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In this podcast, Tom Hammond, CEO at UserWise, and Sam Abbott, Head of Monetization at Rec Room, discuss how player segmentation can lead to stronger monetization in mobile games. They delve into the importance of understanding individual segments and creating tailored games that appeal to those segments. They also explore how to break down player behavior and analyze actions within the game to better understand and serve different segments.
"You can't just look at the average. You really need to look at each individual segment and figure out where that segment is finding value in the game." - Sam Abbott (Timestamp: 6:17)
"It's not enough just to appeal to a certain segment. You actually have to have a game that is tailored to that segment." - Sam Abbott (Timestamp: 11:03)
"In terms of how we think about segmentation, it's really about breaking down player behavior by the actions that they're taking within the game." - Sam Abbott (Timestamp: 14:54)
Creators & Guests
What is Mastering Retention?
Welcome to the ultimate gaming breakdown with Tom Hammond and Neil Edwards! Tune in every week as we deconstruct today's top games and reveal the secrets behind their success.
0:03
hi everyone welcome to today's episode of the mastering retention podcast i'm tom hammond uh your host and co-founder
0:10
of userwise today i'm joined by sam abbott who is currently head of monetization at
0:17
rec room um which will be fun to dig into a little bit um but uh before we do
0:23
that you know sam i always like to ask you know what's your story like how did you get into games
0:30
working at rec room yeah of course yeah no i'm i'm i'm definitely excited to be
0:35
here i uh my journey into games i worked in finance very briefly after college as
0:40
i think a lot of people did it was sort of right around the time of the financial crisis
0:46
i thought i had sort of made it through by the skin of my teeth but sort of a year and i realized it really wasn't for
0:51
me um i had a friend who had just gotten a job at plato which is a social games
0:56
company been acquired by disney uh many years ago and i i called him asking about hey you know these are my skills
1:02
what do you think do i have a shot you know this was sort of at the time that social games was exploding and there was this huge need for um data driven
1:10
thinking and i knew how to work a spreadsheet and i sort of found my way in the door as a data analyst i started
1:15
at ea one thing led to another and i ended up getting a job at another social games company play fish that had been
1:21
acquired by ea playfish sort of merged into the mothership pretty quickly after i joined
1:27
and i sort of hung around in various capacities you know data science data analytics uh product management a little
1:34
bit of production at ea over the course of about nine years and i got to do a lot of different
1:39
things um there and then basically that turned into a two-year gig at scopely
1:45
where i really kind of wanted to hone my craft and go deep on product and
1:50
and work with just the best people in the world and yeah then basically you know i think there's been a lot of
1:56
changes in a lot of emerging new business models and obviously ugc and the rise of that has been
2:02
the one that speaks to me in the most interesting way and so opportunity at rec room came
2:08
along a little over two years after that and uh it just seemed impossible to skip
2:13
out on and i ended up getting it and here i am so that's that's that's basically my story so for folks that
2:19
aren't aware of what rec room is like what is it what do you guys do yeah so rec room is um
2:26
a mass market you know set of virtual worlds games and experiences that is
2:33
mostly powered by user generated content it started as a vr app but it is a you
2:38
know what we call a radically cross-platform uh social app and the idea is that you
2:44
have your avatar and you have your private space but um it is sort of this universe of worlds and experiences and
2:50
there's all kinds of content that you can collect and wear and have fun and it's it's deeply social and so what
2:56
started as you know a vr hangout space has turned into like a sort of massively cross-platform
3:02
experience that pretty much anywhere you go you can sort of experience all different kinds of you know rooms and
3:08
you know experiences and content so that that's that's basically i think recruitment in a nutshell yeah
3:14
how different is it from say roblox well i think i think obviously you know
3:20
both rec room and roadblocks are powered by user generated content i think that rec room has in it the dna of a vr app
3:29
and not that it's vr specific i think you know rec room is very strong on console and it's growing really fast on
3:35
mobile but i would say the biggest difference is that at in rec room you have a really really deep attachment to your
3:41
own avatar in your own space and that basically like it does not rec room does not exist solely for the
3:48
purposes of that avatar in your quote-unquote meta game experience but it also doesn't solely exist
3:54
for the purposes of your relationship with the experiences you have in record right that you there's a lot more
4:00
channel surfing i i think then i think that is probably the easiest way to differentiate between the
4:06
two but uh there's probably lots of other differences but that that's sort of the one that i use as a good
4:11
understanding of you know how where we can get better um where we can learn from roblox stuff like that
4:17
that's great so you know sam one thing that i noticed you know as i was you know getting ready for this
4:24
conversation you actually got your degree in economics from harvard which you know first off means you're probably much
4:29
much smarter than me um but uh secondly i was curious you know i didn't see game
4:35
economists you know in any of your history have you ever done any sort of like game economy stuff um you know i i
4:41
think of myself as a bad system designer yeah i think that basically you know as a as a data analyst and as a product
4:47
manager you have to think about systems design i think that the strength of your ability to
4:52
manage the kpis of a live game is only as strong as the strength of your foundational system and that
4:57
foundational system in my opinion is comprised of two things one of which i have zero skill at one of which i have a
5:03
little bit of skill out right and the zero skill is understanding what makes for a visceral moment-to-moment fun
5:08
experience and then what is the infrastructure that you build around that visceral moment-to-moment experience and that's where system
5:14
design comes in that's where game economy design comes in like i said i i really sort of started from my ability
5:20
to hang out in excel and do lots of modeling and i just sort of picked it up from there and i early in my career i
5:26
got to work with some of the smartest people like ever at game economy design so i just kind of stole from them
5:32
i love it um cool so i know you've worked on
5:38
probably one of the biggest mobile games ever which is uh star wars galaxy of heroes um
5:44
and i thought it would be interesting to talk today about i want to say kind of play to win
5:51
mechanics i'm curious like do you think that galaxy of heroes has elements of pay to win
5:59
you know i i i'm biased i love i still love star wars galaxy of heroes
6:05
stopping playing it was harder than leaving ea and i was at ea for almost a decade and that was pretty hard um so i
6:11
