Overview

DreamQuest Studios is embarking on the development of a game akin to Animal Crossing, an open-ended multiplayer social simulation game. As a long-time competitor in the industry with a solid standing in the market, the studio aims to leverage its experience and expertise to create a captivating gaming experience that resonates with players. However, despite its established presence, the company faces a shifting landscape marked by evolving player preferences, market changes, and intensified competition. To ensure the success of its upcoming project and maintain its competitive edge, DreamQuest Studios recognizes the importance of addressing key challenges and adapting its strategies accordingly.

1. Industry Background

Social Simulation Games have gained much popularity over the years – evolving from earlier forms to provide more player detail, interaction, and decision-making. According to Statista, the market for these types of games has already reached approximately $16B while it is growing at an anticipated CAGR of 7.7% from now until 2027. Moreover, it is important to note that in-app purchases are major component of this form of gaming, adding another major revenue stream for game developers as they look to diversify away from solely game sales. Developed by Nintendo, Animal Crossing is a prime example of the success social simulation games can achieve, with various spinoffs created and in the works. Despite previous versions and similar games acting as predecessors, originally released in 2000, The Sims is credited with popularizing this genre. While the gameplay aspects of social simulation have surely evolved, there remains a massive market for this form of game that provides multiple revenue streams for companies, creating an attractive market opportunity for DreamQuest Studios to explore.

2. Key Challenges

DreamQuest Studios, standing as a dynamic and innovative player in the industry, desires to develop an open-ended, multiplayer social simulation game that promises engaging experiences. Despite our relatively compact size, we believe in the potency of our ambitions. However, we understand that the challenges of recent years have brought forth shifts in our market position and revenue trends. In this ever-evolving landscape, we stand united with the aspiration to elevate our future success to new heights.

DreamQuest Studios encounters common industry challenges, including game discoverability, customer retention, customer engagement, and accessibility, all of which we aim to address. The exponential growth in available games poses challenges for developers in differentiation and discoverability, making it harder to retain players. Maintaining extended player interaction and involvement also poses as another obstacle as it requires enhanced engagement. Moreover, increasing game accessibility across diverse markets presents challenges without a clear understanding of the most appropriate target markets.

In the ever-changing gaming environment, gaining a firm grasp of current market dynamics and consumer behaviors within the gaming industry can be challenging. Our report is designed to bridge these knowledge gaps by identifying emerging trends and customer preferences, empowering you to finely tailor game design and marketing strategies. This alignment with the expectations and demands of the intended audience will not only boost customer engagement and retention but also optimize the game design and drive revenue growth. Embracing this strategic approach, you can confidently position yourself for sustained growth in the fiercely competitive gaming market.

3. Data Sources

Zenodo.org covers video games with 100k+ copies sold and was generated by scraping vgchartz.com while the Science Data Bank dataset describes behavior in a virtual world and environmental perceptions by surveying Animal Crossing gamers during the Covid-19 period. Video Game Popularity: 1980 - 2023 contains a list of video games scraping from Backloggd, a video game collection website.

4. Research Questions

Objective I: Increase Profitability and Market Share, Improve Game Development

Video Game Sales Data (Zenodo.org)

  1. What are the key factors that significantly increase the average global sales per game?

    1. Factors to consider: Game genres, gaming platforms, dates of release, region with top sales

    2. Metric: Average global sales per game (USD)

    3. Sub-questions:

      1. Relative to the PC (Sports genre), is the PS3 platform (Action genre) associated with a higher average sales per customer per game?

      2. What are the most popular game genres and platforms?

      3. Metric: Frequency of genres/platforms in the dataset, weighted by the ranking of each game by total global sales.

Objective II: Enhance player engagement, retention and loyalty as well as gaming experience by tailoring targetting

Game Player Behavior in Virtual World Data (Science Data Bank)

  1. Which factors significantly increase the average frequency of gaming per month?

    1. Factors to consider: Nationality, region, biological sex, age, marital status 

    2. Metric: Average frequency of gaming per month

    3. Sub-questions:

      1. Relative to younger gamers, do older gamers have a higher average frequency of gaming? 

      2. Relative to America, do gamers in Asia have a higher average frequency of gaming?

      3. Do males compared to females have a higher average frequency of gaming? 

  2. Which gamer attributes matter most in determining the frequency at which gaming occurs? 

    1. Considering aspects like age, geography, marital status and gender, which of these factors has a statistically signifcant sway on gaming frequency and occurrence

    2. Metric: This can be evaluated by p-value analysis after running predictive models to weigh the impact each of these factors has on gaming frequency.

