Fundamental Metrics in Mobile Game Development

If you are only interested in metrics and you would like to skip the entry to mobile games, I invite you to the bottom of the article! :)

Mobile Games Market

In 2019, about 2.4 billion people (~ 30% of humanity) played mobile games and they once again crossed the threshold of most revenue in the gaming industry (54%), and by 2021 it will be almost 60% of the entire games market.

Where do these crazy numbers come from? Currently, mobile games can be played by most people in the world, having access to a mobile phone and a bit of the internet. But that's not where the numbers came from. Behind this are well-thought-out decisions and researched game design methods.

Creating mobile games is one of the gaming departments in which game designers are a very large part. They are responsible for all kinds of metrics and analysis. Their tasks include designing the logic, mechanics, game balance and much more. Very often they analyze statistics, e.g. what stage of the game people have reached or how much money users spend.

Mobile Game Genres

The genres in games are determined by the type of gameplay and its characteristics. Very often, this affects the desire to explore different data depending on the species. Various genres also mean different business models.

Deconstruction of the genre is one of the most important things that a designer can do when preparing to create a game. The ability to extract the most important features and the most profitable mechanics is the key to achieving product success.

Currently, Hyper Casual is the genre where the ratio of work put into to profits is the best. You can read about them in my previous article, click here.

Monetization in Mobile Games

Monetization in mobile games is much more complicated than in creating games for PCs or consoles. There are many more factors and sources of income here. The main distinction will be the ability to place ads in games.

We can distinguish 3 monetization models in mobile games:

• In-App Purchase-Driven - A business model consisting mainly of in-app purchases. These are mainly payments related to premium currency, loot boxes or other amenities in the game or to accelerate the development of the character. However, very often such phenomena occur as the so-called "paywall", in which Game Designers deliberately create the game in such a way that the user gets to the point where subconscious itself tells them to buy an upgrade/resource/premium. 
• Ad-Driven - A business model mainly based on making money from ads. The player usually displays an advertising banner throughout the game and every few rounds/games a small screen advertisement (so-called Interstitial Ads) will be displayed to the user. In this model very important are Rewarded Ads, which consists of watching a 30sec movie or interactive advertisement and in return, the player gets some resources, e.g. life, mane, soft currency or hard currency.
• Premium - A business model very similar to what is known for buying games on the PC/Console. We pay once and we have access to all game content, usually without additional microtransactions.

Knowing how we can monetize our game, we need the right tools to maximize our profits. Let's take a look at this below.

Tools for Analytics

To measure so much data divided into so many segments it would be very difficult to do it yourself from scratch. That's why tools come to our aid! There are several very well developed solutions for measuring all information from players who have downloaded our game. Each of them usually has tutorials or documentation, which is why the operation is also very easy!

Here are a few of them:

• Game Analytics - One of the most popular tools for analytics and balancing player behavior. It gives great possibilities for data personalization and has a great design. It also has a very advanced real-time behavior study!
• Unity Analytics - This is the official tool from the Unity Engine. This tool gives us a lot of flexibility. We can use ready-made metrics, make a chart comparing other data, or add own metrics that we would like to measure, e.g. the number of people who slaughtered a given boss or passed a specific level!
• Firebase - Firebase is a mobile and web application development platform known for its very stable solutions that allow you to measure many factors at the same time, often giving greater restrictions than other tools!
• AppsFlyer - A less popular but equally good tool for analytics and attribution. This tool is not just for games, it is often used for the mobile application industry.

Fundamental Metrics!

We finally got here! Here are the most important metrics in the mobile gaming industry with a small description :)

Retention (D1/D7/D30) - The percentage of users who return to the application after the specified time. Common retention metrics are calculated based on 1-day, 7-day, and 30-day periods. This is practically the most important factor in game design. Publishers usually have a guideline that says about the required percent without which it is impossible to consider the game further, e.g. Voodoo requires 47% of D1 retention - which means 47% of people who have installed your game must return to it the next day.

Retention  = (Number of People Who Logged in a Specified Period / 

Total Number of Downloads) * 100%

LTV (Lifetime Value) - The prediction of the net profit for the entire life related to the user. It should show the net value of the estimated future money flows from the user. It is generally very difficult to calculate LTV due to many factors that we often do not influence. This value should also show how much should be spent on development and marketing. There are a lot of formulas for calculating LTV. I will give the simplified one because writing and explaining the expanded formula is the thing for a separate article.

LTV = (Average Revenue Per Users / Churn Rate) - Cost Per Aquisition

Custom Events - Custom Events are events that we define ourselves in the tool that we picked. These are unique events in our game, although we often use the same or very similar patterns in our other productions. A very important role play here parameters that determine the events that allow us to create data analyses based on them. Most often these are metrics that check: what level we had while killing the third boss, how many hp we had, what weapon we had, what armor we had, were we in the team or alone, did we have a premium account or not, etc. Custom Events can be expanded to very large levels, even several dozen parameters, although this requires a lot of data analysis. In most cases, 10 parameters should be enough for a given event. There is no formula in custom events, so you have to think about it on your own.

Organic Installs - Organic Installs are the ones in which users decide themselves whether a game is worth downloading or buying it. These downloads are not assigned to any installation source (e.g. advertisement). This is often considered the equivalent to free advertising. Very often, game promotion through your existing social media channels is thought of as an organic installs acquisition. Some people promote their game through email lists or other free sources. Organic installs are also downloaded straight from the store search engine - when someone just hits your game.

