Game difficulty is a fundamental design choice in the booming mobile gaming sector, a market projected to reach $200 billion worldwide, according to a report by Boston Consulting Group. In the dominant free-to-play (F2P) model, where users can play for free but opt for in-app purchases to enhance their experience or accelerate progress, it is crucial to set the right level of challenge.
"One of the most important decisions game designers of online games or digital games need to make is game difficulty,” says Oded Netzer, the Arthur J. Samberg Professor of Business and Vice Dean of Research at Columbia Business School.
While many game companies strategically increase difficulty to prompt immediate spending, new research by Netzer, Harvard Business School Professor Eva Ascarza, and Northwestern University Professor Julian Runge challenges this myopic approach. Their findings suggest that making games less difficult can lead to higher player engagement and, counterintuitively, greater long-term revenue.
Dynamically Adjusting Game Difficulty
The researchers collaborated with a large mobile gaming company, operating an F2P puzzle game similar to Candy Crush Saga. The methodology included a large field experiment involving over 300,000 players over a 12-week period.
The core of the methodology involved dynamically adjusting game difficulty, meaning changing the game difficulty for each player and each round of the game. In the "treatment" group, users identified as having a higher risk of stopping to play received increasingly easier game puzzles through a more favorable allocation of pieces on the game board (for example, by putting more pieces with the same color). This difficulty adjustment was user-centric, keeping other game aspects consistent. A "control" group experienced no such difficulty adjustments, regardless of their churn risk of stopping to play.
By manipulating game difficulty, the study measured its short-term and long-term effects on customer engagement (e.g., how much the user played on a given day), retention (likelihood of playing again), and various forms of revenue (e.g., purchases, “lives”, "extras," or bypassing "gates"). The researchers also analyzed advertising revenue tied to active player engagement.
Lower Difficulty Boosts Engagement, Retention and Revenue
While offering players an easier game did, as expected, lead to a decrease in purchases of “extras” within that specific round to make it easier for the player to pass to the next round, a far more powerful effect overshadowed this initial dip in per-round spending. Lowering game difficulty drastically increased both immediate engagement and long-term retention. Players in the treatment group engaged in an average of one additional playday and ten more rounds of play within a month compared to the control group, and also progressed faster through levels, with significantly higher likelihood of continuing to play 1, 7, and 14 days after the difficulty adjustment.
This heightened engagement and retention ultimately led to a substantial increase in overall customer spending, both in the short and long run, and a positive effect even on the first day of the difficulty adjustment. The research identified two key synergistic benefits from reducing game difficulty.
Firstly, despite reduced immediate purchases to ease progress, the positive impact on engagement and future retention resulted in a net positive effect on overall player spending in the game. Secondly, the increased retention from lowered difficulty specifically boosted spending for items that provide access to more game content, such as "gates" (repeated paywalls at specific levels), which players could bypass with coins. Players who made significant progress were more inclined to spend money or coins to bypass these gates, indicating that facilitating progress encourages them to pay for continued advancement.
"By adjusting game difficulty lower, you're not only getting players more engaged, but you even get higher revenue from the players because they continue playing and then spend money on later levels,” Netzer says.
The impact of reduced difficulty also varied among different player segments. Players more inclined towards making progress showed a stronger positive response to reduced difficulty, and customers who had previously spent money in the game displayed the strongest overall effect on spending. Players further away from gates benefited most from lower game difficulty, leading to increased engagement and higher spending to pursue continued progress.
Overall, calculations showed that lowering game difficulty increased revenue from advertising by 21% due to increased player engagement and revenue from purchases by as much as 79%. For "spender" users, 94% of the extra revenue came from premium item purchases.
What Dynamic Difficulty Adjustment Means for the Mobile Gaming Industry
The researchers’ findings directly challenge the prevalent industry assumption that increasing difficulty is the primary route to entice player to buy “extras” and make money. Instead, it shows that a strategic focus on personalized game design and fostering consistent player progress yields superior long-term financial outcomes and increases players enjoyment from playing.
By implementing dynamic difficulty adjustment, companies can transform otherwise inactive or at-risk players into valuable, profitable customers. The study emphasizes that players are fundamentally driven by the desire for progress and winning. Companies can cultivate a more engaged and loyal user base by ensuring players experience these small victories and consistent advancement. This loyalty, in turn, translates into sustained play and a greater willingness to spend money, not out of frustration to pass a level, but to continue their journey within the game (e.g., bypassing gates to access new content).
"Overall, our work highlights a win-win strategy. In a freemium economy, companies mistakenly believe that in order to make money, they need to hold off on the free value. This is an example of myopic thinking. We demonstrate that allowing customers to play more through reducing game difficulty can lead to higher long-term and short-term revenue,” Netzer says.
The findings highlight that personalized product design can alleviate the commonly perceived tension between offering free content and driving revenue. Instead of a substitutive relationship (more free = less money), personalization can create a synergistic one, boosting both retention and revenue. These principles apply broadly, suggesting that fostering progress and reducing frustration can be universally beneficial across digital platforms and educational tools.
FAQs:
Q: What is "Dynamic Difficulty Adjustment (DDA)"?
A: DDA refers to a game design approach where the difficulty of a game dynamically changes in response to a player's performance, in this case, to keep them engaged.
Q: What are "F2P" games?
A: F2P stands for "free-to-play" games, meaning users can download and play for free but may make optional in-app purchases for enhancements or faster progression.
Q: How should game companies adjust difficulty?
A: Companies should adopt Dynamic Difficulty Adjustment (DDA) to make games easier, especially for players at risk of leaving, fostering engagement over immediate revenue.
Adapted from "Personalized game design for improved user retention and monetization in freemium games" by Eva Ascarza, Oded Netzer, and Julian Runge, published in International Journal of Research in Marketing.
