Novelty and social connection boost time spent playing
The COVID-19 lockdowns left millions around the world with time on their hands. Many, it seems, used it to play games.
By one count, nearly two-thirds of consumers surveyed said they increased game play during the pandemic. Revenues for the mobile-gaming sector increased more than 15%, to $116 billion in 2021, according to Data AI, which provides data analytics to the mobile industry.
Most mobile games cost nothing to download and play, so developers rely on in-game advertising and in-app purchases of virtual items for their revenues. And both depend on getting people to play more frequently, and for longer.
To better understand what developers can do to keep users playing their games and spending money, researchers Yifan Jiao of the University of Hong Kong, UCLA Anderson’s Christopher S. Tang and the The Chinese University of Hong Kong, Shenzhen’s Jingqi Wang analyzed the activity of more than 15,000 players over the course of three years.
How Developers Keep Users Playing
Their analysis, in Production and Operations Management, turned up several results:
- Players seek novelty, so designers can stimulate in-game purchases by frequently creating and recommending new game rules, characters, avatars and virtual goods.
- Playing with others increases a game’s “stickiness,” so developers should offer incentives for recruiting friends, joining a clan or other social activities.
- Newcomers are more likely to spend more on in-game purchases, so developers target these players with frequent suggestions about new virtual items to buy.
All these strategies have one goal: Increase player engagement. “Revenues are king, but engagement is the kingdom,” writes Tom Wigman, market lead for games at Newzoo, a market-analytics company.
Mobile gaming is the third most popular category of smartphone apps. Thanks to the relative simplicity and low cost of developing mobile games, many game-makers have shifted focus from console and PC games, and mobile games now account for more than half of game revenues, according to Newzoo. China continues to be the biggest gaming market, dominated by internet giants Tencent and NetEase.
Since the vast majority of mobile games are free, those revenues have to come from advertising and the sale of virtual goods — such as tools or weapons to improve game play or characters or avatars to enhance the game experience. The longer a person plays the game, the more ads they see and the more opportunities they have to buy more virtual goods. So, how to keep those players engaged?
The authors analyzed the gaming and purchasing data of players of a free, player-versus-player game from a world-leading online game company based in China. Game participants choose characters or avatars with certain skills or powers and typically play in teams, either with invited friends or with randomly matched players. Over time, players can become part of a clan, or an established group of players, which is both a mark of status and the source of additional in-app currency.
Why User Engagement Changes
The study considers several ideas from behavioral economics that might explain players’ engagement or lack of engagement in the game.
- Discounting and satiation effects: Will players find the game less engaging the longer or more frequently they play?
- Performance effect: How do win and loss rates and recent scores affect future play time and spending?
- Novelty effect: How will new experiences affect playing behavior?
- Social network effect: How does the camaraderie of playing with others affect engagement?
The authors’ analysis suggests that these effects influenced gaming behavior in different ways. For instance, a user who has had a game for a long time tends to play less frequently and for shorter stretches, a sign that interest in the game waned over time. However, players don’t seem to become satiated by spending a lot of time playing the game, and that doesn’t seem to reduce future game playing or the number of ads they see. But frequent game playing does cause a decline in in-game purchases.
Performance, measured by both winning and losing, had a mixed effect. A high score in one week tends to encourage a player to increase playing time and spending in the following week. But both winning and losing streaks have the opposite effect, resulting in a significant drop in playing time the following week. That suggests that players might either find the game less challenging or too frustrating.
Adding novelty to the game had a significant effect on player engagement — acquiring a new character led to a nearly 33% increase in playing time in the following week. Meanwhile, the social effects of being a member of a clan can lead to a 4% increase in playing time compared with nonclan members, and nearly 3% more in-game purchases.
UCLA Distinguished Professor; Edward W. Carter Chair in Business Administration; Senior Associate Dean, Global Initiatives; Faculty Director, Center for Global Management
About the Research
Jiao, Y., Tang, C. S., & Wang, J. (2022). An Exploratory Study of Play Duration and In-App Purchase Behavior in Mobile Games. Production and Operations Management. https://doi.org/10.1111/poms.13772