 19. Pokémon Go Made $200M its first month!
  20. 20. 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.
  21. 21. Pokémon Virtual Coins Here are some items you can buy in the store, but what do they cost in real money?
  22. 22. 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!
  24. 24. 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.
  25. 25. Core Game Loop
  26. 26. Intrinsic Rewards When 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
  27. 27. Extrinsic Rewards This 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
  28. 28. Intrinsic vs. Extrinsic Rewards
  29. 29. Virtual Goods The most valuable virtual goods are ones that speed up or bypass activities that are only extrinsically rewarding.
  30. 30. Dual Loops Two 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.
  31. 31. Multiple Loops Enabling and rewarding short sessions encourages players to play the game on the go, increasing overall engagement and setting players up for the metagame.
  32. 32. Short Loop Rewards Intrinsic:  Jumping on bad guys  Collecting coins  Using a power-up Extrinsic:  Finishing a level on your first try
  33. 33. 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
  34. 34. Long Loop Rewards Intrinsic:  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
  36. 36. Doing Free To Play Wrong
  37. 37. 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!
  38. 38. Mutually Beneficial Relationship Take 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.
  39. 39. 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.
  40. 40. 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.
  41. 41. 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.
  42. 42. 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.
  43. 43. 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.
  44. 44. Never Ending Content You never actually finish the game. You can always come back for more.
  45. 45. 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.
  47. 47. The Player’s Journey
  48. 48. 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.
  49. 49. DAU/MAU The 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.
  50. 50. Sessions Every 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.
  51. 51. Retention Retention 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.
  52. 52. Retention Retention = (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.
  53. 53. Churn Churn 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.
  55. 55. 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.
  56. 56. Flow Most 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.
  57. 57. 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.
  58. 58. 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?
  60. 60. 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.
  61. 61. ARPPU Average 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.
  63. 63. 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.
  64. 64. 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.
  65. 65. 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.
  66. 66. Flow Subtracting sinks from the faucets gives you the flow. Flow is the total balance of currency that your players have spent and earned.
  67. 67. Flow If 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.
  68. 68. ANALYSIS
  69. 69. Regular Popular Game The first graph shows the daily installs for a typical popular game. Why are there peaks and valleys?
  70. 70. 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.
  71. 71. 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?
  72. 72. Game In Need Of Boost Now may be the time for a price-reduction or promotion such as the release of a new feature.
  73. 73. Trending Game The game is in the flow. The app store heavily favors downloads. What could account for so many downloads so quickly?
  74. 74. 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.
  75. 75. 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?
  76. 76. 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.
  77. 77. Metrics Are Not A Silver Bullet!
  78. 78. Group Quest Put together a Monetization Plan presentation for your game.  Monetization Strategy  4 Retention Methods  Monetization Metrics
  79. 79. 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