25 Add friction• Game design is about taking friction out• Freemium design is about adding friction• GOOD fremium design is about finding a balance – just enough friction to encourage some players to pay, without ruining it for the rest of us.
Beware vanity metrics• A metric that can only go up is not useful – Registered users is a particular culprit – Yes, I’m looking at Bigpoint• A metric that can’t be affected is not useful – Track percentages, not absolutes, for quick results• Vanity metrics impress dumb VCs and the press – But they don’t help you run your business better
1 Feed the funnel• To build a successful games business, you must feed the funnel• Potential customers arrive at the top. In the middle, you convert them to payers.• At the bottom, they become long-term, high-spending customers.
2 ARM yourself• A successful online game must Acquire users, Retain them (usually overlooked!), and Monetise them.• All three aspects must be in harmony.• You need all three to build a successful long-term business.
8 Avoid the leaky bucket• Acquiring customers is both hard and expensive.• Once you get them, focus on retention to keep them.• Don’t worry about getting new customers until you can satisfy the ones you’ve got!
3 Make it free AND expensive PRICE Revenue opportunity Marketing opportunity Demand• Giving your content away for free is a marketing opportunity.• You have to find your revenue opportunity.• Draw customers along the curve by offering them things they truly value.
6 key metrics• MAUs• DAUs/MAUs• Retention rate• Conversion rate• Split into whales, dolphins, minnows – ARPU• Oh, and I have platform share but it’s not a metric
MAUs• I start with 200k MAUs – an ESTIMATE• If I were being more accurate, I would model customer acquisition costs. – Maybe in version 2.0• You won’t get a sizeable audience without spending money – CPI on Facebook is $1.00 to $1.50, some say more – Fiksu quoted $1.81 at Christmas 2011, down a little now• BUT audience isn’t your primary measure of success – Find a small, niche audience with great retention, conversion and ARPU – Stop thinking like traditional media
DAUs/MAUs• Also known as engagement• Bizarre stat• Driven by what Facebook chooses to publish• Odd result: – MAUs easier for financial results, long term planning – DAUs drive monetisation, more accurate snapshot• Target: 0.15 (aka 15%)• Ratio fell steadily through 2011 – Trip Hawkins said “FB games are shallow” – I said “its just the summer”• Facebook’s changes in 2011 bumped the engagement ratio up again
Facebook engagement Game Publisher MAUs DAUs DAUs/MAUs 1 Scrabble Gamehouse 330,000 130,000 0.39 2 Bejewelled Blitz PopCap 9,700,000 3,200,000 0.33 3 Pioneer Trail Zynga 3,500,000 910,000 0.26 4 Mafia Wars Zynga 1,600,000 400,000 0.25 5 Diamond Dash wooga 18,900,000 4,300,000 0.23 6 Treasure Isle Zynga 930,000 190,000 0.20 7 Farmville Zynga 22,400,000 4,500,000 0.20 8 The Sims Social Electronic Arts 15,500,000 3,000,000 0.19 9 Frontierville Zynga 360,000 60,000 0.1710 Pet Society Playfish 5,000,000 830,000 0.1711 Social Empires Social Point 6,100,000 940,000 0.1512 Millionaire City Digital Chocolate 1,700,000 250,000 0.1513 Empires & Allies Zynga 10,900,000 1,400,000 0.13Source: Appdata
Retention rate• I have an sighting estimate of 75%• Churn rate = 1 – retention rate (i.e. 25%)• Duration = 1 / churn rate (i.e. 4 months)• Zynga has a duration of < 2 months.• Very hard to get accurate benchmarks for retention• My view: 75% is not average, it’s great.• NOTE: Where you calculate retention from makes a difference.
6 Acquisition lasts longer than you think• The Acquisition process doesn’t end when I click “install”!• 20 million people every month take a look at Cityville – and never return!• You haven’t got a customer until they spend 20 minutes playing. Make sure those first 20 minutes are your best stuff!
Conversion rate• Should I look at it daily or monthly?• I use daily• When looking at benchmarks, try to work out what conversion rates they are using: – What percentage of daily users spent money? – What percentage of monthly users spent money? – What percentage of all users have ever spent money?• Tiny Tower: 3.8% of users in the first six weeks• ngMoco: 2% of DAUs• Jetpack Joyride: 5-10% ever• Temple Run: 1% of users• Anything from <1% to around 20% is feasible
Whales, dolphins, minnows PRICE Revenue opportunity Demand• An approximation of the power-law• Minnows: spend the minimum ($1), 50% of spenders• Dolphins: a “middling amount” ($5), 40% of spenders• Whales: spend a lot ($20), 10% of spenders
The importance of the power law Revenue ($) (%) Whales $ 36,000 44.4% Dolphins $ 36,000 44.4% Minnows $ 9,000 11.1% Gross revenue $ 81,000• Whales are 0.5% of your users; 44.4% of your revenue• 89% of your revenue comes from your higher spenders• Across the whole business: – ARPU: $0.41 – ARPPU: $4.50
DISCLAIMER• Your business will not look like this.• You will not make $2,946,789 in year one• Do not rely on this spreadsheet as an accurate financial predictor
The practical use• All game developers have too many ideas to improve their game• You need to prioritise• Use the GAMESbrief spreadsheet to get a snapshot of the headline areas of Acquisition, Retention, Monetisation• Identify which are below benchmark• Work on those areas for the next sprint• Move on• Repeat
Conclusion• You need metrics to make a successful F2P game• They are useless unless you use them to make informed decisions – And then act on them• It doesn’t even matter if my spreadsheet is right: look for the improvement over time, not the absolute number• If the spreadsheet doesn’t fulfil your needs, change it• (And if you want to, send it back to me, or tell me what you’ve changed)
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