What timeframe – for soft launch?
When you are working on a live game, a game in soft launch or preparing the high level strategy for a pitch, you will presumably be working with a number of KPIs. You will be looking at day 1 retention, day 3 conversion, day 7 redeposit rate, day 90 LTV etc. If you are involved in UA, then you will need to determine which timeframe is relevant to determine how much you can bid and how long you can afford to wait to recoup your investment. Different goals and priorities mean you will be looking at different KPIs over different timeframes. This post will be suggesting an easy and straightforward way to consider relevant timeframes with monetization in mind – specifically in the context of a soft launch.
Unless you are working on a movie tie-in or your game is part of a wider branded entertainment strategy, the monetization performance of your game – your LTV – is what will guide your soft launch process and ultimately your decision to go live with your game. And unless your game is a mega hit or a unquestionable failure, making a business case can be difficult because you sometimes only have partial and uncertain data to go by. You can’t only rely on the LTV>eCPI motto in soft launch because it’s very hard (not to say impossible) to get a clear reading on what your “real” k-factor will be. The other challenge has to do with the timeframes you are looking at. You will (hopefully) only be in soft launch for a short period of time – you won’t be basing your decision on day 365 LTV. So you will have to find a way to translate what you are seeing for your short-term cohorts into actual game/project total revenue: how can you say that $1 d30 LTV means a $30 million a year title?
Answering that question semi-correctly involves quite a few different perspectives and considerations. In this post I’ll be suggesting ways to consider spending occurring within 7, 30 or 90 days of your users installing in light of the total revenue you can expect to generate from your title. If you start to look at your game this way, it puts in a different light the importance of your short and long-term timeframes. Can you make a decision with a day 7 LTV value, a day 30, do you need to look at day 90?
Monetization and time since install
Considering time since install when looking at conversion is pretty standard practice. However, looking at time since install when looking at your overall revenue is not always as common. Let me illustrate what I mean. Say every day you have users spending in your game. On the day they are spending, your users have an “age” – or “tenure” depending on the terminology you’re familiar with: the time since your user installed the game.
What I am suggesting is that instead of looking at your revenue from the perspective of the purchase date (April 1st), look at it from the perspective of the user’s age at purchase moment. When you group the above data by user age you get something like below
The last part consists in doing a cumulative revenue along those line: how much total revenue has been spent by that time
By looking at things this way, then you are effectively capable of telling how important early or late spending is – and how important it is when looking at the overall picture. If we were to take the above example, then 67% of the title’s total revenue comes from users who spend within 4 days of install [$28.95/$42.91=67%]. Also, in this specific example 100% of total revenue has occurred within 7 days of install.
Why does this matter? And how this can help you?
Even though some games monetize much better or worse than other, there are some constant patterns that emerge across all games. One of those patterns emerges when you look at when your revenue comes from. Or, more specifically, when you look at the age of your users spending. If you were to plot this for your game, you will presumably get something like this:
Of course every game will have its own specificities. But the general trend should be the same for all games. It’s most likely the total amount spent by your users within 7 days of install will account for 25% of your lifetime revenue, and the total amount spent by your users within 30 days of install will account for around 50% of your lifetime revenue. And you’ll find that consistency because it’s not so much due to your game economy or monetization structure: it has more to do with basic conversion, engagement and retention patterns in mobile games.
Another thing to keep in mind here has to do with your title’s age: the total time it’s been live. If your game has only been live for 30 days, then you know no user can have more than 30 days on game. That means 100% of you revenue will have occured within 30 days of install. While that is an extreme example, the time your game has been live will have an impact on what you see – especially for the higher percentages.
In the above example, title age has almost no impact on the % of revenue that comes by day 7 – and it has just a little impact on the % of revenue that comes by day 30. Title age does however tend to change the picture when you are looking at the importance of spending by day 90 – or the time it takes to account for 75% of total revenue. On launch year (year 1) spending that occurs within 90 days of install might account for 85%+ of lifetime revenue. When you look at the weight of spending by day 90 year 3 you might be below the 80% mark.
As usual there isn’t a one size fits all conclusion you can walk away with. Ultimately you should consider the specificities of your own game – and look at the existing portfolio of games you have – as well as the degree of certainty you need to make a decision. If you have $2.00 LTV day 3, then finding out what percent of your revenue will come from users within 90 days of installs might not be critical in your decision to go worldwide.
The 2 main conclusions I have from this are:
- When you are looking at your KPIs in soft launch, Day 1 and 7 LTV are crucial, but maybe basing your decision on a longer timeframe such as day 30 is the way to go. And maybe the extra 60 days you would need to wait to get day 90 metrics aren’t worth it. Whatever your priorities are during the soft launch process, looking at the distribution of your revenue per user age can help you assess what degree of certainty you are looking for (you want a metric that will be indicative of 25% of the revenue you can get, 50%, 75%, etc.) – and what timeframe you need to be looking at to get it.
- Seeing “when” (what use age) your revenue comes from is another illustration that monetization is a process that occurs early. When you think that 25% of your revenue will come from users spending within 7 days of install – even if your game has been live for 700 days or more – then that is a clear indication that you should be aiming to monetize your users as soon as they install. My next posts will discuss in more detail how monetization in monetization has a very strong short-term component.