Churn rate refers to the percentage of customers who have stopped using a product or service during a given time period. In the context of Web3 games, it is one of the most important metrics to track because as we integrate this new technology into our existing business models, it becomes crucial to maintain a high retention rate among our customers.
In this guide, we will discuss the key factors that can lead to higher churn rates in Web3 games and how you can use data analytics to identify at-risk customers and increase your player/customer retention rate. This can be the defining factor in your success as a Web3 game developer.
The Different Types of Churn In Gaming
Before we dive into how to calculate and analyze the churn rate, let’s first understand the different types of churn that can occur in Web3 games. The three main types are voluntary churn, involuntary churn, and non-renewal churn.
Voluntary Churn
Voluntary churn occurs when a customer voluntarily cancels their subscription or stops using the service. In the context of Web3 games, this could happen if a player loses interest in the game or finds another game they prefer. It can also occur if a player faces technical issues or is unhappy with the customer support provided.
Involuntary Churn
Involuntary customer churn rate refers to customers who stop using the service or product without intending to. This could happen due to factors outside of the developer’s control, such as technical glitches, server issues, or changes in the game that make it unappealing to the player. This type of churn can be particularly damaging as it may reflect poorly on the game’s overall quality or reputation.
Non-Renewal Churn
Non-renewal churn occurs when a customer does not renew their subscription or purchase additional in-game items or features. This type of churn can often be influenced by external factors, such as changes in a player’s financial situation or competing games offering better deals.
How To Calculate Churn Rate In Web3 Games
The churn rate formula is relatively simple: (Number of Customers Lost / Total Number of Customers Acquired In The Same Period) x 100. This will give you the percentage of players who have churned in a given period. For example, if a game had 100,000 players at the beginning of the year and only 80,000 at the end, the churn rate would be 20% for that year.
In the context of Web3 gaming, it is even more important to track the churn rate as it can directly impact revenue and player retention. By regularly calculating the churn rate, developers can identify any trends or issues that may be causing players to churn and take steps to address them. For instance, if NFTs are required for certain in-game features and there is a high churn rate among non-NFT holders, the developer may need to rethink their approach and make the game more accessible for all players.
How To Discover The Real Reason For High Churn Rate
There could be various reasons for the causes of churn and just knowing your churn rate won’t help you to address the underlying issues. To accurately understand and effectively combat churn, it is important to dig deeper and discover the real reason for high churn rate in your Web3 games.
One of the most powerful tools for understanding churn is analysing user behavior. By tracking usage patterns and identifying potential issues, you can get a better understanding of why users are leaving your game. This can help you to make necessary improvements and retain more players.
Additionally, conducting follow-up surveys or interviews with churned users can also provide valuable insights into their reasons for leaving. By asking the right questions, you can uncover specific areas of concern or dissatisfaction that may have driven them away from your game.
Although these tactics can be useful working with a dedicated team of data analysts can provide even more in-depth analysis and understanding of churn. With Helika, you can access state-of-the-art data analysis tools and services that can help you to identify the root causes of churn and make informed decisions to improve player retention.
Example Scenario On How To Lower Churn Rate
Now that we’ve discussed the importance of conducting a customer churn analysis and understanding the potential reasons behind it, let’s take a look at how Helika helped this game developer lower churn rate in their Web3 game.
Wanderers is a sci-fi rogue-lite that seamlessly blends card collecting with strategic deck building. Every run offers a fresh and unique experience, while each season introduces new stories, abilities, and challenges to conquer. Developed by BlowFish Studios, the game had strong ambitions to include blockchain technology, allowing players to truly own their in-game assets.
However, after the initial hype and launch, the game started to experience a high churn rate. Wanderers struggled to receive any actionable insights from the complex and decentralized Web3 space, making it difficult to track player behaviors and understand which game features were driving engagement and where players were dropping off.
The inability to track player behaviors and understand key engagement drivers resulted in missed opportunities for player retention and optimization, which are critical for long-term success for games. Wanderers recognized the importance of retention and engagement but struggled to gain detailed data insights to pinpoint which game and platform features were driving user attention, where users were disengaging, and what was driving conversions.
This lack of granular insights made it challenging for the studio to effectively track both on-chain and off-chain behaviors, build accurate user personas, and refine their user experiences. To address this issue, Helika developed a tailored analytics solution that gave Wanderers a comprehensive view of their statistics at both the platform and game levels. Leveraging Helika’s data-driven insights, the Wanderers team identified a key issue: most quests were overly challenging, resulting in low completion rates.
In response, they adjusted the quest difficulty, simplifying them to improve player progression. This strategic change led to higher engagement and a more satisfying player experience. With a dedicated customer success manager who held weekly meetings with their team, detailed reporting, thorough analysis, and tailored data solutions was provided. This ensured the Wanderers could translate their data into meaningful, actionable insights.
The results proved that Helika’s approach was successful.
Case Study Summary
With a track record of improving total play-time by 5.9x for Wanderers and a 62% increase in progression efficiency, Helika’s expertise can help game developers lower churn rate and increase player retention.
Helika is the leading Web3 gaming analytics company and has experience working with major brands such as Maplestory, Ubisoft, Yuga Labs, Parallel and more. Contact us to learn how we can help you optimize your game and drive conversions.
Why It’s a Good Idea To Track Churn Data For Better Customer Loyalty
There are many retention strategies available from loyalty programs to exceptional customer service, but one key factor that should not be overlooked is churn data. In this section, we will briefly review and summarize why tracking churn data is crucial for better customer loyalty.
Simply put, the cost of acquiring new customers is typically higher than retaining existing ones. According to Harvard Business Review, increasing customer retention rates by just 5% can increase profits by 25-95%. This is because loyal customers tend to spend more, refer others to the company, and be less price-sensitive. They’ve built a habit around your product or service and are more likely to continue using it.
Customer satisfaction is usually easier to achieve with players and customers that are already familiar with your product. This usage pattern combined with a higher rate of conversions, can lead to a faster growth rate while lowering the costs of your marketing efforts.
Overall, it’s a powerful tool that can help you craft better offers, improve service quality, and upgrade your product lines. As long as you follow the best practices for impoving the customer experience, your retention rates should grow. Your customer base is an asset, and like any other asset, it needs to be protected. Tracking churn data is the perfect way to do so.
The Bottom Line
Understanding customer behavior can be a difficult task. One of the best ways to ensure the success of your Web3 game is to have strong key performance indicators (KPIs) in place and regularly monitor them. By keeping a close eye on your churn rate, you can proactively address any issues that may be causing players to leave your game and continuously work towards improving the overall experience for your users.
Remember, addressing customer churn is an ongoing process. It requires constant monitoring, analysis and this aspect of game development is often outsourced to professional analytical companies. By doing so, game developers can focus on creating engaging content and continuously improving the user experience, while a team of data analysts provides actionable insights and recommendations to help lower churn rate and retain more players.
Contact us at Helika today to learn more about our services and how we can help you achieve your retention goals for your Web3 game. Let’s work together to create a dynamic gameplay experience with a low churn rate, resulting in satisfied and loyal players.
With Helika as your partner, you can focus on what you do best – creating amazing games for the Web3 world. Let us handle the analytics and player retention strategies to help your game reach its full potential.
