57 Terms You Need To Understand If You Make Games, All In One Place

unsplash_523ae1f5502d6_1If you’re interested in game monetization, you should get an idea of the most common terms used in this field.

It’ll make your life infinitely easier.

We pulled together the list below for anyone interested in a one-stop-shop for:

  1. Metrics,
  2. General terms,
  3. Advertising terms, and
  4. Social behaviors

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1. Metrics

Retention Rate: Measurement that tells you the amount of users who sign up today and come back tomorrow and each day after that.

Cohort: A group of players who all played a game in the same time period, such as on the same day; calculating the retention rate requires users to be grouped into cohorts before they can be compared and analyzed.

CAC (Customer/User Acquisition Cost): All the money spent advertising to prospective players, divided by the number of new players you were able to acquire during that same time period.

CPM (Cost-Per-Thousand Impressions): Common term in paid user acquisition contracts in which acquirer pays a certain amount for each 1000 views of an ad.

CPC (Cost Per Click): Common paid user acquisition term in which acquirer pays per click.

CPA (Cost Per Action/Acquisition): Paid user acquisition term in which acquirer is paying per user action, such as an email submit or app download.

eCPA: The effect of viral growth on the CPA. The eCPA is the real cost to acquire a new player. For a game to be a success the eCPA must be less than the LTV. In other words, the cost to get a new player into the game must be less than the player spends during their lifetime.

CPI (Cost Per Install): Paid user acquisition term in which acquirer is paying per completed install; this is usually the most costly of paid user acquisition methods due to the full conversion of use.

Churn: The percentage of users who played last month who did not come back this month; the calculation is 1 – retention rate=churn.

Duration: The number of months the average player plays your game; the calculation is 1/churn=duration.

MAU (Monthly Active Users): The number of players who have interacted with a game in a given month.

DAU (Daily Active Users): The number of users who play the game on any given day; this is typically expressed as a monthly average.

Stickiness: The most important metric for engagement, measuring the number of days per month active users play the game. The calculation is DAU/MAU, so if the DAU is 1000 and the MAU is 2000, the game’s stickiness is 50%. A range of 20-30% is considered good.

ARPU (Average Revenue Per User): Measurement of how much a game is earning per player; this is normally quoted as a monthly number, so the calculation is Monthly Revenue/MAU) = ARPU.

LTV (Life Time Value): The average amount of money spent by each player, including paying and nonpaying; calculation is ARPU x average number of months a user remains active=LTV.

ARPDAU (Average Revenue Per Daily Active User): Common game monetization measurement that shows how game is performing day to day. A good ARPDAU is at least $0.15.

ARPPU (Average Revenue Per Paying User): Measurement used in free-to-play/freemium games; calculates the amount spent by paying users only, so the total should be higher than ARPU.

Engagement: How frequently players interact with a game. The greater the engagement is, the greater the likelihood that they will purchase. Engagement is derived from DAU/MAU.

Infection Rate: How much a given user exposes the game to other players, such as through status updates or email invites.

K Factor: Measures the viral growth of a game. K Factor is calculated by multiplying the Infection Rate by the Conversion rate.

Virality: Measured by K Factor, the Viral Rate/Virality shows how much your users are promoting, evangelizing and spreading your game. The tendency to be spread by word of mouth.

Conversion Rate: Percentage of nonpaying players who become paying players with virtual currency, such as by making in-app purchases.

2. General Terms

Addressable Market Size: The number of people who could become players of a game.

AppStore: An online store for downloading applications. Major app stores include Apple’s AppStore, Google Play Store, and Amazon AppStore.

IAP (In App Purchases): Virtual goods or upgrades that can be purchased within a game or app, usually in free-to-play games.

Casual Game: Games that typically feature simple rules and controls, increasing levels of difficulty featuring light, non-difficult and sometimes short-duration gameplay.

A/B testing: Also known as split testing, A/B testing involves testing two small changes to your creative, website or game on a live service and measuring which performs better by equally splitting traffic.

