Inside Social Games

This is a guest post by Shervin Pishevar, Founder and CEO of Social Gaming Network. SGN is a leading global development platform for social game distribution.

Assessment of the social gaming landscape has historically been based on a few publicly-available statistics – DAU, Installers, and % Active.  But use of these statistics as evaluative criteria has failed to keep pace with the changing structure of the industry.  As the social gaming space evolves toward network and studio models, a new “Network DAU” metric will be most meaningful in comparing application providers.

When social games first became popular in mid-2007, DAU (daily active users) was an appropriate means of measuring success.  An independent developer in possession of one application could measure his success by counting the unique users who engaged that application on a given day – fairly straightforward.  As the entrepreneurial model for social gaming development has given way to network, distributor and studio models, however, DAU has been consistently misused.

SGN and Zynga, for example, each own more than 20 properties; in citing DAU at the network level, they simply sum the DAU of each of their portfolio properties.  This “portfolio summed” model for DAU does not measure unique daily users at the network level, and in turn confers an apparent advantage on networks that cross promote their applications.

To illustrate this point, imagine Network A and Network B, each with two applications, 1 and 2.  Each of Network A’s applications is used by 10 people daily and there is no overlap in usage (that is, no one who uses application A.1 also uses application A.2).  Each of Network B’s applications is also used by 10 people daily, yet there is 100% overlap in usage (that is, everyone who uses application B.1 also uses application B.2).

Using a “portfolio summed” metric, which is the current industry standard, both Network A and Network B have 20 DAU.  Yet, at the “Network DAU” level, Network A has 20 daily users, while Network B has only 10 daily users.

As the network model becomes dominant in social gaming, with networks essentially forcing users of one application to visit another to collect in-game currency, a “Network DAU” metric would be far more appropriate than a “portfolio DAU summed” metric in evaluating major industry players.  My best guess is that advertisers would agree.