think when i think about pay to win or how people perceive pedowinner talk about it it seems like a negative right
6:17
and so i i think the answer the short answer your question is yes in that basically
6:22
like people will spend money for virtual currency that they can use to
6:28
gain power for their characters at a rate that is faster than the competition and they can use that to eke out wins
6:34
and so it's a few steps removed i don't believe it sabotages the experience for people who don't pay um
6:42
and but i mean yeah i think technically speaking i would be remiss if i didn't call that pay to win so i do think that
6:48
those elements are there but um it's you know i think it's important to sort of say that like i i'd love to use
6:54
that term devoid of the connotations that like that's evil or that sucks for everybody else but yeah i mean
7:00
fundamentally that's that is a big part of how the system works well and i i do think some players
7:05
actually love the pay-to-win mechanics so um yeah um but i i'm curious um
7:13
historically gamers hate pay to win you know mechanics and
7:19
stuff and so you've got you know companies like riot you know with league of legends
7:24
completely against the pay to win mechanics and stuff and i'm curious like
7:29
are there any ways that you can utilize combat balancing to
7:35
you know kind of have a sustainable monetization scheme but not completely lean into the the pay to
7:41
win mechanics that is going to sour your player base what's your take on that yeah absolutely
7:47
so i i mean i you know you can't have like in my opinion like
7:54
you can't have a really effective sustainable combat based game without the combat being able to stand on its own two feet
8:01
where the strategic decisions that you make and the investment choices that you make in terms of what you're going after
8:06
whether you're grinding or paying for it that these are like these are sort of foundational elements
8:11
that no swipe of the credit card should be able to undo what i what i really think the most
8:18
interesting like kind of front because you know obviously we spent a lot of time thinking about this and we spent a lot of time
8:23
looking at our data and responding to the community in terms of how they felt about what direction the game was going in spoiler alert a lot of the times
8:30
people were upset and i think you know the working through those problems and trying to do it sustainably i think one
8:36
of the the frontiers that we reached working on that game was
8:41
that you know players understood our systems as well
8:47
or better than we did and a big part of what we had to do was come up with um a good use of their
8:56
time um and if that meant sort of combat balancing decisions that sort of
9:02
obfuscated pay-to-win choices or went against quote-unquote pay-to-win choices like those were the decisions that we
9:08
would make because the most valuable resource that we had was the player's time um
9:13
and so just to zoom in on that right like um you could be operating and this is like
9:20
this is once you nail like the foundations of how to balance the economy and stuff like a lot of this doesn't hold up but if you if you manage
9:26
to sort of get out of that sort of if you manage to move up the hierarchy of needs where you really think about how
9:31
can we create the best game possible while sort of sustaining our business you can break down how a player spends
9:37
their time in a way that says i might not be making money off of this player right now
9:44
but anytime i want to i can and that basically their engagement with the system is really about
9:52
is are we as the developers matching the maximum amount that a player is willing to pay and not going over that and sort
10:00
of sort of sabotaging their long-term relationship with the game and so the reason why this goes back to combat
10:05
balancing just to zoom in that more is that like i think that if you are running a
10:10
top-end meta in a core or mid-core game and you're thinking about sort of the 12-degree
10:17
scissors you know chain that you're putting together in order to create an interesting meta the easy answer of course is to just
10:24
power creep and hard counter and power creep and hard counter and basically the point is you can get away with doing
10:31
that once but the first time you disrespect your players investment that they make in that they're not going to
10:36
be willing to go along with it again and then basically even if you can retain them you're essentially like you've
10:41
developed an unsustainable relationship with how you monetize them so basically like stealing from the great games of
10:48
the age that don't use pay-to-win tactics where you're basically trying to build out um
10:53
breadth of reasons to unlock this character reasons to invest in this character reasons to
10:59
play in a different play style versus just reasons to win you can pretend like it's good for your
11:06
monetization but the reality is that very often it's not but it's good for your attention and your long-term sustainability and i think basically
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what you want to do is you want to be making investments in interesting combat choices
11:18
over time whether or not they actually help grow your business or not because if you can keep people around with that
11:24
kind of novelty and engagement and excitement and remixing of what the game is then you have all kinds of
11:30
opportunities to monetize at the most sustainable rate you can find yeah can't grow that our poo curve that
11:36
the players are churned you can't grow the r curve if the players return and you know what you also can't do is you can't like
11:42
you can't grow the arpu curve bigger than it's going to be grown you and like i know that's such a cliche
11:48
like a silly way to say it but like ultimately like if you talk to players some of them are very rational some of
11:55
them are like i know exactly what you're doing i spend 20 a week because i enjoy logging in and i'm going to do it
12:00
forever my father-in-law does that he's basically that was the conversation he had with me when i found out he was a
12:06
huge uh star wars player still is and i uh the reality of the situation is that you
12:11
know you you can't double that person's investment overnight just by power creeping or if you do they're not going
12:18
to be around in six months like this yeah so a couple things you said in there
12:24
that i thought were particularly interesting um so you said it's important to match what a player is
12:31
willing to pay and not going above that um it kind of as i'm thinking about that a
12:36
little bit like i could see a scenario where um you know johnny can spend five
12:42
dollars a month and cindy can spend a hundred dollars a day
12:48
and you know all sorts of variations in there so i'm curious like do you have any examples of
12:53
what that means to like actually do well or like have you seen it go terribly wrong or seen it go like
13:00
really well like i i mean i think i've definitely seen it go terribly wrong right that like
13:07
i i can think of an instance in which like we've and this is on star wars or
13:12
this is on rpgs and scopely where you've you fundamentally sort of push the way you want to release a character at the
13:19
end point of the meta and you start to release that like basically like let's imagine you know
13:26
i can't remember which character it was in star wars but let's let's say it was you know jango fett or whatever who i
13:31