Objective III: Understand market dynamics and help develop effective marketing strategies

Game Media Survey Data: (Statista)

  1. What are the most prevalent sources of gaming information among the surveyed population?
  • Metric: Percentage/Number of respondents’ preferred sources of information

4.1. Is there a preference of media platforms for different generations in accessing gaming-related information?

  • Metric: Distribution of media platforms used for different generations

Profitable Gaming Segments: (Statista)

  1. Which video game market segments experienced the highest revenue growth rate in the U.S. between 2018 and 2023?
  • Metric: Revenue growth (in USD) rate for each gaming segment

Video Games Reviews: (Popular Video Games 1980-2023)

  1. What are the most popular video game genres based on ratings and player population?
  • Metric: Average rating for each video game genre & percentage of highly-rated games (ratings above 4)  in each genre.

5. Findings and Recommendations

5.1 Objective 1: Increase Profitability and Market Share, Improve Game Development (Through Higher Game Discoverability, Customer Engagement and Retention)

The video game industry is highly competitive, with numerous factors influencing a game’s success in terms of profitability and market share. As part of our research, we aimed to identify the most popular aspects of game development and the key factors that significantly impact the average global sales per game. By analyzing the game sales dataset encompassing various game genres, platforms, release dates, and regional sales, we derived actionable insights that can be used to inform game development strategies and maximize sales.

Popularity

Genres

Platforms

Publishers

Regions

Recommendations

To address the problem of declining revenues and market share while informing game development strategies to increase customer engagement and retention, we suggest the following actions:

  • Genre and Platform Selection: By focusing on Action, Sports, Adventure, Misc, and Role-playing genres, and developing games for DS, PS2, PSP, PC, and Wii platforms, developers can align their efforts with popular choices that are more likely to attract a broader audience and generate higher sales.
  • Publisher Collaboration: Collaborating with the top publishers identified, such as Namco Bandai Games, Konami Digital Entertainment, Electronic Arts, Ubisoft, and Activision, can enhance the visibility and reach of your games. These publishers have proven track records in successful game promotions and distribution, which can boost a game’s market presence and increase its profitability.
  • Regional Market Targeting: Considering the regional sales distribution, you can tailor their marketing and distribution strategies to cater to the preferences and demands of specific regions. Prioritizing the North American market, which represents the highest percentage of sales (53.4%), followed by Japan (30.61%) and the EU (15.76%), allows developers to maximize their potential in these lucrative markets.

5.1.2 What factors significantly increase the average global sales per game (millions USD$)?

Our data analysis reveals the key factors which significantly impact the average global sales per game. Regression coefficients are indicated in the brackets.

  • Game Release Year: A 1-year increase in the year of release is associated with a USD$51,000 lower average global sales per game.
  • Genre: Relative to action genre, genres such as Adventure (-0.152), Puzzle (-0.203), and Strategy (-0.181), are associated with lower average global sales per game, while genres like Platform (0.283), Role-playing (0.2), and Shooter (0.204) are associated with average global sales per game.
  • Top Region: Interestingly, games that have higher sales in Japan (-0.483) and North America (NA) (-0.106) tend to have on average lower average global sales per game compared to games that have higher sales in the European market. Conversely, games with higher sales in other regions (0.655) are associated with lower average global sales per game relative to the EU.
  • Gaming Platforms: Relative to the 2600 Platform, several gaming platforms, including 3DS, DC, DS, GB, GBA, GC, GEN, N64, NES, PC, PS, PS2, PS3, PS4, PSP, PSV, SAT, SNES, Wii, WiiU, X360, XB, XOne, are associated with higher average sales per customer per game. In particular, the platforms 3DS, DS, GB, GEN, NES, PS2, PS3, PS4, PSP, PSV, SNES, Wii, WiiU, X360, and XOne exhibit notably large effects on the average global sales per game, all on average having more than 1 million higher average global sales per game than the 2600 platform.

