Customer retention is an evolving concept, tied heavily to constant developments in communication and tech. The avenues businesses have to explore are diverse, winding, and often confusing for those not actively researching what’s available. Fortunately, history provides numerous evergreen examples of how customer retention should and shouldn’t be approached.
Today, we want to explore the dos and some don’ts through the lens of the gaming industry. With decades of successes and failures to draw from, there’s a lot to look through, where tales of victories and defeats continue to this day.
Simplifying Access – Microsoft
Before the release of Microsoft’s first Xbox system in 2001, getting a video game console online was a complicated process. While early versions of similar dial-up connectivity existed as early as 1983 via the GameLine for the Atari 2600, no console in the early 2000s, save the doomed Sega Dreamcast, matched the efficiency of the Xbox.
With the original Xbox, all players needed was to plug a system into a router, pay a small connection fee, and get going. This brought the simplicity of PC online gaming access to a far broader market, proving its mass viability in every console to come.
Unlike PC, however, users of Xbox Live didn’t have to deal with installing special hardware, managing drivers, or the myriad of other potential crashes and issues common to computers. There was less stress, easier friend list support, and these benefits paid off in consumers returning to their new online gaming home.
Maintaining a Personal Communal Spirit – Sony
Sony eventually followed Microsoft’s example in streamlining online support with the release of the PlayStation 3 in 2007. It wasn’t until the next generation of PlayStation 4 in 2013 that they struck out with an appeal to the home audience.
To a large degree, online multiplayer in gaming killed the home experience. Gone were the days of LAN parties and couch play, as you might never hang out with friends to play games in person at all anymore. This reality led Microsoft to largely abandon the concept of sharing games with a friend, which many had formerly loved since the 1980s.
This came to a head at the announcement of the third Xbox console, the Xbox One. At the time, Microsoft put forward ideas of tying disks to consoles via online checks, complicating the sharing process among friends. Sony quickly capitalised via a now-viral meme showing the ease of sharing games in person.
Microsoft would eventually backtrack on its decision, but at that point, the damage had been done. Sony had shown that it cared about what the customers wanted, not what would provide them the highest profit margins. In doing so, they gained back much of the goodwill lost in the last generation, getting back to a dedicated customer base that lasted the next two generations. Funnily enough, Sony’s recent announcement to abandon physical disks has only recently ruined this goodwill, though their first effort paid off for years.
Focusing on Core Quality – Nintendo
The last console generation where all three big console developers competed directly on hardware was the sixth generation with the Xbox, PlayStation 2, and GameCube. Following this generation, Nintendo abandoned the processing horsepower race, instead choosing to focus on first- and second-party games and unique experiences.
While the following hardware, the Wii, Wii U, Switch, and Switch 2, varied in appeal, what stayed consistent were the games. Even with often far less powerful systems, Nintendo’s never shifted its target on what its core customer base loved most. Their games were consistently of a higher quality than their competitor’s releases, and while these titles evolved, they never abandoned their roots to chase new trends.
The result was that, to this day, no console has the reputation of high-quality first- and second-party games like Nintendo. Players always know what to expect when they buy Nintendo, and this reliability has resulted in the most dedicated console fanbase in history. User retention here is almost a guarantee, and all they needed to do to achieve this feat was to stick to what made them successful.
Greater Gamification Infrastructure – iGaming
While it seems like the video game industry would be a natural fit for more broad-scale gamification platforms, this isn’t quite true. Many of the big companies integrate some level of gamification within their online storefronts, but the best illustrations of gamification implementation are most often seen in the related field of iGaming.
For well over a decade now, iGaming platforms have leveraged gamification via systems like loyalty programs to enhance customer retention rates. In more recent times, advanced customer retention tools have embraced newer technologies like AI to streamline further and simplify the creation and implementation process. These newer platforms personalise gamification per player, offering improved feelings of progress, which result in a stronger short- and long-term relationship.
The technologies surrounding customer retention might change, but the fundamental ideals have long remained the same. It’s about offering value in a continued relationship, and gaming has long offered some of the best examples of this approach done right and done wrong. Mapping this history one-to-one on every modern business might not be possible, though the core lessons are still important to understand, especially as we only become more digital over time.