don't think it was him but it was it was it was a pretty iconic character and at the end of the day you are
13:37
looking at a distribution of how much your players are willing to spend in terms of money and time and fundamentally you come to the decision
13:43
to say i'm going to use these mechanics to push this price up a certain percentage uh
13:49
character's brand new we know the character is very good um like i mentioned earlier you know you
13:56
you can get away with that once you know if you really need to or you really want to but if you've already
14:03
done that before recently where you sort of put like upset players expectations around this is a new character this is
14:10
the hype cycle leading into this character these are the things that we've teased that this character is going to be useful for
14:15
then you come out with that character and the character cost is 20 higher or the amount of time that they have to
14:21
invest in it is 20 lower before it goes away or the utility of that character is significantly lower than what their
14:26
expectations were the the the pernicious reality is that
14:32
you're going to sell that character to the vast majority of the audience you thought you were going
14:37
to sell it to and so you'll probably make some money you know let's you'll charge a certain premium and you'll sell
14:42
to slightly less of the population and you'll say oh great our poo is up and then you'll realize you converted
14:50
you know a fraction of the people in all of the follow-up investment spend or the next
14:55
time you release a character that comes even close to that price point they're comparing it against that character and
15:00
so one persona is satisfied to the exclusion of all of the others and then i i think like look this this happens
15:06
this is part of the you know the business but like the thing that i am like all i try to
15:13
use as a framework for for managing the stuff is uh
15:18
what are we doing to maximize the percentage of the active elder player base that is deeply
15:25
engaging with the economy and going after certain goals so independent of how much they're spending
15:31
do i see people leaving the ecosystem of logging in having healthy behaviors being social spending virtual currency
15:38
or you know earning virtual currency and i i i like i think it's important to try to use that as a barometer um in a way
15:46
that's even more important than how much you know revenue you're making or what your what your character sales are so i
15:51
don't know if that answers the question but like i think basically it's like in order to maximize revenue for
15:57
different personas you have to go beyond pure revenue in order to make the most
16:02
sustainable and long-term decisions yeah so maybe slightly going off to that a
16:07
little bit like is there a good way for me to figure out like for your dad that he's willing to spend
16:15
20 bucks a week and that's it like is it just a matter of
16:21
tons of a b testing or or ways that i can segment it or like having all sorts
16:26
of offers all over the time like yeah i think that is the most scientific and foolproof way to do it it's very labor
16:33
intensive you have to have a large audience in order to make it worthwhile and your economy has to be built so that
16:38
you can actually surface test and sell them things in that regard but short answer is yeah that you sort of
16:45
need a battery of tests and a battery of natural experiments to try to determine
16:50
this is there is slack in the system versus there is not slack in the system yeah and then is it a matter of once i
16:57
find and maybe group all of my players into the segments of where they're at is it a
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matter of now i should have someone on the team design a offer or something
17:08
based on the amount that they want to spend and the frequency that they want to spend and kind of go through like that like that exactly and this is where
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the fun part comes in because i i think that this is where the creativity comes in where it's like all right we know the rough numbers um we know what the you
17:22
know these numbers will generate in terms of how much revenue and how many people are involved and all this other
17:28
stuff now what's something cool that satisfies those criteria that you can make for the
17:34
players and this is both offers but this is even features and game features and i like
17:39
one of the common things i try to default to in this world and even in my my new world is even if there's a lot of
17:45
different ways to think about the experience that you're designing a big part of your job you know as a product manager is to sort of go into terminator
17:52
later laser vision and say all right bottom line what does this do for price times quantity
17:58
this isn't the way that you should be designing you should hand these things off to a designer who knows how to create a good experience and you know
18:04
speak for the player but making sure you're validating your strategy by saying you know
18:09
as long as these are the goals let's satisfy those goals any way that
18:15
you want and that's that's usually the way that i i would kick off a project like this which is to say here's roughly
18:20
what we know about our spender behavior here's the kind of thing we've been talking about doing you know can the team square that circle and if you can
18:29
then go nuts like be as creative as you want and push back and challenge and that's how you end up with really really
18:35
good like designs of offers or features or interventions that still satisfy the
18:40
business goals that's awesome i love it okay one final question on the subject
18:46
before we continue um you mentioned you know ideally you want to avoid the and i see
18:53
this in like basically every rpg i've ever played right which is you power creep and then you counter it and
18:59
you just keep going through that um do you have any examples of how to not do
19:05
that so people can kind of wrap their minds around it because i feel like the default thing is to do a power creep
19:10
encounter yeah i you know let me i can give an example of
19:18
i'm not going to be able to tell the whole story because it was a while ago and you know because all of my my
19:23
friends you know who were involved in like we all worked really hard on this project and something that we were proud
19:28
of but i think basically like um thinking about the introduction this is
19:34
very sort of a silly niche example from star wars thinking about the introduction of jedi uh master the jedi
19:41
version of revan right the character from the guitar character knight seal republic we just sort of to back it up
19:47
strategically like we knew that there was an 18-month gap between um episode 8
19:52
and episode 9 of the star wars films we knew that the sort of that new trilogy was integral to
19:58
the success of that product when it launched um and that basically episode 8 comes out we know that we don't actually
20:03
have mainline star wars stuff to count on and there was this large strategic conversation about what kind of content
20:10
can we bring into the universe between episode 8 and episode 9 to keep people entertained and to give them long-term
20:15
sustainable things to chase after and you know the the argument that i not really an argument
20:21
the conversation that i would have with our life the who the guy who's a live producer at the time he and i basically
20:28
um nick reinhardt is his name he's awesome and he and i would basically sort of go back and forth about like if
