The analysis and use of big data – extremely large data sets – is transforming every industry from e-commerce to grocery stores and even the education sector. Data scientists, consultants, and analysts computationally analyze big data to reveal trends and patterns from which human interactions and behaviors may be inferred. With the gaming industry projected to be worth a cool $2.2 trillion by 2021, the use of big data analysis is still in its infancy and will be a key driver of its success. In this article, we’ll outline five ways that the gaming industry is being reshaped by big data.
#1. Gaming Developers are prioritizing strategy over profits
The most profound way that the gaming industry is being developed is the change in strategy. In a recent interview, Dan Schoenbaum, CEO of Cooladata, noted that many of the gaming companies that his firm has worked with were “truly struggling with their metrics.” They would adopt a ‘spray and pray’ approach to game releases by putting out multiple titles at once and praying to strike pay dirt. Cooladata focuses on helping firms collect, analyze and predict customer trends to make the process of developing games much more efficient and profitable.
That’s all changing according to CIO contributor Kevin Rands, who cites Microsoft’s acquisition of Minecraft as one of the best examples of a change of approach. With sales of Minecraft passing 120 million copies last year, Microsoft’s decision to purchase the game for $2.5 billion shows their commitment to the goal of collecting, analyzing and learning from consumer data. Microsoft can use information from any of the average 55 million monthly Minecraft users and use it for the long term.
#2. Big data is increasing the profitability of Freemium business models
The second most significant way that the gaming industry is being reshaped by big data is the increased profitability of freemium business models. Five years ago, fledgling gaming companies were forced to introduce their games as ‘freemium’ products as a way of generating interest and support in the absence of marketing capital. By offering their games for free, they expected income via in-app adverts or microtransactions as players made in-game purchases to gain extra features. More recently however, the use of big data has increased the profitability of the freemium business model to such an extent that it’s now see as the best route to success, even for incumbent firms.
In 2016, Helsinki-based Supercell, the creator of freemium mobile games Hay Day and Clash of Clans, made 917 million euros in profits. However, its profits fell 20 percent last year to 729 million euros ($900.97 million) as support for Clash of Clans waned. This is where big data is having a large impact on the development of the gaming industry. Big data companies such as Cooladata are providing managed services that take the hassle out of gathering data and predicting consumer trends. Data scientists can offer gaming companies analysis that helps maintain the profitability of their freemium offerings.
Despite Supercell’s falling profitability, it’s worth noting that it earned over $900 million from just four games and didn’t release a single new game last year. According to Schoenbaum, gaming companies are now “empowered with information” that can be used to increase their profits. By making small data-drive changes to their games, they can better hold the focus of gamers and increase the likelihood that they’ll make in-game purchases.
#3. AI-created personalized ads are boosting profits
Artificial intelligence (AI) and machine learning (ML) are helping to drive the shift in all forms of commerce towards highly targeted, personalized adverts. AI helps to match our desires with the products that we need and the gaming industry has plenty of data it can mine. Data scientists can sift through big data to uncover hidden patterns of behavior and decide which in-game ads would be most effective.
Think about it. How many apps and mobile games have you used that require you to sign into your Google + profile or log into Facebook in order to save your progress? Users love the convenience of being able to save their game data in the cloud, particularly if they need to reinstall the app on a new or different device. But in doing so, they are handing over a treasure trove of their personal data to the gaming companies. According to research by VentureBeat, almost three-quarters of users expect to see personalize ads within games now and ‘think a lot less’ of brands that fail to provide them. The rules of the gaming industry are being reshaped by the possibilities offered by AI and ML-driven advertising solutions.
#4. Behavioral data is informing game design
The changing process of game design is another huge shift within the gaming industry being driven by big data. Data scientists can help gaming firms shift through the big data they amass to pinpoint which parts of games are working well, and which are making users frustrated and want to walk away. Via their Analytics Cloud service, Cooladata enables gaming companies to get the answers they need in a matter of seconds, not days. Instead of having to integrate multiple tools and wrangle datasets every time someone needs a report, gaming companies can get the information they need almost in real time. This helps to inform the game design and tailor the gaming experience to the specific desire of players.
#5. Gamers are given what they want when they want it
The fifth and largest way that the gaming industry is being reshaped by big data is the way in which gamers are given specific offers such promotions and deals. Big data analytics is being used by firms such as Cooladata to identify when players are ready for an upgrade to be offered. Big data is increasingly being used to highlight the precise times when gamers are ready for offers or upgrades. This is one of the most important strategies for and increasing user retention and profitability.
In conclusion, the gaming industry is being completely transformed by big data. Everything from game design to monetization is being informed by data subsets, analytics and data science. The more reliable that gaming companies can become in terms of giving gamers what they want, the more profitable the industry will be.