One of the key challenges in mobile gaming is retaining users in a world where there are so many games competing for their attention. When engagement and retention are your critical challenges, you need a KPI that captures the essence of both. All games track the total number of unique users active everyday, known as Daily Active Users, and the total number of unique users active in a given month, known as Monthly Active Users, but alone neither capture the frequency of use or retention of users.
To that end, many mobile gaming companies divide their average Daily Active Users (DAUs) by their Monthly Active Users (MAUs) to create a KPI called DAU/MAU.
Yes, that’s really what it’s called.
So why is that ratio a useful measurement? It captures a number of different factors in engagement at the same time:
- The higher the ratio, the more of your users that are using your application everyday. A value of 0.5 or 50% means your users are playing your game roughly 15 out of the 30 days in a given month.
- It captures customer churn in a basic way. If you are gaining a lot of users but losing them quickly, your DAU/MAU ratio will go down.
- If you track it by cohort, you can see your customer retention over time as your ratio changes. For example, if your ratio is 0.5 the first month but 0.1 the second month, that means usages has dropped from every other day to only 3 out of 30 days in a month.
In recent years, as analytics tools have gotten more advanced, use of the DAU/MAU ratio has fallen in favor of more detailed metrics and tracking. While DAU/MAU is not used as widely as it once was, it has some surprising predictive characteristics in particular environments. For example, in the early days of the Facebook platform and the Apple AppStore, the DAU/MAU ratio was a fantastic predictor of success.
No KPI is perfect, let’s break down the strengths and weaknesses of this one.
- It’s a very simple metric that you can calculate for every customer segment and cohort every month. This allows you to look at engagement and retention across different groups of users and identify problems through comparisons.
- It’s widely known so there are many public benchmarks you can use to compare your performance to other games.
- Since it considers only Daily and Monthly activity, any user lifecycles in between are lost. For example, if you have a game that users love but can beat in a week, that will not be captured by your DAU/MAU ratio.
- Since you need at least a month of activity data to determine your denominator, it cannot help you in the first month after your launch. This is unfortunate since many games will fail in that first month.
I will confess that I was originally very skeptical of the DAU/MAU ratio because of how simplistic it seems on the surface. Today I see it as a useful tool as long as it’s used in conjunction with other metrics like Lifetime Value (LTV) and Average User Tenure.
Quote of the Day: “Once the game is over, the King and the pawn go back in the same box.” ― Italian proverb