Flevy Management Insights Case Study
Digital Transformation Strategy for Mid-Size Gaming Company in North America


Fortune 500 companies typically bring on global consulting firms, like McKinsey, BCG, Bain, Deloitte, and Accenture, or boutique consulting firms specializing in Business Continuity Planning to thoroughly analyze their unique business challenges and competitive situations. These firms provide strategic recommendations based on consulting frameworks, subject matter expertise, benchmark data, KPIs, best practices, and other tools developed from past client work. We followed this management consulting approach for this case study.

TLDR A mid-size gaming company experienced a 20% drop in MAUs and a 15% revenue decline due to outdated platforms and rising competition. After implementing a Digital Transformation and strategic initiatives, the company reversed the trend, achieving a 20% increase in user acquisition and a 15% revenue boost. This underscores the value of innovation and user-centric strategies for growth.

Reading time: 19 minutes

Consider this scenario: A mid-size gaming company in North America is struggling with declining user engagement and revenue due to outdated platforms and increased competition.

Challenges include a 20% drop in monthly active users over the past year and a 15% revenue decline attributed to rising competition and technology lag. The primary strategic objective is to revitalize user engagement and revenue through a comprehensive digital transformation and business continuity planning.



This organization is a mid-size gaming company facing declining user engagement and revenue due to outdated platforms and rising competition. It has experienced a 20% drop in monthly active users over the past year. This suggests the root causes may involve technological obsolescence and lack of innovative content. Moreover, internal inefficiencies and slow decision-making processes could be exacerbating these issues.

Competitive Analysis

In the gaming industry, rapid technological advancements and evolving consumer preferences are driving intense competition. We begin our analysis by analyzing the primary forces driving the industry:

  • Internal Rivalry: High due to numerous established and emerging gaming companies vying for user attention.
  • Supplier Power: Moderate as major suppliers include game development software providers and cloud service platforms.
  • Buyer Power: High since gamers have numerous options and low switching costs.
  • Threat of New Entrants: High due to low entry barriers and increasing availability of game development tools.
  • Threat of Substitutes: High with entertainment options like streaming services and social media competing for user time.

Emergent trends in the gaming industry include a shift towards mobile gaming, increased focus on social and multiplayer experiences, and the rise of cloud gaming. Based on these trends, major changes in industry dynamics include:

  • Mobile Gaming Growth: An opportunity to develop mobile-friendly versions of existing games, but risks cannibalizing PC/console user base.
  • Cloud Gaming Emergence: Potential to reduce hardware dependency and reach wider audiences, but requires substantial investment in infrastructure.
  • Social and Multiplayer Integration: Enhances user engagement but demands continuous development and moderation resources.

A STEEPLE analysis reveals the following:

Socially, there is a growing demand for interactive and social gaming experiences. Technologically, rapid advancements in cloud gaming and AR/VR present new opportunities. Economically, rising disposable incomes expand the potential user base. Environmentally, energy consumption in data centers is a concern. Politically, regulatory scrutiny on in-game purchases and loot boxes is increasing. Legally, intellectual property rights and data privacy regulations are tightening. Ethically, there is growing attention on gaming addiction and its impact on mental health.

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Internal Assessment

The organization has strong brand recognition and a loyal user base but struggles with technological obsolescence and slow innovation cycles. SWOT Analysis

Strengths include established brand and loyal user base. Weaknesses involve outdated platforms and slow innovation. Opportunities lie in expanding to mobile and cloud gaming markets. Threats include intense competition and regulatory scrutiny on in-game purchases.

RBV Analysis

Key resources include proprietary game titles and a skilled development team. Capabilities involve user engagement strategies and community management. However, technological infrastructure and innovation capabilities need enhancement to sustain competitive performance.

Gap Analysis

The organization needs to bridge gaps in technological infrastructure and innovation processes to align with industry trends. Additionally, a shift towards a more agile decision-making process is necessary to respond to market changes effectively.

Organizational Design Analysis

The current hierarchical structure stifles innovation and slows decision-making. A more decentralized model that empowers cross-functional teams could enhance agility and responsiveness to market demands. Aligning strategic vision with operational realities is critical to drive successful transformation.

Strategic Initiatives

The leadership team formulated strategic initiatives based on the comprehensive understanding gained from the previous industry analysis and internal capability assessment, outlining specific, actionable steps that align with the strategic plan's objectives over a 3-5 year horizon to drive growth by 20% over the next 12 months .

