Monogamers, serial monogamers and polygamers: which users make a game successful? © Copyright Slice Intelligence. 2017. All rights reserved. APRIL, 2017 • SLICE INTELLIGENCE, INC. • WWW.SLICEINTELLIGENCE.COM 1 content 03 abstract 03 introduction 04 methodology 04 loyalty and stickiness drive spend 08 serial monogamers are the best user acquisition targets 09 making cross-game purchase data actionable 10 conclusions 11 authors 13 about Slice Intelligence Marketing Science 14 appendix © Copyright Slice Intelligence. 2017. All rights reserved. 2 abstract Slice Intelligence analyzed 10 million mobile game transactions from more than 600K consumers over a two-year period to find behavioral patterns of high-value gamers and the traits of game titles that attract them. In order to understand time-based patterns in user purchase behavior, we developed several user level metrics including loyalty and diversity measures and share of attention and wallet. Slice Intelligence’s unique cross-game view shed light into behavioral patterns in context of the broader market trends and benchmark game performance. We leveraged broader in-game purchase behavior to address the following questions: What are the best predictors of a game’s success? Who are the most valuable customers to target for user acquisition? We found that: Share of game wallet, or the fraction of total spend in mobile gaming captured by a specific game, is the best predictor of a game’s average spend per user Serial monogamers, or users that switch games but tend to stick with one game before switching to another, are the best target for user acquisition introduction Globally, mobile gaming is a $35 billion market, larger than both the console and PC gaming markets. Despite having existed for less time than traditional gaming categories, mobile gaming is experiencing the fastest growth across the entire gaming sector. The games that capture the majority of the revenues are microtransaction based, meaning they are free to play but include items or features that users can buy in-game. From past Slice Intelligence research, we know that looking at a user’s purchasing history is a better predictor of online spending than mere demographics. In this paper, rather than making predictions from past purchases on a single franchise, we studied the purchasing behavior of users across mobile games and found predictors of games with high user spend. © Copyright Slice Intelligence. 2017. All rights reserved. 3 methodology To identify user behavior patterns in successful games, we analyzed data from 600K users in the Slice panel who made at least 10 in-game purchases from January 2015 to December 2016. To understand the patterns of game-spend both at the user and game levels, we examined their purchasing behavior and aggregated them by game. We calculated 10 user-level metrics (see appendix A) based on cross-game purchase data to identify behavioral characteristics of different types of gamers that might identify high value users. We aggregated user populations by game and calculated averages for those user-level metrics as well as new game-level variables (see appendix B for the full list). These user behavior attributes were then used in regression trees to predict user spend for each game, and to understand which user and game-level metrics are most important in predicting game success. loyalty and stickiness drive spend We found that the average user made purchases in five different games in a 12-month period, with one or two games winning the lion’s share of the wallet. At the game level, we summarized the average values of their user-level metrics. The average game has users who play an average of 17 other games (figure 1), and games with users that make purchases in fewer games have a higher spend per user (figure 2). figure 1 users of most successful games spend in fewer other games mean game count ABC A Candy Crush B Clash of Clans C Game of War average number of games where users have made purchases Several of the most successful titles have users that buy fewer games than most other games. © Copyright Slice Intelligence. 2017. All rights reserved. 4 figure 2 game loyalty correlates with higher user spend game-specific user spend ($) Candy Crush Clash of Clans Game of War Games with similar number of competitors capture higher user spend if their users are more loyal. Share of game wallet is highly correlated with spend per user. Share of game wallet is the fraction of the total dollar spend in the category that’s spent on a specific game. All the games we observed with a high share of game wallet also had a high spend per user, even if the average wallet size was small (figure 3). figure 3 share of game wallet is highly correlated with spend per user average game-specific spend ($) total wallet size ($) Candy Crush 0 10% 20% 30% Clash of Clans 40% Game of War 50% 60% 70% 80% Even games that have users with smaller total spends can succeed if they collect a large fraction of the wallet in mobile games © Copyright Slice Intelligence. 2017. All rights reserved. 