The Most Important Element of a Successful Game

Hafiz Kassam
Aug 28, 2017 · 4 min read

Whenever I tell people what I do, make games for a living, they generally ask me two questions. The first question is “what kind of games do you make?”, and when I explain to them that I make free to play mobile games, the next question they ask is, “interesting, how do you make money from a free game?” After explaining to them that ad revenue and in-app purchases are the primary revenue generators, they are satisfied and leave it at that.

Most people who aren’t well versed in game development often don’t think past the equation of “build game, insert ads and in-app purchases, make money.” Occasionally I will talk to someone who has some understanding of marketing (but not from a games perspective, but a retail perspective) and they seem to understand it on an additional level, that you need to inject marketing money to acquire customers/users, and those customers/users are the ones who will generate your revenue. But there’s still something extremely important missing, and it is the one thing that often escapes most amateur or indie game developers, or is realized too late. This missing piece is a three letter acronym: LTV, or lifetime value.

LTV is not a foreign concept to people who are in the marketing space. It is defined as prediction of the total profit generated from a customer (or in the case of games, user or player) over the course of their relationship with the product. The key is to make sure that the amount you spend to acquire that customer, user, or player is less than the predicted LTV that an average user will generate. Basically, money in > money out. It is an easy enough concept and makes sense in everyday life.

So how does this tie into making a game successful or not? Simple. If you do zero marketing and your player base is all organic (or acquired virally), you will be making pure profit, but without any marketing behind your game, you won’t see much revenue at all unless your game is a viral hit. However, as soon as you start marketing, you need to make sure that the amount you spend is coming back from the players you have acquired. This is typically done using cohorts. For example, if I spend $100 to acquire 20 players on a particular day, I need to make sure that after those 20 players have all quit playing my app a month or two down the road (known as churn), that I have made that $100 back or more.

It sounds straight-forward, but where most game development studios fail is in the execution of this task. Say in the above example you find that those 20 players ended up spending $30 in total in your app before they churned, likely a single player from that group contributing 80% or more of that value. You lost $70 on that marketing spend. Not good. If you’ve done several weeks with similar marketing before you found out that number, you will be in the hole far more than that. So what can you do to make sure that you take the necessary steps to solve this problem before you get the results? Two things, in fact. Use an analytics platform such as Flurry Analytics or similar and react to what you measure while it is happening, not after it has happened.

Lets go back to those 20 users that you bought for $100, who ended up spending $30 in your app. Without analytics tracking their behavior, you would never know when they dropped off your app, why they potentially dropped off your app, what caused them to spend the money in your app when they did, and what caused them to repeat purchase if they did. Without all this information, you would be blind, and that is the most common way to fail in game development. By tracking your players’ behavior in your app, you can react to things as they happen and make changes to positively affect the many cohorts that come after your initial group before you spend the marketing money.

So, lets say you are monitoring those 20 users’ behavior and you find out that most of them stopped playing your game on a certain level and never returned. The ones that spent money from those 20 users mostly spent it on that particular level, and most of them a single purchase. Already there are two things that immediately pop out that can be fixed. The first thing is that this level is a churn point and is likely too difficult. With an event log, you could potentially see that the players failed this level numerous times, tried making a purchase and still failed the level, and then gave up on the game altogether. The outcome was that they felt it was too difficult and the purchase they made did not have any value whatsoever in helping them pass the level. Right there you have actionable items that you can change for future cohorts. Simply making the level easier could increase your users lifetime in the game, which increases the likelihood of repeat purchases, which then directly increases your LTV. Future cohorts may end up spending double what the original cohort spent, earning you $60 from your $100 investment, a marked increase.

Continuing this way and optimizing your game play experience using metrics to maximize your LTV is an extremely important step in making your games more successful, but it is also just one major aspect. In a future writing, I will outline the second major piece of the puzzle, targeted marketing, which ties in directly the user performance and monitoring analytics.

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Hafiz Kassam

Written by

Web/Mobile Game Developer and Entrepreneur.

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