20:34
we're going to create a long-term chase for the game we have to make sure that from a combat design perspective that
20:41
the chase reflects the investment and that was that was sort of the default position for the project that was
20:46
something that he had been instituting with his team forever and i would sort of tend to come to him
20:52
and say you know you're right that that is the right framework but let me show you what's happened in the data when
20:58
we've broken those rules when all of a sudden some of the most powerful characters have been cheap relatively
21:04
speaking um or have had a wide open funnel or let me show you when we've
21:09
abided by this framework and then over time we've exhibited diminishing returns because it's really hard to do that without creating a character who just
21:15
completely breaks the economy and you know it i this is obviously it was more complicated than
21:21
this in terms of how we designed the character how we iterated on the character how we released the character but you know
21:27
the idea was that breaking the pyramid of investment is too tempting from a business result from
21:34
even from an engagement result like forget about money like oh my god i can get this character for free and then you
21:39
know power them up and this is so exciting and now i'm going to spend a bunch of money on gear and i'm going to go to my guild and there's it shakes up
21:46
the meta and and you know this goes back to like one of my other like life lessons is that you always live
21:52
long enough to see the long-term consequences of like short-term decision making so this is a situation in which i
21:58
was tempted by you know what you get from breaking the pyramid and you know jedi revan was a monster and it
22:05
was really really hard to unwind and it was really really hard to follow up to that character release with different
22:11
strategies and ways of releasing new characters and engaging star wars fans without sort of sacrificing and i'm sort
22:18
of bastardizing the story of how it happened but like that is a very good high level example of what happens when you
22:24
when you you know whatever the analogy is when you when you get tempted and you you know
22:30
uh and you succumb to that temptation and you can't do it because then you spend 18 months regretting your decision it's like that's
22:37
you know yeah that's that's pretty much it that's great thanks for sharing um okay i'm
22:42
gonna switch gears a little bit and i'm curious and something that i see a lot of
22:48
product managers kind of wrestling with is i think ultimately anyone that's making
22:55
games wants to make the best possible game for our players right um
23:00
and in in a way like we make free to play games
23:05
and so we have to make spending the best possible part like
23:11
you know the game should be great but it should be even more great you know after you spend money um and i'm kind of
23:17
curious like you know and even tied within there especially at larger companies you have business goals
23:23
you know quarterly revenue targets engagement yeah this that and the other how do you context switch and balance
23:29
between like putting on your player experience lens but also then switching back and having
23:36
like the business kpis and kind of keeping those things in balance because like as you mentioned sometimes you do
23:41
want to do things for the player experience because it's going to keep the players around for longer but at the
23:48
same time you also have these kind of business metrics that you have to kind of hit so what's your process for switching between those two
23:54
yeah this is like this is such a this is like such a great and question it's a question that everybody like thinks
24:00
about all the time um right and i think uh my preferred approach has and i this
24:06
is something i've developed over time and i got wrong at first particularly coming to rec room and specifically sort of deciding to come to
24:12
rec room and embrace you know a different way of approaching this than being so relentlessly you know
24:18
monetization focused is the framework is this right it's um
24:24
it's don't a product manager you know should not enter uh sort of the space or work with
24:31
a game team with the idea of sort of um succumbing to an idea of a gray area
24:38
or you know a set of compromises that they're they're willing to make from a clear vision
24:45
my my preferred approach is that basically it is there is no like gray hat approach to
24:51
thinking about your business goals there is sort of the the things that you will do and the things that you will not
24:59
do and so it's just just to sort of expand on that a little bit more if you have precision around what your
25:06
principles are in terms of the ethics of running a business that's also a game experience
25:11
you put those principles above everything else right you put them above revenue and you know maybe you can't
25:16
talk about that you know in that way maybe that's not exciting for wall street to hear but it kind of is because
25:22
it provides clarity and certainty to say that you know at rec room like one of the most important principles that we
25:27
have is it's a small world and it's it's just it's a really awesome like kanji that you can put on the wall and
25:35
you can point to it and say is this are we violating this and if we are we're not doing it and it doesn't
25:40
matter you know how much money you make but i think that's very different from saying we're going to find a way to do
25:46
ethical monetization or we're going to go to find a way to do sustainable monetization or we're going to sand off the edges it's like no like for example
25:53
you know changing the value proposition on something after selling it to a player is a violation of it's a small
25:59
world um i took your money and then i like that that that sort of decision is
26:05
something that you you really can't do uh and if you do you have to do the right thing by the player however um you
26:12
know just as many people would argue that x price point
26:17
is not fair um each i think with each team it's
26:23
different each company it's different but i don't want to live in a world where i'm trying to optimize the
26:28
business and i propose x and somebody says dark patterns and i propose y and somebody says that's too expensive let's
26:34
decide as a as a group what our principles are and if if we are not violating our principles that we are
26:41
willing to integrate this certain tactics into our overall monetization strategy and i know
26:46
that that's like hand wavy about some of the the details of that but like i always try to preach like precision is the name of the game
26:53
here in terms of what it is that we believe is sustainable and ethical and what we believe is not
26:59
yeah that's great um can you talk a little bit about um and
27:06
you know you've had a lot of data science and analytics kind of background
27:12
so i'm kind of curious what the role of analytics can be in helping to
27:17
paint a clearer picture around in-game activity um specifically like
27:24
i feel like we have so much data sometimes now that
27:30
it's just hard for me to like truly understand like what's actually going on
27:35
in a game like what are players actually doing what's that experience i'm curious like
27:43
what should the role of analytics be you know in that is it their role to go
27:48
forward and to put together all these graphs and pictures and things like that or you
27:54