5 The share of game wallet is a function of user loyalty and stickiness. We define loyalty as the fraction of purchases in a game relative to the total amount of purchases across all games. Stickiness is the frequency of switches between games as observed through their in-game purchases. Users with high stickiness switch games less often than expected and users with low stickiness switch games more often than expected. Users with a stickiness of zero have purchase patterns indistinguishable from random switching. Figure 4 below shows examples of purchase stickiness between users who play two games. User A has low stickiness and is constantly shifting between games. User B’s purchasing pattern appears random; showing no perceivable pattern. User C has high stickiness, only experiencing one game transition, sticking to one game until she decides to switch to a new game. Even if stickiness and loyalty are related, they are not the same, as stickiness measures serial loyalty. The loyalty is the same in case A and C, and very similar on user B, but the stickiness is very different. figure 4 examples of stickiness in purchase patterns Stickiness = -1: more purchase transitions than expected by chance Stickiness = 0: purchasing pattern indistinguishable from chance Stickiness = 1: fewer purchase transitions than expected by chance * Box 1 gives a more detailed explanation of these different types of users When we plot average stickiness and loyalty for this user set, we see that all the high user spend games are in the upper right section of the plot (figure 5). © Copyright Slice Intelligence. 2017. All rights reserved. 6 figure 5 loyalty and stickiness can predict high user spend average game-specific loyalty Clash of Clans Game of War game-specific user spend ($) Candy Crush average stickiness of game users Games with high user spend (in red) have either high stickiness or high loyalty. Games with low stickiness and loyalty typically have lower user spend (in blue). Note that almost all the games with high user spend are plotted to the right of the diagonal line in figure 5. box 1 buyer profiles based on stickiness and loyalty ALICE monogamer Alice is a devoted fan of Candy Crush. She makes purchases in the game consistently and has made very few purchases in other games. Her loyalty to Candy Crush is very high. Alice is a monogamer. BOB serial monogamer Bob enjoys playing different games, but mostly focuses his spend on one game at a time. After playing Game of War: Fire Age for six months, he moved on to Clash of Clans for three months, then to Clash Royale where he has been purchasing steadily for several weeks. Bob is a serial monogamer. CARLA polygamer Carla plays Words with Friends every now and then, but she also plays Cookie Jam, My Singing Monsters, and Two Dots, among others. Carla does not invest a lot of money or attention in one specific game, even though her total dollar spend on games is similar to Bob and Alice. Carla is a polygamer. © Copyright Slice Intelligence. 2017. All rights reserved. 7 serial monogamers are the best user acquisition targets Why? Monogamers like Alice are set on a specific game and are less likely to be influenced by ads and promotions. While monogamers may start purchasing in a different game at some point, the timing of that switch is hard to predict. Marketer tip: Focus your efforts on engaging and retaining your existing monogamers, and carefully monitor their behavior to catch any indication of game switching. Polygamers like Carla are open to new games but do not stay long enough to generate significant revenue. Their attention and purchases are inconsistently spread across many games, making difficult to entice a polygamer to remain loyal to one game. Marketer tip: Efforts to attract polygamers will likely result in high cost per install (CPI) and low lifetime value (LTV). Prioritizing other game audiences will generate better performance. Serial monogamers like Bob have shown purchase behaviors that indicate they can be influenced to play new games. They will stick with what they like and can generate significant revenue for games. Marketer tip: Targeting ads to serial monogamers playing games similar to your own, then converting them to play your game and focusing on retention is a sensible strategy to maximize return on ad spend. Figure 6 shows a plot of loyalty and stickiness for all users in the Slice panel that have purchased items in Candy Crush, colored by in-game spend. Most of the high spending users (more than 200 dollars of in-game spend, marked in red) are either users with high stickiness, high loyalty, or both. Marketers should have different strategies to acquire and retain these users depending on their behavioral attributes. © Copyright Slice Intelligence. 2017. All rights reserved. 