Small Studio development choices – Astraware’s Cuboid Approach

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There’s always so much to do, so many new things we could work on! What do we choose next?

More importantly – how do we choose what to do next?

TL;DR : This is an article intended primarily for other developers who are in small studios, about making the best choices on where to focus their efforts. The answer is usually to spend time where it will make the greatest difference, rather than just choosing what’s most fun (well, duh!). Read on for more detail about that!

 

About our games in general

We have, like many developers after a while, a number of games all sharing a similar framework.  That means that an improvement to one, can be rolled out into the other games relatively easily, and maintainability (OS level fixes, new device support) is much easier too!

With that in mind, our choosing process is about where to put the next effort, to best get to a goal of making more revenue. (Got to support that tea and biscuit habit somehow!)

So, do we

  • Make a new game?
  • Work on features in an existing game?
  • Find and implement a new way to improve the monetisation across our games?
  • Work on ways to get more users to the game?

All of these are good options, so it’s about choosing the best.

 

Applying some metrics

Our collective revenue from games is ultimately determined by:

How many games we have :  G

How many daily active Users there are per game (on average)  = ( Dau / G )

Monetisation (aka ‘ARPDAU’ – catchy!) – How much revenue is generated on average per day per active user : Arpdau = ( R / Dau )

 

Simply, if you multiply these values, you get the daily revenue across your whole portfolio : G x  ( Dau / G ) x ( R / Dau ) = R

 

We view these three values as three sides to a cuboid, with the volume being the revenue.

Games, Users (retention), and Monetisation (ARPDAU)

 

 

When we decide what to work on, we look at how much our effort will increase one of those dimensions.

In turn, by knowing the other values that would be fixed, we would be able to estimate the change in the volume.

In the example above, would adding a ‘box’ size to games, users, or monetisation, increase the volume by the most?

Usually – the simplest best choice will be to increase the smallest current dimension.

However, not all of those choices will the same cost, which makes it into a more complex decision.

For instance, over 2016, our possible choices have included:

  • Spend 4 months to make one new game, increasing from 7 to 8
  • Spend 2 months to build a new social system into the games increasing the retention, and the number of users by 10%
  • Spend 3 months to add in a new revenue system (i.e our puzzle streams) which could increase our revenue by 20%
  • Spend 2 weeks on an interim small update to each of the games fixing a problem that affects a small number of users on the latest OS level – 2% improvement in users (but might become more later)
  • Spend 2 weeks on adding in an additional advert provider to increase our ad revenue by perhaps 5%
  • Spend 1 month to build another method for micro-currency earning  ( “Complete surveys for extra stamps!” ) to increase revenue by 20%
  • Spend 4 months to add in daily puzzles to increase active users (via retention) by 50%
    • Spend a further 1 month to add 2nd daily puzzles to add another 10% to users
  • Spend 1 month on adding in extra purchasable puzzle packs to each game to increase revenue by 5%

These are very much the kind of ‘interesting choices’ that might be presented to a game player in a strategic game like Civilization, for instance. It’s one of the places where we’re running a game theory to make smart choices for our games business!

It’s never quite so simple a choice, sometimes a sequence has to be made which isn’t so good in the short term, but ultimately better in the long term. This is like working through a tech-tree in a game in order to get the best bonuses at the end.

For instance, we had to add puzzle streams which was an expensive piece of work, in order to have a micro currency in place and making sense, so that we could add in surveys as an final option. By doing things in that order, we were able to do a meaningful release at each stage, with the players getting a new feature each time.

It would have taken the same total time to do it in the other order, but we wouldn’t have been able to do the interim releases.  We’ve found that every time we do a release we get a burst of new users and activity, and our existing users are kept happy too, so it does make a lot of sense to do things in an order that gets us more updates.

Also there’s always more going on that needs to be done – other projects (like hitting a retail version on time), coping with a new piece of technology (Samsung’s new device resolution of the week), rebuilding to cope with latest OS version ( Apple’s new iOS version of the month! ), etc.

More Games

This is straightforward! We make another new game, create a whole load of puzzles (and plenty to keep the daily puzzle hoppers filled too), and then we can launch it.

