Digital Transformation for the Gaming, Console Manufacturer, and Mobile Application Industry - Creating Sustainable Global Success through Digital ...
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POINT OF VIEW
POINT OF VIEW Gaming, Console Manufacturers and Mobile Applications
Digital Transformation
for the Gaming, Console
Manufacturer, and Mobile
Application Industry
Creating Sustainable Global Success
through Digital Transformation
1POINT OF VIEW Gaming, Console Manufacturers and Mobile Applications
Introduction
85%
ecosystem in terms of revenue–driven by
winning strategies for monetization, retention
The gaming, console manufacturer, and and engagement.2
mobile application industry has undergone
a phenomenal change in the past five years, While the mobile gaming market is poised of mobile app market
dominated by new technology advancements for explosive success over the next few revenue in 2015 was
and the continuous penetration of the internet years, console manufacturers and developers generated by games
and smartphones in emerging economies. continue to face challenges with increasing
By 2020, the app economy is forecasted to production costs and the need to adapt to
double in size, reaching an incredible $101 new user behavior. Per Newzoo, 87 percent of
billion in revenue.1 console gamers also play on a PC – but PC and
mobile are essential devices that people simply
In 2016, the mobile app ecosystem was need in today’s world while consoles are not.
marked by signs of maturity, with notable Although it is the slowest growing segment,
Merger & Acquisition (M&A) and Initial Public the TV console gaming segment remains the
Offering (IPO) activity, as well as significant largest with regular new product launches
market shifts. China became the largest from top manufacturers.
country in terms of iOS App Store revenue,
while emerging countries such as India, Another key factor when looking at the app
Indonesia, and Brazil accounted for impressive ecosystem is revenue. Usage doesn’t seem
gains. Games generated approximately 85 to be affected by regional recessions; strong
percent of mobile applications (apps) market growth seen in Argentina and Brazil in 2015
revenue in 2015, representing a total of $34.8 supports this theory and is comparable to the
billion across the globe. stability of the app industry from the 2008-
2010 period in mature markets, such as the
As the industry matures, gaming applications U.S. during the economic crisis.
(apps) continue to dominate the app
2
Venturebeat – Mobile Games, http://venturebeat.com/2016/02/10/mobile-
1
AppAnnie https://www.appannie.com/ games-hit-34-8b-in-2015-taking-85-of-all-app-revenues
Key trends and challenges in the app economy
Trends:
• Mobile will enable brand innovation via artificial intelligence, virtual reality, and the
Internet of Things (IoT)3
• IOT apps integrations to continue unchallenged4
• Retail banking risk: innovate or get left behind5
• Apps security to be more important than ever6
• Mobile web and app experience gaps will shrink7
• Connected health market poised for growth (from $46 billion in 2017 to $117 billion by 2020)8
Challenges:
• Daily Active Users (DAU) and downloads increase, while mature markets including U.S.,
Japan, Germany see stagnation
• Growth in emerging markets, such as India
• Monetization and conversion
• Usage increase through engagement
• User retention
• Rapid changes in technology via Augmented Reality (AR) and Virtual Reality (VR)
• Regional infrastructure and internet speed
3
Forbes - https://www.forbes.com/forbes/welcome/?toURL=https://www.forbes.com/sites/forrester/2016/02/03/forrester-mobile-trends/&refURL=&referrer=%20
-%207a45de464fee
4
BiznessAPPS - https://www.biznessapps.com/blog/mobile-technology-trends/
5
AppAnnie - https://www.appannie.com/
6
Global Industry Analysts, Inc. - http://www.strategyr.com/MarketResearch/Mobile_Messaging_Apps_Market_Trends.asp
7
Forbes - https://www.forbes.com/forbes/welcome/?toURL=https://www.forbes.com/sites/forrester/2016/02/03/forrester-mobile-trends/&refURL=&referrer=%20
-%203115bff44fee
8
AppAnnie - https://www.appannie.com/
2POINT OF VIEW Gaming, Console Manufacturers and Mobile Applications
How can apps and gaming companies leverage differentiate themselves in an increasingly
the opportunities available globally and cash competitive marketplace.