  • Mobile Gaming Expansion: Develop mobile versions of popular games to capture the growing mobile user segment, aiming to increase user base and revenue by 15%. Requires investment in mobile development teams and marketing campaigns.
  • Cloud Gaming Platform: Launch a cloud gaming service to reduce hardware dependency and reach a broader audience, targeting a 10% increase in user engagement. Investment needed in cloud infrastructure and partnerships.
  • Social Gaming Features: Integrate social and multiplayer features to enhance user engagement and retention. Value creation through increased user interaction and community building. Requires ongoing development and moderation resources.
  • Business Continuity Planning: Implement a robust business continuity plan to ensure service reliability and data protection, minimizing operational disruptions. Involves investment in backup systems and cybersecurity measures.
  • Content Innovation: Accelerate game development cycles and innovate new game content to keep users engaged. Value creation through continuous content updates and user satisfaction. Requires hiring additional creative talent and development resources.
  • Agile Transformation: Transition to an agile organizational structure to enhance decision-making speed and innovation. Expected value includes faster response to market trends and improved project outcomes. Involves training and restructuring.
  • Partnerships and Collaborations: Forge strategic partnerships with technology providers and other gaming companies to leverage synergies and co-develop new offerings. Value creation through shared resources and expanded market reach. Investment in partnership development and management.
  • User Feedback Integration: Implement systems to gather and analyze user feedback for continuous improvement. Value creation through better user experiences and loyalty. Requires investment in analytics tools and user engagement teams.
  • Regulatory Compliance: Enhance compliance frameworks to address regulatory scrutiny on in-game purchases and data privacy. Ensures legal compliance and builds user trust. Involves legal consultations and system updates.
  • Global Market Expansion: Explore international markets to diversify revenue streams and reduce dependence on North American market. Value creation through market diversification and revenue growth. Requires market research and localization efforts.

Business Continuity Planning Implementation KPIs

KPIS are crucial throughout the implementation process. They provide quantifiable checkpoints to validate the alignment of operational activities with our strategic goals, ensuring that execution is not just activity-driven, but results-oriented. Further, these KPIs act as early indicators of progress or deviation, enabling agile decision-making and course correction if needed.


What you measure is what you get. Senior executives understand that their organization's measurement system strongly affects the behavior of managers and employees.
     – Robert S. Kaplan and David P. Norton (creators of the Balanced Scorecard)

  • Monthly Active Users (MAU): Indicates user engagement levels and effectiveness of new features.
  • Revenue Growth Rate: Measures financial performance and success of monetization strategies.
  • User Retention Rate: Reflects user satisfaction and long-term engagement.
  • Game Development Cycle Time: Indicates efficiency and speed of content innovation.
  • Cloud Gaming Adoption Rate: Tracks the uptake of new cloud gaming services.

Insights from these KPIs will guide strategic adjustments and ensure alignment with organizational goals. They provide a comprehensive view of user engagement, financial performance, and operational efficiency.

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Stakeholder Management

Success of the strategic initiatives hinges on the involvement and support of both internal and external stakeholders, including developers, marketing teams, and technology partners. Critical stakeholders include:

  • Development Team: Responsible for creating and updating game content.
  • Marketing Team: Essential for promoting new features and engaging users.
  • Technology Partners: Provide necessary infrastructure and technical support.
  • Users: The end beneficiaries whose feedback is crucial for continuous improvement.
  • Investors: Provide financial backing for strategic initiatives.
  • Legal Team: Ensures compliance with regulatory requirements.
  • Customer Support: Manages user queries and feedback.
  • Management Team: Drives strategic planning and decision-making.
  • HR Team: Supports talent acquisition and training.
Stakeholder GroupsRACI
Development Team
Marketing Team
Technology Partners
Users
Investors
Legal Team
Customer Support
Management Team
HR Team

We've only identified the primary stakeholder groups above. There are also participants and groups involved for various activities in each of the strategic initiatives.

Learn more about Stakeholder Management Change Management Focus Interviewing Workshops Supplier Management

Business Continuity Planning Deliverables

These are a selection of deliverables across all the strategic initiatives.

  • Digital Transformation Strategy Report (PPT)
  • Market Expansion Roadmap (PPT)
  • Game Development Cycle Optimization Plan (PPT)
  • Cloud Gaming Financial Model (Excel)
  • User Engagement Analysis Toolkit (Excel)

Explore more Business Continuity Planning deliverables

Mobile Gaming Expansion

The implementation team leveraged the Product Life Cycle (PLC) and Diffusion of Innovations (DOI) frameworks to guide the Mobile Gaming Expansion initiative. The PLC framework is a valuable tool for understanding the stages a product goes through from introduction to decline. It was particularly useful for this initiative as it helped the organization anticipate and plan for the different phases of the mobile games' market presence. The team followed this process:

  • Conduct market research to identify the current stage of the mobile gaming market.
  • Develop marketing and development strategies tailored to the introduction and growth stages of the product life cycle.
  • Monitor market trends and user feedback to adjust strategies as the product transitions through different life cycle stages.

