Acquiring and Retaining Gamer Users

Game Monetization Acquiring and retaining users

Game Monetization USAConference & Networking event4-5 December, San Francisco Maximize acquisition, retention and monetization in gameswww.videogamesintelligence.com/monetization/index.php

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IntroductionThe video games industry is a vibrant and versatile place. User acquisi-tion has become perhaps the primary factor in driving revenue for game creators. For games that continue to monetize following initial acquisi-tion, retention rates are just as vital. Player behavior and opinion towards a monetization method can directly impact the viability of a business model; however, there are a number of other contributing factors that will affect both acquisition and retention.

This report details the strategies available within the games industry today to help developers and publishers effectively acquire and retain users, complete with key insights from the best and brightest working in today’s video game market.


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User acquisitionOn a fundamental level, the majority of developers agree that in order for any user acquisition strategy to succeed, you must first create a quality, engaging product that is of value to the user. However, in an increasingly crowded marketplace, quality alone does not guarantee an audience for any game.

There are a number of methods in which a developer or publisher can acquire users.

Gaming the systemThere are anecdotal examples of incentivized downloads and bot farms, implemented in an attempt to effectively manipulate the way the system of discovery and user acquisition works. Within the mobile space, for example, a company would pay a third party to loop a program which artificially generates a large number of downloads of a single product. Whilst the direct effect in revenue will be non-existent, as each download is not a real user, the effect for catalogue services such as the iOS App Store is clear - bot downloads create the view that the game is popular, thus pushing it up the rankings.

Because of the dubious nature of this practice, concrete evidence for these practices is hard to attain. However, the prevalence of such methods is likely small, as it is in platform holders’ interests to stamp out such unethical practices in order to maintain a perception of quality for their platform.

Paid mediaPaid media includes any publicity that is gained through paid advertising. Paid media is a strategy that should be followed once a company has already reached significant growth. James Liu outlines the risk involved with a small developer seeking to do traditional paid advertising. “There’s this upper bound of when your investment starts giving you significant returns; we don’t see the benefit in putting all our eggs in one basket by throwing down USD 40,000 to acquire users as our first title. It’s too much of a risk.”

Paid media campaigns can have a large impact and generate a significant number of users for a game. However, if implemented in a non-targeted way, the users acquired will likely not be of a high quality and will drop off quickly. For F2P titles, these kinds of users are also unlikely to monetize.

User acquisition marketingUser acquisition costs are on the rise, especially for the emerging mobile sector, as more and more companies seek to gain a share of the lucrative market opportunity. “[in 2012] Gree entered the US market and bid up the cost of user acquisition dramatically” (Takahashi, 2013a). Companies that are accustomed to higher acquisition costs in markets such as Japan, and using platforms such as expensive television advertising, are inflating the costs associated with user acquisition.

For smaller companies, the cost of user acquisition through marketing


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is a risk. If the cost to acquire a user exceeds the expected revenue, that acquisition strategy is untenable if the aim is to turn a profit.

TargetingWith user acquisition costs and competition rising, targeting has never been more important. In terms of the user journey, the most efficient platform on which to advertise is the one with fewest user actions between where the advertisement is consumed and the call to action. For a Facebook game, for example, the most efficient place to adver-tise is on Facebook itself. This is demonstrated by Plumbee’s experience where “the only thing that really works on Facebook is Facebook ads, either done in-house or through an agency,” says Raf Keustermans.

Operational efficiencies must also be taken into account when planning and implementing a marketing campaign. Keustermans suggests that mobile campaigns are more challenging to implement. “It’s much harder to run an efficient advertising campaign on mobile than it is on Facebook. Advertising on mobile is a lot more like the Wild West: much less sophis-ticated because, unlike Facebook, there isn’t just one company that dominates, so the tools for targeting aren’t really there.” In light of this, as the opportunity for mobile continues to grow, the solutions for targeting advertisements will evolve to become more efficient.

Whatever the platform, the cost associated with more traditional adver-tising means that pursuing such a route is ill advised, even for companies with a significant ad spend. Victor Kislyi, CEO of Wargaming.net, agrees. “The ads you see in [various magazines] are different. Don’t waste your money. It’s marketing people’s work.”

