User segmentation approaches for games

Discover approaches to segmentation to better target your users and grow your business

Every mobile game seeks to create a fun and engaging experience for its players. As a developer, you take into consideration the player lifecycle, creating innovative features, and improving approaches to convert players to payers. However, singular incentives do not drive engagement or purchase behaviors the same way for all users. It’s important to consider how you can encourage different sets of users to engage or spend money in your title. Segmentation is a powerful tool that helps you address this challenge, enabling you to curate personalized experiences and grow your business.

Over my career in mobile gaming, I’ve leveraged segmentation across multiple games to drive increased engagement and maximize monetization opportunities. As a developer growth consultant at Google Play, I’ve had the opportunity to partner with multiple developers and witness the positive results segmentation has brought to their games. In this article, I’ll share the approaches I’ve found to be successful and dive into the advantages of segmentation, including providing perspectives on approaches, data tracking methodologies, and implementation.

Advantages of segmentation

Before discussing the “hows” of segmentation, let’s define some of the advantages. Segmentation enables you to:

  • Personalize experiences. You can create an experience specific to the player, ensuring they are provided with affordable and attainable goals.
  • Create relevant content. Surface the right content to players based on the features and benefits that will matter to them the most, especially when considering where they are in the player life cycle.
  • Drive strong perception of value. Ensure you’re driving the strongest perception of value for your game. This will keep players engaged over time and bring continued monetization growth as players see value in spending both time and money in your game.

The bottom line, we’ve all heard it, is: surface the right content to the right player at the right time. This is done most effectively with segmentation.

So, what do you need to understand about your players to drive effective segmentation? Player segmentation can be done using both engagement and monetization signals. Both can help you understand your players behavior in-game and their needs throughout their lifecycle and gameplay. Understanding these signals is a good starting point in defining the types of inputs you can use to create segments that drive the behaviors you want to see in your game.

Segmenting by engagement

Engagement is a key component of effective segmentation. If you’re not engaging your players, they won’t see value in sticking around and in-game monetization strategies will be ineffective. The more someone plays, the more they’re enjoying the game, the higher the likelihood they’ll see value in making a purchase. Also, for titles that are concerned with player fairness in offers, engagement segmentation may be the easiest or preferred place to start rather than using monetization segmentation.

Player engagement gives you insight into gameplay preferences, intent, and drivers. The history of a player’s engagement is a good indicator of how they will engage with your game in the future. Engagement, therefore, helps you understand the features and rewards that are most important to players, as well as how their preferences evolve throughout their life-cycle. You can use historical gameplay information to personalize in-game features and pricing to drive incremental increases in your player’s engagement.

Segmenting by engagement provides insight into:

  • Supplying players with desired features and content. Understand what your players engage with the most, what is meaningful to them, what will keep them engaged, and what will drive further engagement.
  • Creating and assigning attainable goals. Analyze player’s actions and asset consumption in the game to understand different player types. It doesn’t make sense to give a beginner the same goals or assignments as a more skilled and invested veteran player.
  • Creating new habits throughout the player lifecycle. Early insights into gameplay preferences can help you convert beginners to veterans.

How do you measure engagement?

It’s important to consider what increased engagement means in your game. In one game, increased engagement may mean more time spent. For another, it may be about driving players to spend the same amount of time in more significant, impactful areas of the game. These are the areas where you want players to spend their time taking key in-game actions to maximize monetization opportunity.

You can assess what your game’s engagement and participation metrics are. These metrics are based on a player taking a key action in your game and are tailored to what types of actions you expect your users to take. They are good indicators of your user’s participation or engagement and show a player’s intent and desire to progress through the game.

Here are some examples of key actions across several different genres:

  • Casual match-3 games not only look at who comes into the game and collects their daily bonus, but also focuses on which users have made, or even completed, a level attempt. When you think about this genre, a level attempt (even a loss!) shows the intent to progress through the game. A level attempt, especially a loss, is an opportunity for users to spend their in-game currency.
  • Social casino games enable players to collect free in-game currency daily, sometimes even hourly. A key action in these games is to consume that in-game currency. Things such as a spin on a slot machine, playing a round of bingo, and even quantifying the users who consume their entire in-game wallet can be a meaningful measure of participation and engagement.
  • Strategy games have depth and demand players to take a multitude of actions, both alone and against other players. Participation and engagement are heavily driven by player interactions. Attacks on other players is a good participation metric to consider in this genre. Attacks drive reciprocal actions in-game, such as replenishing resources, re-building camps, and retaliation attacks. Alternatively, players who start construction or collect resources from in-game missions are also taking key actions that capture segments of the population that tracking the attack action alone may miss. Both of these player actions drive higher demand for consumption of in-game currency.