Recommendations

To further address declining revenues and market share while increasing customer engagement and retention, you can implement the following strategies:

  • Game Release Year: Considering that an increase in the year of release is associated with lower average global sales per game, your marketing team should focus on optimizing marketing and promotional efforts for games released in more recent years. Highlighting the unique features, enhancements, or updates in newer game releases can attract the attention of the gaming community and potentially lead to increased sales.
  • Genre Optimization: To maximize profitability, consider incorporating elements from the popular genres and leveraging their association with higher sales. Strive to create captivating games that combine the strengths of these genres, such as Action and Role-playing, to provide unique and engaging experiences for players. Moreover, while Adventure, Puzzle, and Strategy genres exhibit lower average global sales, it may be advantageous to explore opportunities for innovation and integration of these elements to add diversity and depth to game offerings.
  • Regional Marketing Strategies: Understanding the variations in regional sales, you can tailor your marketing strategies to target specific regions with higher potential for sales. The significant association of top sales in other regions with higher average global sales per game suggests that the team should explore untapped opportunities in other regions. Diversifying their reach beyond the primary markets can open new revenue streams and contribute to overall profitability. Additionally, despite the lower relative sales in the EU market found in the previous regional comparison, developers should not overlook its significance. Games that had top sales in the European market tended to have higher average global sales compared to games that performed better in the Japanese and NA markets, all else being equal. By identifying and leveraging factors that resonate with the European audience, developers can enhance their market presence and potentially increase sales.
  • Platform Optimization: Developers can optimize their games to cater to platforms that have notably large effects on average global sales per game. By tailoring game features to leverage the capabilities and unique attributes of these platforms, they can enhance user engagement, leading to increased sales and better market performance.

Utilizing all these data-driven insights and recommendations in game development and marketing strategies will help your game developers make more informed decisions, align their efforts with market preferences, and ultimately increase profitability and market share. Furthermore, these insights can be used as a guiding framework to increase customer engagement and retention.

5.2 Objective 2: Pinpoint Target Customers to Drive Customizable and Tailored Advertising

In order to drive effective and tailored targeted advertisements, it is crucial to have a firm understanding of the customer base’s makeup. By analyzing the “Game Player Behavior in Virtual World” dataset that contains valuable demographic and behavioral information surrounding several gamers, conclusions regarding typical user profiles can be drawn and subsequently be leveraged to power advertising insights.

5.2.1. Which factors significantly increase the average frequency of gaming per month?

Factors like age, gender and geography are investigated to determine which, if any, of this aspects generally impacts the frequency at which an individual games. Using this information, certain demographics can be pinpointed to drive targeted ads in order to maximize conversion per dollar spent on the marketing front.

Gamer Attribute

Age

Gender

Geography

Marital Status

5.2.2. Which gamer attributes matter most in determining the frequency at which gaming occurs?

To best tailor solutions for customer acquisition and retention via marketing, it is crucial to comprehend which gamer attributes matter most as it pertains to gaming frequency. This was, the company can prioritize efforts and be as cost-effective as possible with this initiative.

Recommendations

Investigating the two research questions in Objective II have yielded insights that can be translated into tangible and actionable recommendations for DreamQuest Studios. Firstly, as seen in the regression results, gaming frequency varies between different attributes like gender, age, geography and marital status and secondly. However, upon closer inspection of the p-values, it is evident that being male has the most significant impact on increased gaming frequency. These findings reveal concrete information which in turn, leads to the following recommendations:

  • Precise Ad Targeting: Based on the findings derived from Objective 2, we advise to create tailored targeted advertising initiatives to attract the specific demographics that are most likely to engage with the product and be potential customers. With the insights provided, these ads can be narrowed to specific demographics that include age, gender, geography and more in order to maximize the value of each advertisement that is purchased. The analysis provided lays the foundation for understanding the makeup of the customer base and who best to target when thinking about this decision from a conversion standpoint. By implementing this recommendation, marketing initiatives will deliver more value per cost, thus improving the profitability of the business by boosting revenue growth while maintaining costs reasonable.
  • Developing Curated Ad Content: Once the target groups are identified, the opportunity to further capitalize exists as well in tailoring the ads to match the interests of said groups. Therefore, it is recommended to conduct additional market research into what resonates the most with the targeted groups in order to boost conversion in targeted ads even more. By gathering relevant data that would suggest how to best market to subsectors of the market, the company can ensure that the message being disseminated matches the target, allowing the firm to benefit both from an appropriate target sector and specifically curated content.

5.3 Objective 3: Understand market dynamics and help develop effective marketing strategies

To comprehend market dynamics within the gaming industry and facilitate the development of effective marketing strategies, three data sources were used, Game Media Survey Data from Statista, Profitable Gaming Segments from Statista, and Video Games Reviews from Popular Video Games 1980-2023.

5.3.1. What are the most prevalent sources of gaming information among the surveyed population?

The analysis of Game Media Survey Data aims to identify the most prevalent sources of gaming information among the surveyed population and the preferred media platforms for different generations.

We have three media analyzed and the findings presented:

  • Media services people used with regard to video games or gaming in the past 12 months: The most used media services included social media, gaming websites, and TV.
  • Channels where people encounter new games or information on new games: The most popular channels for discovering new games include family and friends, the app store, and social media; in-game ads and game reviews were also highly ranked.
  • Social media platforms people used with regard to gaming in the past 12 months: As for social media platforms, Youtube, Facebook, and Instagram were the most popular, followed by TikTok and Discord.

We also looked into the preferred media platforms for accessing gaming-related information for all age groups, which has the promising potential to contribute to target marketing.

Sources

Media Service

Media Channel

Media Platform

Different Generations and Their Preferred Media Platforms

5.3.2. Which video game market segments experienced the highest revenue growth rate in the U.S. between 2018 and 2027?

Additionally, we seek to uncover the video game market segments that experienced the highest revenue growth rate in the U.S. from 2018 to 2027, including projected revenue growth. As cloud Gaming has been dominating the market share for a while till now, the trends of other segments such as gaming live streaming and in-game advertising seem to be highly dependent on current affairs.

By understanding the projected growth, DreamQuest can plan the profitable segments that have best potential to allocate resources. For a multiplayer social simulation games, we can boost the revenue flow from gaming networks using community engagement and opt-in rewarded ads. Implementing subscription models and encouraging in-game purchases, creating limited editions and collectibles, are also specific strategies to increase cash flow or revenue from a cloud game as it is.

WordCloud

Recommendations

As interesting as the facts our data analysis has revealed, we suggest the following actions to capitalize on the opportunities and enhance DreamQuest Studios’ position in the gaming market:

  • Real-Time Monitoring of Gaming Trends: Implement a real-time monitoring system to track the performance and popularity of different gaming segments. This will allow DreamQuest Studios to adapt their marketing and advertising strategies based on current trends and capitalize on emerging opportunities in the dynamic gaming market.

  • Collaborate with Influencers and Content Creators: Leverage the popularity of social media platforms such as YouTube, Facebook, and Instagram to collaborate with influential gamers and content creators. Engaging with popular gaming personalities will not only increase brand visibility but also enhance the reputation of DreamQuest Studios’ games, attracting a wider audience and driving organic growth.

  • Focus on Adventure and RPG Game Development: As Adventure and RPG genres have consistently ranked high in both player population and ratings, the client should prioritize the development of games in these genres. By aligning with audience’s preferences, the studio can increase the chances of success and player satisfaction, leading to positive word-of-mouth and increased game sales.

