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Why ROI In Games Marketing Is Hard To Find
While considering a gaming strategy, marketing teams may be considering a variety of KPIs to measure. From number of impressions to conversion rates of CTAs, there’s often a common thread between these metrics that marketers care about: ROI.
But for marketers researching the space, it can often be difficult to estimate the ROI for campaigns in the gaming landscape. Accessing performance data and revenue models is not an easy task, and the games industry is more opaque than other, well-documented marketing channels like social media or ad buying.
So what’s the deal? Measuring success in the gaming industry has specific challenges, but here’s what to do to overcome them and build your best gaming strategy.
Most data is proprietary information
If it feels like data and information is kept under lock and key in the gaming industry, it’s probably because it is. Both hardware and software developers are prone to keeping data close to their chests, due in part to the fact that the games industry treats data differently than, say, the music or film industries. The purpose of this data might even change from manufacturer to manufacturer, studio to studio, and title to title.
Consider the differences between a game like Fall Guys and one like Candy Crush Saga. Both games are reliant on ongoing gameplay and continuous content updates. However, due to its multiplayer, battle royale format, Fall Guys is more dependent on maintaining a high volume of concurrent players to survive. Meanwhile, Candy Crush’s business model is designed largely around the lifetime value of a single player.
This means that Mediatonic, the studio behind Fall Guys, is likely to keep quiet when their monthly active user (MAU) number is down, since that would denote the game’s demise to its playerbase. On the other hand, King, the developer of Candy Crush, is more likely to publicise their MAU during any given period since their success is less tied to the amount of concurrent players and more likely tied to in-app purchases (IAP). With these differences in mind, it still is just as likely for either company to not publicise their overall sales numbers (except maybe in their parent organizations’ annual financial reports).
This may feel contrary to the standards of other media industries like film, TV, or music, where sales data often directly correlates to pricing ad units and cross-promotions. Instead, games studios operate closer to something like Netflix.
Just like Netflix, game studios often own the platform for distribution and frequently don’t rely on ad revenue for monetization. Netflix may publicise their subscriber count to attract more content syndication (and to reinforce their reputation to investors), but they also don’t have a strong incentive to publicize the watch numbers of every show and movie on the platform because they don’t rely on advertisers.
Instead, flashy numbers like Bridgerton being watched by 82 million households within 28 days of release is enough to sell the quality of their original content. Similarly, Xbox values hardware purchases and subscriptions to Xbox Game Pass and Xbox Gold Live, so they care more about producing engaging gaming content for these platforms than they do serving ads on said platforms. There’s more incentive to widely publicise subscriber numbers and hardware sales to form partnerships with other game studios, but less data will be available for their revenue streams for non-endemic brand partnerships.
That was a lot, we know. The key takeaway is that the specific data you are looking for might not be available because the game company simply does not care to make it available. But that doesn’t mean a partnership or activation wouldn’t be beneficial — it just might take some extra sleuthing or conversations to figure that out.
There’s no centralised tracking
In other situations, the lack of available numbers is due to a lack of tracking. There is no central agency or platform that oversees the collection of usable data in the gaming industry. Nielsen’s former games division SuperData is no longer in service, so point-of-sale data is less immediately available. Marketing researchers are more likely to rely on third-party tracking, but this is also difficult to measure for games due to the complicated nature of cross-platform digital content.
Let’s dig into an example. A game like Rocket League can have players on PC, PlayStation, Xbox, and Nintendo Switch. Since its developer’s acquisition by Epic Games, the game fully supports cross-platform play, and player accounts can be tracked from device to device with clarity. However, a game like the recent remake Mass Effect: Legendary Edition, which combines remasters of three previously released games, is available on multiple platforms without crossplay. The overall lifetime reach of the Mass Effect series, including the original game releases and the remake, would be difficult to parse.
This type of behavioural tracking is common in other digital media industries. For example, most websites utilise cookie tracking and other inputs to cross-reference incoming traffic, determine last touch points, and build out profiles of users across multiple devices and web domains.
But it’s generally more difficult to establish behavioural metrics through games because of technological limitations. Game software is typically not built for measuring impressions or encouraging direct engagement.
Sales figures don’t tell the whole story
Because of the deeply interactive nature of games, consumers engage with games differently than media types like film and music, and the industry is structured in ways that reinforce these behaviours. Common analogs can fall apart quickly if you don’t understand the particular nuances of the gaming landscape, so it’s even more important to pursue specific KPIs to narrow in on the most vital parts of your research.
Another metric that is somewhat unique to games is the disparity between Units Sold versus Hours Played. Of course, not all games are designed to be played for hundreds of hours, but some very well can be played endlessly. This means a game can sell millions of units, but be quickly abandoned by its player base. In contrast, a game can have a lower volume of sales, but an extremely dedicated player base that keeps the game alive for a long time.
The prototypical example of the latter is No Man’s Sky, which had an extremely rocky launch in 2016 but has maintained the game for its dedicated players. Now, it boasts millions of players with each update and an avid fanbase to match. For marketers, the first few years of its lifespan would’ve boded poorly in terms of ROI, but for studio Hello Games, there was clear value in the game’s upkeep.
This is especially true for the games as a service model (GaaS), which largely relies on keeping a core audience rather than a constant stream of user acquisition. While some game launches do rely on sheer volume of sales (narrative-heavy games, RPGs, visual novels, etc.), games like Fortnite, League of Legends, Destiny 2, and even mobile games like Pokemon Go, Homescapes, and Candy Crush Saga all have the potential to grow their revenue even if their user base diminishes to a certain extent.
Because of this, it may be difficult to measure the lead value for the average player of these games, and the ROI may be skewed if you don’t account for these differences between players’ in-game spending habits. Music streaming works similarly. There are revenue models for those that use the free tier of Spotify and SoundCloud, but the core product development is designed to attract and maintain users for the premium versions of the apps. The ROI for the free users and the paid users are inherently different.
Alternatives and Oblique Approaches
If you’re despairing, don’t. ROI is obviously crucial for a marketer, but determining the value of your engagements in gaming just requires some elbow grease.
Some of the best publicly available data in the gaming landscape comes from SEC filings and financial statements. In these documents, you’re likely to find sales numbers by division — games, digital services, hardware, etc. While the breakdowns might not be as specific as you’d like, you may find more assurance in looking at year-over-year trends. Has the company invested more in certain areas? Have there been significant changes in profit share for particular verticals? These indicators help narrow in on the ROI estimations.
If you don’t have the time or resources to dig into these hefty documents, or you’re not privy to the financial calls, a handful of gaming outlets publish aggregated reports and updates. Gamesindustry,biz, Esports Observer, and Eurogamer, for example, all regularly report quarterly and annual earnings for major game companies.
Other sources of useful data can be found through third party research organizations. Organizations like Stream Hatchet and Quantic Foundry specialize in gaming research and release free ongoing trend reports in addition to their paid insights services. Others are more platform-specific, like App Annie, Tapjoy, and StreamElements, all of which compile data based on their customer base.
It’s also worth investigating if gaming companies publish their own research. Facebook Gaming, YouTube Trends (for YouTube Gaming), Activision Blizzard Publishing, and Unity have all released trend reports, survey data, and other case studies that may be useful for estimating the ROI for your strategic development.
Our quickest recommendation to navigate the gaming space is to build out your marketing mix. Because success can be opaque, it’s always in your best interest to cover your bases and spread out your investments. Fine-tune your investments based on what appears to be working. If you need help, drop us a line.