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Game analytics
Although the global game industry is now larger than the music industry and on par with the size of the film
industry, game developers are only starting to adopt advanced analytics to support game development,
product design, targeted marketing efforts, and data-driven in-game monetization optimization. The
corresponding game analytics industry is still greatly underserved. A list of niche analytics vendors for
social and mobile games continues to expand, with representation by Kontagent, Flurry, Mixpanel,
Totango, Claritics, and Google Analytics. There are far fewer vendors focusing on the computer and MMO
games, and no single analytics provider appears to focus on delivering cross-game platform analytics.
Many of these off-the-shelf products adequately provide the expected standard list of metrics for social
games (see Resources), including:
Daily active users (DAU)
Monthly active users (MAU)
A combined DAU/MAU ratio
Engagement, which measures time spent playing a game
K-factor, which is an infection rate of viral game growth as the core and casual player base
expands
Average revenue per user (ARPU)
Lifetime value (LTV), which captures a player's value to the game based on in-game purchases
and other monetization-related behaviors, player influence on virality, and net game evangelism
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Game monetization
Traditionally, video and social games have had distinctly different business models. Now there is more of a
convergence of business monetization approaches between game types. Historically, video games relied
on a subscription-based model requiring gamers to make an upfront game purchase and subscribe to an
ongoing monthly fee. This business model is being replaced by some games with the testing of free-toplay models that closely follows the emerging freemium model typically offered by social games
(see Resources). Currently the terms mobile and social are often used interchangeably; however, they will
likely become distinct game genres as game distribution patterns develop. They will expand game access
and greatly increase the corresponding potential player universe. Whereas some games today are
available only on certain sites such as Facebook, on single platforms such as computer or Xbox, or on
specific devices such as iPhone or iPad, eventually many game titles will be released across more
platforms in a more site- and device-agnostic fashion.
Social and mobile games make money (monetize) in a few ways, and related business and monetization
models are changing dynamically. Some games, such as the iOS-based W.E.L.D.E.R. word game, charge
an initial purchase subscription fee but will likely eventually move to a freemium model. Other games, such
as those on Facebook, rely on the sale of virtual goods. Games such as Zyngas CityVille, for example, fit
the mold where players use actual money or Facebook Credits to purchase in-game virtual goods to help
them perform better, gain advantages, get premium access, and move to higher levels (level-up) faster. A
third popular form of game monetization is in-game advertising. Companies such as TapJoy offer in-game
banner ads, video offers, and full-page interstitial advertisements. There is a growing list of companies that
offer hybrid models aimed at both raising awareness of new games and monetization optimization. As
games and associated monetization models evolve, the relevance of underlying analytics to identify
segments of players, how they play, propensity to click on an in-game ad, or pay cash for virtual goods
becomes exponentially greater. Current providers offer standard metrics, and some of these vendors, such
as Flurry and Kiip, offer virtual good or ad-recommendation optimization engines. While the game analytics
industry is making big strides towards catching up, it is still arguably in its infancy. Stores of virtually
untapped social data reserves at the player ID level exist as potential predictors that can be tied to
segmentation and propensity to purchase models that can drive value-based game development,
localization, targeted in-game offers, and ads. This social data can also measure the success of net
promoter scores, identify player evangelists, and track redemption of in-game offers.
In addition to the mainstream game monetization approaches detailed above, another major marketing
trend is emerging that is worth mention, and is also relevant from an advanced game analytics
focus. Gamification is one of the hottest enterprise trends for 2012, involving the use of game mechanics
and design to motivate people and drive specific behaviors (see Resources). In a consumer behavior
sense, gamification involves the introduction of game elements such as leaderboards, badges, trophies,
points, virtual currency and credits, and more to reward desired behaviors. In one such example,
Bunchball and IBM have teamed up to introduce gamification to drive user adoption and engagement in
the IBM Connections environment (seeResources). Healthcare companies such as UnitedHealth Group
have integrated gamification and video game strategies to promote the self-management of wellness and
healthy behaviors. Gamification is forecasted to receive US$2 billion in direct spending by 2016. As these
programs gain popularity and are more widely implemented, game analytics solutions to measure impacts
of gamification programs on customer engagement and loyalty will be in demand.