The engagement factors you need to consider when segmenting your audience will be unique to your title, and depend a lot on the outcome you want to drive. You can use these engagement and participation metrics to create player segments centered around the frequency of play, the area of the game where the most time or in-app currency is spent or player’s primary day of week to help optimize your content calendar.

Let’s walk through an example of a simple approach to segmenting by engagement. Assume you have decided to create or optimize an in-game quest system. You can use the player engagement information to create relevant, meaningful, and directed quests for each player segment. There are many approaches you could take, but consider layering different inputs such as:

  • Player category can help you categorize the area of the game your players find most compelling. Use this to help understand the best place to direct your players in the quests. For example, if your game has seasonal or limited-time content, understand which players mainly engage with this content versus those who mainly engage with your core content.
  • Player engagement level can help you assign attainable goals for the quests. Use a player’s gameplay history to assign a value that will increase engagement, but feels achievable to the player.
  • Reward type can help give a stronger incentive for your players to complete quests. Knowing what a player needs, based on their in-game progress, will enable you to design quest rewards that are immediately useful to the player. You can also leverage this to direct players to areas of the game they wouldn’t normally explore.

Engagement is a powerful segmentation technique in its own right. Increased engagement in games, especially those offering in-app purchases or surfacing ads, gives players more opportunity to consume their currency and, hopefully, encourages them to make purchases. In-app currency consumption is a good proxy for revenue, which is driven by increased player engagement: if paid currency consumption is increasing, revenue is likely to be going up as well, since it implies a high demand for additional currency and purchases.

Segmenting by monetization

The goal of monetization segmentation is to maximize revenue while minimizing revenue hangover. It has a dual role, to help you understand how to convert your non-paying users and to help maintain or increase revenue from existing buyers. Here are some things to consider to drive meaningful monetization segmentation:

  • Help players recognize value for money.
  • Create a payer purchase cycle for buyers.
  • Ensure you’re surfacing relevant offers.

As with engagement segmentation, the factors you need to consider when segmenting for monetization will be unique to your game and depend a lot on the outcome you want to drive. However, there are three categories to consider when segmenting by monetization:

  1. Purchase drivers: These are the factors that start and maintain payer behavior. These drivers can include in-game progress, in-app currency wallet size, starter pack composition, limited time offers, in-game events, new content releases, and alike.
  2. Payment tiers: Once a player has converted to a payer you have a data point telling you how much they’re willing to spend on a given purchase and what types of in-app currency they will open their wallet for. Consider using average transaction value over a recent period (like 4–6 weeks), to create relevant offers for each buyer that they are more likely to convert on.
  3. Purchase frequency: This information is used to keep players on a regular transaction frequency cycle or, possibly, increase the number of transactions. This helps you understand the user’s preferred purchase cycle. It can also indicate whether the player needs an additional offer, based on how recently their last purchase occurred.

You can use these three categories to start thinking about ways to optimize your monetization approach. This can be done by:

  • Optimizing the surfacing point and composition of your starter pack.
  • Refining approaches to converting non-paying users, especially long tenured non-buyers.
  • Segmenting supply-side sales.
  • Targeting lapsed buyers with special offers.
  • Creating post-purchase offer sales.
  • Enhancing your content cadence to drive additional demand for in-app currency by driving up paid asset consumption after a player makes a purchase.

Let’s walk through an example of a simple approach to segmenting a supply-side sale. Assume you have a user that has spent an average of $10 per transaction over the last month. Providing this buyer an offer that is worth $50 may have certain risks. Firstly, they’re less likely to convert since it’s a much higher price point than their usual purchase. Secondly, if purchased, this higher price point could last the player longer than their usual $10 purchase. This extended service can cannibalize future purchases driving the payer’s purchase frequency down. The larger offer may even last the player until the next in-game sale, habituating the player to only purchase during sales. Instead, consider offering a binary option to this buyer: an offer worth $5 with a small bonus and an offer worth $15 with a large bonus.