A new ‘puzzle’ game in our existing framework takes about 3-4 months of creation time, usually split between the two of us, across all of the tasks – Design / Art / Development / Puzzle Creation / Testing / Production, etc.

We know that we’ll be able to cross-promote to  our existing players, using the advertising system that’s already in the games. We can sacrifice some paid ads, to promote our own games instead, which players typically are happy to try, as they already trust our games and the new game is free too!

Revenue Per User

Statistically the revenue per user can be calculated from the number of users and how much is made, in terms of in-app purchases and ad revenue. It’s a bit more challenging in that advert revenue is comparatively small, only a trickle, but if a user keeps up with the app – playing for free – but for many months or years, that can add up appreciably.  The industry talks about LTV (Long Term Value) or LARPU (Lifetime Average Revenue Per User), which are used in calculations.

Some of the things we can do to increase the revenue are:

  • Adding in extra purchasable features or packs
  • Including adverts at appropriate times
  • Add in other cross-sells to our other games
  • Add in other ways for people to get items in the game (micro-currency) such as doing sponsored surveys

There’s an obvious limit – if we put in too many adverts, or adverts that pop up at a bad time interrupting play, or adverts that take up too much of the screen while a game is in progress, etc., these will increase the number of advert views in a short time, at the expense of retention – nobody likes a product they can’t use because it’s constantly interrupting them! Sometimes it’s a careful balance between monetisation and retention, but we tend to side more with retention!

We currently get a revenue of around $0.15 per user on average, roughly split equally between in-app purchases and revenue from advertising.

 

Number Of Users

While the number of games and revenue per user are fairly straightforward, in terms of changes made, the choices about number of users is quite a bit more subtle.

Every day we have new users finding the game, and some users uninstalling.

Each choice we make will change the number of new users trying the game, and the likelihood of them (or existing users) from deleting the game. This is all about retention which I’ve written more about in another article!

We hope to make choices that increase new users, and decrease uninstalls, at the same time!

  • Best possible first-play experience
  • Plenty of value over time
  • Daily content
  • Sufficient free content (which may be ad supported)

 

Having Fun

Sometimes we can be guilty of being a bit blind, and launching into doing some development that’s fun. For us, that means running headfirst at whichever problem seems the most difficult, challenging, and downright unsolvable. We love creating new things, new systems… but it’s not always the best choice.  Yes, we end up with more fun things (and our customers love that too) but there are times when improving the existing suite of games could do better!

Over the last few years, we’ve deliberately tried to take an informed/data driven approach to what to work on – ultimately we look at the choices, and we work out what think each choice would mean for our revenue stream (best guesses all round). We might divide in to the effort to get a value of  ” revenue per month, per day of effort ” which is an awkward unit, but really makes us focus on the reality.  Sometimes that means we’ll have to punt ‘fun’ things down the development order a few times, which is always a pain, but they do get to stay on the list!

 

Crazy Assumptions

OK, we admit it! There are a lot of assumptions to be able to call it a cuboid!

  1. Not every game has identical monetisation.
  2. Each game will get a different profile of retention.
  3. Each new game doesn’t add the same number of users straight away (it takes a while!)
  4. Fans of certain games are more likely to follow ads (or take surveys) than other games.
  5. What worked last year might not work this year or next
  6. That we can estimate in advance the timescale to create products, features etc.

That’s so many assumptions and errors that it’s not exactly a bankable value, but any analysis is better than none – and if you know the flaws, you can at least appreciate the risks!

 

Summary

While we do love to make new games and solve new problems, that isn’t always the best choice.  Averaging over a long time, we spend about a third of our time on making new games, a third on acquisition and retention (supporting new devices, new platforms, new features, product maintenance and updates), and a third on making sure the games can make us revenue ( extra puzzle packs, more ways to play for free supported by ads / surveys, more content, etc.)

There have been times where we’ve realised (after analysing some data) that we’ve been missing something important, and that we have an easy way to increase one of the dimensions.  An example of this was when we realised how badly we were organising our advertising! ( Hint – mediation can be brilliant! )

 

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