JUNE 16, 2009 • As the game industry rapidly evolves from a packaged goods business to a more service oriented busi- ness, it becomes increasingly important to monitor ongoing product usage. Mea- suring raw unit and dollar sales at retail is now only becoming a starting metric for the game industry. The ability to sell subscrip- tions, downloadable content, advertising and other product enhancements requires ongoing monitoring of usage. Keeping consumers engaged with a product over a long period of time is rapidly becoming the key measurement of profitability.

DFC Intelligence has been partnering with companies around the globe that have unique abilities to track ongoing consumer usage of games. One of the most intriguing research partners is gamerDNA. GamerD- NA.com is an online community of gamers fueled by a database that tracks consumer gameplay patterns over time. One of the most exciting things about gamerDNA is a real time perspective of consumer usage across multiple platforms (PC, console and mobile) and the ability to glean insight into trends happening right now with gamers. The message and reach extend beyond gamerDNA as consumers share content across their social graph, using one ID across sites like Xfire, Steam, Xbox Live, Twitter, Facebook and others.

The ability to track products across both the PC and Xbox 360 platforms is one of the many unique advantages of gamerDNA. Using gamerDNA data, DFC Intelligence was able to come up with some interesting conclusions about the Valve game Left 4 Dead. Left 4 Dead makes for an inter- esting case study not only because it was released for both the Xbox 360 and PC, but also it uses Steam as a major online distribution channel.

Steam is Valve’s proprietary digital distribu- tion and rights management service for on- line delivery of PC content. Valve is rapidly proving how high-end PC game products can be delivered directly to the consumer without having to go through traditional re- tail channels. Furthermore, Steam is rap- idly becoming a marketing vehicle where promotions run on Steam can significantly increase product sales and usage. The numbers for Left 4 Dead clearly bear this out.

With over 20 million users around the world, Steam has clearly gained mass traction. At the 2009 DICE conference, Valve co-founder Gabe Newell gave a key- note where he highlighted some interest- ing stats about Steam. One of the most interesting points Newell claimed was how dramatically a sales promotion can in- crease overall dollar sales. According to Newell, a 75% off promotion results in 15% more actual revenue than selling a product at full price.

DFC Intelligence was interested in seeing how Steam promotions impacted overall product usage. Using gamerDNA data, we were able to track Left 4 Dead usage on both the PC and Xbox 360 from its release until early May. The data clearly shows that specific Steam promotions can have a significant impact on usage.

Left 4 Dead is a high quality first-person shooter launched in November 2008. From the time of its release until mid-February usage on both the PC and Xbox 360 was fairly consistent. However, this changed when Valve launched a 50% off promotion for the PC version on Steam during President’s Day weekend. The promotion caused an immediate spike in usage, but more importantly, over the next two months the usage of the PC version of Left 4 Dead remained significantly ahead of the Xbox 360 version.

The next big event in the Left 4 Dead universe was the release of a free Survival Pack of downloadable content on April 21st. This resulted in a strong usage spike for both the PC and Xbox 360 version. However, this spike was relatively short lived and after a week usage was trending back to the level of before the release of the Survival Pack.

It is at this point that there was a dramatic divergence in usage of the PC and Xbox 360 versions of Left 4 Dead. On April 29th, Valve had Freaky Free Friday where users could play the PC version of Left 4 Dead free on Steam for 24 hours. Users pre- loaded the game plus the new Survival Pack with no purchase obligation. The game was turned on for the 24-hour pe- riod. Of course, users now had the game loaded so it was a simple matter for trial users to purchase the full product.

The usage spike for the PC version was obviously dramatic on the day of the trial. However, it also resulted in a significant long-term increase in usage that meant the PC version ended up with significantly more overall usage than the Xbox 360 version. It appears that the combination of releasing downloadable content PLUS having a free trial day was a winner. By the first week in May average weekly usage for the PC version of Left 4 Dead was up 100% over the week April before the release of the Survival Pack. In compari- son, the Xbox 360 which had the Survival Pack release but no similar promotion saw only a 19% usage increase by the first week of May.

Going forward it is likely that monitoring usage and running promotions designed to increase both sales and usage will be a key to success for game products. The good news is that digital distribution adds a great deal more flexibility in the ability to run a free trial promotion that can be easily converted to a paying customer. This is simply not feasible with a traditional retail product.

The 50% off promotion at Steam result- ed in a nice usage boost. However, the Steam Freaky Free Friday promotion for Left 4 Dead appears to have had significantly more impact than both the 50% off promotion and the release of extra downloadable content. Of course, this is all part of a complex marketing mix designed to keep a product active over a long-term period. However, the next few months we will closely monitor Left 4 Dead usage and see how it tracks with specific product promotions. Stay tuned!

•        •        •

•        •        •