'Ninja Metrics' Tracks Gamer Behavior to Startup Success
Ninja Metrics promises to help better understand the behaviors and wants of online gamers. This concept art shows a thief character from the upcoming massively multiplayer online game called Guild Wars 2.
Everyone from Facebook to the U.S. military and Hollywood sees video games as big business, but Jaideep Srivastava still remembers a time when colleagues at the University of Minnesota worried about his choice to study social interaction in gaming. In their eyes, Srivastava was risking his professional career as a computer scientist.
That was before Srivastava joined a network of researchers who shared a vision of online games as virtual behavior labs . Together, they have cofounded a Los Angeles-based startup, called Ninja Metrics, which promises to help the game industry harness gamers' desires and behaviors. Several of Srivastava's students have even gone on to work for Zynga, the maker of wildly popular (and profitable) social games on Facebook such as "FarmVille."
Side bonus Srivastava's focus on games earns him points with younger gamers.
"We get three or four high school students every summer who want to intern at my lab," Srivastava said. "I have a 15 year old daughter, and all her friends who are boys want to hang around and talk to me."
Ninja Metrics offers to help game companies track how much time and money players spend on a game, uncover cheating, and even spot customers who show signs of wanting to quit a game. It may also extend its services to social networking sites or online retailers.
The sleeper has awakened
Many Internet companies have already learned to live or die by knowing their customers Google monitors search histories to offer more tailored results, Amazon makes buying recommendations based on past purchases, and Netflix offers film lists based on ratings of old rentals. Such companies have the "power of analytics in their DNA" because of founders who cultivated a healthy respect for data, Srivastava said.
By contrast, the game industry is just beginning to realize that it has perhaps the biggest "treasure trove" of data about customer desires and behaviors. A few companies, such as Zynga, Valve Software and Blizzard Entertainment, have effectively used such data to tailor existing games and future products to players' desires.
That wealth of information comes in part from how much time people spend playing online games perhaps as much as 3 billion hours a week, according to game designer Jane McGonigal. But it also comes from the complex levels of social interaction that take place when gamers step into the shoes of virtual avatars such as superheroes, fantasy warriors or farmers.
"Of all applications on the Internet that are engaging people, games are some of the most engaging," Srivastava told InnovationNewsDaily.
Some game companies gave a collective yawn to researchers' early requests for cooperation, but perked up once they realized they could learn more about their customers. That led Srivastava and Dmitri Williams, a communications researcher at the University of Southern California in Los Angeles, to their business idea for Ninja Metrics.
"One company said: 'Not only will we give you access to the data set, but if something comes up we'll buy it from you,'" Srivastava said. "That's when we realized it had commercial value."
Easy come, easy go
If a game company or social network uses Ninja Metric's system to predict when a customer might be getting ready to leave, they might nip the loss in the bud by offering perks for the customer to stay. Telecoms such as AT&T and Verizon have long fought against customer defection, called "churn," by locking customers into 2-year plans with offers of cheap cell phones.
"What churn prediction can do is say, well it's Monday morning, and given the behavior of various people, in the next month these are the people likely to churn, so you'd better do something about it," Srivastava explained.
Defections can have a huge impact on a popular online game such as the fantasy-themed "World of Warcraft," which has earned billions of dollars each year by collecting $15 subscription fees from millions of players. The loss of several hundred thousand players over a few months can translate into a lot of lost revenue, as "World of Warcraft" publisher Blizzard Entertainment has witnessed.
Ninja Metrics even promises to help identify customers who may be most worth the most to a game company. That could be because the player has big social influence on other players, or because the player happens to spend a lot of money purchasing virtual game items .
The startup already has several big (unnamed) game industry clients who run massively multiplayer online games. But it's not a huge leap to someday go from analyzing such games to helping mid-size social networks figure out their customer base, Srivastava said.
"Games are at one end of the social interactivity spectrum," Srivastava said. "At the least end, I would put something like phones, or e-mail, because those are point to point. Our sense is that social networking falls somewhere in the middle."