Competitions and tournamentsThe extent to which competitions are effective at acquiring users depends greatly on the mechanics of the competition and the prizes awarded. Any barriers to entry created through competition mechanisms, such as a question that has to be answered or a registration that has to be filled out, will decrease the possible entries received, and conse-quently, the impact of the competition.

However, creating a competition with little or no barriers to entry (such as a follow and re-tweet mechanic using Twitter) will often generate a lot of entries, the majority of which will not be of the quality desired. There are a number of accounts on social networks whose only activ-ity is to enter competitions. A more lifestyle-based social network, such as Facebook, alleviates some of these challenges; however, the cost of running such a competition is greatly increased because of more strin-gent terms and conditions (Facebook.com, 2013).

For competitions involving social media, if the body running the compe-tition does not already have a significant following, any potential reach (number of users who will see the promotion) will be severely diminished.

The greater the market value of a competition, the more likely it will be


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that a significant number of users will enter. However more bespoke content offered as a prize will more likely garner an invested clien-tele. Joe Dale, Digital Product Manager for nDreams, notes: “If you use competition prizes that have a direct relation to the game, like a copy of the game itself or Free-to-Play items that would otherwise need to be purchased, you’ll likely get fewer entries, but the chances are these will be users who will, or already have, invested in your product”.

PromotionsPromotions have an interesting effect on sales. As one would expect, reducing the price of an item on a limited basis, coupled with market-ing activities, boosts sales of that item. The extent of the uptick in sales will differ based on the cost reduction, platform and level of marketing activity.

What is less expected is that related items will also see an increase in unit sales. For nDreams, a recent promotion saw a PlayStation Home item, one part of a four part set – The Complex: Silo – go on sale for a three week period, four weeks after launch. Taking the overall unit sales of that item at the four weeks post-launch mark, unit sales increased by 37.7%. Another facet of nDreams’ strategy was that the item within the sale was the least popular of the four items offered in The Complex.

With a boost of almost 40%, Silo quickly overtook two of the other offer-ings; however, at the end of the seven-week period after launch, “Bio Dome still leads the way in terms of units sold and revenue generated,” reveals Joe Dale.

Boosting the sale of one item within the four item offering also helped boost sales of the entire pack. “We saw that 52% of people who purchased at least one [item] went on to purchase all four [items]. When you look at the conversion from people who bought at least two, that percentage is way higher”.

Because of this success, an upcoming strategy for nDreams within this particular campaign is to introduce a promotional sale of one of the other, less popular items. The boost in sales generated will likely encom-pass both the standalone item and the sales of all four items on offer.

Any promotion should take account of the bigger picture in terms of a publisher or developer’s portfolio. Simply reducing the price of a game or in-game item and accompanying that activity with a marketing push will likely see increased sales. However, a more far-reaching strategy would be to promote a single item within a set. By showing the user benefit of owning one piece of that set, the promoter is far more likely to see increased sales across the board, as nDreams have shown in the example above.

This strategy has been employed by many for some time. Sony frequently offers games that have a soon-to-be-released sequel, such as the offer of inFAMOUS free-of-charge to PlayStation Plus subscribers in June


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2011 as part of the “Welcome back” program following a security breach that caused Sony to shut down PlayStation online capabilities for over a month. This was timed perfectly with the release of inFAMOUS 2 in the same month, and helped generate sales and publicity for the new title.

Owned mediaOwned media includes any promotion channel that is directly controlled by the creator or distributor of the material being publicized. For small and large developers alike, this is key. The cost of creating and publish-ing a website is negligible, and the benefits are cemented in the fact that there will be no purer source of information on a product.

BoxCat Games’ Co-Founder, James Liu, sees the value in classic market-ing techniques. “Getting your name out there in a traditional way is a must”. Liu has actively been elevating his brand by generating thought leadership pieces on gamasutra.com, as well as generating content within forums and by attending conferences, “We went to GDC and found it to be very beneficial. We were able to get in touch with various journalists and specific mobile game websites that broadcast about new games or upcoming games. So we were able to build relationships that way”. Pursuing users and engaging with forums blurs the line between owned and earned somewhat; however, the benefits to brand awareness are clear.

Earned mediaEarned media is arguably the most valuable and hardest to gain. This includes any publicity gained as a result of promotional efforts outside of paid advertising.