With all of the expected growth around video, social, and mobile games and the increasing enterprise
adoption of gamification, one might expect the associated game and gamification analytics solutions to be
more mature. A large barrier exists to nimble game-and player-related analytics that has hampered rapid
advancements in this space. The sheer mass of in-play, leveling up, skill achievement, in-game purchase,
and peripheral game data at the individual player level presents a challenge for traditional database
structures. Legacy relational database management systems (RDBMS) were not built to manage, store,
and process the petabytes of data generated by modern MMO and mobile or social games. New big data
solutions are based on NoSQL technology (see Resources) and are far better suited to manage the rapidly
changing data volume, sources, and format of structured, semi-structured, and unstructured data, and filter
datasets to a manageable level as an input to on-the-fly analytics solutions.
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statistical processes directly in Hadoop nodes. Also popular are commercial NoSQL options that integrate
with Hadoop and other open source tools and greatly extend these capabilities with analytics, text mining,
in-application processing, map reduce functions, and graphing options. One such example is the recently
released IBM InfoSphere BigInsights (see Resources) that is built on the Apache Hadoop platform and is
available in both a basic no-charge option and a more powerful enterprise edition.
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Summary
Both the game industry and technology are evolving at a rapid pace. Technological advancements in both
sectors provide exciting opportunities for game developers and media studios to apply advanced analytics
to further enhance design and optimize game monetization efforts. If new state legislation passes to
legalize online gambling, a new focus on advanced analytics and microsegmentation to drive player
monetization based on gambling patterns will emerge. Game fraud and analytics to combat this across all
game genres will continue to be stressed. As more and more users gravitate to smart phones and tablets,
more game business models will move to freemium models, and new player monetization models will
emerge that require propensity modeling and segmentation for better targeting. Gamification will continue
to spread, and the need for metrics associated with these programs will grow. The next decade promises
to be fertile ground for specialized game analytics solutions and analysts focused on incorporating big data
technologies to uncover rich insights into both player and consumer behavior.
Resources
Learn
"All the worlds a game" (The Economist, December 2011): Read where Tim Cross predicts video
games will be the fastest-growing form of mass media over the next decade.
Mobile Social Gamers: The New Mass-Market Powerhouse: Check out this Flurry Blog entry
posted by Peter Farago.
Do You Speak Metrics?: Justin Johnson's blog entry on GamesIndustry International breaks
down the language of game analytics.
Freemium and the virtual goods phenomenon: interview with Sanjay Sarathy (The Guardian
Media Network, March 2012): Learn more about the freemium business model.
10 Gamification Predictions for 2012: Read this Badgeville blog entry from Kris Duggan for his
predictions on why gamification will be one of the largest trends for the enterprise in 2012.
Nitro for IBM Connections: Learn more on why IBM teamed up with Bunchball to get users
engaged and effectively using all of the great features IBM Connections offers.
Tapping Enterprise Communities Through Gamification (STC Summit 2012): Learn strategies,
tips, best practices, and more for enterprise communities from this STC Summit presentation by
Marta Rauch and Samartha Vashishtha.
Gamification, Game Based Marketing, Serious Business (3sixtyfive, November 2011): Here's
another presentation on gamification.
NoSQL And Elastic Caching Platforms Are Kissing Cousins: Mike Gualtieri talks about NoSQL
and elasticity in his blog entry on Forrester.com.
"Big Brother is watching: how developers use game analytics" (Nightmare Mode, March 2012):
Check out this post by Patricia Hernandez.
developerWorks Business analytics: Find more technical analytics resources for developers.
developerWorks on-demand demos: Watch demos ranging from product installation and setup for
beginners to advanced functionality for experienced developers.
Evaluation software: Find more trial software. Download a trial version, work with product in an
online, sandbox environment, or access it in the cloud.
Discuss
developerWorks community: Connect with other developerWorks users while exploring the
developer-driven blogs, forums, groups, and wikis.
Kimberly Chulis is one of the original founders of Core Analytics, LLC. With over 18 years
of professional advanced analytics experience, she's demonstrated analytic expertise on
projects at several companies and industries, including WellPoint, HCSC, UHG, Great
West, Accenture, Ogilvy, Microsoft, Sprint/Nextel, Commonwealth Edison, TXU, Eloyalty,
SPSS, Allstate, Cendant, and others in the financial, telecommunications, healthcare,
energy, nonprofit, retail, and educational sectors. Kimberly has conducted PhD research at
Purdue University's Health and Human Services Consumer Behavior program, and has a
Masters degree in economics with a focus on health economics and econometrics from the
University of Illinois at Chicago.