8 figure 6 high spend users tend to have high stickiness or loyalty Candy Crush users with high spend (in red) tend to have high stickiness, high loyalty, or a combination of both * Each dot is a Candy Crush user making cross-game purchase data actionable Distinguishing between monogamers, serial monogamers, and polygamers is difficult for a marketer without visibility across all game purchases. Monitoring the loyalty and stickiness of users can be proxy indicators for the performance of a game and the effect of customer retention measures, such as new features, items, characters, or levels. When releasing new titles, game developers can strategically time their promotions by targeting users whose loyalty and stickiness has fallen below a certain threshold. High stickiness users who might be looking for a new game can be retained by a game developer if they’re able to direct them to another one of their releases, instead of a competitor’s. Monitoring the same metrics for competitors also would allow game companies to find other games that are slowing down and try to capture their loyal and sticky users with high lifetime value. © Copyright Slice Intelligence. 2017. All rights reserved. 9 conclusions Gamers tend to make purchases across multiple games but, generally speaking, their spend is disproportionately distributed to just a few games. purchaser loyalty Loyalty, or the share of purchases that gamers dedicate to one game, and the amount of time that game captures their attention, are the strongest predictors of their dollar spend. Efforts to retain these loyal buyers are worth their weight in gold. monogamers Gamers who have been very loyal to a single game for a long time might not be good candidates for user acquisition, as their purchases are focused within that one game. serial monogamers Gamers not loyal to just one game, but whose purchases tend to stick with a game for a period of time before switching to a different game (low loyalty, high stickiness) are your ideal target audience for new user acquisition. polygamers Gamers who make purchases on multiple games simultaneously tend to be low lifetime value customers for a microtransaction game. recommendation for mobile marketers While monogamers may be a difficult audience to acquire, identifying and focusing on monogamers who may be switching games soon can really pay off. Polygamers are easy to identify and more likely to test out multiple games at a time, so initial results of targeting this audience may be misleading. Lifetime value will decrease over time. Targeting serial monogamers who will stick with your game consistently is the ideal acquisition strategy. These users will help you reach your revenue goals, just make sure your app is optimized incentivize gamers to continue playing over time, as well as to reduce churn. © Copyright Slice Intelligence. 2017. All rights reserved. 10 guido núñez-mujica data scientist [email protected] Guido Núñez-Mujica is a computational biologist, data scientist, and a science communicator. Previous to joining Slice Intelligence, Guido was the founder of Lava-Amp, a healthtech start-up that applied data science to medical diagnostics and epidemiology. His work has been widely featured, including in Nature, Wired, IO9, BoingBoing, and Biotechniques. He is also the subject of a chapter in the book Biopunk: DIY Scientists Hack the Software of Life by Marcus Wolhsen. As a prolific science communicator, educator, and activist, Guido has been recognized as a TED Fellow and the Cornell Alliance for Science Fellow; he was also awarded a grant from Start-Up Chile, the leading Chilean business accelerator, in 2011 for his entrepreneurial endeavors. Currently, he is producing a documentary called Silenced Crops on the topic of low-cost biotechnology in Venezuela. Guido holds an interdisciplinary degree in computational and physical sciences, and a licentiate degree in biology from the Universidad de Los Andes, in Venezuela. eric berlow head of science [email protected] Dr. Eric Berlow is the co-founder and president of Vibrant Data Inc., which was acquired by Slice in 2016. He is an ecologist, network scientist, and data scientist who is globally recognized for his research on ecological complexity. He has written articles for Nature, Science, and the Proceedings of the National Academy of Sciences that received ISI’s Most Highly Cited Papers awards. His talks as a Senior TED Fellow on finding hidden patterns in complex data have received over 2 million views. Previously, Eric was the founding director of the University of California’s first science institute inside Yosemite National Park, and focused on guiding datadriven decisions to protect natural ecosystems. Eric has received numerous awards including an Alexander von Humboldt Fellowship and a National Science Foundation Post-Doctoral Fellowship. In 2016 he was named one of the Top 100 Creatives by Origin Magazine. Eric holds a Ph.D. in ecology from Oregon State University and a B.A. in biology from Brown University. © Copyright Slice Intelligence. 2017. All rights reserved. 