Nielsen’s study conducted in 2012 found that 92% of respondents trusted recommendations from friends and family above all other forms of advertising (Nielsen.com, 2012). David Reid, CMO of developer CPP, agrees. “You have to have a strong community, with a lot of referrals coming from within the community; a lot of positive word-of-mouth.”

The value of earned media is far higher than paid and owned, in that each Facebook share or tweet, for example, is far more likely to convert an audience into users. A paid Facebook advertisement, on the other hand, will be trusted by just 36% of the population.


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Figure 1: Consumer trust in advertising

Source: Nielsen, 2012

For 22cans, their title ‘Curiosity – What’s Inside the Cube?’ was a runaway publicity success, as the nature of the game was such that global media took a continual interest. “The day Curiosity was completed, it was number 1, 2, 3, and 4 trending on Twitter. It achieved more press than a premier football club or FTSE 100 company,” explains 22cans’ Peter Molyneux.

Earned media can become part of any marketing strategy and can, in fact, be built into the game. “We have items that you get as part of referral perks and cosmetic items that are noticeable on the field so that players will want to bring their friends into the game,” David Reid comments, in relation to one of CCP’s products. By not only creating opportunities for gamers to share content with their friends, but generating a positive social experience with referral perks, a developer can effectively increase the likelihood of a game being positively shared by users.

Ads on TV

TV program product

placements

Recommend-ations from people

I know

Ads in magazines

Online video ads

Editorial content such as newspaper

articles

Ads in newspapers

Online banner ads

Brand sponsorships

Ads served in search engine

results

Consumer opinions posted

online

Billboards and other outdoor

advertising

Ads on social networks

Branded websites

Ads on radio

Display ads on mobile devices

Emails I signed up for

Ads before movies

Text ads on mobile phones

Figure 28: Consumer trust in advertising

8%30% 42% 42%

58%53%53%53%

67%64%60%60%

50%

59%54%53%

71%67%64%

92% 70% 58% 58%

42%47%47%47%

33%36%40%40%

50%

41%46%47%

29%33%36%

� Trust completely / somewhat� Don’t trust much / at all


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Table 1: Consumer trust in advertising

Source: Nielsen, 2012

The flip side of a referral scheme is the negative publicity associated with progression wall mechanisms. In games such as Farmville, certain in-game tasks cannot be completed unless a friend aids the player through a social network. These types of mechanics are frequently deemed as cynical by the player and their friends, and can often create bad publicity for the brand. Furthermore, progression walls have bled into the collective psyche to the extent that their use has been referenced as a part of popular parody videos (for an example, see the Hardcore Casual Gaming Rap on collegehumor.com, 2012). Media such as this can be seen as wholly-negative in that the users of social sharing are actively being ridiculed, thus discouraging future users.

James Liu warns: “Sharing out your top scores or highest scores causes annoyance amongst other users. We want to build a brand name and avoid the market response to social gaming companies like Zynga – we want to avoid those types of PR scenarios”.

Table 9: Consumer trust in advertising

Trust completely / somewhat

Don't trust much / at all

Recommendations from people I know 92% 8%

Consumer opinions posted online 70% 30%

Editorial content such as newspaper articles 58% 42%

Branded websites 58% 42%

Emails I signed up for 50% 50%

Ads on TV 47% 53%

Brand sponsorships 47% 53%

Ads in magazines 47% 53%

Billboards and other outdoor advertising 47% 53%

Ads in newspapers 46% 54%

Ads on radio 42% 58%

Ads before movies 41% 59%

TV program product placements 40% 60%

Ads served in search engine results 40% 60%

Online video ads 36% 64%

Ads on social networks 36% 64%

Online banner ads 33% 67%

Display ads on mobile devices 33% 67%

Text ads on mobile phones 29% 71%


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Other earned media can be brought about by creating dialogue between developer and the community.

ViralityCreating a game with mechanics that allow it to spread virally is a signifi-cant earned media strategy that can reap huge rewards. There are several ways in which virality can be built into a game:

Social sharing mechanics are features that are implemented to encour-age users to post links to a game using their social media networks. This is most often seen within the social and browser space. To go a stage further, some games offer rewards for recruitment of players from the social networks of users and more still offer ‘social gates’ – similar to pay gates, these effectively act as a stopping point in the game where the user must either recruit a friend to aid them or use in-game currency, often the kind that can only be purchased with real money, to proceed. These mechanics are therefore very closely related to pay gates.