Multivariate Testing: Involves identifying a few key areas/sections of creative, of a website or of a game and then creating variations for those sections specifically. (As opposed to creating variations of a whole creative series, website or game in an A/B or split testing).

Positive Unit Economics: This means you are profitable when it comes to app monetization, since it indicates your LTV is greater than CAC.

Vanity Metrics: These are metrics that do not necessarily indicate success in the app monetization world, but some companies like to track them and boast about them anyway. Examples include the number of game registrations to date, total hours played, total items purchased with virtual currency, number of concurrent users, and likes.

Virtual Currency: An in-game or online currency generally purchased with real money. Can be redeemed inside a virtual world or online game, usually for virtual goods.

Virtual Worlds: Online worlds where players create avatars and interact in real-time.

DLC (Downloadable Content): Any content purchased after a full game’s installation or purchase that adds new features or extends game play and the life of a game.

Entry Event: The first action a user performs when they enter a game.

Exit Event: Opposite of entry event. It is the last action a user performs before exiting the game.

F2P: Free to play – allows game play without restriction.

Freemium: A business model whereby the core game is free and users are charged for a premium service(s) or virtual good(s).

Free-To-Play: Also known as F2P – allows game play without restriction.

Funnel: The steps a new customer or user takes from entry towards a predefined goal, such as installation, account activation, registration or purchase.

Optimization: Steps taken to improve an app or game’s performance, often in terms of important funnels. Optimization involves interpreting analytics and making adjustments to improve them.

Reengagement: The act of bringing lapsed players back to the game. It includes re-engaging gamers who have been signed off for an hour, a day, a month, or more.

Gamification: The use of gameplay, games community, marketing and analytics techniques in non-game environments.

Monetization: The practice of making money from an online or mobile app/property. Typical approaches include display ads, subscriptions, affilliate links, context advertising, add-on purchases, or microtransactions/in-app purchases.

Social Gaming: Multiplayer games with social graphs on social networks and mobile phones. Social games generally have a very gentle learning curve, easy-to-understand UI, and live on a social network, taking advantage of player’s friendships in meaningful ways within the game.

3. Advertising Terms

Advertising Network: Sells ads across multiple publishers in order to optimise ad delivery based on the user rather than context.

Ad Server: A web tool that intelligently delivers multiple advertising campaigns spread over time.

Affiliate marketing: A marketing practice in which a business rewards one or more affiliates for each visitor or customer brought about by the affiliate’s own marketing efforts.

Affiliate Network: Acts as an intermediary between publishers (affiliates) and merchant affiliate programs. It allows website publishers to more easily find and participate in affiliate programs which are suitable for their website (and thus generate income from those programs), and allows websites offering affiliate programs (typically online merchants) to reach a larger audience by promoting their affiliate programs to all of the publishers participating in the affiliate network.

Context ads: Adverts placed directly inside or next to relevant content or features.

Geo-targeting: Showing content, usually advertisements, only to people in a specific country or region.

Impression: The basic unit of online advertising. An impression is counted when a single user sees a single ad.

4. Behavioral Terms/The Six Social Principles

Reciprocity: This social principle refers to the fact that people usually feel obliged to return favors offered to them. One example includes buying more from a merchant offering a discount.

Scarcity: People tend to want things as they become less available, such as when they are told a certain product will be gone soon so they should buy it now.

Liking: People are more likely to agree to offers from people whom they like.

Authority: People often act in an automated fashion to commands from authority, even if their instincts suggest the commands should not be followed.

Social proof: People generally look to other people similar to themselves when making decisions. This is particularly noticeable in situations of uncertainty or ambiguity.

Commitment/Consistency: People have a general desire to appear consistent in their behavior, and they also value consistency in others.

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  1. […] Firstly, I’m going to start by giving full credit for this information to Derek Shanahan of SuperRewards.  The original article is here. […]

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