Game operations for all:
What you need to know
I. Summary
It’s not enough anymore to build a great game and
walk away. The rise of “games-as-a-service” means
players now expect regular updates, promotions, and
social integration — all components of the expanding
field of game operations. The top games studios are
masters at this, often using complicated in-house
technology. But the ideas behind game operations are
easy to understand. Before launching your next game,
consult our checklist to make sure you’re ready.
II. Introduction: Games as a service
Ten years ago, most games were sold as essentially packaged goods: Once a game was shipped, it was out of a studio’s hands. Players either bought the game or they didn’t.The rise of the Internet, mobile, and free-to-play have changed all that. Now, games of all kinds and types use continuous updates and promotions to engage players for the long term. These kinds of live games are often associated with mobile platforms, but their influence is taking hold in the PC and console realms as well. This evolution in games mirrors the similar evolution of software-as-a-service, leading to the term “games-as-a-service.”
Not all live games are free-to-play or freemium. The advantages of ongoing player communication and the ability to add new content to a popular title without releasing a new version mean that even traditional hard-core franchises such as Call of Duty now include standard live game features such as leaderboards and microtransactions.
Across all platforms, live games accounted for $24 billion in revenue in 2014, or about 30% of the industry’s total. By 2020, it’s estimated that 80% of the games industry will have moved to games-as-a-service.
Live games have the promise of increased engagement and revenue, but they also require a whole new set of technology to do well. For example, consider two game titles based on the TV show The
Simpsons:
• The packaged title, The Simpsons Game for Xbox, launched in October 2007. Sales peaked two months later and total revenue was $11 million.
• The live title, The Simpsons Tapped Out for iPhone, launched in March 2012 but had to be pulled by publisher EA for several months to be fixed. It was then relaunched in October 2012 and has life-to-date revenue of $132 million.
The “Simpsons” packaged game was never updated, while the live game has been updated more than 36 times. The packaged game hit peak sales in just two months, while the live game has been a top-grossing title for more than two years.
In this new model, it’s not enough for studios to create a great game and walk away. They must also have a scalable backend (to prevent the kind of launch disaster experienced by EA) and a sophisticated operations plan that lets them continue to update and optimize the game for years after launch.
III. The challenge: Game operations
Effective game operations are amazingly powerful, yet very few companies do it well. Those that do — top game studios such as King and Kabam — have become billion-dollar companies. They have also spent millions developing in-house tools and the staff to run them.THE IDEAS BEHIND GAME OPERATIONS ARE EASY TO UNDERSTAND, HOWEVER, AND CAN BE BROKEN DOWN INTO THE FOLLOWING CATEGORIES:
• Catalog management • Events
• Offers & promotions • User acquisition • Monetization
• App store optimization • Customer service • Player communication
At a large company, each of these functions may be handled by a separate team. In a small studio, one person may be responsible for all of them. If that sounds like a lot of work, well, it is. But consider the example from Asia, where mobile and free-to-play games have been a huge part of the game industry there for several years already.
With $1 billion in annual revenue, Nexon has been one of the most successful in this area. And according its CEO, Owen Mahoney: “The single greatest predictor of success and of sustainable competitive advantage in this business is live game operations.”
IV. The basics of game operations
Here is a short definition of each component of a successful game operations
strategy, along with real-world examples.
Catalog management
The catalog is the core instrument for managing the in-game economy after launch.
Anything players can buy with real or virtual currency is listed in a game’s catalog, along with its various attributes, such as how long it lasts, whether it can be traded, and any associated image or other content. New items for purchase can be loaded into a catalog and offered to players, or new powers added to make certain levels easier to achieve.
Catalog management is not just about increasing revenue, however. One of its main purposes is to make sure the game’s
economy remains stable. Another term used to describe this is “managing sources and sinks.” Sources are any way a player can earn new currency, such as completing certain challenges or buying virtual currency with real money. Sinks are any way that currency can be removed from the game, such as by players spending their money on in-game items or to advance more quickly.
When sources and sinks go out of balance, rapid inflation or deflation can occur, resulting in players being reluctant to spend money, or in extreme cases, abandoning the game altogether.
Another goal of catalog management is making sure that the right content is offered to the right players: “Whales” who spend a lot should ideally be offered high-end items, for example, while those same items might scare off a new player.
Spending patterns and pricing can also differ by geographic region. One easy way to manage this is by creating a subset of a catalog, called a store. Stores can be targeted at a particular player segment and filled only with content and/or pricing attractive to that segment. Two stores might have identical items for purchase, but prices might be 15% lower in one, based on region. Another store might only show items whose cost is below a certain amount.
With these rules set, new content can automatically appear in each store without the game operator having to manually change prices each time.
