These are exciting times for casual gaming, as the industry is shifting at a remarkable pace. There has been a rapid movement away from the premium download model, where players pay once for unlimited use of the game, to a freemium model, where the player can play for free, but is encouraged to make in-game purchases.
Under the premium model, the key to success was convincing a large group of players to pay upfront for your game. Whether those players played the game for 3 days or 3 years had a limited impact on the developer’s bottom line. Under the freemium model, however, player retention is critically important. The more often players play, the more opportunity they have to make in-app purchases.
For one of my internship projects, I wrote a white paper on how competitors used virality mechanics within Facebook games (friend invites, gifting, posting updates, etc.) to enhance viral user acquisition and retention. So yes, I spent a big portion of my internship playing games on Facebook! But when I reflect on what I learned about customer acquisition and retention in casual games, I realize how applicable and valuable this knowledge is even in industries far removed from gaming.
Several of my smaller summer projects involved gaming analytics. Cue first quarter stats (especially regression and hypothesis testing)! With the shift to freemium games, some developers have found success by placing a heavy emphasis on testing and iteration. Imagine your game has a few million daily active users. Will total revenue go up if you decrease the price point of a particular in-game item? Will players invite more of their friends if they see a green “Invite” button or a blue one? Will players send more free gifts if they have one gifting option, three gifting options, or 20 gifting options? Rather than making a game-wide change and hoping for the best, developers can use A/B testing (or even multivariate testing) on small subsets of users, and only implement game-wide changes that show statistically significant improvements over the existing game features.
But perhaps the biggest takeaway from my internship was that my MBA experience has given me the skillset to add value, even in an industry where I had no previous experience. As a result, I am confident in my ability to significantly contribute to my fulltime employer – even if they are not in the zombie proliferation business.
~Guest Blogger Ethan Anderson, Full-time Class of 2013