Interview: Kontagent's Analytics In The Facebook Space

In the Facebook space, metrics are crucial to success. Meet Kontagent, the firm that works with Electronic Arts, Ubisoft, THQ and many other major game companies on their social gaming initiatives. Its CEO, Jeff Tseng, has a unique vantage point on the space, with over 300 companies actively using the company's tools. Kontagent began as a Facebook app aimed at the local search space -- "We were trying to build something like Yelp on Facebook," Tseng tells Gamasutra as part of a new interview. The company built its own analytics for that, and in 2008 shifted to focus exclusively on the analytics space. While Kontagent's analytics solution isn't Facebook-specific, the social network is currently the company's focus. "We feel that's a good place for initial traction, but we have some early engagements with some of the companies on the Facebook side that are interested in using our tools on their MMO and free-to-play games as well," Tseng explains. Tseng says that companies developing Facebook games benefit most from granular looks at what users are doing on a per-session basis. Many developers now use analytics tools to focus on improving monetization by eliminating design bottlenecks. Tools like Kontagent's allow makers of Facebook games to observe points in the game where there's significant user drop-off, to better spotlight what stages of play need more tuning to allow users to remain engaged. They can also use analytics to see the most successful discovery channels that lead users to the game, so that they can concentrate their efforts on the promotional tools that are working and discontinue attention to the ones that aren't. Tseng believes Kontagent's strength lies in offering virality metrics that look at how many further users are acquired for any single users, analytics that help companies plan acquisition costs. Although Zynga uses its own internal analytics tools, it takes a similar approach, Tseng explains. "Zynga is probably the most advanced analytics company -- because that's pretty much what they really are," Tseng says. "They spend more money on analytics than I think a lot of companies spend on their game development." Recently, Zynga, which is set to go public, has seen such high valuations that many worry whether Facebook games can possibly sustain those levels in the long-term. Is the space over-valued in Tseng's view? "I think it's a fair valuation; from what we've seen we've been fairly surprised at the growth in the space as well," he says. "The early phase was usually about how quickly you can acquire users. I think we're in a newer phase, where it's become a lot more stable and now it's a lot more about monetization and engagement," he continues. "The shift has been toward better gameplay, and you have companies beginning to penetrate the hardcore user base where the monetization is significantly higher." "There's a lot of growth left in the space," he suggests. "Monetization is still pretty nascent, especially in the hardcore space. There are still dollars in the casual game space, and there is still room for social games to grow in that direction as well." Companies aiming for some of that growth share should know which metrics to focus on at which stages, Tseng suggests. "If you're not hitting the right engagement and retention metrics, the economics of the game don't work out," he says. "If you can't get the lifetime value of your game high enough, you're not going to be able to sustain growth in the game. Can you get the core play engaging enough that you can drive players?" "If you can't -- this is something Zynga's really good at doing, they'll cut their losses really quickly and then move onto other games," Tseng adds. "Multiple people say optimization will get you a certain amount, but if you're optimizing off a very poor base, you still can't make a great game." There are fairly basic things developers can do. One primary practice is to focus on the "user funnel" in the early stages of the game, looking at user behavior to ensure the earliest gameplay is tuned to pull users in quickly, and eliminate any zones where they're getting stuck. "When it comes to free to play and microtransactions, a lot of it is balancing the virtual economy too," he says. "Is the economy too biased toward spending money, or is there too much currency to where things are devalued? That's really important to tweak, especially if you're working on monetization," Tseng adds. Kontangent is currently preparing itself to serve companies looking at cross-platform social gaming, as that's an area of focus for almost all its major publisher clients. "A lot of developers are now looking at Facebook as a starting point, but are really wanting to distribute these games across multiple platforms and, in some cases, provide seamless transition among the platforms. We're trying to keep on top of that."