This week NativeX participated in the 6th annual GamesBeat conference. Organized by VentureBeat, GamesBeat is one of the leading events in the mobile games industry, gathering “top execs, investors, analysts, and entrepreneurs from the hottest companies to explore the gaming industry’s latest trends and newest monetization opportunities.”
The theme of this year’s GamesBeat was “Total World Domination,” focusing on gaming’s journey to becoming the dominant medium of entertainment. As part of the discussion, NativeX Co-Founder, Rob Weber shared the stage with Kixeye CEO, Will Harbin. Together, they talked about data science and its role in mobile app monetization from the perspectives of an ad network and a F2P gaming studio.
Kixeye CEO Will Harbin and NativeX Co-Founder Rob Weber speak at GamesBeat 2014 in San Francisco.
Image Credit: Michael O’Donnell, VentureBeat
VentureBeat described the session by stating, “as the mobile market continues to grow and mature, the conversation around making money has become something fans hate to hear and developers despise discussing. The industry has changed to the point where “casual gamer” is being re-defined and companies are learning how to cater to consumers accustomed to receiving content for free.”
Highlights from the session are below in quotes for those who couldn’t make it to San Francisco for GamesBeat and didn’t catch the live broadcast on Twitch:
Rob Weber: “Our data science team looks at thousands of variables and analyzes the predictive value of each one — basically A.I. [artificial intelligence]. Then they boil down the data to 15-20 key indicators that tell us which ad and ad format has the best chance of converting for each player.”
Will Harbin: “I can’t fully speak to what our data scientists are doing now but I wrote the original algorithms. Now they just wake me up for the important meetings. At this point we only use data science half the time. A year ago, we probably were doing way too much, you know, data-driven decision-making. I think that hurt us in some ways. Now we’re probably going to err on the side of doing something which is fun even if the data doesn’t justify it.”
Rob Weber: “We built our own data science systems at NativeX. To get the ball rolling, we hired an experienced Chief Data Scientist, Dr. James Shanahan. Then he hired a full team of 14 data scientists, many with PhDs.”
Will Harbin: “LTV is sort of a chicken / egg problem for mobile game developers. You need to collect a lot of data to get it right. This makes it nearly impossible for developers starting out with their first game. At Kixeye, we are very conservative about measuring lifetime value (LTV). For example, our average retention is well over two years but we estimate it to be just nine months.”
Rob Weber: “If game developers can earn a few dollars from the 90 percent of non-payers, that can go a long way to share the burden of payers who are shouldering the cost for these games.”
Will Harbin: “Too many F2P games focus on whale spending. Pay to win is not a sustainable model for the games ecosystem.”
Rob Weber: “It’s inevitable that bigger AAA game developers are going to create separation over indies through the use of data science. That’s why we’re building the tools they need to compete.”