know is it more of well as a product manager or something i should come forward with a question and
28:02
then i bring that to my analyst and say here's my question can you help me figure out
28:07
what the answer is interesting you know i i actually that that my that second model is
28:13
definitely something you can do i i actually love it when it's the other way around um because i started as a data
28:20
analyst and i spent you know like this is gonna sound dorky you know but like i spent a lot of my free time just looking
28:26
at just being like that is cool let me figure out how that like what is going on there like are you oh wow so at x
28:33
player does this and it's an ocean and you can completely get lost and have analysis paralysis and it's not good to
28:39
just sort of fully embrace it full throttle right but but i did it anyway right and i think a lot of people do
28:44
because it's so fascinating um and i you know i was an analyst professionally you
28:49
know first but i was a gamer before i was an analyst so i i just like oh whoa that's
28:55
how that works blah blah so i think it's best if so
29:02
the analogy i use is um is a bump isn't volleyball and i don't play it but like i just i think it's a
29:08
funny analogy where it's like it's it's bump set and spike right and that basically like i think that the
29:14
the bump really needs to come from data where it's like there's a whole bunch of unstructured information it can be an
29:20
analyst it can be a community manager it can be any sort of form of unstructured data to say like hey every sorry i'm not
29:26
going to do them i'm not going to do the the the physical but you get it the bump is
29:31
hey like we're seeing all this interesting information about how players are reacting to something and i
29:36
thought that this was fascinating given what we talked about with our strategy and the set is more like
29:42
production a little bit of product management to say here's what we would want to do with that information here's
29:49
how many resources we would need to do it here's how much time you have
29:54
and then the spike is really the design which is to say here's how we're going to do it and so i i think that basically
30:00
like the role of the analytics team and analytics professionals in games i i
30:05
feel like there's a lot to it right they can build a better quantitative culture they can build a testing culture like
30:11
there's all kinds of stuff that i'm learning even more about at rec room about you know what's the best way for data scientists to sort of add business
30:17
value and sort of relentlessly push the team to be better and i think that there all of that is there and i think that
30:23
basically like that can take many forms but i i saying that you're data driven or that your
30:29
data informed or is really fundamentally about like harnessing the natural curiosity that we all have about that
30:35
ocean of data and then sort of taking it to the game team and sort of having conversations to say what are we going
30:40
to do about this you know is this a strategic problem that we want to solve um and you know is like
30:48
how actionable does this i think the second part of you know the role of analytics of course is also just
30:53
to sort of measure the success you know of different initiatives and that's where the loop comes in where it's like okay we took all this information we put
31:00
together a plan you know we validated it we built it we shipped it we're live operating it how's it doing and that's
31:07
where you know you have to sort of filter it back both through the ocean of unstructured data
31:13
that everybody has access to but also in that that that mechanism that you said which is basically sort of a product
31:19
person asking the analyst hey like we really wanted to do x like did this work
31:25
you know where are we falling short what do we do next and and that sort of virtuous cycle is
31:31
it's pretty common now but i i still love it i still find a lot of joy in executing it
31:37
here's another one for for analytics um everyone likes to talk about game
31:43
economy and how game economy touches every aspect and you know if your game economy goes
31:48
awry it can mess everything up but what's our roles does analytics play
31:55
and like how do you know if your game economy is messed up or like what are the things
32:00
you should be watching for of like the currency and you know yeah
32:06
yeah well what's your take on that yeah you know i think i don't really
32:12
think that anybody you know like we've all sort of developed different approaches to this
32:18
it's going to be a never-ending cycle right of working on game projects and interactive projects and getting better
32:24
at understanding virtual economies and now virtual economies are having more and more real world value and this is i
32:29
i you know i don't think anybody's sort of at least i certainly haven't felt like i answered this problem but i do
32:34
have like a couple of tools that i think are really valuable and like i i mentioned this earlier which is to say that like
32:40
one of your guard rails has to be about aggregate participation in in the economy and that basically like you can
32:47
be operating off of game like business kpis you can be operating off of like complex behavioral kpis but um
32:55
a lot of those kpis are based on averages a lot of those kpis are sort of divorced from some of the economic
33:01
contexts that lead to them so like for example you know if if you're uh motivating a whole bunch of players
33:08
uh with hard currency as rewards theoretically you know only a handful of
33:14
players would get those rewards and only a handful of players would ever sort of get sourced an amount of virtual
33:19
currency that um you know is is enough that you would need to be worried about and i think we all spend a lot of time
33:25
worrying about that but i think the reality is um the
33:31
what really matters is are they are players still in the system
33:36
when they get what they want right if players spend a lot of time hunting for virtual currency or building
33:43
things that reward them virtual currency or you know fighting once they get it do they actually have a
33:48
reason to play and one of the easiest ways that i think you can manage that and monitor that in analytics is it's
33:54
not like rocket science but it's also like not super basic either it's about
33:59
and this is you know it it's about moving from averages to distributions right it's about moving
34:04
from averages to percentiles it's about understanding you know like this is a cliche but like
34:10
you operate a live service for 100 of your players you don't operate it even if your money comes from a certain group
34:16
or even if the social and the engagement the community sentiment like if if you're like most businesses like
34:23
don't operate off of like crazy rocket ship growth all the time forever and so like you can't it's not
34:30
responsible for you to say f5 of your audience they were free to play like we're not going to care about them
34:36
that will come back to bite you if you don't think about it in a sustainable way so so really just sort of like
34:41
the role of analytics in game economy management to sum it up should be about painting a clear picture of 100 of your
34:47
customers and 100 of your potential customers and again i know it's cliche but like i i really feel like that's as
34:53
far as i've gotten in terms of like a rock solid rule for for operating do you think that you should and we're
35:00