The success of social sharing mechanics is clear. Zynga became the number one publisher of social games on the Facebook platform, with 80% of the companies’ revenue reported to come through the platform in 2012 (BBC News, 2012). By creating a loyal user base that is actively engaged with your product, social sharing mechanics can help increase that user base.

There are a number of drawbacks to social sharing in games, namely that a vocal proportion of social network users find them to be an annoyance; therefore, the ability for your game to be played, perhaps at a slower pace of progression, without the use of social sharing will help temper any adverse publicity and negativity from critics of the device.

The level to which the consumer is provided with choice is important, as Kurt Bieg, Founder of Simple Machine notes: “If you force people into a community they don’t want to be a part of, that’s not cool, but you can use [social sharing] to give people a great experience – it’s important to make those things optional.”

The ease [with] which this social virality can be implemented on platforms varies. “It’s easier to invite your friends on Facebook than on mobile. On mobile, it’s still a bit clunky,” says Raf Keustermans.

The social nature of games is a development of the last five years, and will continue to see growth as developers build unobtrusive ways to encourage social sharing. James Liu highlights his future strategy: “We’ll be playing around with some of these mechanisms in future, especially the less invasive ones such as referral codes... if we know you’re sharing the game then we want to reward that behavior in-game”.

Bieg similarly notes the importance of social sharing within sectors of the market – “For a free game, you have to have ways of connecting to your audience, to grow the user base and keep people going,” while Margaret


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Wallace, CEO of Playmatics, reports that: “Social is probably the most important factor in retaining users as well as attaining them”.

Organic virality, or ‘K’ factorOrganic growth is predicated on creating a quality product that users will not only enjoy, but that they will want to share with their friends so that they too can join the game and experience it. Developers have been creating multiplayer experiences across all genres and market segments as a response to the compulsively social aspect of the human psyche.

As we have seen, developers can build social sharing mechanics into their games, forcing players to utilize their social networks to ease progression. However, whilst the value of social sharing is questionable, organic virality is a precious commodity that involves building trust with the user. Creating a product that will be shared organically more than once per user is an art that few games have achieved; understandably, these games, coupled with an effective monetization strategy, are much more likely to succeed.

As an offshoot of organic growth, a limited number of games have created a user base that generates advertising material outside of the direct influence of the developer or publisher. At its most basic, this involves fandom: players become invested in the game world to the extent that they produce content discussing aspects of the game or to increase their enjoyment through the creation and development of social circles outside of the game world. Many MMOs implement clan systems – a fundamental social fabric that allows players to easily team together to complete tasks and exchange resources. World of Warcraft has many examples of clan members who have taken their relationship offline, with frequent clan meet-ups seen worldwide.

EVE Online has perhaps some of the most extreme examples of organic virality. The essence of the game is such that, rather than the develop-ers constantly creating content for the users to consume in the form of dungeons and combat instances, CCP create tools that players use to create their own economies and political systems.

David Reid, CMO of CCP, explains: “The events that happen in EVE become bigger and better headlines. The battle of Asakai that happened in January is another example of this emergent gameplay. A guy acciden-tally jump-gated his Titan, the most powerful ship in the game, which can take months to build; he veered into the wrong section of space, away from his colleagues and found himself undefended. As a result, one of the quietest sectors of the EVE universe became hugely populated; 3,000 people showed up to join a giant battle and this story became big international news”.

In a sense, with the implementation of a system that allows for players themselves to create their own ecosystem, and for player actions to shape the game world, CCP have introduced a game that will periodically garner media interest much in the same way that real-world political


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machinations do. Searching on Google for “battle of Asakai”, without even using the name of the game, currently brings up over 83,000 results. With the battle of Asakai, EVE Online has received a fantastic amount of publicity, with no direct effort from the CCP marketing team.

The developers have not only created a game that lends itself to such headline-grabbing stories, but are actively developing with that in mind. “With the Odyssey expansion, we’re expecting more of this to happen because we shook up and rebalanced ships and resources; the value of assets in the EVE universe changed quite a bit, and so Corporations with tens of thousands of people in them are going to war right now,” reveals Reid.