The player is more likely to purchase the larger of the two offers since the value proposition is better. The offer also provides the user with a number of assets in a similar range to their average $10 purchase. This gives you the flexibility to use in-game events or features to increase the players paid asset consumption and drive continued demand for additional purchases.

As a side note, these segments do not need to be based on one input alone. You can layer different signals, even coupling engagement with monetization, to create personalized supply-side offers. Consider layering the payer tier with:

  • Purchase drivers by creating multiple offers with different in-app currencies or bundled offers based on what the payer is more likely to convert on.
  • Purchase frequency by knowing when their last purchase was. If it was within the last week, maybe it’s not the best time to surface an offer, since this can lead to the player hoarding assets thus delaying their next purchase further.
  • Engagement behaviors by understanding what your player’s engage with most in your title can help you create different bundled offers that you can assign based on gameplay preferences and demand.
“At Vlogger Go Viral, we were able to triple the conversion of a starter bundle by identifying early game differences between player segments and creating distinct offers for each group.” — Guilherme Campbell, Head of Product, Tapps Games

Approaches to storing data for segmentation

As a mobile developer, your most powerful tool is data. You’re probably already tracking a lot of important information in your game, and much of that data is usable in creating meaningful segments. As with all data tracking, it’s a good idea to track more than you think you need. After all, you can easily ignore extraneous data, but it’s impossible to go back to collect something you’ve missed.

Now that you’ve gone through the exercise of figuring out the important engagement and monetization inputs for your segments, some things to consider for tracking and aggregating this information are:

  • What is the meaningful unit of time for your title? Consider factors such as how frequently you want users to interact, what mechanisms are in place to drive user behavior, and alike. Daily is most common for games, but you can go as granular as hourly if it’s useful.
  • What are the core engagement metrics that you want to use? Consider metrics such as core engagement and participation metrics, sessions, time on device, and interactions with features (including tournaments, social, limited time events, and seasonal content vs. progression).
  • What is the critical user data that can help further segment your players? Look at things like in-game level, noting that the user’s position in the player lifecycle can impact behavior drivers, content consumption, and in-app currency inflows and outflows (including sinks, gross and net, as well as where it is spent).

You can easily use this data in real-time to create your segments. However, consider taking this data and creating a user level aggregation table based on the optimum time unit, including all the information that can feed engagement and monetization segmentation for your game. Here is a simple example:

Once you have all the data inputs that are meaningful for your segmentation, you can use them in multiple ways. From creating segmented supply-side sales to mitigate asset hoarding and drops in revenue, personalizing push notifications to make them more meaningful and actionable, gating or pricing of in-game features based on in-game preferences and behaviors, to segmenting in-game pop-up controls based on the player’s level of interest.

Start with a small number of inputs to feed the creation of your segments. You can then analyze what the most meaningful inputs are by testing layered insights from these areas: player lifecycle, engagement behaviors, and monetization performance. However, it’s important to test and check if an additional “layer” meaningfully changes the user segment. There will be times when additional layers don’t change behavior, so you can analyze and learn which are the most impactful for your game.

Approaches to segmentation implementation

There is a perception that segmentation needs to be 100% customized to be effective. While some of the most sophisticated games can create 100% personalized offerings, it’s not required to drive increased performance for your game.

When starting out, even relatively larger size segments that aren’t fully personalized are capable of improving engagement or increasing revenue, but more importantly, drive strong learnings for your team. The best approach for games is to start with a small number of segments. This makes it easier to build tests around these segments and validate that you’re taking an approach that’s meaningful to your users. A smaller number of segments also enables you to get a large enough population per segment to run tests that can be completed quickly, enabling you to iterate and optimize your segments.

Closing Thoughts

Every game developer can approach and implement player segmentation differently. There’s no one size fits all, but it’s a powerful tool to help you drive engagement and monetization in your game. Hopefully, you have found these different approaches to player segmentation for games useful for your title. While your long-term goal may be to achieve fully customized offers, start small to gain immediate learnings and benefits. You know your game best, so utilize the data you have to make educated assessments on the input factors to create meaningful segments and execute thorough testing to drive iterative improvements.


What do you think?

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