The Diffusion of Innovations framework was also employed to understand how new mobile games would be adopted by different segments of the market. This framework helped the organization identify early adopters and leverage their influence to drive broader market acceptance. The team followed this process:

  • Segment the market to identify early adopters and influencers within the mobile gaming community.
  • Develop targeted marketing campaigns to engage early adopters and encourage word-of-mouth promotion.
  • Analyze adoption rates and feedback to refine marketing and development strategies.

The implementation of these frameworks resulted in a successful launch of the mobile gaming platform, with a 20% increase in user acquisition within the first 6 months. The organization effectively navigated the product life cycle stages and leveraged early adopters to drive broader market acceptance, leading to sustained user engagement and revenue growth.

Cloud Gaming Platform

The team utilized the Value Chain Analysis and the Technology Readiness Level (TRL) frameworks to guide the Cloud Gaming Platform initiative. Value Chain Analysis is a strategic tool that helps identify and optimize the activities that create value for customers. It was particularly useful for this initiative as it enabled the organization to pinpoint areas for improvement in the development and delivery of cloud gaming services. The team followed this process:

  • Map out the entire value chain for cloud gaming services, from development to delivery.
  • Identify key activities that add value and areas where efficiencies could be improved.
  • Implement process improvements and technology upgrades to enhance value creation.

The Technology Readiness Level framework was employed to assess the maturity of the cloud gaming technology and ensure it was ready for deployment. This framework helped the organization systematically evaluate the technology's readiness and address any gaps before launch. The team followed this process:

  • Assess the current technology readiness level of the cloud gaming platform.
  • Identify gaps and areas needing further development or testing.
  • Implement necessary upgrades and testing to achieve the desired readiness level for launch.

These frameworks facilitated a smooth and efficient launch of the cloud gaming platform, resulting in a 15% increase in user engagement within the first quarter. The organization optimized its value chain and ensured the technology was fully prepared for market entry, leading to a successful and well-received product launch.

Business Continuity Planning Best Practices

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Social Gaming Features

The implementation team employed the Customer Journey Mapping and the Kano Model frameworks to enhance the Social Gaming Features initiative. Customer Journey Mapping is a strategic tool that helps visualize the end-to-end customer experience, identifying key touchpoints and areas for improvement. It was particularly useful for this initiative as it provided insights into how users interact with social gaming features. The team followed this process:

  • Map out the entire customer journey for social gaming, from initial engagement to ongoing interaction.
  • Identify key touchpoints and pain points within the customer journey.
  • Develop and implement strategies to enhance user experience at each touchpoint.

The Kano Model was also utilized to prioritize feature development based on user satisfaction and importance. This framework helped the organization focus on the most impactful features that would drive user engagement and satisfaction. The team followed this process:

  • Conduct user surveys to gather feedback on desired social gaming features.
  • Classify features into basic needs, performance needs, and excitement needs.
  • Prioritize feature development based on user feedback and potential impact on satisfaction.

These frameworks led to the successful integration of social gaming features, resulting in a 25% increase in user engagement and a 30% increase in user retention. The organization effectively enhanced the user experience and prioritized feature development, leading to higher levels of user satisfaction and loyalty.

Business Continuity Planning

The team utilized the Scenario Planning and the Risk Assessment Matrix frameworks to guide the Business Continuity Planning initiative. Scenario Planning is a strategic tool that helps organizations envision and prepare for various future scenarios. It was particularly useful for this initiative as it enabled the organization to anticipate potential disruptions and develop contingency plans. The team followed this process:

  • Identify key uncertainties and potential disruptions that could impact business operations.
  • Develop multiple scenarios based on different combinations of uncertainties and disruptions.
  • Create contingency plans for each scenario to ensure business continuity.

The Risk Assessment Matrix was also employed to systematically evaluate and prioritize risks. This framework helped the organization identify the most critical risks and allocate resources accordingly. The team followed this process:

  • Identify potential risks and assess their likelihood and impact.
  • Prioritize risks based on their overall threat to business continuity.
  • Develop and implement mitigation strategies for high-priority risks.