Discoverability increasingly harderThe number of competitors within the market has also increased user acquisition costs, explains BoxCat’s James Liu: “You have such a large influx of applications, practically 100 apps a day on iOS App Store. So you have to scream louder than them in order to get an audience”. In the month of March 2013, Xylogic counted almost 31,000 new iPhone apps and over 22,000 new Android apps in the US app stores alone (Garth, 2013).

Andrew Swanson, VP of Sales for Twitch, sees a future where discov-erability becomes as much of an issue for consoles as it is currently for mobile platforms. “If it becomes easier to self-publish on console, then I think we will run into a similar to the mobile challenge of discovery.”

For BoxCat Games and many small companies like them, the current risks associated with traditional advertising are enough for them to seek alternative methods to acquire users. “We are not paying advertising money because we’re not certain about that yet; we’re testing various places like Tapjoy and Chart Boost, which are both great services,” reveals Liu. However, Simple Machine’s Kurt Bieg is of a different opinion. “A game almost can’t be judged on its merits in the free market without an advertising spend to gain exposure”. Some ad campaigns can also prove to be cost effective, even for small developers, as Bieg points out. “Even a little bit of Facebook advertising can pay unbelievable dividends – in the neighborhood of around 400 users from USD 50”.

The featured effectThere are few media strategies more powerful than being featured or backed by the platform holders themselves. For CCP, developer of DUST 514, this was a key consideration when outlining the project along with the technology that would allow them to fulfill their vision of a true cross-platform franchise. “When a title comes in that is strategic for the platform then they can get behind that game in a big way and that can carry a lot of weight,” comments CCP’s David, Reid. “It’s not just the access to the users; it’s the active promotion that the platform are able to do to keep the game top of mind for players.”

Knowing early that it had the platform holder’s support meant CCP could choose to measure the effect themselves. “When we launched DUST 514,


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we decidedly used the PlayStation network as our primary vehicle for advertising. We did a light online advertising campaign to make sure we got the word out, because not everybody is logging into their PlayStation every day.” This is a particularly innovative strategy in that it provides a company with empirical data as to the effect of their own advertising campaigns.

Support from the platform holder is also the method with the least resis-tance, Reid notes. “There is no more efficient way for us to promote the title than on the platform, because the journey for the user is immediate; you’re right there to click and download the title.” Comparing this user journey with a simple trailer for example, the user has to remember the content to react to any call to action at a later date, or be so driven by the content that they immediately divert their attention and respond to a call to action. Both drive up the need for quality advertising, and will likely increase the cost of creation.

For mobile, with a particularly crowded marketplace, being featured by the platform holder is arguably more crucial than on other platforms. ICO Partners’ Diane Lagrange notes that being featured alone will not neces-sarily lead to success. “The effects of being featured don’t last. It’s a good start, but having a good retention rate is crucial in the first place.”

Developer Johnny Two Shoes have some experience of the effect being featured by Apple, as their co-founder Maxwell Scott-Slade points out. “Plunderland was not only featured in 2010, but it was preinstalled on the Apple products in store. For the whole of that period, we had an income of between GBP 10,000 and GBP 12,000 a month, which is a lot for an indie developer.”

The extent to which being featured on any particular storefront will vary hugely depending on your position within the featured content and length of time featured, as well as the assets that accompany your game. It is important to remember that being featured does not guarantee success; having effective app descriptions, rigorous taxonomy and entic-ing artwork are all key considerations.

User retentionThe development and implementation of new content is the single most effective way to retain users. New game features can also be added to change gameplay over time to provide players with new experiences. Alexander Mamontov, Product Lead at Wooga, notes that many new features are added to their products after launch. These new game mechanics will have an impact on retention rates. “With one particular feature we’re seeing that people are coming back just to see the feature in action and to try and figure out how it happens.”

Certainly, the evidence for both iOS and Android suggests that there is a positive correlation between a game being updated recently and its popularity. Within the top 100 paid apps on the iOS App Store, 58% of apps were updated in the last 60 days. This figure is even higher on


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Google Play, with 81% of apps having been updated in the past 60 days. In the modern marketplace, developers need to continually support their products with new content long after launch in order to continue driving revenue from their portfolio.

