Matthew Emery is a mobile games consultant and the owner of Turbine Games Consulting.
This article was first posted on LinkedIn, and has been reposted with permission from the author.
"We have tons of ideas, but what should we do first?"
Having worked with over 30 game teams as a product consultant, I've been surprised by how often developers fail to frame the prioritization problem correctly. As a result, I've seen teams spend months agonizing over important product decisions as they repeatedly second-guess themselves.
A simple application of the appropriate perspective (which will sound absurdly obvious) can make short work of these problems by shining a spotlight on which initiatives deserve priority.
The key question is:
Where can we create the most value, with the least effort?
Why? At the risk of stating the obvious, it's because:
Profit Margin = Business Success
In any enduringly-profitable business, behind the flashy headlines touting 'exceptional leadership' and 'game-changing ideas', you'll find the relentless pursuit of a decidedly less sexy goal: how to cut costs while increasing value.
The delta between the value generated and the effort required to deliver it is a company's profit margin.
But, in an efficient, competitive market, this margin will get squeezed from both ends, as 1) input costs to produce the product or service are driven upward, and 2) price competition decreases what customers are willing to pay.
Our hyper-competitive F2P game industry is a particularly acute example, because:
- Everyone wants in. Because the mobile games industry is massive, sexy, and highly profitable (for a fortunate few), its siren song lures many investors, who then bankroll your newest competitors.
- Competition drives up UA costs: User acquisition / ad marketplaces are real-time and hyper-efficient, quickly driving CPI to the line where profit margins disappear.
- Demand for talent increases development costs: Limitless demand for experienced developers, paired with efficient job marketplaces, empower developers to demand higher compensation.
- Customers now expect free, high-quality games: F2P business models place downward pressure on what customers expect to pay for entertainment.
If we want to survive In F2P games, these competitive realities only leave us with two viable paths:
- Create a differentiated product that can’t be easily cloned, or
- Deliver value with higher efficiency than your rivals.
In reality this is a false choice; the extreme level of competition in our industry demands that we do both. That said, strategy #1, defensibility and differentiation, is a topic for another article. The rest of this article focuses on #2: 'Deliver value with higher efficiency than your rivals.'
Finding Efficiencies in Game Design
To survive in this competitive environment, game designers and developers must be able to create products that are 1) adequately differentiated, 2) polished and high-quality, and that 3) offer as much value (entertaining, retentive content) as possible, all while 4) tightly controlling development scope to minimize costs.
The four goals above are by no means a trade secret, but in my experience creative teams tend to focus on the first two goals (novelty and quality) and neglect the second two (highest value possible at lowest cost).
After all, to make the best choice among many options, we need to do more than compare their impact on product quality and value.
Our north star must be return on investment.
A simple rubric for prioritization:
A deliberate but simple process like the one below can help move teams in the direction of high-yield thinking.
Estimating Benefit: To arrive at a useful, apples-to-apples comparison, I recommend framing all potential improvements (whether to retention, to monetization, or otherwise) as improvements to player lifetime value (LTV).
Estimating Effort: When estimating effort, I recommend choosing one of two approaches: either an arbitrary effort scale from 1 to 10, or an estimate of the number of actual weeks of development time.
If you feel like you're making wild guesses, don't despair -- your ability to estimate benefit and effort will improve with experience. You can also improve estimates (and fast-track learning) by sourcing independent estimates from your team, then debating the results as a group.
The final estimates needn't be perfect, just directionally correct, to point you in the direction of the 'right decisions' given the information available. The result of this exercise is a simple, back-of-napkin ROI calculation per feature. And, in my experience, you'll have a few low-effort, high-yield candidates at the top of your list.
If, on the other hand, you find yourself short of ideas, here are some to consider.Click here to view the list »