In mobile and video gaming, the phrase “ROI” or “return on investment” is frequently used for a good reason. Whether your mobile or video game has just been released or has been in development for some time, you must understand the return on your investment.
Hence it’s crucial to understand the ROI of games. Knowing this will enable you to improve how you approach app revenue creation.
The process of localization and measuring ROI is lengthy and complicated. Different professional game localization services provide the entire cycle of it.
The term “return on investment” extensively applies to all business areas. Given that it must take staff / personal time expenditures, marketing, software, and other factors into consideration, this broadness might make determining ROI on mobile or video games challenging.
A project’s return on investment (ROI) is the difference between the net amount of money you get from it and the money you invested in it (investment.) A percentage is frequently used to represent the ROI. For instance, if you invest $50,000 and make a net profit of $5,000 after deducting all of your translation costs, your ROI is 100% x $5,000/$5,000, or 10%.
How can you discover consistent methods to change your marketing budget to increase the ROI of your mobile game? The solution is not to only pay attention to gaudy statistics like game installs and downloads, which reveal nothing about the value that any new players to your game add. After all, even if many new players download your game at once, their retention rates won’t increase significantly if they abandon it within a short period.
Instead, you should understand how your game affects player engagement and conversion. This will enable you to make better-informed marketing decisions and use your limited resources more effectively to increase engagement. This will increase your spending for your game’s user growth and acquisition.
If you want your mobile game to expand consistently and predictably, ROI won’t be your only crucial objective. You will also need to monitor additional indicators, such as the cost of acquiring each client and the value you derive from them.
- Cost per install, or CPI, is a common statistic for analyzing client acquisition expenses. Simply said, you may determine CPI by dividing your overall client acquisition costs by the number of times your game has been downloaded. So, your CPI would be $150,000 / 130,000 installations = $1.15 if you know you spent $150,000 on promoting your game, resulting in 130,000 new installs.
- Knowing how much each new game installs cost you is essential, but you also need to know how much each of those added new gamers is worth. LTV, or lifetime value, is one way to state this. You may divide income by the number of players your game has ever had to get at an incredibly approximate LTV value for your title. It should be noted that LTV may be computed in various, more intricate ways, some of which involve artificial intelligence (AI) or machine learning to anticipate future LTV.
You can undoubtedly see from the above why we previously stressed interaction so much. The longer a player actively plays your game, the more this will increase your game’s lifetime value (LTV).
The LTV of your game must be more than your CPI value for it to be profitable. A negative return on investment results from your game’s CPI surpassing its LTV.
The good news is that even if your ROI is currently negative, you can still take the necessary steps to increase it by understanding how much it takes to acquire new customers and how much each one is worth. You can go forward with identifying inefficiencies in your game growth plan, enabling you to determine precisely what needs to be done to increase ROI.
How to estimate the return on investment for mobile or video games
Game ROI may be determined in various methods, much like other metrics frequently used in this business. A few straightforward formulae that might be applied are:
- By multiplying the cost of the investment by 100 and dividing the net return on investment,
- dividing the difference between the original and final investment values by the cost of the investment before multiplying by 100
Much more than just a basic mathematical formula is needed to calculate the return on investment for mobile or video games. It would be best to adopt a holistic viewpoint to comprehend the effects of each growth step you make.
You will be in a much better position to make wise modifications to your campaigns when you take the time to grasp the subtleties that influence the ROI for your mobile game. This will support your game’s development in the ways you choose. That will then suggest that you shouldn’t spend money carelessly on marketing efforts (post-IDFA), as this is usually where most businesses can optimize their earnings.
How to increase the ROI of localization
- Follow the best localization plan techniques to optimize your localization returns.
- Choose markets where there is the most demand for your goods or services.
- Use the top international SEO techniques
- Before tackling localization, resolve technological issues like internationalization.
- Ensure the localization team has everything necessary for effective collaboration.
- Give the material that has to be translated the highest priority.
A translation management system may significantly aid most of the essential processes.
Specifically, according to studies, the localization team’s improved efficiency resulted in a 20% reduction in turnaround time. Your human resource costs will be reduced by 20% as a result.
Additionally, by lowering the amount spent on material and translators, translation technologies like Translation Memory may significantly boost ROI.
By working with competent game localization services, you may attain your objectives more quickly than you think. All phases of the game localization process, including glossaries, Translation Memory, QA, modifications, and transcreation, are covered by linguists and localizers.