What drives retention

Posted by(Visited 11027 times)yabo Tagged with:,
Jan 30 2019
The difference in active users between 100% and 10% churn shows a huge increase under the curve for the lower churn rate.

For better or worse, much of the games market is moving to games-as-a-service. Once upon a time, this was known as the MMO business model, because all MMOs were games-as-a-service, and virtually nothing else was.

Obviously, a lot of GaaS games won’t be MMOs.Candy Crush Sagais a service, but it’s not an MMO. Nor does GaaS mean the game has to be free to play with upsells via microtransactions.GaaS is abusiness strategy, and F2P is arevenue model.

In the past we’ve seen services of all sorts drive revenue in lots of ways:

  • free sampling to get you in the door, supported by other revenue streams such as other paying members subsidizing free users, or advertising
  • a la carte offerings which let you dip into a service without an ongoing commitment
  • periodic upgrade offers to take you from that free tier to something with recurring payments
  • subscription tiers — a low basic offering and a few richer ones catered to specific demos, which retain the ability to a la carte for specific features
  • individual one off upsells for special events that are never covered by the sub tier

In fact, cable companies and phone service both do just aboutallof the above at once. So there’s lots of ways to make money, if you have a service, and arguably, mature service businesses use as many of them as they can.

But underneath it all is one inevitable underlying truth.

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