Gaming: Main marketing definitions and vocabulary

1/ Gaming - Behaviors

Authority: People often act in an automated fashion to commands from authority, even if their instincts suggest the commands should not be followed.


Commitment/Consistency: People have a general desire to appear consistent in their behavior, and they also value consistency in others.

Liking: People are more likely to agree to offers from people whom they like.

Reciprocity: This social principle refers to the fact that people usually feel obliged to return favors offered to them. One example includes buying more from a merchant offering a discount.

Scarcity: People tend to want things as they become less available, such as when they are told a certain product will be gone soon so they should buy it now.

Social proof: People generally look to other people similar to themselves when making decisions. This is particularly noticeable in situations of uncertainty or ambiguity.

2/ Gaming - Monetization

Addressable Market Size: The number of people who could become players of a game.

ARPDAU (Average Revenue Per Daily Active User): Common game monetization measurement that shows how game is performing day to day. As a game’s DAU count climbs, some games that are very healthy financially may dip below this threshold, but for most games, $0.05 is a good first benchmark. Games with excellent monetization will have ARPDAUs between $0.15 and $0.25.

ARPU (Average Revenue Per User): Measurement of how much a game is earning per player; this is normally quoted as a monthly number, so the calculation is Monthly Revenue/MAU) = ARPU.

ARPPU (Average Revenue Per Paying User): Measurement used in free-to-play/freemium games; calculates the amount spent by paying users only, so the total should be higher than ARPU.
Casual Game: Games that typically feature simple rules and controls, increasing levels of difficulty featuring light, non-difficult and sometimes short-duration gameplay.

Churn: Unfortunatly for developers it is quite difficult to retain players that often get bored and move on to other games or apps. The rate at which they do so is defined as the churn rate. The percentage of users who played last month who did not come back this month; the calculation is 1 – retention rate=churn.

Cohort: A group of players who all played a game in the same time period, such as on the same day; calculating the retention rate requires users to be grouped into cohorts before they can be compared and analyzed.

Conversion Rate: Percentage of nonpaying players who become paying players with virtual currency, such as by making in-app purchases.

DAU (Daily Active Users): The number of users who play the game on any given day; this is typically expressed as a monthly average. Games with longer session lengths like RPGs will tend to have fewer Sessions/DAU while endless runners and games with shorter sessions can easily exceed 4 or 5 Sessions/DAU.

DAU/ MAU: The ratio DAU/MAU (Daily active users / Monthly active users) is used to measure stickiness of your users. How well the game is capable of retaining the players is indicated by this metric. In a way it exhibits the potential of the game to drive engagement and make it extremely compelling for the players. How many of the users that have visited the game in the past month also initiated a session today?
A game with a strong DAU/MAU ratio will be able to maintain a value over 0.2 for an extended period of time. Be careful comparing this between games: when running a user acquisition campaign, the ratio will be skewed upward.
It is not an indicator of the sales or IAP figures.

DLC (Downloadable Content): Any content purchased after a full game’s installation or purchase that adds new features or extends game play and the life of a game.

Duration: The number of months the average player plays your game; the calculation is 1/churn=duration.

Engagement: How frequently players interact with a game. The greater the engagement is, the greater the likelihood that they will purchase. Engagement is derived from DAU/MAU.

Entry Event: The first action a user performs when they enter a game.

Exit Event: Opposite of entry event. It is the last action a user performs before exiting the game.

F2P: Free to play – allows game play without restriction.

Freemium: A business model whereby the core game is free and users are charged for a premium service(s) or virtual good(s).

Free-To-Play: Also known as F2P – allows game play without restriction.

Gamification: The use of gameplay, games community, marketing and analytics techniques in non-game environments.

Infection Rate: How much a given user exposes the game to other players, such as through status updates or email invites.

IAP (In App Purchases): Virtual goods or upgrades that can be purchased within a game or app, usually in free-to-play games.

K Factor: Measures the viral growth of a game. K Factor is calculated by multiplying the Infection Rate by the Conversion rate. Most of the games usually have a k-factor that is <1, as most of the games do not grow exponentially. This being said, a K-factor is declining over time.

LTV (Life Time Value): The average amount of money spent by each player, including paying and nonpaying; calculation is ARPU x average number of months a user remains active=LTV.

MAU (Monthly Active Users): The number of players who have interacted with a game in a given month.

Monetization: The practice of making money from an online or mobile app/property. Typical approaches include display ads, subscriptions, affilliate links, context advertising, add-on purchases, or microtransactions/in-app purchases.

Optimization: Steps taken to improve an app or game’s performance, often in terms of important funnels. Optimization involves interpreting analytics and making adjustments to improve them.

Reengagement: The act of bringing lapsed players back to the game. It includes re-engaging gamers who have been signed off for an hour, a day, a month, or more.

Retention: It means that the goal is to know how many players are still playing after 1 day, after 3 days etc... Rates of 40%, 20%, and 10% are considered a good benchmark for Day 1, Day 3 and Day 7 retention.
These benchmarks change drastically according to the genre of the game (strategy games have a high 30-day retention compared to casual games).

Social Gaming: Multiplayer games with social graphs on social networks and mobile phones. Social games generally have a very gentle learning curve, easy-to-understand UI, and live on a social network, taking advantage of player’s friendships in meaningful ways within the game.

Stickiness: The most important metric for engagement, measuring the number of days per month active users play the game. The calculation is DAU/MAU, so if the DAU is 1000 and the MAU is 2000, the game’s stickiness is 50%. A range of 20-30% is considered good.

Vanity Metrics: These are metrics that do not necessarily indicate success in the app monetization world, but some companies like to track them and boast about them anyway. Examples include the number of game registrations to date, total hours played, total items purchased with virtual currency, number of concurrent users, and likes.

Virality: Measured by K Factor, the Viral Rate/Virality shows how much your users are promoting, evangelizing and spreading your game. The tendency to be spread by word of mouth.

Virtual Currency: An in-game or online currency generally purchased with real money. Can be redeemed inside a virtual world or online game, usually for virtual goods.

Virtual Worlds: Online worlds where players create avatars and interact in real-time.