A Primer on KPIs for F2P Mobile Games

12 min readMar 18, 2019

Having been an avid gamer for most of my life, it has been rewarding to combine games and investing when operating Wave Ventures for the past couple of years. This experience is something I am excited to take with me when embarking on new opportunities.

During the past years, we have witnessed some great success stories arising from the region, including Supercell, Rovio, King, and Small Giant Games — an indication that the Nordic gaming scene is not short on talent. At Wave Ventures, we have had the privilege to partner up with ambitious and talented founders looking to build new captivating experiences for us to enjoy on our mobile devices.

This deck covers the basic key performance indicators (KPIs) used to track the performance of free-to-play (F2P) mobile games, with focus on player engagement, retention, churn, and monetisation. This deck is intended to serve as an introduction to aspiring game developers and other gaming enthusiasts interested in understanding what metrics game developers track and optimise when creating F2P mobile games.

This deck is divided into three sections:

Section I: Overview;
Section II: Engagement, Retention and Churn; and
Section III: Monetisation.

Image courtesy: Small Giant Games, Rovio, and Supercell.

Key Performance Indicator (KPI):

KPIs are metrics that illustrate how a product performs against its objectives.
Player behaviour is tracked across different stages of the player journey through various KPIs.
In mobile, game companies know a great amount about their players, i.e. what they do, what they like, and what their spending habits are like, as all behaviour can be tracked.

Understanding the Player Journey:

User Acquisition (UA): New players are acquired either organically or through paid UA.
Engagement & Retention: Game design decisions around sessions and levels are optimised to effectively engage and retain players.
Conversion: Engaged and retained players convert to paying players as they are willing to pay for an advantage in a game.
Referral: Players who enjoy a game refer it to their friends.
Churn: A game does not engage and retain its players, who in turn stop playing and churn.

Organic UA:

Any marketing effort that drives game installs without the use of paid ads.
Achieved through referrals, app indexing, app store optimisation (ASO), search engine optimisation (SEO), and earned media (press coverage, PR, and other organic social media phenomenons).

Paid UA:

Any paid marketing effort that drives game installs.
A game publisher purchases ad space on popular ad platforms such as Facebook, Instagram, or other mobile games.
Paid UA also includes the use of paid ads in other media (e.g. TV and billboards) and the use of influencers to promote games.

Convincing Soft Launch Metrics Are a Must for Paid UA

In order to combat established companies, paid UA has become the norm for smaller studios as well. However, the competition among established companies is fierce. Emerging studios need to achieve convincing soft launch metrics in order to score sufficient follow-on funding in later Series A and B rounds to enable extensive UA campaigns.

CPI (Cost Per Install):

The cost of getting a new player to install a game.
A CPI campaign is an ad campaign, where publishers place digital ads across a range of different media in an effort to drive installation of the advertised game.
A game company is charged a fixed or bid rate only when a game is installed by a player.

Daily Active Users (DAU):

The number of unique players that open a game at least once on any given day.
DAU alone does not provide a sufficient amount of information regarding a game’s performance and should be viewed in conjunction with other metrics such as Monthly Active Users (MAU).
It is important to emphasise that looking at DAU for a given day is merely a snapshot in time, and that the metric is far more interesting when examined on a trendline, i.e. how DAU for a particular game evolves over time.
Combining DAU with some other metric, such as MAU, gives us more context, e.g. how well a game retains its players over a certain period of time, in this case a month.

DAU/MAU (Stickiness):

The ratio of Daily Active Users to Monthly Active Users.
Indicates how well a game retains its players during the course of one month.
As an example: Anton’s Game has 100.000 MAU and averages 10.000 DAU. This means 10% of the people who play the game on a monthly basis come back on a daily basis.
Benchmarks: Facebook has a reported stickiness of nearly 50%. Top mobile games tend to reach a stickiness of 20% and more. Having less than 7% stickiness is considered bad for any game genre.

Retention Does Not Always Equal Sticky

Stickiness generally drives retention, but a product that retains its players well may not necessarily be sticky. Retention defines how well a game is able to keep its players coming back, whereas stickiness is an indicator of how well a game is designed to keep its players coming back at their own volition. When a game is sticky, players become tied to it and do not want to leave. A game’s stickiness should be a direct result of engaging game elements that create recurring “wow moments” for players each time they log back into the game.