in at a faster rate, both in mature markets and
emerging economies? 1. Customer Experience should
use all available levers to optimize
This Point of View paper looks at how gaming,
console, and apps companies can harness
engagement and meet expectations
the power of digital transformation to enable The optimal customer experience is customer
holistic transformation of their business centric, focused on the overall journey, and
processes, service delivery models, and is channel agnostic. Optimized solutions
relationships with business partners to realize that allow a CRM system to provide a
superior outcomes. 360-degree view of the customer across their
entire digital journey, regardless of channel,
Drive transformation across three device or interaction type. Enabling process
key areas transformation with the use of Artificial
There are three key areas in which Intelligence (AI) and automation facilitates
Sutherland’s solutions
gaming, console manufacturers, and apps better knowledge management, increasing reimagine Customer
companies can harness the power of digital self-service usage, and adoption. Experience
transformation and enable solutions to Sutherland’s services help
dramatically improve the
customer experience,
increase retention, reduce
cost of service, and enhance
SUCCESS STORY
profitability. Customer
A leading global gaming console Experience Transformation
provider enhanced the user experience solutions include:
by leveraging Sutherland’s Customer
Experience Transformation Services • Omni-Channel customer
support: email, in-app, chat,
Challenges: voice, social media, messaging,
apps, and SMS
• Slow adoption, higher costs for
customer experience • Community support: owned
and 3rd party
• Lack of scalable solutions for
• Tech support, Voice of the
global expansion
Customer (VOC), survey
management, fraud, and
Results with Sutherland:
payments management
• Integration with client systems • Game/app translation and
to provide video chatbots for localization
assisted-service
• Knowledgebase management
• Improved user experience, and
convenience with introduction of • Sales and retention in over
a mobile interface for self-service 40 languages
• Customer journey mapping
and optimization
• Digital self-service solutions:
Customer experience solutions should be maximizing the agent experience to increase avatars, chat bots, dynamic
technology agnostic, using a suite of tools, productivity. Information collected from every IVRs
systems and integrations to create a seamless touch point should be available to agents to
360-degree customer view. Omni-Channel drive faster resolution times, resulting in higher • Customer 360-degree
routing of customer interactions should be customer satisfaction. view solutions with system
facilitated using best-in-class technology, integration, analytics,
platforms, and next best
actions for end customers
3POINT OF VIEW Gaming, Console Manufacturers and Mobile Applications
Big Data Analytics solutions uncover valuable apps/games, while the constant factor that
customer insights regarding purchase eventually leads to lower in-app engagement
behavior, history, preferences, intent, trends, and churn is the customer experience.
and patterns; while innovative customer
23 percent of all apps installed today are
journey mapping solutions help identify
deleted after being used once.10 Given the
where friction happens, the pain points
pace at which technology changes, innovation
of each touch point, and how to optimize
in customer experience becomes a critical
the customer experience. With such rich
business success factor–a core strength to
data and innovative solutions available,
generate revenue in the app ecosystem.
it becomes easy to personalize customer
User engagement success has become even
experiences across all digital touch points
harder and the user journey is no longer
and an enhanced customer experience equals
linear–but rather an infinite loop.
greater customer loyalty.9
When customer experience is well-
One of Sutherland’s clients–a music streaming
designed, engagement becomes a strategy
app company–transformed their contact
game, employing best practices, using
centers into digital knowledge hubs where
personalization, and segmentation to
Customer Experience (CX) agents deliver
constantly show users the value of the
outstanding experiences across email, chat,
app/game.
