Essential KPIs in iGaming

In the iGaming environment, measuring business results comprehensively to ensure alignment with established objectives is essential. To accomplish this, various KPIs are used to define actions and ensure the continuity of success in the operation. 

This article will explore which KPIs have become the most important ones to consider for an online gaming business strategy.

What is a KPI?

KPI stands for Key Performance Indicator. It is a quantitative metric that measures the progress of an activity, initiative or process towards achieving a given objective.

Types of KPIs

Each project must have specific KPIs. Taking data from the consulting firm Latam Entertainment, we will see that there are a series of measurements that make it easier to obtain concrete information when operating a business in the online gaming sector:

1. Profitability 

Gross Gaming Revenue (GGR): Gross revenue generated by the casino, calculated as the sum of all bets minus the winnings paid to the players.

GGR Per Player: Gross revenue per player.

Net Gaming Revenue (NGR): NGR shows the casino's net winnings after deducting its expenses, including commissions, game provider costs, license fees, taxes, external services, advertising campaigns, etc.

Total Deposits: The sum of all funds that players deposit into their accounts.

Total Deposits Per Player: The total deposits per player.

Conversion of Deposits to GGR: GGR computes the percentage of deposits made by players that the company retains as net profit after paying out wagers won by players.

ARPU (Average Revenue Per User): ARPU is defined as the average amount of revenue users generate during a specific period, usually a month. In other words, it represents each user's economic value to the business. To calculate this KPI, total revenues are divided by the number of active players. 

2. Marketing Efficiency

Cost Per Acquisition (CPA): The cost per acquisition is the cost of acquiring a new customer who performs a desired action, such as registering on the platform or depositing.

Return on Investment (ROI): The ROI of advertising campaigns is calculated by comparing the GGR generated by players acquired through those campaigns.

3. Player Behaviour

Deposit Frequency: Deposit frequency measures the frequency at which users deposit money into their accounts. It is expressed as the average number of deposits an active user makes during a specific period, usually a month.

Average Deposit Amount: This calculates whether players make frequent small or occasional large deposits. This can influence bonus and retention strategies.

Conversion Rate: The conversion rate measures the percentage of users who perform a desired action within a particular period, usually a month. Everyday actions include account registration or initial deposit.

4. Player Retention and Loyalty

Retention Rate: This is the percentage of active players after a specified period. A high retention rate indicates a good user experience.

Churn Rate: The churn rate corresponds to the rate of players who stop playing in each period. A high level in this rate may indicate problems in the game offering, customer service, or overall user experience.

5. Market Comparison

Benchmarking: Total deposit and GGR metrics are compared to competitors within the industry or to industry averages. This will help identify areas for improvement and understand the company's position in the market.

6. Player Segmentation

Segmentation by Value: This involves dividing players according to the value they bring (e.g., high-value players vs. occasional players). This will allow the customisation of retention and marketing strategies.

Player Lifecycle Analysis: This is to understand what stage of the lifecycle players are in (new, recurring, inactive) so that strategies can be adapted to maximise each group's value.

Lifetime Value (LTV): The customer lifetime value is the average total revenue a player generates during his relationship with the company. To calculate LTV, the average revenue per player is multiplied by the average duration of the relationship.

Other elements to consider 

LatAm Entertainment consulting firm highlights two more factors contributing to measuring the above indicators: bounce and conversion rates.

Bounce Rate

Bounce rate refers to the percentage of visitors who leave the website or game application after viewing a single page. It is calculated by dividing the number of visits to a single page by the total number of visits and multiplying the result by 100. It is also considered a factor when indexing the website in search engines.

Let's analyse the fact that there is a very high percentage of this rate. It is assumed that visitors have yet to find what they expected or had difficulty navigating, negatively impacting SEO positioning in search engine results. Thanks to this measurement, the company can effectively analyse the causes of abandonment and thus evaluate the possible reasons that generate it to provide a solution to the problem.

Conversion rate

The conversion rate is the percentage of visitors who perform a desired action, such as registering for an account, making a deposit, or playing a certain game. It is calculated by dividing the number of conversions by the total number of visits and multiplying the result by 100.

It is considered in developing different marketing strategies since it helps to determine the number of people interested in what has been promoted and who have finally performed the expected action.

Conclusion

In short, monitoring and analysing KPIs is indispensable for online gaming companies seeking to improve performance, optimise resources, and maximise long-term profitability.

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