Events
In-game events keep a game fresh and interesting for players by introducing special new elements or types of gameplay on a limited basis. Events are also useful for game operators, who can use them to launch new content, boost engagement, or fix an unbalanced game economy.
The chart above shows the revenue for Tetris Monster in Japan (aka Tetris Blitz) for just one month (February 2015) and demonstrates the power of events. There were no updates to the game that month — the huge swings in revenue performance were entirely due to live game events.
For all events, it’s important to plan both the mechanic of the event and the “fiction,” or in-game story. The former describes what is happening behind the scenes in the game, while the latter is how the event is described to players in keeping with the game’s narrative. A third element of an event is the reason for creating the event, which could be just for fun, or could be related to a specific game operations goal.
Here are two examples of events, one in an RPG where crafting (assembling useful or ornamental items from basic elements) is popular, and the other in a mobile game whose publisher is now trying to promote its sequel.
Name Goal Mechanic Fiction Duration
Harvest Festival Contest
Rebalance the in-game economy by getting players to stop hoarding raw materials
Increase the crafting rate of success by 3x, thereby encouraging more players to craft straw sculptures
The long harvest season is over, and it’s time to make your neighbors envious! Dazzle them with your straw sculptures in the Harvest Festival Contest.
1 week
Unicorn Welcome Wagon
Promote a new game,
Unicorns Forever, to
players of a previous game
Give players of the first game extra virtual currency if they try out the new game
Say hello to your new unicorn neighbors! Try out “Unicorns Forever” and then return home with some lovely parting gifts: 20 extra gold pieces!
1 month
Offers & promotions
Most of us are familiar with traditional retail offers and promotions: buy a set of steak knives, get a knife block free; 30% off day-old baked goods; senior discounts at the movies before 5 p.m., etc. Depending on the retailer, these can be used to attract customers at an otherwise slow time, to appeal to bargain hunters who don’t normally spend money, or to offload material that would otherwise go unused.
Offers and promotions in games are used for the same purpose: to attract players to change their behavior. Here are a few examples:
• Featured items: Be the first in your guild to buy this brand new SuperSword! • Bundled items: Buy the SuperSword and get 10 free potions!
• Discounted items: 30% off the SuperSword!
• Limited time promotions: Buy the SuperSword, on sale for $1.99 this weekend only! • Come back offers: We miss you! Complete one new mission and get the SuperSword free! Similar to events, offers and promotions are always running. Like events, they should be planned ahead of launch, ideally with a few months’ worth of content ready. For games with many events and offers, a content calendar can be a helpful tool to keep things organized.
User acquisition
The best game in the world will still fail if no one plays it. Getting players to try their game is still one of the biggest hurdles faced by game studios and publishers. While user acquisition is often handled
by sales or marketing team members, many game operators find themselves responsible for this area as well —particularly for any changes to user acquisition strategy that occur after launch. Broadly speaking, there are three parts to any user acquisition strategy:
Paid: Ads are the most traditional and familiar way of attracting players. They’re also expensive, and may have low ROI depending on the game’s revenue potential.
Earned: Press coverage is one form of earned acquisition, but for most games, earned mostly means hoping that players who love the game will tell their friends. Huge traffic from this kind of organic referral is the holy grail of successful games —and almost as hard to find. Building a community around the game can help improve the odds.
Owned: Game promotion begins at home. Studios now start tweeting and posting on Facebook about their games long before launch. Putting game trailers on YouTube or creating Let’s Play videos will also help build excitement around a game.
There are also various crossover forms of user acquisition, such as an ad swapping campaign between two games, or using a publisher’s bigger owned acquisition channels to promote a game. From a game operations standpoint, the key thing is to be able to understand whether all of these efforts are paying off, and to be able to fine-tune them post launch.
Monetization
Simply put: How is the game going to make money? Better yet, a profit? Most people start by answering a different (and easier) question: Where is the revenue going to come from?
If from players, will it be a one-time purchase (common for console and PC games) or in-game purchases in an otherwise free-to-play game (common for mobile and social games), or a
combination of both? If from advertisers, how are the ads going to be embedded in the game, and will players be offered any incentive to watch them?
And that’s just the revenue side. Monetization plans also must account for how the game is going to, over time, recoup the costs of developing and publishing the game. Specific targets need to be set, and plans made for what happens if the game misses a target.
The answer to that last question is where monetization meets game operations. The original plan may have been created pre-launch by a business team, but as with user acquisition, any changes that are needed post-launch rely on a game operator’s ability to experiment with new options. One common scenario is identifying player segments or game features with high revenue patterns and prioritizing new downloadable content (DLC) that caters to that audience or that part of the game.