and social media to millions of customers
across the globe in 10+ languages. Powered Proactive engagement connects with users
by business process transformation, this from the beginning of their journey across
engagement-led customer support allowed their lifecycle. Using app reviews and in-app
our client to significantly improve their surveying ensures always-on support and
customer satisfaction, while providing a feedback availability to improve the user
scalable multi-language solution that keeps experience. Integrating VOC—a vital part of
pace with their expansion and growth strategy. the engagement and customer experience
strategy—collecting user feedback on all
2. Engagement as a Service is a touch points, using analytics to help with user
key driver for building competitive segmentation, and incorporating insights into
advantage the development process, will help improve the
Each day, thousands of new apps are current and long-term user experience.
published amongst fierce competition, which Community engagement and moderation
requires considering complex factors for is another challenge for today’s console
choosing a revenue model. One of the biggest manufacturer, gaming, and apps companies:
challenges gaming, console manufacturers, scaling for global markets puts pressure
and mobile application companies face on the engagement strategy and users are
today is decreased engagement for their most engaged when they can communicate
with other users in their language, and more
23%
specifically within their preferred communities.
3. Scale the community reach from
owned community to 3rd party
communities in global languages to of all apps
sustain growth and increase revenue installed today
Building long-lasting relationships through are deleted after
best practices for influencing behavior and being used once10
generating increased brand awareness will
result in increasing conversions and longer
Customer Lifetime Value (LTV). Adopting
practices that worked in one country to
9
Sutherland Labs - http://www.sutherlandlabs.com/work/designing-a- all countries will have the opposite effect.
roadmap-to-customer-loyalty/
Engagement is an art of localized insights
Localaytics - http://info.localytics.com/blog/23-of-users-abandon-an-app-
10
after-one-use and strategy that observe user behavior and
4POINT OF VIEW Gaming, Console Manufacturers and Mobile Applications
focus on building relationships, which work to if the customer experience was designed
influence purchases and conversions. to align with the targeted users’ behavior
and expectations, coupled with a top-notch
User engagement is a sustained and localized customer support program to truly set an
effort to incorporate best practices to create organization apart from its competitors.
true brand advocates via push/two-way push The always-on millennial generation, which
notifications, in-app messages, and creating represents most app users, demands always-on
mini-groups or mini-communities. Adopting support, always-on engagement, and always-
these best practices will generate results on personalization.
SUCCESS STORY Sutherland increases User
One of the largest mobile game publishers in the world increased engagement by incorporating Engagement, and efficiently
gamer feedback into new game releases with Sutherland Design Thinking and Journey Mapping and effectively scales Global
Communities
Challenges: Sutherland’s User Engagement
solutions provide cost-
• Extract, analyze, and understand existing users’ feedback for the current version of the game efficient scalability to
multi-lingual communities,
• Uncover the highest drivers for frustration and dis-engagement and focus on improving
user engagement. Impact
Results with Sutherland: retention and conversion
by integrating community
engagement, moderation,
• Collected feedback was transformed into actionable insights and recommendations
and VOC management into
the 360-degree view of
• Average daily usage and engagement rate was increased, which positively impacted revenue the user journey, and plan
outcomes against strategically
designed user segmentation
engagement strategies.
4. Redefine Monetization and equivalents throughout the 90 days following
Retention strategies to increase first use and have the highest retention rate of
any vertical after three months.
engagement and generate revenue
Analyzing user behavior per operating
Until a few years ago, product marketers
system (OS) is important. Gaming, console
would focus on new user acquisition and
manufacturer, and mobile application
securing massive amounts of downloads. As
companies should dedicate time to understand
the industry matured and competition became
the differences in user behavior, including how
fiercer than ever in countries like the U.S., UK
users respond to notifications, messages, and
and Japan–user behavior has changed and
interact with the app and brand.11
shows a constant demand for engagement
and personalized customer experiences. Retention is closely linked to engagement
and customer experience. The challenge is to
In 2015 the New User Acquisition (NUA) cost
increase retention, while reducing the cost for
rose by 117 percent, which led companies
NUA and quickly moving users through the
operating in the app ecosystem to find new
funnel (adoption rate) from free to purchase/
ways to retain a larger share of existing
premium is critical. We use design-thinking
customers. In 2016, overall user retention for
strategies to design, deploy, and manage
the apps industry improved by 36 percent.
