The gaming industry uses similar metrics as subscription-based businesses to track their performance and success. One of the most important metrics for gaming companies is the retention rate. This metric measures the percentage of players who continue playing a game over a specific period of time.
The reason why retention rate is important in games is because it directly impacts the churn rate. These two metrics go hand in hand when it comes to measuring the success of a game. A high retention rate means a lower churn rate, which is beneficial for any gaming company but it can be confusing defining the difference between the two. That’s why we’re here to provide an ultimate guide on retention rate vs churn rate in games.
High Churn Rate vs High Retention Rate
To best understand the differences between retention rate and churn rate in the gaming industry, it’s important to define each metric separately. Customer churn rate is the percentage of customers who stop using a service or product over a given time frame. In gaming, this refers to players who stop playing a game after a specific period.
On the other hand, customer retention rate measures the percentage of customers who continue using a service or product over a given time frame. So, a higher retention rate in gaming means that more players are continuing to play the game over a specific period of time.
It’s helpful to have a new stream of new customers entering your gaming ecosystem. However, to sustain and grow your customer base, reducing your annual churn rate and increasing retention rate is crucial. It would be best to begin analyzing your game metrics now to find ways to improve these two metrics. At Helika, we’ve helped leading gaming companies to reduce their churn rate and increase retention rate through our comprehensive analytics tools.
The Retention Rate Formula
(Number of users at the end of a set time period / the number of users at the start of a set time period) x 100 = retention rate percentage
Once this calculation is complete, you can compare it to the industry’s average customer retention rate. Each game genre has their own benchmarks and if you are curious to see how you stack up, feel free to contact us for more guidance on how to measure and interpret your retention rate.
A common mistake game developers make is focusing solely on acquiring new players without prioritizing their existing ones. In most businesses (gaming included) it costs more to acquire a new customer than to retain an existing one. Therefore, investing in improving retention rates can have a significant impact on your overall revenue and profitability.
The Churn Rate Formula
(Number of customers lost / Number of customers at start of period) x 100 = Churn Rate%
So, as you can see the churn rate formula discovers how many players left your game over a specific period. It’s important to remember that churn rate can vary greatly depending on the type of game and its target audience. Single player story driven games naturally have a higher churn rate compared to multiplayer games. However, DLCs and other updates can help boost retention rate in these types of games.
Our analysts can work with your team to discover ways to improve retention rates for all genres. From loot box ideas to new game modes, we’ll help identify the best strategies to reduce churn rate and retain players.
How To Use Game Analytics For Sustainable Growth
It’s essential for game developers to utilize game analytics in order to achieve sustainable growth and long-term success. By tracking important metrics such as monthly churn rate, developers can gain valuable insights into player behavior and make data-driven decisions to improve retention rates. A good churn rate varies depending on the business model and genre of the game, and we can help identify the ideal churn rate for your specific game.
In addition to analyzing churn rate, developers can also use game analytics to identify areas for improvement in the overall player experience. This could include implementing loyalty programs or offering personalized offers based on player behavior. With the help of our team at Helika, we can find a business model that works best for your game and utilize game analytics to continually optimize and enhance the player experience.
Using best practices is important to start the process but analyzing and optimizing with practical data is crucial for sustained growth. Our team can help you identify the key metrics to track and create customized reports to measure progress towards your goals.
Customer Satisfaction = Greater Customer Lifetime Value
One important aspect of growth for any business is customer service. By providing a positive and enjoyable experience for players, game developers can increase their total number of customers and ultimately improve their business performance. This can be achieved through analyzing customer behavior, implementing loyalty programs, and offering personalized offers based on player data.
By continuously tracking key metrics such as churn rate, repeat purchases, and total customers, developers can gain insights into the customer experience. Whether it be increasing the quality and quantity of products delivered in a subscription service or other strategies to improve customer loyalty, striving for a low churn rate and increasing customer satisfaction can lead to greater customer lifetime value.
Final Thoughts
Higher churn rates indicates that there is room for improvement in the player experience while low retention rates echo the need for more engaging content. By focusing on customer satisfaction and utilizing game analytics, developers can optimize their games to retain customers and attract new ones.
At Helika, we are dedicated to helping game developers reach their full potential by providing personalized solutions and utilizing data-driven strategies. Let us help you take your game to the next level. So don’t wait, contact us today to get started!