Engagement:

A measure of the time an individual player spends in a game completing actions or using features.
Relevant engagement metrics include: sessions, sessions/DAU, session length, session interval, time in game, and player actions per session.

Session:

Every time a player (not just a unique player) opens a game.
Similar to DAU, this metric is usually presented in conjunction with some other metric, e.g. as Average Number of Sessions per DAU (Sessions/DAU).

Sessions/DAU:

This metric generally differs per genre.
Games with shorter sessions tend to bring players back more frequently during the day (e.g. games that have loot boxes with timers, where gamers return every two hours to open a loot box).
Games that rely on longer intervals between repeatable in-game events result in less frequent but longer sessions.

Session Length:

The measure of time between the first and last activity a player performs in a game.
A timeout is typically set to indicate the end of a session when a player is idle for a certain period of time.
The impact of new features on player engagement can be analysed by seeing if the session lengths change significantly.
Combined with session frequency, i.e. the number of sessions a player has per day, it is important to identify possible cohorts of players who spend a lot of time within a game, and analyse their behaviour in order to improve the experience for the rest of the player base.

Session Interval:

Session interval indicates the time between two consecutive sessions.
Indicates how quickly players return to a game.
Also a go-to metric to measure a game’s addictiveness.

Time in Game:

A function of session length and session frequency.
Measures how much time players are spending within a game on a daily, weekly, or monthly basis.

Player Actions Per Session:

Measures the number of critical actions that a player performs during a session.

Starts, Fails, Attempts and Completes Measure Progression

Whether or not the player has to explicitly start a new level, many game types have a leveling component incorporated in some way.

Starts:

Measure the number of times a player starts a new level.

Fails:

Measure the number of times a player starts a level but does not complete it.

Attempts:

Measure the number of times a player completes or fails a level.

Completes:

Measure the number of times players complete a certain level.

Progression Metrics Help in Identifying Gameplay Bottlenecks

By identifying bottlenecks in gameplay that cause players to drop the game, developers are able tweak their games accordingly, and ensure fair progression that engages players more efficiently. A typical case might involve the identification of certain level in a game that is severely unbalanced and/or unfair towards players, and subsequently balancing it out.

Engaged players need to be retained on the path towards conversion.

Retention:

The percentage of players that come back to a game in the first n days (commonly 1, 7, or 28 days).
When calculating retention, players are separated into cohorts based on the day they downloaded a game.
The day a game is downloaded is day 0. If a player opens a game the next day (Day 1), they are retained.

Benchmarks For Great Retention in Mobile Games:

Day 1: 40%
Day 7: 15%
Day 28: 6,5%

The Longer a Game Retains Players, the More Likely They Are to Convert

This is arguably the most important metric in a F2P game, as successful F2P games create long-term relationships with their players. Players who enjoy a game enough are likely to pay for an advantage in it, and a game needs to have strong retention to have the time to build this relationship. Different mechanics can be used to cause this effect. A game developer can e.g. combine an engaging and interesting core gameplay mechanic (that makes the session fun) with deeper metagame mechanics, such as leaderboards or talent trees, that give the player a long-term goal to achieve in the background of the core gameplay.

Virality:

Often measured by the viral coefficient or k-value, i.e. the number of new players that existing players get to join a game through referrals.
Can be calculated as the average number of invitations sent by each existing player * conversion rate of invitation to new player.

Churn:

Measures the number of players that have downloaded a game but are no longer playing (determined on a specific timeframe, e.g. not logged in during the past 28 days).
Pinpointed by looking at the drop-off in retention, and by identifying the step of the player journey that is causing the players to not convert.
It is important to examine the characteristics and behaviour of player cohorts that churn versus the player cohorts that retain to understand why this is happening.
Cohort analysis and player churn prediction is a quintessential part of game development, as low churn rates are directly connected to revenue stability.

Conversion Rate:

The percentage of unique players who have made a purchase out of the total number of unique players during a certain time period.
Repeat purchasers generate the majority of revenue for F2P games.
This trend is shifting towards larger bases of paying players due to studios getting better at monetisation design.

