6 Technical Obstacles that Drain Video Game Revenue & Profits

By Barry Whitley

The internet continues to present a host of great opportunities for game-related development and efficiencies. Without the right content delivery strategy, these advancements come with technical challenges that can create a massive drain on productivity, revenue and profits. Gaming products have moved almost entirely from retail environments to 100% online environments. The gaming industry’s next frontier is making that process as fast and safe as possible in order to grow productivity, revenue, and profits.

At the start of 2017, an annual report from SuperData Research put the global game industry revenue at $91 billion, with the lion share of the valuation attributed to mobile and free-to-play online games ($60 billion). SuperData has already identified mobile as the largest gaming platform and projected that the global game market will exceed $100 billion by the end of 2017. This is just one indication of the seismic shift from retail to online taking place within the video game marketplace. The internet is not only changing the way consumers buy and play video games, it’s also changing the way game developers support and monetize games.

Below are the top six technical obstacles in online game revenue that you should consider when optimizing your game delivery strategy:

Infrastructure

It is important to not neglect or over-invest in your infrastructure. Preparing for success and the long-term sustainability of a project requires planning for scale, distribution and taking advantage of cost efficiencies as you grow. For many game developers and publishers, that means leveraging on-demand content delivery network and cloud infrastructures to minimize upfront investment without sacrificing revenue from any unforeseen demand. The control, and potential long-term savings, of internally operated distribution can seem appealing, but the savings can be impossible to accurately project with the unpredictability of game adoption and sustained use. What you give up in direct control and ownership over the infrastructure, you gain in cost control, risk mitigation and scalability within API powered services that can be deployed as you need them.

Scalability

When game developers and publishers are unable to make investments in scale, any sudden, large influx of users can overwhelm servers, slowing some users down and preventing other users from playing or downloading altogether. Scale and capacity needs can be projected in a number of ways based on many factors. Gauging past demand is usually the simplest and best place to begin, but it can still be difficult to take all the relevant factors into account. It takes time, it costs you money, and despite your best efforts, you could still get it wrong. If you over or under-projected by too wide a margin, your players will have a poor experience, negatively impacting your short and long-term revenue depending on your monetization strategy. The only foolproof way to ensure you’re prepared to handle a wide-range of traffic levels is to build out a massive network, but unless you operate with consistently high levels of traffic, you would be paying for a lot of unused capacity. Even if you do operate at consistently high traffic levels, you could still face an unexpected spike. You end up in a never-ending cycle of hedging your capacity or paying for unused capacity. The right strategy will require a CDN service that can help you meet fluctuating demand and scale with minimal ramp-time.

Reach

Like scalability, reach can be a huge challenge. Naturally, you want to launch your game and gain popularity in new markets, but it can be tough to reconcile the cost of expanding your existing infrastructure and the revenue opportunity of penetrating an untapped market. The last thing you want to do is start setting up teams and servers on every continent, especially without knowing what level of investment to make or how successful your game will be in that market. A global CDN mitigates your overhead costs and reduces your risks by allowing you to enter new markets without building out your network and giving you the flexibility to move in and out of markets based on your game’s performance.

Efficiency

The goal of any organization is to maximize efficiency, both in cost and performance.  Ideally, you would like to achieve both, but often times companies are forced to choose one or the other.  Do you need the speed and scale required for a top tier user experience to achieve the highest possible conversion ratios? Or are you constrained by costs, hoping that the revenue will keep growing despite a mediocre experience?  Cloud services and a global content delivery network can help with both.  The scale, reach, and performance of those services can be achieved at a cost that is a fraction of doing it in-house.  You can spend your money on engineers that focus on adding more downloadable content, and not on staff managing your network ports in Tokyo.

Insights

Understanding players’ behavior and experience are important to assessing performance. Having the right analytics to help you understand download performance, player demographics, and overall engagement is key to your promotion, game development, and monetization strategies. A content delivery network offers you analytics to help dissect your game’s performance metrics so you can optimize and improve it. If you’re not getting the right insights and analytics, you could be making decisions that have an adverse impact on your performance and ultimately your revenue. In addition, more granular data can help you make sound predictions about your traffic behavior and capacity needs in the future. StackPath, in particular, draws from aggregate, per-file, and per-geo data streams, and provides multiple key metrics in real time. Our next-generation analytics platform provides detailed data points about your content and is designed so that you can segment data reports on a per-domain or per-CDN protocol to full global reporting basis, and the data can be pushed directly into your own collection systems.

Security

One of the major challenges to come with delivering and playing games online is the vulnerability to cyber threats, especially DDoS attacks. Gaming companies are one of the biggest targets of DDoS attacks; in fact, they have faced many of the largest and most prolonged attacks on record according to the 2016 State of the Internet Report. The revenue loss from just a single incident can easily exceed millions of dollars. However, the cyber threat to game companies is not just limited to DDoS attacks. Game developers and publishers also have to worry about account hacks, data and software theft, and other intrusions. When you use StackPath to deliver your website and content, you’re protected by a complete SSL/TLS network and advanced, multilayered security with features like network firewalls, volumetric attack protection, geo-blocking, origin shielding and more. SecureCDN also comes with WAF and DDoS mitigation. Security may very well be the biggest threat to profitability and revenue for game companies, so it must be a priority for you and any company you decide to partner with.

The Bottom Line

It is easy to see the allure for game develops and publishers in building and managing your own infrastructure. You want to ensure that every part of the game experience, your security, and performance is under your control. It can seem like the right way to create the best possible experience for your players or even, in some cases, appear to be the most cost-effective approach. More often, however, it comes with significant challenges that are not easily addressed without a partnership, and they can take a toll on your revenue and profits. StackPath GDN (Game Delivery Network) is an advanced CDN offering for game publishers that gives users maximum levels of control and management of their infrastructure and guarantees a high level of performance, without the risks and challenges of running your own network. We know developers just want to make great games and get those games in the hands of consumers, not worry about network performance and cybersecurity.

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