Online games are increasingly becoming reactive to players wants and needs. That’s all well to say, but doing it means acquiring and processing a lot of data and not every company is immediately up for that task. GamesAnalytics is here to help with this growing issue, and we talked with Alan Miller, Director of North American Operations, about this new field in gaming.

[a]list: Tell me a little bit about what GamesAnalytics does.

Alan Miller: We provide technology for online game companies to help them increase revenue and player satisfaction. This is part of the change from brick and mortar to digital download, which I think is great for the industry, not so great for retailers! It has many ramifications – the monetization model was a one time purchase thing – that is something that has little relevance in many online games. It’s about purchases in games and that’s what GamesAnalytics does. We can predict where the players are going and provide them with handsome offers and challenges and move them away from frustrating situations. We offer a turn key solution that provides these services.

[a]list: So you’re helping online companies with game design?

Alan Miller: That’s right! Part of it is behavioral analytics and applying that to development. Even if you collect the data some may wonder ‘What do you do with it ‘ You merge our experience with the analytics and we can take care of it. We have a novel approach – we do it in real time, knowing where players are and send them targeted messages based upon those metrics in the player’s game. Nobody closes the loop quite like that.

The way we deliver these notifications is through the in-game messaging system, so these notes are delivered in the context of the game, and we don’t deliver them ourselves, we send a message to the publisher. We have an agreement that these messages will be approved.

[a]list: What’s your background in game development?

Alan Miller: In the past, I developed at least a 100 different games. I’ve been working in the industry since ’77. Our goal was to create a popular franchise and iterate it every 18 to 24 months at Activision and Accolade. The way it was with games originally, we tried to develop as much as possible and that was it. As time evolved, we sent in bug fixes and they got patched, but in the last few years we’ve been able to continue development after release. For online, now we’re looking to put out updates every 3 to 7 days. So the situation has changed now; they’re delivering unfinished games and it’s going to continue evolving as players play the game.

These changes are part of the reason I’m interested in GamesAnalytics and the ability to change and tweak things to help the player experience. In order to do it, they have to determine what players are doing that’s getting them frustrated. These are the sort of things human beings can’t figure out, so we need the analytics to find out what’s successful and deliver hints and challenges to move them in the right directions.

Publishers are usually interested in capitalizing on monetization. Part of the reality of online games, is that only 1-2 percent make payments! So most payments are voluntary; it’s making small incremental purchases for a decorative item or two. Zynga said they have 320 million unique individuals that have played their games, but their revenue rate is $750 million, so those millions of players have delivered only $2 per player, not good ARPU. So its important to recognize and motivate players towards payment.

Zynga’s success is in no small part from looking at the data.

[a]list: Do you feel like there’s a natural connection between Facebook games, MMOs, and virtual worlds that are complemented by what GamesAnalytics does?

Alan Miller: The online audience is very diverse. In retail distribution, you couldn’t get those games [you mentioned] on the shelf, so there’s a lot of diversity. What we provide is a turnkey procedure that’s simple to apply to the game. We look at a mirror of the data, and we send signals back to the game, to accomplish very specific things for specific gamers in specific games. For instance, the audience for MMOs is quite diverse, but they all have virtual goods. Virtual goods have come to dominate the industry; past year, 7.5 billion was spent on virtual goods and here it’s looking to be 2.1 billion in the U.S., so we’re still behind; a lot of that revenue occurs in Asia. But that’s just an example of how but you also have to look at where the revenue comes from in games.

[a]list: I guess anyone in the social field needs to look at what Zynga is doing and respond?

Alan Miller: Generally, that’s correct. Any company that wants to compete has to respond to them. Zynga has the biggest analytics group in the biz and I think there’s a direct correlation between that and their success. They will probably exceed a billion in revenue this year. A lot of publishers can’t afford to staff up like that, but all online game publishers need those sort of stats, but they maybe can’t afford to invest in [it like] Zynga. And that’s where we come in!

[a]list: Do you see micropayments in free-to-play titles becoming even more important in the industry? And what does GamesAnalytics do to help companies with their F2P games?

Alan Miller: I’ve been exclusively working with online games for the past 10 years. Even online games originally started as a one time purchase; it was part of the evolution from retail. We’ve experimented in advertising supported, subscription, but now virtual goods are dominating. I don’t think it’s the end of the evolution, so there’s going to be continued experimentation models, but several subscription based games have changed their models to virtual goods and World of Warcraft is experimenting with virtual goods; they had a lot of success with it.

[a]list: It seems to us that there’ll eventually be pressure with World of Warcraft going free-to-play…

Alan Miller: There are a bunch of competitive reasons [to go F2P.] There a bunch of competitive free options. So when all your competitors are offering something and you don’t, it will eventually put pressure on them. Now some companies are experimenting with tiered subscriptions, so you can have different levels of commitment from consumers. But the guys of Blizzard are sharp and they know what they are doing, and at Activision they’re quite prescient in the evaluation of the product so kudos, but at the same time they’re learning that not all their properties are keeping up. Take purchases in the expensive peripheral market; when you see [that plastic guitar] next to the game box it’s an incentive… or was an incentive.

[a]list: Talk to me about how you see GamesAnalytics helping titles with their in-game marketing?

Alan Miller: A very real world example – you’re a subscription based MMO. You see a lot of people leaving after a certain point or level; you clearly don’t want them to abandon the game. [Our software] can analyze different behavior and find out why they no longer subscribe. We are getting close to that point where we can look at the analytics in real time. So we can send them a marketing message, like offering free goods to make them still interested in the game.

Since only 1 or 2 percent of players are paying [in F2P games], we can identify behaviors that led them to be paying players. So we look at that, and examine the non-paying players and push them towards being a paying player. These are all in context of the game as a marketing message. Like “talk to the innkeeper” or “here’s a sword to defeat the dragon.” We work with the publisher in advance and develop what is appropriate.

[a]list: It sounds like a delicate balance in order to make sure players an incentivized and not put off…

Alan Miller: The last thing we want to do is make a player alienated; we want to put the publisher on the right path. We only send the publisher info relevant to that.

[a]list: How does the data acquisition work with the client?

Alan Miller: We do provide various compression streams, but in general, we look at the entire player database. It’s not live, it just sits in parallel and to what resides on the client’s servers.  Our interface can respond with a very simple message. It’s very important that it be easily integrated; we call it turn key solution.

[a]list: It sounds like most of this technology is more applicable for rising parts of the industry, but are you offering your services to more established publishers?

Alan Miller: Yes… in fact, all the traditional publishers are transitioning to online publishing and are gathering massive player data; a big game can collect a terabyte of data a day. Disney bought Playdom; EA bought Playfish. A lot of traditional publishers have difficulty making a go of it in the online sector on their own. We do need to have a large data set to make our analytics useful; Playdom and Playfish are in the top online games, so our analytics would work for all of their games.

[a]list: Anything you’d like to add?

Alan Miller: One thing I want to bring up is that many people think there’s going to be a lot of consolidation in the industry, and I don’t think so, because I think there’s going to be a lot of possibilities for publishers in targeting a specific audience. Because of the social grid of the internet, consumers are often quickly aware of a good game if it’s out there. In retail distribution, there’s only about 50 or so publishers; those constraints aren’t there when you’re talking about online.

You’ll probably see more companies providing these specific back end services; [Richard] Garriot provides some services for example. It’s complex to set up a game company, but luckily, they are becoming more affordable and GamesAnalytics help can provide the services you need.

[a]list: Alan, thanks.

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