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Build-Measure-Learn Cycle: The Untold Story for Casual Mobile Games
Fundamental activity of Lean methodology is Build-Measure-Learn cycle. Steps are simple; Build your product as fast and minimum as possible, let user decide what to use, how to use and Measure it then Learn from this measurement to develop your product. This method fits perfect for game development. You will never know which functions your user will use. Thus you need to test you game before hard launch.
Every game developer knows that games need to soft launch after alpha and beta builds. You can proceed from alpha and beta builds to soft launch if there are no bugs in your final product. But how to know when to proceed from soft launch to hard launch? Below, I will try to explain with simple maths how to decide soft launch phase is ended.
There are 3 main parameters you need to look at: Retention, ARPDAU (Average Revenue Per Daily Active User) and User Acquisition Cost. Lets look at some boring staff, the definitions.
Retention (Rolling Retention)
Retention, the dictionary meaning, is the condition of retaining (keeping) something. For games, retained players are players who keep coming to your game after the date of their registration date. Retention is almost shown as percentage. “n”th date retention is percentage of players keep coming to your game after nth date from their registration date. For instance 1st day retention is percentage of players who are keep coming any day after registration date. For games, successful retentions are 1st day is 40%, 7th day is 20%, 30th day is 10%.
ARPDAU is the combination of ARPU (Average revenue per user) and DAU (Daily active user). DAU is the summation of registered player at specific date and retained players. ARPDAU represents as $, and is the division of revenue at specific date by active user at that date. Games should have ARPDAU higher than $0.03. Some says that below $0.05 is not a successful game but I think that higher than $0.03 is a good start for any start-up company. Thus if you have lets say 1000 active user and $30 revenue per day, you have $30/1000 = $0.03 ARPDAU. Keep in mind that these are the revenue. You have to subtract 30% of commission for Android and iOS platform, to find the net revenue.
User Acquisition Cost
Each game need marketing budget. You may have $10 to millions of dollars. User acquisition cost is the money that you have to bring new users to your game. Average cost for 1 user is vary from $1 to $20. For soft launch, for casual game, you can assume that average UAC is $1. This may be higher if your game has new concept. If your game has football theme, for instance, your cost will be lower, but if you have brand new board game, your costs will be higher. Besides paid users, you will have organic users. These organic users may come from platform lists (Top lists) or invitation from players to their friends (Word of Mouth effect). Thus if you have higher organic user, you will have lower user acquisition cost.
The Untold Story – The Plan
If you want your game to be successful, you have 3 main objectives.
- Make your retention higher, so keep your player daily active user to make LTV (Life Time Value) higher.
- Raise your ARPDAU to make higher revenue.
- Lower your User Acquisition Cost.
From these 3 objectives, I prefer raising ARPDAU. However any unsuccessful objective affects others. At least you have to keep all of them minimum acceptable amount.
Here is my concrete example plan. Divide your plan into weeks. Keep iterate with 1 week marketing (soft launch) and 1 week debug, develop. These iterations will be as long as you meet your goal. But I believe at most 4 iterations you have to meet your goal.
First you need to choose platform and you should not change this platform through your soft launch. Bear in mind that in Google Play ARPDAU will be lower along with UAC. UAC will be 30%-40% lower and ARPDAU will be 20%-30% lower. Consider these values while you are making your final calculations.
For marketing budget, at least you need $3000 to acquire user for 1 week. Thus you need around $12.000 to test your game. Lets say we have chosen Google Play. In 1 week you will have 3000 paid user with around 1000 organic users. In week 1 if you have 40% 1st day retention you will have around 1000 DAU. You should have $0.02 * 1000 * 7 = $140 revenue in that week. You need to iterate till we finally meet your goal.
Don’t forget! Your retention will lower when you make higher user acquisition. Thus I recommend you to make your 1st day retention 50%. Here I have noticed the importance of 1st day retention. 7th and 30th day retentions are also important but from my experience, other retentions are proportional with 1st day retention.
I also omit the fixed costs like server and employee cost. You should also monitor these costs. Again from my experience these costs will not be problem for casual games.
1 week marketing and measurement is not enough of course. If you have bigger company, you can make higher budget for your soft launch. However you have limited time and budget thus I have concentrate the iterations.
There are some predictions from these 3 objectives;
Any other situations are very critical. You need to calculate your revenue very carefully.
I believe that every game has potential. You can earn enough money to continue your journey. Make your measurement and learning very carefully. Keep up good work and Good Luck.