Non-Organic Installs - Non-organic installs are downloads that have been made by various types of marketing activities or activities. These downloads are very often considered equivalent to paid downloads. This means that the advertising campaign attracts new users.

CPI / CPU (Cost Per Install / Cost Per User) - This is the price for a new user based on paid advertising. CPI is often used to check the profitability of a project campaign. This metric is only related to paid installs. You can bring a lot of conclusions from it, e.g. if the CPI will be bigger than LTV, it means that the product is not profitable.

CPI = Total Advertising Expenditure / Total Amount of Downloads

CPA (Cost Per Acquisition/Action) - This is the metric that shows us the cost for user action (conversion), e.g. downloading the game, click the ad or buy InApp-Purchase. It's a great thing because it grants us the ability to pay for a direct result and easily compare performance across channels. 

CPA = Total Cost of a Campaign / Number of Conversions

CTR (Click Through Rate) - The percentage of people who click on an ad. This is a method of measuring the success of an advertising campaign. The higher the CTR, the more effective the ad unit is. CTR may vary depending on the ad unit – an ad that will be often clicked will have a higher CTR than an ad that will be avoided by users.

CTR = (Total Clicks / Total Impression) * 100%

ARPU (Average Revenue Per User) - A metric that allows you to measure the average revenue per user. ARPU will vary greatly depending on the game genre. It may even turn out that for one species ARPU can be up to 50 times larger.

ARPU = Total Revenue / Total Number of Users

ARPPU (Average Revenue Per Payed User) - A metric that is used to estimate the average amount of money spent by players. Only those who have made a transaction count in this metric. Mostly most players do not spend any money (advertising revenue does not count). This is an important note - if your game will be ad-driven, then probably this metric will be useless.

ARPPU = Total Revenue from Paying Users / Total Number of Paying Users

ARPDAU (Average Revenue Per Daily Active User) - A metric that allows you to learn more about how your game works. It allows you to accurately check behavior in the game with an accuracy of one day. Mostly it's just data that measures the average revenue per daily active user.

ARPDAU = Daily Revenue / Daily Active Users

DAU (Daily Active Users) - The number of users who have entered the application at least once in a given day. DAU is very often used in combination with other metrics (e.g. ARPDAU). It mainly aims to measure whether our game keeps growing, decreases or just stays in place.

WAU (Weekly Active Users) - The number of users who have entered the application at least once in a given week. Very often used for DAU/WAU or WAU/MAU ratios.

MAU (Monthly Active Users) - The number of users who have entered the application at least once in a given month. Often used to measure "stickiness" of the game.

CPM (Cost Per Mille) - A metric that determines the cost of reaching a thousand recipients. If the CPM is $10 it means that 1000 views will cost $10.

CPM - (Total Campaign Advertising Cost / Total Impressions) * 1000 

eCPM (effective CPM) - eCPM is used to assess the revenue from the product. This is the revenue from 1000 impressions. If the eCPM is $1 it means that 1000 ad unit views generate $1 for us.

eCPM = (Total Revenue / Total Impressions) * 1000

ROI (Return on Investment) - A metric that will help us find if the current state of the product reflects our investment expectations. Very often used to increase investment efficiency or compare to other investments.

ROI = (Net Profit / Total Investment) * 100%

Conversion - The conversion in other words is an action that was caused by an advertising campaign. It mainly means downloading the game by new users, but it can also be buying a product in the game or something else.

Impression - The impression, in other words, is simply a measure of the number of ads views. Each impression is counted, even if the ad was not clicked.

K-Factor - A metric used to determine the growth rate of the game. If K-Factor is 1, it means the game stays in place, if less than 1 means decrease, and greater than 1 means increase.

K-Factor = Inivites Sent by Each User * Conversion Percentage of Invites

Sticky Factor - A metric that specifies the engagement of players. It's just the MAU/DAU ratio, which shows us how a large group of players often enter the game. The higher the percentage, the greater the player's involvement.

Sticky Factor = Monthly Active Users / Daily Active Users

Segment - A set of users who have similar characteristics. Mainly it is a group categorizing according to various criteria that determine their behavior in the game. E.g. If there is a segment of players who are involved in the game or spend a lot of money, you can give them a special promotion for the item in the game. Market segmentation is one of the most important things that you need to consider when building your game. This can help a lot in increasing player engagement.

Funnel This is a metric that allows you to see and measure the player's path. It's mainly about checking which stage of the game the player has finished and at which most end their adventure with this application. The well-done funnel can show which stage of the game can be bugged or too hard. It is also a great way to improve retention and conversion.

Churn Rate - This metric helps you measure the number of users who are leaving your game during a specified period. This is one of the most important data that is needed to calculate LTV.

Churn Rate = (Users Who Left / (Users at the Beggining of Period + New

Users During the Period)) * 100%

Average Number of Sessions Per Daily Active User - The higher the number the greater the players' involvement in a very short time. Determines how many session players play per day on average.

ANoSPDAU = Total Sessions / Daily Active Users

Total Daily Play Time - The total time in seconds that your players invest in your game.

Whale (Spenders) - This is the term for players who have spent a lot of money in your game. Usually, it is less than 1-2% of all users. Companies have their thresholds, most often it is 100$/month.

Minnow (Spenders) - This is the term for players who have spent the smallest amount of money possible in your game. Usually it is 1$/month.

Summary

That's it. These are the basic metrics that every game analyst and the mobile game designer should know and use with ease.

I would be very grateful for your feedback.

Thank you for your time!

Michal Korek