11 rich williams senior data scientist [email protected] Dr. Rich Williams is a data scientist who specializes in developing analytical methods and visualization techniques for large-scale, high-dimensional data. He is an accomplished software engineer, computer scientist, and a frequently published research scientist. Prior to joining Slice Technologies, Rich was a data scientist at Vibrant Data Inc. and Quid Inc. Earlier in his career, Rich started a research group at Microsoft Research in Cambridge, U.K., doing research and developing computational methods in ecology and environmental sciences. Rich’s research has focused on understanding ecosystems as complex networks and dynamical systems by using tools and techniques that connect ecology and computer science. He has published over 50 papers, including work in Nature and Proceedings of the National Academy of Sciences. Rich holds a Ph.D. in physical oceanography from Scripps Institute of Oceanography at the UC San Diego, and a M.S. and B.S. in ocean engineering from the Massachusetts Institute of Technology. Ron is the vice president, Marketing Science at Slice Intelligence, and is responsible for launching and growing Slice’s digital advertising business. ron kato vice president, marketing science [email protected] Ron brings a rich background in corporate strategy development and operational management, with a focus in ad tech and digital marketing. Prior to Slice, Ron led Rakuten Marketing’s strategic corporate planning as the Director of Corporate Strategy. He expanded Rakuten’s digital marketing portfolio through corporate M&A, and spearheading strategic and operational efficiency projects. Ron’s interest in ad tech found its roots when he was an IT consultant at Cambridge Technology Partners in their Digital Transformation practice. Ron has a M.B.A. with Distinction from the Stern School of Business at New York University, and a B.A. in management information systems from The George Washington University. Although a Silicon Valley resident, he is a New Yorker at heart and has an undying love for the Knicks. © Copyright Slice Intelligence. 2017. All rights reserved. 12 about Slice Intelligence Marketing Science With a panel of over 4 million online shoppers, Slice Intelligence directly measures all digital commerce activity from the consumer. By collecting and cataloging actual shopping behaviors from online shoppers in the wild, Slice Intelligence precisely measures what others have only been able to approximate, revealing new insights about online shoppers and their behaviors. Slice Intelligence’s retailer-independent methodology captures commerce as it happens at the item level, across all merchants. While most companies rely upon panels of online users or of people who scan or take pictures of their receipts, Slice measures all online shopping activity directly gathered from consumers’ purchases. This allows Slice Intelligence to collect more data, at a higher level of quality than other methods. This intelligence gives clients unparalleled insights about everything their customers buy, even when shopping elsewhere, eliminating the need to use less reliable and less actionable research products. The Marketing Science service takes the high-definition data used in the Intelligence product and creates custom audiences. Leveraging Facebook’s custom audience creation process, Slice Intelligence Marketing Science is able to generate audiences based on real purchase data, across merchants, focusing on frequent shoppers and/or high spenders for a given brand, category, or merchant. Slice Intelligence comes from a methodology developed at Stanford that extracts online purchase data from e-receipts in consumers’ inboxes. This refined data collection method enables impeccable, near real-time data from a global panel of 4 million people, the largest panel of online shoppers anywhere. Slice Intelligence is led by a team of measurement and digital marketing industry executives who have brought some of the most innovative and successful data products to market. © Copyright Slice Intelligence. 2017. All rights reserved. 13 appendix A: list of variables at the user level B: list of variables at the game level weekendiness the fraction of an user’s dollar spend in the game category that is spent during weekends number of users number of people in the Slice panel who purchased from a game day diversity the variety of days in the week that a user makes purchases loyalty the fraction of transactions devoted to the game where a user purchases the most stickiness the degree to which a user tends to stick to one game once they start purchasing in it number of games number of different games that a customer has purchased from overall game diversity the variety of games purchased user span the total amount of time between first and last in-game purchase across mobile games game-specific span the total amount of time between first and last in-game purchase (for a specific game) average spend per order average dollar amount spent per transaction (across all games) average game-specific spend average spend of users for a specific game average share of wallet average fraction of the wallet spent on a game by a user average share of attention average time between first and last purchase in the game, divided by total time between first and last purchase in the game category average transactions per user average number of transactions per user of the game exclusive player rate fraction of the users that play only that game repeat rate fraction of users that make more than three transactions in a game top game rate fraction of users that have the most transactions in a given game, e.g. their favorite game total purchases total number of game transactions made by an user total spend total amount spent by a user across all games © Copyright Slice Intelligence. 2017. 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