Mark Robinson Mark Robinson, COO of GamesAnalytics, has been working in the data mining industry his entire career. As well as being awarded several industry awards for innovative use of data, Robinson contributes to thought leadership in the industry through his membership of the Direct Marketing Association Council. Read the full biography here.

Putting Analytics at the Heart of Game Monetization

The Challenges and Opportunities of Online Distribution

23rd May, 2011

The Interactive Games Industry is rapidly changing from a product-based boxed retail model to a service-based digital distribution model. From its peak in 2008, retail distribution of boxed games has decreased dramatically and is now being challenged by online distribution on a variety of channels such as Facebook, iPhone, PC and online digital platforms on the traditional consoles. Recently in the US, digital game downloads exceeded traditional boxed retail sales for the first time and it is clear that this trend is set to accelerate.

This change in the method of distribution is having a fundamental effect on the way games are developed, published and monetized. Game development and publishing is a highly competitive industry. Traditionally resource and investment was piled into games without knowing before they hit the market whether they would be a success or not. Game publishing has historically been driven by the strength of the game concept and the effectiveness of the execution, with little reliance on consumer feedback, and in this hits-based industry finding the right formulas for success has frequently been elusive.

With the advent of online distribution, especially through social media channels (such as Facebook), it is possible for game developers to become their own publishers and to launch games that are not fully fleshed out and to release improved versions of the game every few weeks, or even every few days. This takes some of the risk out of the investment in development and allows games to be continually enhanced further increasing their chances of success.

One key aspect of online distribution that is quickly gathering momentum in the industry is the ability to gather behavioural data from games and analyse player behaviours.

This data asset is rapidly becoming an essential tool for understanding actual consumer game play and for maximising the revenue potential of each game.

Regardless of platform, whether social games, PC games or iPhone games, it is possible to collect event information at the individual player level. The challenge is to turn this usually vast amount of data into actionable insight to influence game design, enhance the player experience, and maximise revenue from the games.

Many companies have begun using Key Performance Indicator (KPI) dashboards to monitor the ‘health’ of their games but often these metrics are too general and backwards-looking to be able to optimise game monetization. Although KPI dashboards provide some useful information, they themselves don’t provide solutions to real business problems. ‘So what should I do?’ is often the game developer’s response to the metrics of declining retention or payment reported by KPI dashboards.

However help is at hand. For many years, financial services and retail organisations have been using data mining techniques to derive valuable knowledge and insight from customer behaviour data and provide actionable marketing interventions.

It is now possible using advanced analytic techniques to apply data mining procedures to game data and provide solutions to move the metrics in a positive way.

There are key monetization opportunities and threats within playing behaviour that can be isolated and understood at the individual player level. Some of these are:

		Converting more of the typically 98% of players who don’t make payments to paying customers
		Understanding and maximising the opportunities for micropayments within game play
		Predicting individual player abandonment and improving retention rates
		Conversion of trialists to fee-paying subscribers in massively multiplayer online games
		Detecting bottlenecks in game play that frustrate players and prevent them from getting further into the games

And there are many others.

By applying data reduction and predictive modelling techniques, we can understand the different paths that players take through games and influence these paths towards desirable outcomes. It is also possible to characterise key purchase behaviours such as ‘buying a sword’ and understand the likelihood that other players who share these characteristics will also buy a sword.

Another fruitful area of analysis is to understand the virality of certain individuals (their likelihood of inviting other players to the game) so that they can be influenced to increase the game playing community.

It is not unusual to be running 20-30 different analysis scenarios at the same time for one game.

The key to unlocking the potential of any game is to predict next best action for each player; whether this is a purchase event, an invite event or a retention event.

Importantly this analysis needs to be actioned. That is why GamesAnalytics has developed real-time analytics and in-game interventions that deliver targeted offers, incentives, hints and tips to improve the game playing experience and maximise the revenue potential. Each intervention is carefully planned to be appropriate, contextually relevant and timely whether this means in real-time, or within current game session or within next session.

This concept of targeted and personalised intervention is important as gamers are often bombarded with irrelevant and irritating messaging during their game play which can only act as a barrier to their engagement with the game.

By defining an ‘intelligence layer’ within the game that delivers intelligent, appropriate and timely ‘marketing’ messages, we can significantly improve player engagement as well as the revenue from the game – in some cases revenues are increased by 50-100%.

However a good game concept is still critical to success; analytics alone cannot resurrect a game with a poor concept. But when the concept and analytics work in combination, the developer and publisher can be assured that the revenue potential of the game has been optimised and they are getting the maximum payback on their investment.

There really is no alternative to employing effective behavioral analytics in games; the future of the industry and competitive advantage lies in the ability to turn game data into actionable insight. Companies like GamesAnalytics have been created to help developers and publishers improve player engagement and maximize revenue through understanding player behaviours. The secret lies in putting analytics at the heart of your development culture; it should not be an afterthought. Once engrained in your business it will pay back its cost many times over.

Mark Robinson

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