The implementation of these frameworks resulted in a robust business continuity plan that minimized operational disruptions and ensured service reliability. The organization successfully anticipated potential risks and developed effective contingency plans, leading to improved resilience and stability.

Content Innovation

The team employed the Design Thinking and Stage-Gate frameworks to drive the Content Innovation initiative. Design Thinking is a user-centered approach to innovation that emphasizes empathy, ideation, and prototyping. It was particularly useful for this initiative as it helped the organization create innovative game content that resonates with users. The team followed this process:

  • Conduct user research to understand player needs and preferences.
  • Generate creative ideas through brainstorming sessions and collaborative workshops.
  • Develop and test prototypes to gather user feedback and refine concepts.

The Stage-Gate framework was also utilized to manage the innovation process and ensure efficient development cycles. This framework helped the organization systematically evaluate and advance new game content through various stages. The team followed this process:

  • Define clear stages and criteria for advancing new game content from ideation to launch.
  • Conduct regular reviews and assessments at each stage to ensure alignment with strategic goals.
  • Implement a structured process for refining and finalizing game content before market release.

These frameworks resulted in the successful development and launch of innovative game content, leading to a 20% increase in user engagement and a 15% increase in revenue. The organization effectively harnessed user insights and managed the innovation process, resulting in highly engaging and commercially successful game content.

Agile Transformation

The team utilized the Scrum and Lean Startup frameworks to drive the Agile Transformation initiative. Scrum is an agile methodology that emphasizes iterative development, collaboration, and flexibility. It was particularly useful for this initiative as it helped the organization enhance its development processes and respond quickly to market changes. The team followed this process:

  • Form cross-functional Scrum teams to handle different aspects of game development.
  • Implement regular sprints and reviews to ensure continuous progress and alignment.
  • Foster a culture of collaboration and transparency to enhance team performance.

The Lean Startup framework was also employed to promote a culture of experimentation and rapid iteration. This framework helped the organization validate new ideas quickly and minimize waste. The team followed this process:

  • Develop and test minimum viable products (MVPs) to gather user feedback.
  • Iterate based on feedback and data to refine and improve game features.
  • Implement a continuous improvement process to enhance overall efficiency and effectiveness.

These frameworks resulted in a more agile and responsive organization, with a 30% reduction in development cycle times and a 25% increase in project success rates. The organization successfully adopted agile practices and a culture of continuous improvement, leading to faster innovation and better alignment with market demands.

Partnerships and Collaborations

The team employed the Strategic Alliance and Value Network Analysis frameworks to guide the Partnerships and Collaborations initiative. Strategic Alliance is a framework that focuses on forming mutually beneficial partnerships to achieve shared goals. It was particularly useful for this initiative as it helped the organization identify and leverage synergies with other companies. The team followed this process:

  • Identify potential partners with complementary strengths and capabilities.
  • Develop strategic alliances based on shared goals and mutual benefits.
  • Implement joint initiatives and projects to achieve common objectives.

The Value Network Analysis framework was also utilized to understand and optimize the flow of value within the network of partners. This framework helped the organization identify key value exchanges and enhance collaboration. The team followed this process:

  • Map out the value network to identify key partners and value exchanges.
  • Analyze the flow of value and identify opportunities for optimization.
  • Develop strategies to enhance collaboration and value creation within the network.

These frameworks resulted in the formation of strategic partnerships that enhanced the organization's capabilities and market reach, leading to a 15% increase in revenue and a 20% increase in user engagement. The organization successfully leveraged synergies and optimized value exchanges, resulting in mutually beneficial outcomes for all partners.

User Feedback Integration

The team utilized the Net Promoter Score (NPS) and Voice of the Customer (VoC) frameworks to guide the User Feedback Integration initiative. NPS is a customer loyalty metric that measures users' willingness to recommend a product or service. It was particularly useful for this initiative as it provided a clear indicator of user satisfaction and loyalty. The team followed this process:

  • Conduct regular NPS surveys to gather user feedback and measure satisfaction.
  • Analyze NPS data to identify areas for improvement and prioritize actions.
  • Implement changes based on NPS insights to enhance user experience and loyalty.

The Voice of the Customer framework was also employed to systematically capture and analyze user feedback. This framework helped the organization understand user needs and preferences in detail. The team followed this process:

  • Collect user feedback through surveys, interviews, and social media monitoring.
  • Analyze feedback to identify common themes and areas for improvement.
  • Develop and implement action plans based on VoC insights to enhance user experience.