6. Recommendations to Maximize Dynamic Report Utilization

The dynamic application we’ve developed will enable you to extract valuable insights on-demand, facilitating timely and informed data-driven decisions. We strongly encourage you to harness the inherent flexibility of the application, allowing you to select numerous variables for each regression model. This capability enables real-time exploration and customization, ensuring you can address any emerging queries effectively. Additionally, we recommend delving into the interactive bar charts meticulously crafted to offer a comprehensive and nuanced portrayal of the results. These charts will provide a deeper understanding of the findings, enhancing your decision-making process.

6.1 Using the Dynamic Model to Compare 2 Platforms/ Genres

Relative to the PC (Sports genre), is the PS3 platform (Action genre) associated with higher average sales per customer per game? By selecting the relevant platforms/genres to include in the model, we find that relative to the PC platform, having a game on the PS3 platform is associated with a 0.698 higher average global sales per game. However, we also found that the average sales per customer per game of a sports game is not significantly different from an action game.

These insights indicate that focusing on developing games for the PS3 platform could result in increased sales compared to games designed for the PC. However, to identify the most profitable game genre to target, further comparisons with other game genres would be valuable. These valuable insights can be readily uncovered through our dynamic platform by adjusting the variables included in the model. By conducting such analyses, we can make informed decisions about which game genre offers the greatest potential for maximizing sales and overall success in the market.

7. Limitations

While striving for comprehensive results, we acknowledge that our analysis has a few limitations. The analysis heavily relies on the available dataset, and any biases or limitations within the data might affect the accuracy of the conclusions drawn and lead to potential gaps in insights. Unobserved variables might influence observed associations in our regression models. Furthermore, the analysis doesn’t fully account for emerging trends or technological advancements due to time sensitivity. Sampling bias could restrict the generalizability of results from the Animal Crossing dataset to the global gaming population. Lastly, temporal events like global crises might not be fully considered in the analysis of revenue growth and popularity trends, impacting our understanding of gaming dynamics.

Nevertheless, these limitations can be mitigated through expanded data collection and the inclusion of additional variables in our analysis. Our current descriptive analysis offers a comprehensive view of the video game industry, along with tailored recommendations for your new game design endeavor. We encourage you to explore our predictive analysis proposal, designed to enhance your game’s sales success prediction. This will empower you to make informed adjustments and optimize your game’s revenue potential.

8. Conclusion

In conclusion, our data analysis offers valuable insights to fuel DreamQuest Studios’ pursuit of greater market share, profitability, and long-term success. The recommended actions encompass a spectrum of opportunities, from optimizing marketing expenditures to guiding game development and feature choices. These steps will allow DreamQuest Studios to make significant progress towards the three outlined objectives. Moreover, in completing this work, TCube has identified new avenues for continued partnership. Building on a deeper grasp of the company’s status and market position, we recommend future endeavors, including advanced machine learning algorithms to predict new game release success. In all, by following through on the several recommendations provided and nurturing this relationship for added value, DreamQuest Studios charts a clear and attainable path toward enhanced market presence, profitability, and industry standing.

9. References

Clement, J. (2023, June 15). Topic: Video game industry. Statista. https://www.statista.com/topics/868/video-games/#dossier-chapter1 

Globe Newswire. (2023, February 20). Video Games Market Size to Hit $307.19 Billion by 2029 | At 6.3% CAGR. Retrieved June 18, 2023, from https://www.globenewswire.com/en/news-release/2023/02/20/2611370/0/en/Video-Games-Market-Size-to-Hit-307-19-Billion-by-2029-At-6-3-CAGR.html

Smith, G. (2022, January 24). Video games sales. Zenodo. https://zenodo.org/record/5898311#.Y9Y2K9JBwUE 

Randomarnab. (2023, March 23). Popular video games 1980 - 2023 . Kaggle. https://www.kaggle.com/datasets/arnabchaki/popular-video-games-1980-2023 

Vuong, Q.-H., Ho, M.-T., La, V.-P., Le, T.-T., Nguyen, T. H. T., & Nguyen, M.-H. (2021, October 8). A multinational dataset of game players' behaviors in a virtual world and environmental perceptions. ScienceDB. https://www.scidb.cn/en/detail?dataSetId=cb5d36cce29f4e5695a586c9b85d0