LicensingThe implementation of licensed intellectual property (IP) is a tactic that Kabam has seen large success with. This strategy can be extremely cost-effective with regards to marketing because, for well-known IP especially, consumer awareness of your product can be brought about indirectly. “Having your game IP topical will help with discovery. For the Hobbit, for example, we made sure the game was ready for the release of the movie, and that really helped it succeed,” says Matt Curtis, Senior Director of Project Management at Kabam.

IP licenses can, however, increase development cost, as Margaret Wallace, CEO of Playmatics notes. “Even some parties, they can sometimes get revenue just for waking up in the morning, even if they’re not in the game”.

The additional costs must be weighed against the projected benefits. These benefits may include marketing, as well as the benefits of an already established brand. Kabam recently announced that Fast and Furious 6: The Game had over 17 million installs in the first month of launch, which was timed to coincide with the US movie premiere. Fast and Furious 6: The Game is F2P and was featured by the iOS App Store in more than 90 countries worldwide.

Persistent worlds, immersion and investmentThe generation of real investment within a game is one of the most powerful ways in which developers can retain users. For this to occur, the gameplay either has to be compelling enough for the game to remain in the psyche of the user after a play session has concluded, or the game world must be persistent and social. Interaction between players creates a near-infinite number of gameplay variations, and it is this unpredictabil-ity that may well cause players to return again and again.

Chief Marketing Officer of CCP, David Reid, notes the value of unpredict-ability. “For CCP, every new player in the game isn’t just another person to monetize, [they are] a source of content creation. It’s a very fundamental part of our universe. 500,000 players worldwide working and interacting together exponentially creates more content than just 400,000 or 300,000.”

CCP see virality, player investment and potential for earned media through persistent game worlds as a crucial strategy that they will build into their entire portfolio in future, “With EVE, as it gets bigger, it gets better, and we’ve built these same mechanics into DUST 514,” Reid discloses.

TournamentsTournaments and e-sports are recent phenomena that are slowly gaining traction. Popular MOBA game League of Legends has created a long tail


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to the lifecycle of the game by holding frequent tournaments with real cash prizes for the victors. The marketing brought about by commu-nity members employing their social networks and fan consumption of streamed tournament gameplay that isn’t necessarily published by the developers themselves is extremely cost effective. Whilst the cost to put on a tournament may at first seem high, the cost to gain similar coverage using traditional means would likely be several times higher.

Services like twitch.tv have built an entire business model around stream-ing gameplay and tournaments, with ad revenue shared between the content creators and twitch.tv themselves. The most popular content creators are invited to become Twitch Partners. Members to the partner program receive additional perks to help build and interact with the community to further drive subscriptions and thus revenue.

David Reid believes that the inclusion of tournament events could help elongate the life of products. “The idea of cyber gaming and tournaments in the first person shooter space is pretty well proven, and tournaments, arenas and e-sports are very much on the road map of things to do for DUST 514,” he says.

Notably, turning a game into a viewing experience for e-sports does not work for every genre, and lends itself currently to the PC market rather than consoles or mobile because of the difficulty of creating a viewing experience on smaller-screened devices for games with high levels of complexity. “We absolutely see the value in stand-alone tournaments. League of Legends, for example, works very well for online streaming. We’re currently thinking through what a robust tournament philosophy looks like for EVE because of the size and challenge of understanding a match as a viewer,” says Reid. League of Legends is a PC only multiplayer online battle arena game (MOBA) with arguably the most robust tourna-ment infrastructure of any game currently on the market.

Wargaming have even changed their business model to better accom-modate the tournament culture that has grown around World of Tanks, removing the exclusivity of pay to win items. “We are removing this ‘real money only’ for golden bullets and similar, inside the battle,” announced Victor Kislyi, the company’s CEO.

Player investment and P2PPaid applications, by nature of their monetization method, require a player to enter the game world with a higher level of personal invest-ment than F2P games. This is a difficult line to walk as the developer has created a barrier to entry for players: that of making payment before any gameplay has been experienced. The added consideration for player investment in P2P games is that their expectation will be higher, especially if the price point is higher than the platform mode.

However, if implemented effectively, P2P games are more likely to attract users who will invest their time in a game and are therefore more likely to further invest. James Liu, Co-Founder of BoxCat games, notes of their


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game Nameless: The Hackers, “Because we’re a paid application rather than a free application, we fall into a different bucket. As users have invested [an up-front payment] in us, so that’s why our Appstore review rates are higher – at around 20%, rather than the industry standard of between 1-5% on free Apps” (Liu, 2013).

