In this series of posts, we’ll be examining the best practices from successful FTP (free-to-play) games so that they can be applied to your titles, from design to soft launch and beyond. To begin, let’s go over some basic metrics, their definitions, and typical benchmark targets for successful games.
The first thing to measure during soft launch is the level of engagement of your users. This is typically measured by focusing on retention, session length, and frequency.
Most analytics and marketing attribution tools will provide you with a measure of the retention by taking cohorts of users who installed and launched your app on a given day, and looking at the percentage of those users that launch your app again after a given amount of time, commonly in days (Dx). You will typically look at D1, D7 and D30 retention rates, which respectively measure the percentage of users who came back to your game 1 day, 7 days, and 30 days after installing it.
These data points can be used to model or estimate the lifetime of your users: the average number of days that your game will be played by each of them. Typical target benchmark values for retention are the well-known 40%/20%/10% for D1/D7/D30, but those should be taken with a grain of salt because the genre of your game will obviously impact your targets. More casual games will target much higher D1 retention (as high as 65%-70%, such as Crossy Road) but will most likely have a lower D30 number. Mid-core games can thrive with slightly lower D1 as once the users get onboard and like the game, they will likely stick around for longer. Still, the higher the better!
Session length and frequency are self-explanatory, and their targets will also vary a lot depending on the genre of the game. For successful casual games, it is typical to see short but more frequent sessions, in the order of 2 – 4 sessions per day per DAU (Daily Active User).
During soft launch, it is important to measure these engagement metrics and improve them iteration after iteration, by focusing first and foremost on first user experience (tutorial completion rate, etc.) and identifying any bottleneck in your funnels (level progression, churn points). At Thumbspire we work very closely with our partner studios by providing the analytic data and suggesting improvements for product iterations during soft launch and beyond.
Once the engagement metrics are aligned with your game genre targets, it is time to look into the monetization metrics. Most successful F2P games today monetize with a mix of IAP (In App Purchases) and Advertising. In this initial post, we will focus mostly on the IAP part, but it is important also to measure the ARPDAU (Average Revenue Per Daily Active User) contributed by the ads placed in your game. To reach an LTV (Lifetime Value) that can sustain User Acquisition, you should target a healthy mix of IAP and ad revenue (60/40 or 50/50 share). We will dive more into ad revenue in future posts.
For IAPs it is important to measure the conversion rate (CR%) both on a daily basis and over a longer time period. The daily CR% is the number of purchasers divided by DAU, while the overall CR% over a 90 day period will give an idea of the share of your user base that will ultimately make a purchase in the game. It is well known that for F2P games the overall conversion rate is ~2% of the base over a 30 day period while your target for daily CR% should be between 0.8% and 2%. Again, these are just average benchmarks, as the effectiveness of your game’s monetization will also depend on the ARPPU (Average Revenue per Paying User) that varies wildly depending on the game’s genre. When we work with our partner studios, we compare their monetization metrics to similar games in the same category, and we suggest improvements that can help the conversion rate. Special attention should be put into the first payment since more than half of the users who make an initial purchase will end up purchasing multiple times after that. Starter packs and well-timed Calls to Action in your game can help on the first payment conversion rate and bring up the CR%.
Ultimately the bottom line metric that you can easily measure during your game’s soft launch (and that is a function of all of the above) is the ARPDAU (Average Revenue Per Daily Active User). The ARPDAU may range between $0.02 for quick casual games (monetizing exclusively through ads) to over $0.50 for mid-casual/mid-core games. Here is a breakdown by game genre from SurveyMonkey, but please note that this is not definitive - different reports may show different results!
All the metrics described so far contribute to the calculation of the LTV (Lifetime Value) of your game which is the average revenue generated by every install over their lifetime. If you are able to measure or estimate Lifetime and ARPDAU, the LTV can be simply calculated as
ARPDAU x Lifetime (in days)
More often you will have to estimate the LTV with available retention data points using different approaches and calculators, like the ones mentioned here.
The LTV (or its estimate during soft launch) is what will determine if your game can sustain the cost of user acquisition. It is important to notice that even if the overall LTV is not greater than the average CPI (cost per install), there is still hope for your game. We can often identify specific segments or niches where the combined action of user acquisition and the subsequent organic downloads uplift can have a positive margin and sustain the growth of your game.
There’s more to come on this subject in future blog posts, but in the meantime, do not hesitate to contact us!