Now that we have finished “part one” of game analytics, let’s deep dive into it and understand it from the core basics of business metrics and associated frameworks and more in the context of the gaming domain.
What are metrics?
Metrics are an unbiased, standardized measurement system. Based on the context, they can be either game metrics, marketing metrics, growth metrics, or just business metrics in general.
Why are metrics important?
Metrics are important because they help remove ambiguity and enable us to
- Monitor and Track performance.
- Make decisions.
- Set up goals and objectives.
- Interpret data into actionable insights.
How do they originate?
Metrics originate from raw telemetry data interpreted against the desired time frame related to the event. They can be either straightforward interpretations of data or a complex aggregate of several other metrics.
KPIs?
Key Performance Indicators are the subset of metrics used to represent the performance against a defined objective.
KRIs?
KRIs are metrics to signal risk exposure or potential losses and enable us to mitigate or minimize the risk.
What is NSM (North Star Metric)/MTMM (Metric That Matters Most):
NSM is the single critical metric is used to represent the product strategy to meet the product vision within a defined timeframe.
How do they work?
To understand the relationship between the many different metrics, we have adapted frameworks that can be directly tied to the company’s business objectives or the product strategy. The most essential frameworks would be AARRR or RARRA, and the constituent metrics crucial to these frameworks would be
- Acquisition
- Activation
- Retention
- Referrals
- Revenue.
Depending on the product lifecycle and the business objectives, one of the macro-metrics stated above becomes the MTMM of the product/organization. It is still paramount to understand the relationship between these metrics to have a successful product strategy.
Different companies have different metrics for each of these macro metrics. For example, few companies use CPI, and others use CAC (per channel) to measure the acquisition costs. But it is imperative to understand the metrics and why it clicks more to the particular domain of the company.
Now that we have covered analytics basics let’s focus more on game analytics.
For a F2P gaming company, The AARRR or RARRA framework does not seem to fit in the gaming context because of a few things:
- Activation for a general SAAS company would be when the user starts to use the product, directly leading to revenue. Still, in the case of a gaming company, the player might find the game and play the game for multiple sessions. But, until he does his first IAP or watches the first Ad, the player does not contribute to the revenue.
- It lacks the inclusion of virality factor or the social factor of the games that leads to the referrals and LTV (prediction of the profit margin a company will earn during a player’s entire app-usage time).
To solve this, we can adapt to the new framework, which is also known as the ARM funnel. The ARM aims to maximize ARPU, increase the LTV, and minimize CAC.
During each phase of the game development life cycle, different metrics need to be optimized to cover all the facets of the ARM framework — do consider an adaption of a RAM framework for games that have already approached the maturity phase.
In the next post, let’s focus more on the “game metrics” that play a crucial role during game development.
