Maximizing The Value Of Your VIP Players

by Marcel Stroop | July 10th, 2020

 

2020 brings unprecedented opportunities for freemium mobile gaming vendors 

 

Gaming has been one of the few beneficiaries of the Covid-19 coronavirus pandemic. Global quarantine and stay-at-home orders preventing people from traveling, commuting, and socializing has resulted in a boom for the gaming industry.  

 

Marcel Stroop

 

It’s reflected in the numbers—as a whole, the industry is set to grow 9.3% this year, generating $159.3 billion in revenue. Tom Wijman of the gaming industry analyst Newzoo has estimated that the gaming industry will hit revenues above $200 billion by 2023. Gaming is bigger than the global music and movie industries combined. 

 

Mobile gaming jumped 30% year over year when the pandemic hit Europe and the Americas in March. Even now that many countries are emerging into a ‘new normal’ post-pandemic environment, mobile gaming is still up almost 20% on last year. In-app payments have increased by 24% since the pandemic began and the amount of advertising required to convince people to download a game has reduced by 33%.  

 

This is a serious opportunity for vendors—an increasingly dynamic market that requires brand new level of player experience for the power users that have been emerging since Q1.  

 

Industry-wide, these are great numbers, but some revenue models are faring better than others here. Both the Xbox and PlayStation are getting a reboot this year—after seven yearsso the standard console game is likely to get a boost in 2021, but what about the mobile games featured in that revenue top ten?  

 

Right now, the top-grossing mobile games are PUBG Mobile, Roblox, Candy Crush Saga, GardenscapesFortnite, and, in China, Tencent’s Honor of Kings. All these games featured among Sensor Tower’s top games by worldwide revenues for March and April 2020. What is also interesting to see is that many of these games are several years old, for example, Candy Crush Saga was launched by King in 2012.  

 

The interesting thing about the freemium business model is that most players never spend anything. A small number of gamers will spend significant amounts to progress inside a game they loveyes, those mystical creatures that we affectionately know as ‘whales’. Producing mobile games? Then you should absolutely be designing your customer experience strategy around maximizing value from the ‘whales in your player community. 

VIP-Paler support

 

Design a strategy that maximizes revenue, but also respects the players. 

 

Freemium mobile vendors need to place significant focus on correlative analysis to understand player behavior and design actions and events accordingly, as explained by Jerry Leisure, CEO of Officium Labs in a recent interview on the CX Files podcast:  

 

Start to do correlative analysis through data science. And then if you follow that correlative analysis, over time, you’ll start to see trends.” It should be possible to create cohorts of players with similar behavior and you can then run A/B tests on specific cohortsto see how different behaviors can be encouraged or discouraged through specific actions or events in the game. 

 

Jerry explained: “Once you get to that point [locating the correlating behavior], then that’s when you know that if I invest in customer service in this specific way then I’m going to get this output in revenue, play session time, and a decrease in churnwhatever the measurement is.” 

 

The creation of a unique ID and the data analysis to identify correlations between actions in the game and gamer behavior are critical if you want to successfully monetize a mobile game and maximize the value of your whalesIt is likely that just 2% of your players will spend any cash in a game and perhaps just 10% of those spending in-game can be classified as whales. 

 

But proceed with caution. Maximizing the value of your whales must be handled carefully. The use of in-game purchases to earn revenue has often been criticized by some who believe that it can lead to addictive behaviors. Nintendo has backed away from mobile gaming because they are wary of the freemium model—but they also have hugely successful products with alternate revenue models, such as the Switch.  

 

Manage your whales as revenues rise

 

Managing your whales is becoming increasingly important as they are spending more and more on mobile games. Analysis by GameAnalytics published earlier in 2020 explored how the top 5% of gamers by revenue have increased their in-game spending by over 20% over the past three years. It’s likely that this figure will be revised upwards once the data includes the lockdown period throughout Q2 of this year. 

 

Consider implementing VIP support or experience programs. Use data to identify key actions and moments where player experience can be stepped up for your whales—with the help of in-game agents acting as peers, or via additional rewards built-in using payment triggers. Take a look at some of 5CA’s case studies to see how it can be done.   

 

As you focus attention on your whales and ensure they are having a great experience, don’t lose sight of the players who are enjoying the game and not spending anything. They may not be spending now, but some of them may be your future whales and the game environment is improved by having more players, even if most are not generating revenue. 

 

Your player experience strategy needs to embrace the whales and make them feel especially loved, but not at the expense of creating a poor experience for everyone else. Mobile games are booming and the whales are spending more. It’s time to show that minority of players just how much you value their attention. 

Marcel Stroop

Marcel is our Sales Manager and heads up the team of Account Managers. He is very passionate about making the life of our and your customers easier. Marcel also loves to work on the growth of 5CA, and to confirm some stereotypes, as a proud Dutchman he loves to cycle.