This guest article on Mobidictum.biz elaborates the “miracle” of compound interest and why a focus on retention strategies gives mobile gaming companies the competitive advantage
Since the onset of privacy-first marketing, endless games industry discussions have focused on the difficulty of user acquisition and how to fix it. It’s not just difficult; UA is now exceptionally costly, too. None of this is untrue. Mobile gaming is in a tough spot and hasn’t fully adjusted to the days of easy-come, easy-go UA.
It’s also still true that if ARPU > CPI, you will make money. Some companies have certainly figured out how to thrive in the current market, particularly large publishers that had titles with large audiences already in the market when the changes took place.
Very few, though, have figured out these companies have a huge competitive advantage due to what’s sometimes described as the “miracle” of compound interest.
By slowing the revolving door of users and keeping them in the game for longer, profits can be reinvested into UA that is additive, rather than constantly spending to replace churning users like-for-like, thus resulting in a self-accelerating process.
It’s my view, then, that most games should be talking about their retention strategies before investing significantly (more) in UA. This article explains why the power of compounding makes retention rather than acquisition the real win for mobile game devs.
(…) Read the full article by Eberhard Dürrschmid on Mobidictum.biz.
Effective retention optimization using sophisticated machine learning is a huge competitive advantage. We are entering the age of customer relationship management (CRM) in the mobile gaming world, and it will be a slim, data-based CRM where the power of compounding interest is clear, and the customer is king.
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