digital customer experiences that result in
But mobile operating systems and devices
higher engagement and shorter sign-up free-
matter when analyzing retention and new
purchase/premium funnel conversion times,
user acquisition, with Android apps seeing
while increasing competitive advantages
higher retention through day 90 compared
to iOS apps. For social and messaging, apps
Appboy - https://www.appboy.com/blog/app-customer-retention-spring-
11
on iOS consistently outperform their Android 2016-report/
5POINT OF VIEW Gaming, Console Manufacturers and Mobile Applications
through business process optimization and a loyalty and rewards program, engagement
digital innovation. Access to competitive program, and retention program.
intelligence and market trends is crucial when
When it comes to best practices for
creating a market strategy, as key factors that
monetization, a great example comes from
are significantly impacting revenue are related
Zynga, whose data-driven VIP program
to customer segmentation and behavior
focuses on developing, retaining, and
trends intelligence. For example, data shows
reactivating VIP customers. VIP agents
that 10 percent of purchases that occur
identify specific needs and behaviors to
while a user is in a mobile game account for
offer special treatment to their VIP gamers,
90 percent of mobile gaming revenue. This
who are identified as the highest revenue
information becomes critical when designing
contributor players.
SUCCESS STORY Sutherland’s solutions rethink
marketing strategies for
A leading technology company needed to understand drivers of customer churn and target “churn Superior Outcomes
at risk” customers with relevant marketing campaigns
Sutherland’s Analytics-as-
Challenges: a-Service solutions drive
smart customer lifecycle
• Identify the valuable “churn at risk” customers in each segment and market management to transform
marketing campaigns.
Leverage acquire-retain-
• Optimize retention marketing campaign spend
engage models such as
lost customer scoring,
• Identify the right engagement strategy to retain the highest risk customers churn-tactic optimization,
win-back model, customer
Results with Sutherland: lifetime value model, lead-
funnel analytics, acquisition
• 96 random forecast models developed, which identified key variables influencing customer modeling, campaign
churn behavior optimization, marketing
mix modeling, customer
• Geographic segmentation of 19 global markets uncovered specific target revenue groups affinity model analytics, and
customer services powered
• Significant decrease in churn was realized using the new model by the retention platform.
Consulting services assist with
market research and revenue
model innovation.
What’s Next? U.S. are shifting from a download growth
phase to one of strong growth in app usage
Global mobile app store downloads will reach and revenue expansion. Time spent in social,
284 billion in 2020. Much of the growth will be shopping, and transportation apps strongly
driven by smartphone adoption in emerging suggests that advertising and commerce will For more information on how we
markets. Mexico, Brazil, Turkey, Indonesia, can help you transform your
form a significant proportion of economic
China and especially India are poised for processes, visit us at
activity in the app ecosystem beyond the $101 www.sutherlandglobal.com, email
some of the strongest growth over the next billion projected for in store sales.12 us at sales@sutherlandglobal.com
five years. This opens a huge opportunity for
or call 1-800-388-4557 ext. 6123.
developers to target unmet needs and create
Mobuzz - http://www.mobuzz.org/wp-content/uploads/2016/11/app-annie-
12
whole new markets. Mature markets like the 02-2016-forecast-en.pdf
Connect with us
As a process transformation company, Sutherland rethinks and rebuilds processes for the digital age by combining the speed and
insight of design thinking with the scale and accuracy of data analytics. We have been helping customers across industries from
financial services to healthcare, achieve greater agility through transformed and automated customer experiences for over 30 years.
Headquartered in Rochester, N.Y., Sutherland employs thousands of professionals spanning 19 countries around the world.
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