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“Monetization is always a challenge in the gaming industry,” says Eyal Grundstein, VP of growth and user acquisition at GSN Games, one of the world’s top game publishers and creators with game content on mobile, social and the web. “The biggest challenge right now is monetizing the other 95 percent.”

Many games do a good job of attracting users, and by the percentages, will always land a small number that will engage and monetize. But the majority of your user base is sticking staunchly to their free-to-play lifestyle. So how do you dig into that 95 percent and change their hearts, minds, and spending habits?

The biggest problem is jumping on them right out of the gate, rather than focusing on what’s really important — engagement and retention, Grundstein says. “I see people really pushing hard on monetization early on, and it hurts their overall retention and engagement numbers,” he notes. “I’ve seen games that have extremely high ARPU, but very low long-term retention.”

It’s the fundamental flaw in the free-to-play space, Grundstein says — people are being very aggressive early on, and sacrificing long-term retention in favor of short-term gains.

These are the games that look great on paper, for a little while, he notes. They’re the ones that are showing revenue growth in the top-grossing charts, and probably attracting some attention because of it — and making their developers happy about their immediate return on investment.

But this strategy is not sustainable, Grundstein warns. “They’re able to monetize really well from a per user perspective,” he says, “but at the core they’re not able to retain users long term, which means they’ll have a systematic problem building and maintaining an audience that plays and retains.”

In an ideal world, he says, you need to strike a balance between your monetization and retention strategies, which is the way you build an audience that becomes loyal enough (and invested enough) to become paying players.

“We look at user engagement and retention and monetization very analytically,” says Grundstein. His biggest piece of advice: “You really want to test test test.”

GSN drills down deep on their engagement metrics to craft personalized experiences for each segment to cater to both their play pattern and eventually their monetization, and they’re always constantly testing and refining to stay on top of user behavior shifts.

“Sometimes people get caught up in certain package sizes and certain flows to get people to monetize,” he continues. “They’re very set in their ways and don’t spend enough time iterating on different promotional tactics, different package points, different visuals for how your store looks, and different flows within your conversion funnel to get users to convert. You should be testing all the time.”
In the end, Grundstein says, none of the three core focus areas can work alone.

“We’re a strong believer that monetization follows retention and engagement,” he explains. “At the core we’re focused initially on making sure our retention is sound and our user engagement is really solid. Then if that works, monetization will follow.”

To learn more about balancing your three key strategies, how monetization goes beyond just leveling up the free players and more, join this VB Live event today.


Don’t miss out.

Register here for free.


In this VB Live event, you’ll learn to:

  • Customize your monetization strategy so that it’s scalable
  • Unlock the revenue potential of lower spending users
  • Attract higher-spend users
  • Negotiate monetization strategies without alienating current users

Speakers:

  • Eyal Grundstein, VP Growth & User Acquisition, Game Show Network
  • Stewart Rogers, Director of Marketing Technology, VentureBeat
  • Rachael Brownell, Moderator, VentureBeat