Churn. It’s an ugly word.
Game developers are naturally concerned about player retention. But eventually even the most ardent player loses interest in a game. It’s normal. It’s part of the cycle.
And so it’s also normal when developers are inclined to squeeze the absolute maximum revenue out of people before they’re gone forever. However, trying desperately to monetize your players only increases churn, aggravating the problem.
“Raising squeeze on players not only results in reduced engagement but also higher player churn, with revenue cannibalization occurring in future quarters,” wrote Atul Bagga, former CFO for game developer Zynga Asia wrote in a VentureBeat guest column earlier this year.
This situation has led many companies to shift their focus from customer acquisition to retention in the hope of boosting the cost-effectiveness of their marketing strategies.
Still, this doesn’t address the fundamental problem that retention efforts might be targeting people simply ready to move on to the next thing. And if players aren’t really interested in your kind of game, there’s not much point in spending money to try and keep them around.
It’s a vicious circle: Either you try to squeeze them and risk a spike in your churn rates, or you might end up wasting time and resources in a vain attempt to keep them around a bit longer.
“Monetization is always a challenge in the gaming industry,” Eyal Grundstein, VP of growth and user acquisition at GSN Games, told VentureBeat in August. “The biggest challenge right now is monetizing the other 95 percent.”
That’s a huge chunk of your audience not making you a single cent. And if players aren’t going to stick with your game anyway, wouldn’t it be great if you could still monetize them and create a whole new revenue stream for your business? So why not simply sell them?
Now, I’m naturally not talking about actually selling a person from one game developer to another. Consumers should always remain in control of their data. But there’s a more elegant way: Securely giving access to inactive players based on their gaming preferences and other factors like how long they’ve been dormant.
Our Berlin-based start-up allows developers to do just that with the first peer-to-peer game marketing platform. Launched only in March, Simplaex already counts many of the game industry’s biggest companies as its clients.
Using solely first-party data and its own real-time bidder, our new platform completely bypasses the traditional ecosystem for digital marketing. We expect to have direct access to over 100 million players any day now.
This marketplace can be used rather effectively for both player acquisition and retention. Capturing in-game events of players in real-time, developers can use it to target customers and tailor marketing campaigns on a granular level. Simplaex also offers personalization options to engage and reengage users throughout the lifecycle of a game.
But the platform also creates an entirely new revenue stream by monetizing churn. This “selling” of players that are no longer actively playing a game is highly customizable. For example, a developer can choose to offer players dormant in the past 7 to 15 days, or even select those gamers still active but whose gameplay is already beginning to taper off.
It’s important to stress this does not increase churn, it merely allows developers to monetize players that would have left a game regardless.
And players benefit from narrowly targeted marketing campaigns showing them games tailored to their specific preferences rather than blunt and ineffectual advertising. Customer data always remains with the original developer — Simplaex simply facilitates access for another company interested in a certain player profile.
The seller creates new revenue, the buyer gains solid leads, and the player receives relevant offers: It’s a win-win-win situation.
So churn doesn’t have to be such an ugly word after all. At least not when it’s monetized.