Choosing the right KPIs in the gaming industry

Most mobile gaming companies won’t survive in the industry if they don’t publish multiple apps and continue to grow. This means building out more teams, supporting both apps that are in production and in development, and setting unique goals for each game.

In this article, we’ll cover the KPIs mobile teams have found success with—specifically user acquisition and lifetime value—while exploring an example of what worked for a top mobile games company with a billion dollar valuation.

We’ll also answer many questions newcomers might have, like:

• Should I cater to the high-value users or the general user?
• How can I gain more users?
• Should my KPIs be actionable and focused or long-term bets?

Before we start, it’s important to recognize that KPIs come with a time component.

If your company is large enough to think long-term, then you can focus on bigger products or features that sacrifice short-term gains for future benefits. For example, building an entirely new product offering as opposed to adding features to a preexisting product. However, if your company is still building out its first app, not yet seeing any revenue, or in any similar situation, your KPIs should be made with regard to surviving to the next day.

For more on the discussion of long-term vs. short-term, you can read our piece about how your goals should influence your KPIs and engineering team structures.

Chasing the high-value user: User acquisition & lifetime value

Game developers will likely caution you against focusing on your power users. Though they are essential to your revenue and might contribute more given some attention, they have already found something they love about your game and are willing to spend.

In addition, it’s tough to evaluate whether a decision will specifically impact a power user—Most changes would affect the general user’s experience too. Instead, if you’re focusing on user acquisition, focus on improving the general experience and impacting the greatest amount of users. The move to speed up startups (not time to boot the app but rather, in games, time to the user’s first play/action) and performance might grow more high-value users and will definitely reduce user loss.

Also, developers often don’t realize that the bulk of their revenue doesn’t come from single power users. Ad revenue from a larger part of your free-to-play user base is always significant.

As a KPI, this would mean looking at Lifetime Value (LTV), which is effective Cost Per Install (CPI). This is an especially important metric because it can help decide how long your game can survive or should continue to be supported: Basically, has your bet on producing this game paid off?

Because LTV isn’t the most actionable KPI—it might be tough to see how software engineers could impact CPI—you should instead view these metrics as drivers for your growth. Each decision you make should be in service of smaller KPIs that bubble up into producing LTV.

Remember those free-to-play users? They also supply a hidden benefit for CPI: Free-to-Play users are great word of mouth marketers for your application and can add installs at no additional cost.

Of course, this is simply the metric that the large mobile gaming company mentioned above found success with, discovered through their history of producing profitable games. They had to make other decisions, including structuring their teams uniquely, to support these KPIs.

Supporting lifetime value as a KPI and as a team

As demonstrated above, KPIs can be actionable and focused or be a bet that you collect on far in the future.

• Actionable and Focused: Increasing # of New Users or Power Users
• Middle of the Road: Looking at Retention & Revenue or Evaluating Organic vs. Channel Growth
• Long-Term Bets: Focusing on LTV vs. CPI

From this list, you can see how each of these KPIs are highly similar: Without users, you won’t have LTV. Power users contribute a ton to your LTV.  Bettering retention means more “time” in that LTV, and so on.

In order to focus on both sides of this spectrum, that large-scale mobile games company took a hybrid approach to their team structure.

Each game had two teams, one focused on the long-term with a product manager and the other, the short-term with growth managers. This meant they had a staggered release process and had to solve the issue of maintaining similar versioning across teams, but they could release content constantly, demonstrating commitment to the app store and its users.

The short-term team brought users into the pipeline for the product managers to understand how they could help these users have the best in-app experience possible so they could grow LTV vs. CPI.

This process of choosing KPIs and building out your team changes constantly. In the beginning, you won’t be able to mirror this hybrid structure, so you’ll have to make your own bets to learn what works for you. All you can do is continue to make bets while keeping in mind: Failures can inform your KPIs as much as your successes do. Once you’ve found some success, however minor, you’ll be able to build and grow in a way that works for you.

How Embrace helps mobile teams

Embrace is a data driven toolset to help mobile engineers build better experiences. We are a one-stop shop for your mobile app’s needs, including error debugging and monitoring performance and feature releases.