Thinking about Daily Active Users and the Limitations of this Metric

Daily active users (DAU) or daily active customers (DAC) are vital indicators used in the gaming industry to measure the scale and potential of a live game. These metrics provide insights into the number of users engaging with your game on a daily basis. When scaling your game, generating daily revenue is a key factor. Improving monetization performance, such as daily in-app purchases and average revenue per daily active customer (ARPDAC), is crucial. However, to sustain long-term growth, you need to focus on building a loyal user base.

The Limitations of DAU/DAC

While DAU/DAC is an essential key performance indicator, it does not provide a comprehensive understanding of user engagement over time. It only gives you a snapshot of active users on a specific day. The limitation of this metric, like retention, is that it doesn’t indicate how many regular users are actively using the game. Are you building a “sticky” user base that consistently contributes to future revenue? Not all daily active users are regular users, and there is no linear relationship between the two concepts.

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The Importance of User Engagement

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To assess the extent to which your game is part of users’ daily routines, you need to consider additional metrics. Who are the active users, and how engaged are they? These questions are crucial to measure the success of your game. However, it’s challenging to answer them definitively. Determining what makes a user “regular” is subjective, and DAU/DAC alone cannot provide a clear answer.

Observing Weekly/Monthly Uniques

One way to gain a better understanding of your user base and their engagement is to examine weekly/monthly unique players. Among these players, how many days do they play within a specific period? It’s important to focus on players who have installed the game long enough to complete at least one entire period. New installs should be excluded from this analysis since they cannot play every day of the period and may not continue engaging with the game after the initial impression.

Engaged Users vs. Nonpayers

Regardless of the game genre, customers tend to have higher engagement levels than nonpayers. Over a given period, paying customers are more likely to play every day, while nonpayers may only play once. Players who consistently play every day in a period are a unique group compared to other users. As the duration of the period increases, the proportion of players playing every day decreases. This is due to the higher number of opportunities for life events to interrupt daily play.

The Importance of Churn and Active Users

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The percent of users playing every day in a period is a robust predictor of churn. Looking at the number of days your active users play is crucial because the majority of revenue comes from highly engaged players. Therefore, it’s important to focus on engaged players over the long term, rather than just the number of active users on a specific day.

Engagement vs. Monetization

Engagement and monetization go hand in hand. Players who engage more with your game on a daily basis also tend to spend more. The more engaged a player is, the more valuable their active day becomes. By analyzing the percent of active days with an in-app purchase, transactions per active day, or revenue per active day, you can identify your most valuable players.

In conclusion, while DAU/DAC is a crucial metric for assessing the scale of your game and evaluating its performance, it has limitations. To truly understand user engagement and build a successful game, you need to consider additional metrics that reflect the regularity and depth of user involvement in your game.

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