These frameworks resulted in a significant improvement in user satisfaction and loyalty, with a 20% increase in NPS and a 25% increase in user retention. The organization effectively integrated user feedback into its development processes, leading to a more user-centric and responsive approach to product innovation.

Regulatory Compliance

The team employed the Regulatory Impact Analysis (RIA) and Compliance Management System (CMS) frameworks to guide the Regulatory Compliance initiative. RIA is a framework that assesses the potential impacts of regulatory changes on an organization. It was particularly useful for this initiative as it helped the organization anticipate and prepare for regulatory requirements. The team followed this process:

  • Identify relevant regulatory changes and assess their potential impacts.
  • Develop strategies to address regulatory requirements and mitigate risks.
  • Implement compliance measures to ensure adherence to regulations.

The Compliance Management System framework was also utilized to establish a structured approach to regulatory compliance. This framework helped the organization develop and maintain an effective compliance program. The team followed this process:

  • Develop a comprehensive compliance management system to monitor and enforce regulatory requirements.
  • Conduct regular audits and assessments to ensure compliance with regulations.
  • Train employees on regulatory requirements and compliance procedures.

These frameworks resulted in a robust regulatory compliance program that minimized legal risks and ensured adherence to regulatory requirements. The organization successfully anticipated and addressed regulatory changes, leading to improved compliance and reduced legal exposure.

Global Market Expansion

The team utilized the PEST Analysis and Market Entry Strategy frameworks to guide the Global Market Expansion initiative. PEST Analysis is a strategic tool that examines the Political, Economic, Social, and Technological factors influencing a market. It was particularly useful for this initiative as it provided insights into the external environment of potential markets. The team followed this process:

  • Conduct PEST analysis for target international markets to identify key external factors.
  • Analyze the political, economic, social, and technological environment of each market.
  • Develop strategies to address identified opportunities and risks in the external environment.

The Market Entry Strategy framework was also employed to develop a structured approach to entering new markets. This framework helped the organization evaluate different entry modes and select the most suitable strategy. The team followed this process:

  • Identify and evaluate potential market entry modes, such as joint ventures, partnerships, and direct investment.
  • Develop a market entry strategy based on the evaluation of entry modes and market conditions.
  • Implement the market entry strategy, including localization efforts and establishing local operations.

These frameworks resulted in a successful expansion into new international markets, leading to a 20% increase in global revenue and a 15% increase in user base. The organization effectively analyzed the external environment and developed a structured market entry strategy, resulting in successful market penetration and growth.

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Key Findings and Results

Here is a summary of the key results of this case study:

  • Increased user acquisition by 20% within the first 6 months through the successful launch of the mobile gaming platform.
  • Achieved a 15% increase in user engagement within the first quarter following the launch of the cloud gaming platform.
  • Enhanced user retention by 30% and user engagement by 25% through the integration of social gaming features.
  • Boosted revenue by 15% and user engagement by 20% through strategic partnerships and collaborations.
  • Reduced development cycle times by 30% and increased project success rates by 25% via agile transformation.
  • Improved user satisfaction by 20% and user retention by 25% through effective user feedback integration.
  • Expanded global revenue by 20% and increased the user base by 15% through successful international market expansion.

The overall results of the initiative indicate a significant turnaround in user engagement and revenue growth, driven by strategic digital transformation efforts. The mobile gaming expansion and cloud gaming platform initiatives were particularly successful, achieving substantial increases in user acquisition and engagement. The integration of social gaming features and agile transformation also contributed to improved user retention and faster innovation cycles. However, some areas did not meet expectations, such as the cloud gaming adoption rate, which fell short of the targeted 10% increase. This shortfall may be attributed to the high initial investment and technological readiness challenges. Additionally, while the regulatory compliance efforts ensured legal adherence, they did not directly translate into measurable user or revenue growth. Alternative strategies, such as more aggressive marketing campaigns for cloud gaming and a stronger focus on user-centric regulatory communication, could have potentially enhanced these outcomes.

For the next steps, it is recommended to focus on optimizing the cloud gaming platform by addressing technological gaps and enhancing user experience through targeted marketing efforts. Additionally, continue to leverage user feedback to refine and innovate game content, ensuring sustained user engagement. Strengthening partnerships and exploring new collaborations can further expand market reach and capabilities. Finally, maintain a proactive approach to regulatory compliance, integrating user communication strategies to build trust and transparency. These actions will help solidify the gains achieved and drive further growth and engagement.

Source: Digital Transformation Strategy for Mid-Size Gaming Company in North America, Flevy Management Insights, 2024

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