Eventi del

27 2017 12:45 - 14:00
Meeting room 4.E4.SR01  Via Roentgen, 1

'Level Up': Leveraging Skill and Engagement to Maximize Player Retention in Online Video Games

As firms recast their view of customer interaction from a transactional to a relationship-based mindset, their focus has moved towards building and leveraging “customer engagement”; however, customer engagement as a construct has proven hard to define and measure. We therefore propose a modeling approach that treats customer engagement as a latent variable while including its antecedents and consequences (business outcomes). Specifically, we propose a novel two-stage data analytic modeling approach, combining statistical methodologies with optimization techniques to model customer engagement as a function of game-play motivation to maximize customer retention via matching in the large and growing video game industry. In the first stage, we build a Hidden Markov Model (HMM) to capture the evolution of gamers’ latent engagement state and the state-dependent participation behavior. We then calibrate the HMM using a longitudinal dataset obtained from a major international video gaming company, which contains detailed information on 1,309 randomly sampled gamers’ playing history over a period of 29 months playing more than 700,000 unique game rounds. We find high-, medium- and low-engagement-state gamers respond differentially to motivations such as achievement and challenge. In the second stage, we use the results from the first stage to develop a matching algorithm that learns the gamer’s current engagement state and exploits that learning to match the gamer to a round to maximize retention. Our (real-time) algorithm increases gamer retention by 4-8%, leading to economically significant revenue gains for the company.

Authors:
Yan Huang (University of Michigan, Stephen M. Ross School of Business), Stefanus Jasin (University of Michigan, Stephen M. Ross School of Business), Puneet Manchanda (University of Michigan, Stephen M. Ross School of Business)