Ad Conversion

Conversion of ads is measured in F2P games that rely on ad revenue in addition to in-game purchases.

Some F2P games rely solely on ad revenue. This a typical solution in hyper-casual games, i.e. games that are not suited to retain players for longer periods of time but to keep them highly engaged for short periods of time. These games are usually characterised by being based around a single gameplay mechanic. Voodoo’s (Paris-based game publisher) portfolio is an example of this approach, with hyper-casual titles such as Paper.io, Helix Jump, and Baseball Boy! showcasing this type of game design.

Following premium games (one-time purchase of a game), in-game purchases have become the dominant form of mobile game monetisation. This is largely a result of F2P games having an easier time acquiring players (free download), and a better ability to monetise due to broader player bases for in-game purchases and ads.

During 2011–2013, the market shifted so quickly from the premium model (one-time upfront purchase of a game) that by the end of 2013 between 90% (iOS) and 98% (Google Play) of mobile game revenue was generated by F2P games.

Some games with short engagement loops and little depth are bound to retain players less effectively than other games. These hyper-casual titles monetise via ads that are shown in-game.

ARPDAU (Average Revenue Per Daily Active User):

How much revenue does a daily active player generate on average?
ARPDAU allows developers to understand how a game performs on a daily basis.
This metric is usually tracked before and during UA campaigns.
Before starting the campaign, developers need to be aware about the range of the ARPDAU and its fluctuation.
During the campaign, new players are segmented by source in order to be able to track which sources perform best in getting new paying players.

ARPPU (Average Revenue Per Paying User):

The amount of revenue a paying player generates on average.
Measures only a subset of players, i.e. the ones that have completed a purchase in a game.
Varies based on game genre. Casino, Role Playing, and Strategy have ARPPU of over 40$ whereas the Word genre has an ARPPU under 10$.
Games with a high ARPPU usually have a deeper and more engaging gameplay for a smaller group of players, whereas games with a low ARPPU might be less engaging and in turn cater for a larger, more casual audience.

Maximising Revenue

It is important to measure and balance a game’s economy. Game developers need to find a delicate balance between allowing players to earn enough in-game currency in the beginning to enjoy a game without having to purchase in-game currency for real money, while simultaneously narrowing this access when the player progresses in order for her to convert into a paying player.

Sources:

Places where players can earn virtual (in-game) currency.
Source measures the amount of currency a player has earned.
It also includes any currency he or she has been given by a game designer.

Sinks:

Locations in a game where players spend their currency.
In Massively Multiplayer Online Role-Playing Games (MMORPGs) with massive in-game economies, such as World of Warcraft, obligatory sinks are used to control the money supply of player currency.

Premium and Soft Currencies:

Both Sources and Sinks can refer to premium (hard) and secondary (soft) currencies.
Premium currencies are usually currencies purchased with real money.
Soft currencies are earned through in-game activities.

Flow:

Combining Sources and Sinks results in a game economy’s Flow.
It is the total balance of currency that players have spent and earned.
Generally the Flow should look stable.

Understanding the Flow

If the Flow skews upward like an exponential curve, the player base will eventually have too much currency and no need to spend real money.
If the Flow slopes negatively to zero, players will not have enough resources to do anything within a game.

Some tactics for boosting monetisation are considered less accepted among players. These tactics include the availability of premium items and frequent sales.

Premium Items:

In-game items that are sold only for real money.
Usually lead to pay-to-win games that discriminate non-paying customers.

Sales:

Limited-time campaigns where in-game currency or items are sold cheaper.
Recurring sales affect purchase behaviour as players start to purchase only during sales.
Results in players owning an abundance of resources post-sale, effectively harming the flow and halting in-game purchases as a game is inflated with cheap resources.

LTV (Lifetime Value):

Measures the cumulative revenue from a cohort of players over their expected lifetime.
Usually measured as 30-day, 60-day, 90-day and 180-day, and is the foremost revenue metric for measuring how well a game is able to monetise its player base.

For more reading on the topic I recommend the posts written on the Deconstructor of Fun blog as well as the GameAnalytics blog.

Feel free to discuss these topics further in the comment section or reach out to me directly at anton@robincapital.co or through Twitter @readyplayerana.

A Primer on KPIs for F2P Mobile Games

Written by Anton Backman