App store optimization
To some extent, app store optimization is a subset of user acquisition, and like that topic, it shares a lot in common with general marketing principles. Nor is this topic only important to mobile games — other popular game marketplaces, such as Steam for PC, feature similar discovery challenges.
Because app store optimization is still a nascent field, a lot of the strategy around keyword stuffing and title manipulation feels like SEO from 10 years ago. While the weight and importance of keywords (other than title) may shift over time, there are two other factors that will likely carry weight in perpetuity: install volume and app ratings.
Install volume (how quickly how many players download the game) is tied to user acquisition, but also to how easy it is to download a game in the first place. If the initial install is huge, for example, players may decide to give up halfway through.
App ratings and reviews are a form of organic referral, but one that the design of a game can greatly influence.
One quick trick: Don’t ask for a rating until after a player has achieved something in the game. Catch them when they’re happy and a more positive rating is more likely.
Player communication
Communication is vital to the success of any game operations plan. Acquisition advertisements, in-game messaging, push notifications, event email, sales promotions — all of these require effective player communication.
What’s more likely to deepen a player’s connection with a game: a bland, run-of-the-mill system dialog (the in-game equivalent of junk mail), or an immersive message that makes something as basic as a rating request seem like a fun part of the game?
Communications must also be informative and valuable, so that players look forward to them. One way to do this is to include personalized stats or a limited time offer. Most importantly, every piece of communications should have a call to action: a desired behavior by the player. Examples include “come buy the SuperSword now” or “Rate us on the App Store.”
And just as with any other aspect of game operations, it’s important to test and fine-tune. Which messages have high response and which don’t?
Customer service
Finally, customer service — aka the area of game operations that makes some developers most nostalgic for the ol’ “box on a shelf” days. But the days when players were content to wait 6 months for a patch are long gone. If players are having a problem with an in-app purchase, or have a question about their leaderboards, they expect an answer now (or at least within 24-48 hours.) The good news is that well-designed backend systems make it easy for customer service teams to handle players’ needs. Purchases can be refunded and virtual items or currency can be offered to make up for problems. All of this can be tracked across players, to ensure consistency of treatment,
and to look for patterns of complaints that may reveal level-specific problems. Many systems also allow marking out certain players for special treatment, so that if there is a backlog, those players with higher typical spend or referral value can be responded to more quickly.
V. The role of business intelligence
Thought about user acquisition? Calculated a monetization model? Have an events and promotions calendar for the next two years? That’s great, but it’s still not enough.THE LAST KEY ELEMENT IN GAME OPERATIONS IS THE ONE THAT TIES IT ALTOGETHER: BUSINESS INTELLIGENCE.
What makes the difference between a game operations plan and a game operations strategy is the ability to measure and react to what’s actually happening in the game after launch. Game operators frequently test a variety of options across player segments to fine-tune their games, but they might as well be playing darts blindfolded if they don’t have solid BI tools to verify their results.
Business intelligence is different than overly broad and often misapplied term “analytics.” Analytics is about measuring key metrics, such as daily active users (DAU) or average revenue per user (ARPU). Those are important, but without the context of player behavior and other key variables, analytics data can lead to as many unfounded assumptions as the lack of them.
For example, a frequent topic among game developers is attracting the elusive “whales” — the big spenders who account for outsize proportions of player revenue. But what about the players who may not spend that much, but are a huge source of organic referrals? Is there a way to identify these players early on by their behavior? Or, conversely, are there behaviors associated with players about to leave a game? Studying these patterns can provide huge insight into game performance. Consider the two graphs below. The one on the left shows monthly revenue. It’s nice, but so what? What insights do this graph show? Now look at the one on the right. This graph shows that revenue through 10AM is under the historical average. Why is that? Maybe it’s a federal holiday, or maybe something is wrong in the game. The graph on the left provides information, but the graph on the right is a call to action.
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grow live games, including player accounts, catalog management, analytics,
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Learn more at: playfab.com
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VI. The game operations checklist
At its heart, effective game operations is about having the knowledge and tools to measure and react to what’s happening in a game post-launch. When creating a game operations strategy, ask these questions:
• How are you measuring your in-game economy to detect imbalances, and what will you do to correct them?
• How will you keep your “whales” happy and continuing to spend?
• What events and promotions do you have planned for the first three months? • How will you know if those events and promotions are a success?
• What is your expected ROI from your paid user acquisition campaigns? What will you do if it underperforms?
• How will you encourage your players to spread the word about your game via app reviews and organic referrals, and how will you measure this activity?
• What is your first-month revenue target? Your six-month revenue target? What could you change to meet those targets if you had to?
• When is your breakeven date and what will you do if it slips? • How will you handle customer complaints?