So whilst P2P games will see higher feedback rates, F2P games will require significantly more users, and implement gameplay features that encourage players to invest in the game in order to generate the same level of feedback.

Removing barriersFor EVE Online, developing a universe and economic tools for players to create their own stories has not only worked as a way of generating earned marketing content, but has worked to attain a user retention percentage that is much higher than the industry average.

However, CCP have also implemented an innovative strategy that hybrid-izes the subscription model to allow low-income players to continue playing the game. “One thing that CCP pioneered a few years ago is what we call PLEX: Pilot License Extension.,” explains Reid. “I can buy a PLEX from CCP directly – it is an in-game item that has a value of 30 days of game time. If a player has more money than time, they can buy a PLEX directly and take that into the game to sell to a player on the in-game market for ISK, the in-game currency, to another player. So a player with more time than money can earn a lot of in-game currency, and CCP gives you the ability to have somebody else pay for your subscription.”

Through PLEX CCP have, to a certain extent, removed the barrier to entry that subscription places on the game, without reducing their revenue accrual. “The reason PLEX works in EVE is that somebody still has to go through the effort of making in-game currency in order to pay for my subscription as opposed to paying with cash.” The true innovation here is that CCP have taken the concept of F2P and applied it within the subscription model without devaluing the subscription. Reid continues: “What we see with our implementation of PLEX is geographical differ-ences. In Russia, for example, we had a lot of players who couldn’t pay for their subscription in Rubles, so Russian players were earning a lot of in-game currency and paying for their subscription using PLEX.

Community engagementSocial media tools are so prevalent within the gaming population that almost every company should be expected to have a digital presence. James Liu highlights the ease of social media saying: “It’s something you can do very well with all the technologies available, to talk with your users and engage with them on that level – because, if they like our game, then they’ll tell their friends.” Kurt Bieg, Founder of Simple Machine, notes that building a community can have additional benefits. “Releasing new games will help you build up a fan base, and they end up going through and paying for your back catalogue.”


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For hardcore games, or those that serve a particular niche, engag-ing with hobbyist communities directly within the spaces they already interact is a fantastic technique for gaining users and nurturing word of mouth. BoxCat Games felt they were “trying to fit into a very particu-lar niche market so we’re going into forums that are JRPG oriented or anime oriented and saying ‘hey, here’s something on the app store that is unique’” (Liu, 2013).

Victor Kislyi, CEO of Wargaming.net, agrees. “For kids’ games, maybe you go to MacDonald’s. With World of Tanks, it was easy: museums, history societies, websites, magazines… then MMO websites… We don’t advertise in the New York Times very much simply because it isn’t as targeted as these other outlets.” By targeting a niche that a developer knows their game directly caters for, the higher quality of user attained and, thus, the percentage of users retained goes up.

Actively engaging with and building a community also comprises a business strategy, as the popularity of a product even before launch will affect relationships with platform holders and publishers in the same way that a proven track record of game development will. “Using social media helps create a buzz, making your game feel bigger than it is in the early days. So community building can be more of a business strategy rather than a simple direct drive for downloads,” underlines Steve Stopps, Founder of Kumotion.

Developing a quality portfolio is valuable beyond measure for any devel-oper. Chris Petrovic, industry thought leader, explains: “We are a hits driven industry; previous success does not guarantee future windfall”. Whilst this is certainly true on a micro level, the bigger picture is that the ability for a company to build and maintain a brand is extremely import-ant when driving a subset of the gaming audience to download a title.

SummaryUndoubtedly the most effective promotion that can be done for a game is to be featured by the platform holder. Whilst any effect will be short term, coupled with a strong retention rate, you have a robust business model that can be built upon. Of course, no developer or publisher can guarantee that their game will be featured; however, we have seen that there are a number of techniques that will increase your chances.

Word of mouth is the strongest endorsement available, and develop-ers have to maximize their ability to build a following for their game by finding and engaging directly with their community. This goes hand-in-hand with every other marketing strategy, and should be the first step within any marketing plan.

Acquiring and Retaining Gamer Users

Marketing

Transcript of Acquiring and Retaining Gamer Users