about to get into segmentation so it's going to be fun but um do you think it's important to segment
35:06
players when doing analytics as well so like
35:12
players that do xyz i want to look at how they behave in the game and their currency and stuff players that do
35:18
something else i should look at that whereas if i look at them combined together i
35:23
might get the wrong picture so that last thing you said is 100 the case right that basically like great
35:30
game experiences um have diverse behaviors associated with them um and you want to make sure that you're
35:37
actually sort of sketching out those behaviors and having a good like behavioral hypothesis for how you would measure a segment is really important
35:43
and that's where like the design and product loop works really well where it's like i i don't need you to worry
35:49
about how we're going to measure it i just need you to say like this is a phenomenon that i'm seeing or i'm playing or i want to understand is true
35:56
you know and our players hoarding currency in advance of the next event are players trying out
36:01
you know b and c tier characters in their combat are players you know turning their social activity into
36:07
something that they're actually looking forward to and preparing for all of these things and it's like okay we'll figure out how to measure it we'll
36:12
come back and say is this a sufficient picture to sort of tell you if this is real or not so at the end of the day you
36:17
do that over and over again and you develop segmentation on the other hand i i'm actually i'd
36:23
love to know what you think about this but like is the role of evolving a live service
36:29
about being all things to all people or is it about is it about telling a story to people
36:36
who can share that story and i'm i i want to do both but as i've
36:41
especially coming to rec room where like social is the most important social is more important than modernization it's
36:47
more important than you know everything like we're basically having something that you can share with others is what
36:52
creates value in the ecosystem and i actually even think that was true in my my previous life in in rpg land too
36:59
and so how do you avoid a rock solid segmentation strategy from becoming
37:05
a way of balkanizing your community and inhibiting your ability to do really really cool stuff for as many
37:12
people as possible like a travis scott fortnite concert like you know what i mean like i i think that
37:17
i think that there's a limit and it's but like i said i'd be curious to know what you think about it because it's not i don't feel like it's
37:24
settled for me so i think when i think about segmentation
37:31
and i i'm thinking about it with my user-wise liveops everything that we do
37:36
is built around segmentation and driving monetization but i'm also thinking about it from my experience as a player of a
37:41
lot of games um and so i think if i kind of blend those two
37:47
together where my ideal comfort level would be and i'm not
37:53
saying that this is the best thing to do um but uh and
37:59
so something happened to me as a player and i don't know if this was designed i know how i would design it and user-wise
38:04
and i think it would be perfectly and it could have just been like a spoof of random luck
38:10
but uh i did a special episode with my buddy david molnar where we just like
38:16
played a bunch of wild rift and then we kind of broke down the liveops that we had in there um and as i was playing wild rift well one
38:24
i was reminded why i've played thousands of hours of league of legends and i had to uninstall that app but um as i was
38:31
playing uh at one point in time i had a bunch of currency so i was like i'm gonna buy a new champion and i was
38:36
feeling a little bit trolly that day so i decided to buy teemo um because i wanted to mess people up with bombs and
38:42
blinds um and i bought teemo and immediately after buying teemo
38:48
i went like 18 and three like i just tore it up like i felt
38:54
amazing just destroyed everyone i got mvp on the team i got an s rating
39:00
and immediately after that i got us an offer to buy a teemo skin now i don't even remember if i bought it
39:06
or not yeah um but to me like that was
39:12
a perfect time like if you're going to tell me a teemo scan it it's right after i like just did amazing on teemo because
39:18
i want to strut my stuff um and and to me i think that's where i could do something like you could create
39:24
a segment of teemo players or maybe players that recently bought
39:29
teemo and then you have a triggered action of if they got an s rating or higher or
39:35
something like they did really well then they get this pop-up for a special offer that kind of like unlocked or something
39:41
um you know emotionally physically now i don't actually know how much revenue that's going to drive because that could
39:46
be a very small number of players that actually like get into there and so that's kind of the balance where you have to do some analytics to figure out
39:51
like what's in there but you know to me that felt really good as a player because it was like personalized right
39:57
but also meaningful um and so i think if you can find a way to blend those two
40:03
together that would be in my opinion like the best way to do it it makes perfect sense yeah this is this
40:08
is where i'm i'm headed as well in terms of thinking about it which is to say that like this is more high level cliche
40:13
i apologize it's like good segmentation is is about the journey and not about
40:19
the destination right so what i mean by that is that your experience onboarding
40:24
into being the perfect candidate for a teemo skin it
40:29
your game experience doesn't end after you purchase it but your journey was one that was a perfect fit for it and so
40:36
what i what i think is like for each incoming cohort of players experiencing a game
40:41
like sorry i'm just on an analogy train today but like i love it like like
40:46
okay i enter league of legends there is a party going on all the way
40:51
out at the end of the user life cycle right where everybody knows the meta people are excited they have agency in
40:57
what the game is they yell at the devs they they like it's it's a party right we love that party liveops is that party
41:04
it's sort of the main factor behind you know one of the biggest growth engines in games in the last 10 15 years but a
41:11
new player is not part of that party right and i believe that the role of
41:17
segmentation is to optimize the journey to join that party
41:22
shorten the journey to that party personalize the journey to that party you know engage and monetize the journey
41:28
of that party and so basically like i think the real question is like how thoroughly and concretely and um
41:36
uh intentionally was that journey that you had designed um or is it sort of the output of some
41:43
like incredible machine learning engine and i think that basically like that's where i'm at is to say that like i
41:49
i want it to be the latter i think that's the most sustainable way to run a business but i don't think that's actually a huge part of how segmentation
41:56
succeeds at scale i think that designing really really smart contextual interventions and short circuiting some
42:02
of the long and circuitous things that are no longer necessary for a new player three four five years out to join the
42:08
party that is the actual rule but i but i am also increasingly of the mind that
42:13
once you're at the party um segmentation does not take on that role and that you actually want to be
