Things have been good for the gaming industry. While the majority of the industries were hit by the pandemic, the gaming industry hit an all-time high in terms of revenue and player growth, and the market expanded 26% between 2019 and 2021.

But the game is changing…

Changing market dynamics introduce new challenges

Although the long-term performance of the gaming sector looks strong, the next couple of years pose a unique challenge for the gaming industry, as analysts predict the market to decline in 2022 and a recovery starting from 2023.

Combined with economic recession, post-covid gaming fatigue, and a saturated market, it is getting harder to attract new users and retain the existing ones, leading to reduced conversion rates and higher costs for player acquisition.

UA has been top of mind for gaming companies as a main driver of growth. Due to the increased price consciousness among players and the limited time they have, the price of acquiring new users is increasing rapidly and eating away from the profit margins. As a result, the focus is shifting from growth to retention and capturing high-value players.

While the task is getting harder, UA and marketing teams in the gaming industry are not necessarily receiving additional resources. On the contrary, due to the global economic turmoil, budget cuts are placed, teams are shrinking, and/or hiring is put on hold.

When there is more to do and fewer resources to get it done with, there is no other option but to get smarter and more efficient.  

 

Challenges pile up on the old ones

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User acquisition in gaming has never been simple due to the existing structure and industry dynamics. Before the new challenges piled up, UA teams were already tasked with a difficult job due to:

The fast-changing and competitive market: From multibillion-dollar giants to niche developers, the gaming industry is vast. With more players coming into play and different platforms and game types rising in popularity, the industry is under constant pressure to innovate.

Balancing loyalty and novelty: One of the most critical challenges of user acquisition is not only to launch a successful game but also to keep it running with a high number of DAU (daily active users) and revenue over an extended period. With so many options available and players on the lookout for novelty, UA requires regular assessment and analytics to optimize ROI.

Complex analytical landscape: UA teams analyze multiple campaigns for different games, across geographies, media sources, user groups, and platforms. Testing for every potentially relevant factor and combination of factors can be daunting.  

 

How can UA teams beat the odds?

As gaming industry veteran Vineet Vashishta said "Disney frequently talks about how not all customers are created equal. They arm experts with granular customer data to guide their UA activities and maximize revenue per customer. Gaming companies have access to rich datasets. The ones that can connect in-game behaviors to buying behaviors with analytics and automate their workflows will beat the odds in maximizing revenue per user and retain high-value players."

1. Capture high-value users and boost retention

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Changing marketing dynamics is pushing UA teams to focus on a wider set of metrics. Growth has been the primary focus in the past couple of years and metrics around new users were the top priority. Now teams are putting more focus on improving lead quality, profitability, and retention, making metrics like D30, D90 retention, and CLV more important.

What to do?

• Identify the segments of high-value players early on
• Run re-engagement campaigns alongside acquisition campaigns
• Work more closely with game developers and product managers to create more engaging experiences and share insights from performance analytics among teams

How can analytics move the needle?

Drill down to the why in a fast and comprehensive way. Go deeper and analyze how sub-factors, and combinations of sub-factors affect your metrics and cross-check other metrics to gain context. This can help identify high-value players and the marketing efforts that resonate the best with them faster and more accurately.  

 

2. Make every penny count

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Running the same campaigns is getting way costlier. The budgets that used to be sufficient to run an effective campaign bring only mediocre results. Many teams are trying to battle the rise in Cost Per Install (CPI) and the drop in Return on Ad Spend (ROAS). As increasing the budget isn’t an option for many companies, teams narrow down the scope and cut more experimental initiatives.

What to do?

• Work closely with product teams to produce more marketable games
• Keep a constant pulse on your campaigns and gather a fast understanding of what is working and what is not
• Double down on the best-performing UA channels

How can analytics move the needle?

UA teams can optimize metrics like ROAS to their full potential by

• Look into campaigns at a more granular level by automating diagnostics analysis.
• Take a closer look into metrics that looks flat as drilling down can uncover opposing trends/effects and reveal actionable insights to improve metrics  

 

3. Increase team efficiency and fuel experimentation

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The complex nature of user acquisition in gaming requires teams to analyze vast data sets. With so many factors potentially affecting metrics, teams don’t know where to look and what would move the needle. Trying to do the analysis on dashboards or in Excel means a tremendous amount of manual work. And if your team is smaller than it used to be, capacity is going to be even more limited. Testing millions of hypotheses is humanly impossible. With a large or small team, you will have to sacrifice either comprehensiveness or speed.

What to do?

• Invest in augmenting analytics to automate menial repetitive tasks
• Reallocate time spent on manual analysis to high-value tasks and experimentation
• Quickly test new campaigns and iterate

How can analytics move the needle? Analytics can focus the teams' attention on areas that matter the most by helping them dig deeper quickly and to understand what's working for which channel/audience and other combinations versus just scratching the surface by testing for the usual suspects.  

 

How do leading teams leverage analytics?

Leading gaming companies observe the behavior of their players and potential users very closely. They collect data points directly from the game as well as from marketing and analytics partners. Pushing the limits of analytics and using all available data, they adopt a more proactive approach. They excel in building better games, engaging players, and maximizing the return of their marketing efforts. In addition, they ensure close collaboration between analytics, marketing, and product teams to share insights seamlessly and make regular improvements.  

 

In a nutshell

As challenging as it is for User Acquisition teams, it is also a very interesting time. Creativity and experimentation are becoming more and more important. To overcome the market challenges and excel in UA efforts, teams should focus on

• Forming a stronger collaboration between user acquisition, product development, and product management teams and sharing insights and learnings
• Automate repetitive manual analysis as much as possible to enable teams to adopt a proactive approach and spend more time on creative tasks and experimentation
• Measure the return on investment very closely, double down on well-performing activities or improve/pivot quickly on the rest.