[MUD-Dev] Predictive models for churn in subscription based games

Damion Schubert damion at zenofdesign.com
Tue Feb 18 08:22:48 New Zealand Daylight Time 2003


From: Scott A. Farley

> I occurred to me that this is a roughly similar model to a retail
> box MMO with a subscription so I thought I would share some
> observations regarding churn models.

Overall, churn is something that the big boys watch very closely,
although your odds of getting numbers published out of them isn't
very good.  As you probably know, aside from being important biz
figures, it's too easy for churn numbers to be spun poorly by
competitors and/or disgruntled ex-players.

> So if you add 10,000 subs in December, and you expect that 20%
> will not pay past the first month, (your historical month one
> retention) then you will have 2,000 subs leaving in January.  In
> February, the expected churn for the December population drops to
> 8%, so you need to predict a loss of 8,000 *.08 = 640 subs leaving
> 7,360 in the December population.  The retention rate curve
> usually declines over the length of service for wireless phones,
> so for this fictitious population, March might be 6%, then every
> month for next 4 might be 5%, then 4% for the next 6 months, etc.
> The December population can only decline over time as more and
> more of it's members drop their subscriptions.  For MMOs, I expect
> there is a serious spike in churn after some period of time as
> players simply grow tired of the game.

You were doing pretty good up till this point.  =) MMOs do not
appear to have much in the way of spikes born of pure weariness with
the game mechanics - the games have strong barriers to exits that
prevent this from happening.  Spikes can almost always be traced
back to a specific event:

  1) A period of unusually high trials (I.e. you've just released
  the expansion pack, or you've put the client free on PCGamer).  

  2) A period of really, really bad mojo (Your latest patch deleted
  every player house in the game, you nerf an extremely popular
  class beyond acceptability, or your programmer goes on the boards
  and says something that makes you want to beat the stuffing out of
  him).

It's worth noting that, as the game ages, churn tends to rise even
as the population stays steady (or sometimes, even grows!).  This is
largely because, as the game ages, management stops counting on the
box sales for revenues, and starts up with things like lower price
points, OEM deals and sometimes even free downloadable clients!
This will frequently bring in a rash of casual gamers who will come
in, realize the game's too hardcore (and often, by that time, dated
looking) for them, and they'll churn out immediately.

Other than that, nice read.

--d

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