42:19
able to do your live ops elder storytelling to the entire party rather
42:25
than to sort of certain and again it's like it's more common than that i'm sure but like that's sort of where i'm at i think you know as you're kind of talking
42:31
through it reminded me of another use case for segmentation that i think is key so you know i was recently talking
42:37
to a customer or potential customer for user wise that um they're using lean
42:42
plum right um and i would say for most their use cases they're like kind of covered but
42:49
where lean plum was failing is that they were trying to do re-engagement
42:55
campaigns because it's like a game that's been around for a while um and they've got all these like churned or
43:01
semi-churned users and they really wanted to design kind of like the perfect comeback
43:07
campaign and they couldn't do that because of how segmentation was like cross-filtered and
43:13
stuff and so like they'd come back in and instead of getting this like perfectly designed come back like remember the good times
43:20
the golden moments and stuff they were intertwined with all the existing like elder game meta liveops stuff that's
43:26
like right already in there and it was like poisoning the experience whereas like you know
43:31
you want to remind these players like what's the good time like like clash of clans um
43:37
they introduced this little like uh carp thing so like when you get rated it like
43:42
stores up stuff so if you don't play clash of clans for a while you come back like 30 days later you've got like 14 million gold and like all this mac stuff
43:49
and it's like oh i can like do some upgrades like you you remember the good times and like what when it's
43:56
and it's it brings you back in a little bit um and so i think that's what they were trying to do but they couldn't because of how like lean plum was
44:02
working but i think segmentation can work really well for those types of campaigns too because you almost want to
44:08
like separate out these players to design the perfect player experience and eventually you do want to merge them
44:14
into everyone else but for a little while you might need to separate them and that's where segmentation can be really key i think
44:20
i think so too the the folks at scopely are just extraordinary at this and it was something that i learned a lot from
44:26
them at and just to say that like how can you run like a really really efficient liveops you know organization
44:32
and grow kpis week over week forever you know always move things up into the right without sort of you know
44:39
sacrificing like some massive churn you know at the elder game and i think that what you're talking about specifically
44:45
is like something that like i said but it's like it was based off of you know great pieces of tech and great you know humans
44:52
but but it ultimately was not um it ultimately was a system that had a
44:58
lot of design and a lot of craftsmanship to it um and anything that was not well crafted would not work and
45:04
anything that was well crafted would tend to work better and so i think basically we're still scratching the surface of how to be
45:11
at like the level of mass-market tech platforms and social media companies like all the things that they do with re-engagement and segmentation like i
45:18
still think games are in a building phase where they don't they haven't achieved best practices at the level of
45:23
some of those larger products and that's actually it's like that's like one of my bucket list things in my career is like
45:28
how can we run a service for 500 million people and do so sustainably like that
45:34
scale is something that i i i'm specifically really excited about rec room about yeah no i i haven't seen any
45:39
game that has a tick tock or instagram algorithm to like get players back and keep them engaged and stuff
45:46
even you know supercell claims they have these amazing machine learning algorithms i think they're
45:52
stupid like they give me like cards that i've never even played in any deck it's like why would you want me to buy that i
45:57
would never buy that i think you know i mean it's like i i think that basically like the the
46:02
you know they're they're one of the best but i think that basically like one of the things that you realize even if you're running i mean i
46:09
i obviously don't know much about supercell i never you know worked on any of their games but like at the end of the day those free-to-play products are
46:18
optimizing their elder game on behalf of a relatively small number of people and there's
46:24
amazing benefits to that in terms of that quote-unquote storytelling but what you're talking about with regards to really intelligent kick-ass segmentation
46:31
you need 100 million people and a ton of training and the smartest people in the world and we're we're all getting there in games in my opinion but i don't think
46:37
we've gotten there yet yeah totally um i am curious like
46:42
scopely was amazing like did you learn anything there of like how they do segmentation and maybe this isn't scope
46:49
play i'll say it could be any anyone that you've worked with in the past but like what are good ways to like actually
46:55
group segments together like is it the cohort days are there player levels like what have you found
47:01
actually works well you know i think i should say that i i worked in the rpg and mid-court division at scopely and
47:06
there's a center of excellence in forex and there's a center of excellence in you know social pvp games and there's a
47:12
center of excellence in casual games so it's like i didn't learn everything in only two years but in rpg land like the
47:18
main thing i learned from all those people there was about uh cohorts install cohorts and your
47:24
average age of the player and like my whole analogy about the party like it really is about that which is to say
47:30
that like how are you building a product that enters year three your four your five through six and still provides a
47:36
viable on-ramp and good unit economics on ltv minus cac without sacrificing
47:42
sort of relentless optimization at the far end of the game so that basically to say like you know what what kinds of
47:49
annual refreshes are you doing and how are you forget about making the perfect decision how are you not making the wrong decision with your future
47:55
development teams just making sure that you you take high percentage shots and make the game sort of on ramp the
48:01
game better for players coming in from a business perspective um and also
48:07
just like never yield an inch on how to create sort of the fully optimized elder community that
48:12
i think most of the scope is live games are known for so that was the main thing i learned about segmentation it was about delineating between a player who
48:20
is super super elder a player who is super elder a player's regular elder a player who's on their way to being elder
48:26
um yeah that those the new player experience always really challenging and i don't i don't know if
48:32
i have like a long list of projects that i've tried and mostly failed but i i think everybody's sort of in that boat
48:37
and so i think that yeah you know some like model strike force i know this has been extraordinary at that over the
48:43
years um but uh yeah anyway that's that's sort of my my main experience with housing what
48:49
like the best practices on segmentation real quick yeah um well i wanted to talk a little bit
48:54
about marketing and pre-install efforts but i don't know that we have time but i do want to cover um just some
