Eric Seufert explains why analytical people thrive in the mobile gaming industry
Eric Seufert is a partner at Heracles. He shares his expertise on analytics and freemium mobile products. Follow his reading list on Quibb.
Eric found his place in the mobile gaming industry at companies like Rovio and Wooga, where his analytical mindset gelled perfectly with the development process of free-to-play games.
The relationship between people who worked in games to those that have now found their place in growth/UA roles is a common path. But there’s some nuance there, too — it’s not just any gaming people that do well in these types of roles. It’s specific to those that previously worked for freemium-focused mobile games. The dynamics of console games are very, very different, as Eric noted:
“If you were to go talk to somebody at the company that makes Grand Theft Auto, and go talk to a product person, I don’t know that they would necessarily be metrics-heavy. On the other side, if you went to go talk to anybody in product at a free to play gaming company, they would very much be obsessing over metrics, and that would inform basically everything they do on a daily basis.”
Why is that? Eric thinks there are two reasons, both based on the freemium model:
The first is that to succeed with a freemium model, you need a lot of users to be continuously generating revenue, which drives a process of constant experimentation and data collection from those experiments.
“That necessarily involves generating lots of data, because you have lots of users, they generate lots of data, so the modern digital product company has tools and internal resources to deal with lots of data. It’s almost just a matter of convenience. It’s there, you have the tools to interpret it and use it to improve the product, so it just becomes part of the development and operation cycle, almost by default. It’s there, we have the tools to use it, so let’s use it.”
The second reason is that a freemium game is essentially a digital product as a service, and when operating that way, you need to continue to iterate on the product based on user feedback. “You need to react to the way users interact with your product in order to improve it,” Eric says. This is the key difference between a freemium mobile game and a game like Grand Theft Auto, which a customer purchases once:
“When producing a completed, packaged good, you make money upfront, and revenue is just really directly a function of marketing spent right. I have this thing I pushed out to stores, I pushed a lot of marketing onto it, people buy it, and if they hate it, well they can’t really do that much about it. They could potentially return it and whatever, but I made my money.”
So with a console game, like Grand Theft Auto, the revenue (and success of the game) is based on initial purchases. But with a freemium game, the revenue (and success) is based on continuously extracting value from the user. How do you do that?
“The only way to do continuously extract value from the user is to process lots of data and also build frameworks for making decisions with data. In that sense, data analysis is the foundation of freemium product development, because it’s just a continuous set of product iteration cycles. If those aren’t based on user feedback, if it’s just a PM saying, ‘Okay, I think the next thing we should do is this, just because I feel that, that would improve the product,’ then there wouldn’t be a benefit to using the freemium model. You should just make that a packaged completed good up front.”
Eric pointed out that if you’re “mega-viral” you don’t have to focus on metrics and analytics to get incremental improvements out of everything. But the other side of that coin is gaming.
“Given how commodified and undifferentiated most free-to-play games are, you’re paying for almost all of your installs. At the very least, even if you have a decent amount of virality, a decent viral coefficient, your growth model is based on paid user acquisition. The only way to compete is to spend money, but more importantly to spend money effectively. That just necessitates a robust analytics infrastructure and a capacity for doing analysis.”
“In gaming, the growth department is user acquisition,” he says. “That just has a very visible, high impact role in any gaming company.”
These are unique skills that are highly valuable nowadays when the amount of money to be earned by top App Store games is staggering, as Eric explained regarding Supercell and Ketchapp. The basis for these types of skills is also common in another field — finance. Eric has found that a lot of his peers come from this type of background, too:
“A lot of us have finance backgrounds. It was funny to see how these people cluster together even after they move out of that initial industry that they may have started in.”
Things get a bit meta too, in relation to how UA professionals think about their role, as well as their career. This pressure to continuously acquire new users, to extract value from current users, to dig into data, drives Eric to think about himself and his career in the same way. He approaches most things in this pragmatic, experimentation-focused way:
“It just is what it is… and you adapt. I love it because that’s my job, that’s my skill set. I think, if for whatever reason, marketing on mobile became easy tomorrow, I would be living under a bridge, so I hope it gets harder.”