Ryan was furiously navigating his car on the streets of his racing app. He was a champion in this game and had completed all his races in record time. But this time it was different, his car was not built for the current hilly terrain of the track, and while he completed the race successfully, his inability to complete in record time made him feel the need for a better and a sturdier car. He navigated to the upgrades section of his game. He had just 200 game coins short of adding the Land Rover Discovery to his fleet of cars!! He goes on purchase 200 game coins and Hola! he was in for a surprise, the 200 coins were available at 50% off just for him. Excited, he purchased the same and geared himself up for the same track again. 3…2…1… he sped off!!!
Video games are the in thing once again. With increased smartphone penetration, users have moved to gaming apps. In addition, online gaming apps are equally popular. According to a survey by A4E, the revenue generated by all kind of video games, is over twice of that generated by the movie industry. Gartner Group estimates the combined mobile and PC-based game industry will grow to more than $43 billion USD by 2015. Add to that another $68 billion USD for console (Wii, etc.) and handheld video, and Gartner’s market size estimate shoots north of $110 billion USD. While console-based video games will still dominate, the mobile device gaming market is growing fastest, nearly doubling in size during the three years Gartner has kept track.
With this much popularity and online activity gaming industry offers a rewarding new space for Big Data Analytics in a similar way as any other business that provides consumers an online presence. With internet at fingertips, most games capture gaming patterns and data and use it for several purposes to raise the top-line. This data gives huge scope for utilizing data analytics in the gaming industry. Electronic Arts or popularly known as EA have 275 million users generating 50 TB of data per day. Name any analytics domain, and you will find it working in high revs in the gaming industry.
Its true that not all developers are looking to monetize through the games they develop. However, going further, we shall focus on companies who are looking to monetize their games through a viable business model.
Industry Trends
- Emerging Customer Base– The number of people playing games is increasing with maximum share of the pie residing in US. Driving right content to right screens will be key to success. Mapping these opportunities is one of the key capabilities of Big Data Analytics
- Changing landscape of games– With increasing smartphone and internet penetration, gaming companies need to up their game by creating immersive experiences across all screens of consumption. AR and VR devices are gaining market; developers are encouraging consumers by providing virtual like experience by enhancing. Another factor aiding innovative game development is film and television companies making their content more interactive, gaming companies cannot afford to ignore the same. Gaming companies are looking at analytics to align their strategies to consumer preferences on a 360 degree.
- Digital Delivery- The wide availability of high-speed internet has changed much of our daily lives and that includes how we play games. The physical distribution of video games has significantly decreased on a global level. Digital has become a norm across tech platforms and personalized gaming experience. Digital delivery aids gaming companies to capture data on several parameters such as gaming preferences, churn pattern, recommendations etc.
Need for Analytics in Gaming Industry
With connected devices and apps, and with the rise of social networking sites games have been used for more than just entertainment of kids and adults. A powerful application of big data lies in the gaming industry, where game logs accumulate massive streams of data as the gaming field grows and expands to consoles, PCs and mobile. Bigdata here incorporates every interaction and transaction that gamers make, storing streams of pure data ready to be analyzed. Unlike other industries, the challenge does not lie in data collection; it lies in how to make best use of it. Game developers, the market researchers and analysts of their field, utilize analytics to understand consumer behavior, demographics, and cause-and-effect trends in both gameplay and sales.
In a recent blog post, Pankaj Singh from Adobe Analytics says that game analytics relies on 4 metrics:
- Time metrics – Average daily time spent by users, number of users per day or weekends
- Involvement metrics – number of people making in-app purchases, using a certain feature
- Revenue metrics – typical business metrics such as ARPU, including cost metrics
- Event metrics – specific to gaming industry for identifying churn factors
Levers for Analytics use in gaming industry
- Huge amount of data
The humongous data captured per session of any game helps designers to comprehend which aspects/features of their games keeps players involved with the game. The big data enables them to analyze the 360 degree customer view of their game cycle and design and thereby help improve upon those aspects for longer customer retention and fueling engagement. Every player has a different approach to their game. Therefore, to become a one game destination for such players, mining relevant data from past records of vast data sessions is key to understanding what data game design would work best for all categories of players. The permutations and combinations for this are immense. This is where data analytics comes into play by helping companies to draw conclusions based on player interactions and enhance the landscape of their game to accommodate all players within their design.
- Increase in processing power
When it comes to gaming metrics, there are hundreds of numbers one can track. On the simpler end of the spectrum there are metrics like downloads, sessions and DAUs(Daily Active Users). These metrics are pretty straightforward and help in measuring concrete actions. The more complicated ones include ARPPU(Average Revenue Per Paying User) and DAU/MAU. Other metrics include retention, conversion rate, churn. Increases in computer-processing power, cloud-storage capacity and usage and network connectivity are turning the current flood of data in most companies into a tidal wave and the same is true for gaming companies. The data arrives in all formats from a range of sources including Internet-of-Things devices, social media sites, and internal collaboration systems. Despite an increase in the number of tools and technologies designed to ease the data management, most companies are still unsure about how to best use these data. Therefore, expanding data management infrastructures massively and quickly is the need of the hour.
- Marketing
Marketing is where the heart is. Data-driven marketing offers industry leaders opportunity to increase market growth while shaping CSAT at the same time. Gaming worlds have become the destination for marketing products and gaming companies are increasingly trying to monetize their platforms. From free to freemium to premium, gaming worlds are driving revenue from both players as well as marketers. Users need to pay a fee to make their games ad-free while marketers need to pay for ad-space on the gaming apps.
- User Engagement
Several companies bank upon success of their previous game releases when they are launching a new product. For quick adoption they strategize to immediately engage users from previous games and create a market space for their new game. Analytics will play a huge role here to understand customer behavior and align game architecture to suit them best.
Conclusion
While the findings above are not exhaustive, we can safely predict that going ahead, analytics will play a dominant role in the game value chain right from developers to the end-users i.e. the players. Analytics will be crucial for driving engagement and revenue. Important aspect to remember here would be that the analytics capabilities will be unique to each game and may require the need to be tweaked. A one-fits-all solution may not work in this industry given that each game targets a niche consumer base with different profiles.
It is safe to say that for analytics in this industry… The game is ready to begin… 3..2..1.. GO!