48:59
monetization stuff uh real quick before we end um so i think there's been some
49:04
really kind of really aggressive monetization tools um and i'm you know curious what your take on things like
49:11
loot boxes rotating shops events gotcha social pressure
49:16
what's your take on monetization where we're at where we maybe should be going
49:23
yeah i mean i think it goes back to what we were talking about earlier right which is to say that a lot of free-to-play mobile projects
49:31
have fallen deep deep deep into the arms race right in terms of sky-high
49:36
acquisition costs and that these mechanics sort of came into fashion as a way of combating that arms race and
49:42
winning and you know not this is uh there's a lot of good 4x games out
49:47
there but like and there's a lot of excellence in you know the way that they were run but like
49:53
i don't know like i kind of got tired of game of war after a while and back at like eight years ago and i think that
49:58
basically like that being like the apotheosis of great like super hardcore aggressive
50:04
monetization to the detriment of a lot else like i think that everybody sort of started going down the long road of
50:10
saying like you know this is probably not sustainable and i think that basically a lot of my
50:16
time at star wars and a lot of my time um at scopely was about trying to find a
50:21
way to get off that path where it's like we're still running a business but we can't burn players um
50:29
you like you you you if you if you do something to drive a player away
50:34
you have lost and you have to sit around losing forever um
50:39
because you're you're probably not gonna get fired but you are gonna get like you're gonna be in a situation where it's like man we really shouldn't have
50:45
done that and so i think that like i know that's like kind of obvious but i think basically like
50:51
the net effect of all of that has been that people have thrown out most of the monetization mechanics that have existed
50:58
you know in mass market products and i think that you know you look at the rise of the battle pass and mass market products you think okay this is a
51:03
sustainable modernization mechanic and it's true in that it's somewhat sustainable in terms of the price that's being charged but is it sustainable in
51:10
terms of how much content that you have to create is it sustainable in every every type of genre ever um is it
51:17
sustainable as more and more live projects become more powered by the players themselves
51:23
whether it's through ugc or through like decentralization like all of these trends that are happening like
51:30
i think that i basically i you know i i feel like it's important to understand how these mechanics work and what they
51:37
do with precision because i think that they will be really valuable um in the future in a in a more
51:45
player-friendly more sustainable way and i think that i'm trying to figure out how to sort of like keep those best
51:51
practices alive lest we sort of run into a situation where we are all running pretty you know sub-optimal or
51:58
you know semi-sustainable businesses so i i think i'll always be a scholar of those kinds of mechanics even if rec
52:05
room is not a good fit for any of them or even if you know uh what we're doing in ugc will probably
52:11
not integrate those types of mechanics but i just i always want to you know keep keep thinking about them and keep
52:17
thinking about ways to sort of resurrect them sorry and this is there's one other element of this which is to say that
52:22
like if you figure out uh really
52:29
in like if you figure out a really powerful way of monetizing your game then you don't have to figure out 17
52:36
different ways of monetizing your game i really am a big fan of like not nickel and diming the players and saying giving
52:41
them transparency and saying this is what we're selling this is how our business works
52:47
if you nail that and you are ruthless about that then you don't have to monetize everything else and you can
52:53
avoid the malaise that sort of takes hold when everything is monetized so that that's sort of that's why i want to
53:00
keep thinking about aggressive monetization mechanics because like maybe you use one and then you don't have to ruin the rest of your game like
53:06
that's yeah that's something that i think is going to be really important for folks as they think about like not just money but scale like how can you
53:13
make a great game for 10 million 50 million 100 billion people that's amazing i love it well i do have
53:20
one final question for you because it is the master retention podcast and that is you know what's one tip trick or lesson
53:26
you've learned over the years to help keep your players playing for longer how do you keep them retained
53:31
i think man the one thing i love talking about is the um
53:36
you know the bethesda moment right the moment when you exit the vault for the moment when you sort of walk up on the
53:43
mountain and you see everything in front and just sort of the grand aspiration i used to call it the auth kotlin moment from balder's gate too but nobody knew
53:49
what i was talking about so the idea is like
53:54
those first impressions they can apply to your game and they can apply to features and we like living in liveops
54:00
land we think it's important to ship quickly it's important to iterate and sometimes like nintendo blizzard polish
54:06
whatever is not everybody's top priority but sometimes you have to switch lens from your you know your terminator
54:13
liveops kpi lens to like what is the very first impression this feature is going to make on the player and i'm not
54:18
talking about the tutorial i'm not talking about you telling them how to use the feature i'm talking about boom nonverbal
54:25
wow i'm going to spend months of my life working on this and i would over invest in those areas and cut
54:32
rigorously from things that didn't contribute to that and i think that that's like whenever we're i'm working
54:37
on a new feature with a team i probably say that over and over again to say like if this doesn't
54:43
kill you in terms of like wow this is absolutely you know awesome and i didn't see it coming and it's huge and
54:50
aspirational i think when i'm looking at high risk features and trying to hit retention and trying
54:55
to inflict that i just i try to go all in on that i love it
55:00
thank you so much sam if folks do you have you know any questions for you or about rec room or anything like that is there a good way for them to get in
55:06
contact with you yeah of course you know all my on my linkedin sam abbott i love talking about ugc and rec room's really
55:12
an amazing culture and sort of shameless plug like we're growing like crazy and we're hiring all different types of disciplines so if you wanna
55:19
you know work on live ops great if you want to make features great if you want to be a server dev great if you want to do trust and safety awesome like we're
55:26
we're we're really growing quickly and tackling a million different challenges and i i like i said the ugc
55:32
i think it's the most interesting thing going on right now and like i i know that i know there's a lot of web3 stuff going on i mean it's not completely
55:38
unrelated um i love rpgs with all my heart and i left them to go tackle this
55:43
because i think it is the future and so i yeah that's that would be something i would always be happy to gather about
55:48
with anybody that's awesome all right well thank you so much awesome thank you tom