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  • Writer's pictureHugo Pinto

Bah-zynga! Why’s IPO is a no-brainer and the company will keep on prospering

The announcement of an IPO from has brought up the usual facebook-like articles, of Candy crush is dead, or why it’s already dropping in users, etc. Like my previous article about why facebook is not dead, modern gaming companies are not dead – and their business models are based on more and more data.

And the data allows them to do a lot of things. I’ll just write about a few key ones…

1. Know how to get their customers to use their products

User acquisition is now a financial exercise – it’s like accounting – or like conversion rates from online financial services and travel businesses – you invest X, you get Y, you just need the money to spend and watch the market.

The key is not in how you spend the money, it’s in what you do with that information, and how much you learn from it. With the current data capabilities you can do attribution analysis and know exactly what channels to use to acquire the best and most profitable users, or the ones that give you more media impressions.

You can also do cohort analysis and REALLY segment your user profiles, and by doing so you can’t bet on the wrong horse, because you know how to get fingers on touch screens downloading your games, playing them and sharing the high score o Facebook in 24 hours.

Mission accomplished, you can now get clients through the door…or screen…or get them poking your product!

2. Know how their customer use their products and adjust it to their needs

New levels are added to candy crush, like new expansions are added to boardgames or new extras or apps on mobile phones.

If your friends didn’t text you back, would you text? Because we all know you wouldn’t, how does and others like Supercell or Miniclip make sure you keep playing?

A mix of 3 things, proven by the success of user-centric rockstar

a. Social media to make sure players support and help each other becoming Candy-crush buddies for extra lives and moves. It’s also a user-driven promotional platform (earned media).

b. Gamification to make sure you always have an uncompleted task or unachieved goal, driving competitiveness and rewarding you with uber-ruler-of-my-backyard type badges – that work unless you have a full time job, mortgage and kids!

c. DATA! Lots of data! From your opinion on a level you just played. From when do you spend money vs when you ask for help. From at what time you connect and how long do you play for in average.

3. Know what products their customers are going to want next

Another fantastic thing about having advertising on your games or doing cross promotion is being able to map behaviours from your users.

My parents had a video rental, and they quickly figured that on weekdays, people rented movies whenever they came to the café in the same neighbourhood – back in the days when people rented physical movies and games. Cross-selling gave them the leverage both businesses – yes they opened a café next door!

The point is they can understand what other games their users (all different profiles – the ones that spend a lot but play for a short time, the ones that never spend, and so on) also play, or at least get their attention.

4. Conclusion

Think about mapping the customer journey across the whole life-cycle, and creating a business plan based on predictive models that can help you forecast how much users and revenue, and on top knowing what type of game to build, and exactly where to gate the purchase or include the social incentive…

And they test dozens of games, but release only one or two per year – there’s nothing random about this business, and the real dangers are the same ones any other pure digital business faces.

This is the perfect scenario for any business – you know how to get clients, you adapt your product to their needs, making them happy, engaged and spreading the word, and you know what they’ll buy next and have the ability to give it to them.

It’s clear that they have the talent to deliver the product so it sounds like a no-brainer my friends…


Really cool links you should check out:

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