We recently sat down with Anna Yukhtenko, head of analytics at Hutch, for a webinar on Player Retention and Revenue Growth in Gaming. The following explores our discussion about how the U.K.-based game developer uses Amplitude Analytics to validate new ideas by focusing on key metrics such as retention and customer lifetime value (CLV).
Using retention to validate new games
For Hutch, retention, or how often users are returning to a game, is perhaps the most important metric for quickly validating new concepts.
“When you validate the concept, you probably don’t have monetization [avenues] yet, so what you care about is how engaging the concept is,” Anna notes. “That's where retention comes in.”
For new games, Anna adds, the challenge lies in making decisions with a limited player base—often around 2,000 players. And because the games are new, you can’t evaluate retention rates over a long period. Instead, you need a real-time retention curve, which provides a clearer picture of the game’s potential viability.
“Retention is a metric of stickiness—how likely are users to come back the next day and the day after,” she says. “It doesn't measure engagement per se, but it does mean that the game is most likely engaging.”
When assessing engagement—which is typically reflected by the length of players’ sessions—it’s essential to distinguish between good and bad engagement. For example, players returning to sabotage the game by exploiting a single mechanism would be considered disingenuous engagement.
Anna explains that for older titles, you likely already understand your player base and have optimized the game flow to encourage the desired engagement. But with new games, it’s crucial to analyze metrics such as retention rates and average time spent in-game—and how these metrics change over time. Typically, a new game will experience high engagement in the first few weeks due to the “golden cohort”—players who are still exploring the game and finding it enjoyable. If this engagement declines over time, it may indicate that the game lacks long-term appeal.
Evaluating LTV for free-to-play games
Understanding the lifetime value (LTV) of a player is critical for the success of free-to-play games, where a substantial portion of players may never make a purchase. “LTV is a key metric . . . one of the key metrics for any free-to-play game because gamers are essentially playing for free,” Anna says. “And we have quite a large percentage of our top players in every game that have never paid for anything; they just invested lots of time.”
LTV helps Hutch estimate the average revenue from an individual player or user cohort and determine an optimal cost for acquiring new users.
“If you know how much money you're going to get from a certain user cohort,” Anna says, “you can say, ‘O.K., I'm happy to pay 50 cents per user because I know in a year, I'm gonna get a dollar.’”
The key here is balance, Anna notes. “If we accurately calculate the LTV of our customers, we understand their total spend to a certain extent,” she says. “This knowledge allows us to determine the maximum amount the business can responsibly spend on acquiring new customers.”
However, calculating LTV can be complex due to differences in pricing across countries and platforms. Anna says Amplitude has been critical in integrating custom events—such as in-app purchases and ad revenue—into their LTV metrics. Anna also builds LTVs for virtual currency to analyze the in-game economy and how players acquire or spend currency depending on how long they’ve played.
Prioritizing a robust event taxonomy
When it comes to custom events, Anna notes it’s crucial to maintain a standard event taxonomy, especially within a portfolio that includes a diversity of games. For example, events related to spending must differentiate between in-game currency like coins or gems and real-world currency like dollars.
Similarly, Hutch standardizes events such as “match complete” or “race complete” across games to simplify analysis and foster better collaboration. For instance, if an issue arises in one game, an analyst with experience in another game can assist because it uses the same event terminology.
Additionally, assigning specific properties to events makes them easier to track and document. This is especially helpful in gaming, which typically involves tracking a vast number of events around user interactions.
Exploring key metrics while staying flexible
When it comes to analyzing key performance metrics (KPIs), Hutch strikes a balance between structured goal setting and exploratory data analysis. During monthly team meetings, the focus isn’t solely on predefined metrics. “Of course, we have quite hard definitions of what we mean by retention and daily activities,” Anna says. “We have benchmarks to determine what’s considered good or bad retention for each product. But we also try to leave a lot of room for exploration.”
Hutch’s approach encourages analysts to dig deeper into the data and share their findings with the team. “If one of the analysts finds something really interesting, we encourage following your nose and sharing it with the team,” Anna shares. “Whether it's a positive trend, an opportunity, or identifying an imbalance that impacts player enjoyment, spending, and engagement, it’s all valuable.”
This culture of exploration fosters an agile environment where analysts feel empowered to investigate anomalies and insights that may not be immediately apparent through standard KPI analysis. “We allow analysts the freedom to explore and present their findings, which can lead to significant improvements and adjustments in our games,” she adds.
By combining strict KPI definitions with a flexible, exploratory approach, Hutch ensures they are not only tracking essential metrics but also uncovering deeper insights that can enhance player experiences and drive game success.
Want to learn more about gaming analytics? Watch the full webinar on Player Retention and Revenue Growth in Gaming.
