Key Metrics for Success in Social Game Development

As a social game developer, understanding the key performance indicators (KPIs) is crucial to the success of your game. Metrics provide insights into user behavior, engagement, and revenue generation, which in turn help you make informed decisions to improve your game.

Understanding the Essential Metrics

The most critical metrics for social game developers include:

CPI/CPA (Cost per Install/Cost per Acquisition): This measures the cost of acquiring new users. Lowering this metric can help in increasing the cost-effectiveness of your game marketing strategies. New Users: This metric focuses on the number of users who install and activate the game for the first time. Paying Share: This represents the percentage of users who make in-app purchases or engage in other monetization activities. ARPPU (Average Revenue Per Paying User): This measures the average amount of revenue generated by each paying user. Increasing ARPPU is essential for improving your game's overall revenue.

While these metrics are vital, they only provide a partial picture. To get a comprehensive understanding of your game's performance, you should also consider retention, engagement, and monetization. These metrics are precursors to long-term success in the competitive world of social games.

The Importance of Retention

Retention is one of the most significant metrics, as it directly impacts user loyalty and activation. User retention is critical because acquisiting new users is more expensive than retaining existing ones. Even if you can attract users through the door, if they do not stick around, they won't have the opportunity to monetize.

To emphasize the importance of retention, we recommend measuring DAU/MAU (Daily Active Users/Monthly Active Users) and X-day retention. Highly sticky games can have a DAU/MAU ratio as high as 20, but in most cases, a ratio of 8 is needed for a game to be considered viable.

Freemium Model and Additional Metrics

Most social games operate on a freemium model, which means they offer free content and require microtransactions for in-game advantages. For freemium games, the most important metrics include:

Cost of User Acquisition (CPI/CPA): This is vital for assessing the efficiency of your marketing efforts and understanding how much it costs to bring in new players. Retention: As mentioned earlier, retention is crucial for ensuring users continue to play your game and have the opportunity to monetize.

Breaking Down Metrics into Categories

Metrics can be categorized into three primary areas:

Reach: This includes new user activations, acquisition metrics, and viral coefficients. Engagement / Retention: This involves measuring churn over different time periods (24 hr., 72 hr., 1 week, 1 month), and monitoring how long users stay engaged with the game. Revenue: This includes per-user metrics such as ARPU (Average Revenue Per User), ARPPU (Average Revenue Per Paying User), and LTV (Lifetime Value of a User).

While the metrics are relatively straightforward, the challenges of collecting accurate data can be substantial. For example, tracking individual user points within the viral loop is difficult because the App Store can act as a 'black hole' from a metrics perspective. Although we can measure aggregate clicks into and out of the app store landing page, tracking individual users is not straightforward.

Portfolio Management and Risk Hedging

For a broader portfolio of games, it's important to measure your titles across key metrics such as distribution, engagement, retention, and monetization. Ensuring risk is hedged in these areas can help in achieving a balanced approach to the success of your portfolio.

At a high level, the key categories that drive the most value with the least fanfare are retention and distribution. Reducing churn and optimizing distribution can lead to substantial gains in monetization and social distribution. However, it is critical to address the challenges associated with collecting some of this data for mobile social games, especially when dealing with the metrics black hole that is the App Store.

In conclusion, while many broad discussions exist around game metrics, the categories that drive the most value with the least attention are retention and distribution. By focusing on these metrics, you can effectively enhance your game's success and competitiveness in the social gaming market.