Video games take a lot of time and money to make. This isn’t news to anyone working in the gaming industry. And yet every year, multiple titles are released that make the collective gaming public sit back, scratch their heads, open up Reddit, and ask “how the bleep did this get made?”

There is no one answer for why mediocre games are made and released, but the answer usually involves a studio approaching the game development process with excessive confidence, relying more on domain expertise than on empirical data.

Smart studios have seen this movie before, and are determined to trend on Reddit for the right reasons. With that goal in mind, they often apply the concept of product-market fit to ensure the success of their game — to make sure that it finds an audience, and retains that audience.

While product-market fit, a classic tech concept and framework, has its place in game development, it may not be the best starting point. Instead, developers should first evaluate their game’s product-market potential, which can be determined much earlier in the development process using data-driven insights.

Previously, we walked through multiple ways to validate your game idea before starting development.

In this article, we’ll go a big step further. We’ll explain what product-market fit is, explain why it is a useful concept but often the wrong thing to focus on early in game development, explain why product-market potential is a much better place to start, and establish the Product-Market Potential Framework

Understanding Product-Market Fit

Product-market fit is a concept that was introduced by Marc Andreessen in 2007. It refers to the state of being in a good market with a product that can satisfy that market. As Andreessen explains:

“You can always feel when product/market fit isn’t happening. The customers aren’t quite getting value out of the product, word of mouth isn’t spreading, usage isn’t growing that fast, press reviews are kind of ‘blah’, the sales cycle takes too long, and lots of deals never close.

And you can always feel product/market fit when it’s happening. The customers are buying the product just as fast as you can make it—or usage is growing just as fast as you can add more servers. Money from customers is piling up in your company checking account.”

To put it in simple terms, product-market fit is essential for a product to succeed. Products that don’t find it are almost guaranteed to fail — eventually.

The Challenges of Product-Market Fit in Gaming

Achieving product-market fit is essential for the success of any game, as it ensures that the game resonates with its target audience and can generate sufficient revenue. However, game developers face unique challenges in their pursuit of product-market fit, including:

1. Predicting what resonates with players: Rapidly changing player tastes and trends make it difficult to predict what types of games and features will resonate with audiences. Considering how long it takes to create most most games, developers need to meet players where they’re going, not where they are.
2. Standing out in a crowded market: The gaming industry is increasingly competitive, with countless new titles released each year across various platforms and genres.
3. Balancing innovation with what’s known to work: Over-reliance on either innovation or convention can lead to games that fail to connect with audiences or achieve commercial success.
4. Optimizing for engagement and retention: In an era of countless entertainment options and short attention spans, game developers are competing in a different arena than most other products.

These challenges make it increasingly difficult for game developers to create hits that achieve lasting success.

Where Game Product-Market Fit Falls Apart

Failing to achieve product-market fit can have severe consequences for game studios. These can be as mild as wasted resources and poor player retention, or as dramatic as an entire studio closing. As the gaming market becomes more complex and competitive, the pressure to create successful games has only intensified. Studios not only want to find product-market fit but also want to do so as quickly and confidently as possible.

However, it’s important to note that reaching the largest possible audience isn’t always the goal. Instead, the focus should be on right-sizing the audience to ensure the game resonates with the target players and can sustain long-term retention and profitability. Factors such as development budget and the core fantasy of the game should be considered when determining the appropriate audience size.

The solution to this problem would seemingly be a systematic approach to finding and validating product-market fit. This might include steps like:

1. Conducting extensive playtesting and gathering player feedback
2. Measuring key engagement metrics
3. Analyzing monetization metrics
4. Monitoring social media sentiment and community feedback
5. Conducting market research to validate demand and assess competitor offerings
6. Continuously iterating and optimizing the game based on data-driven insights

These all sound great, and are vital for sustaining success in the gaming industry. However, they come with a massive problem: these steps occur late in the game development process. While studios may find product-market fit with this approach, they can end up with a much smaller market share than they initially anticipated.

This is because these games achieve what is known as a local maximum — a point at which little can be done to grow the user base through an iterative, data-driven process.

The Product-Market Potential Framework

To avoid hitting the local maximum once a game is live and to find the right-sized market for a game, developers should focus on identifying their product-market potential. This approach helps developers discover the maximum potential audience for their game concept before development begins.

The Product-Market Potential Framework is a five-step process that occurs entirely in the concepting and ideation phase, before any development work has begun. By the end of this process, you’ll have a unique value proposition, positioning you to create a game with a well-defined target audience.

1. Create Your Initial Game Concept
2. Refine Your Concept Based on Research and Data
3. Identify and Understand Your Target Audience
4. Refine Your Concept Based on Audience Wants and Needs
5. Define Your Game’s Unique Value Proposition

Step 1: Define Your Initial Game Concept

The first step in the Product-Market Potential Framework is to define your initial game concept. Begin by outlining your game’s core mechanics, gameplay loops, and unique selling points. Consider the genres, themes, and innovative features that will set your game apart from competitors. Ensure that your concept aligns with your studio’s brand, portfolio strategy, and available resources. At this stage, keep your concept flexible enough to allow for further refinement based on the research and data you’ll gather in the subsequent steps.

An initial concept can be as simple as something like this:

An X genre game with a unique X twist, similar to X and X.

Step 2: Conduct Market Research and Competitive Analysis

Once you have a clear initial concept, the next step is to conduct thorough market research and competitive analysis. Research games that are similar to your concept, analyzing their strengths, weaknesses, and overall market performance. Identify opportunities to differentiate your game and address any untapped player needs or preferences. Use market data to assess the financial viability of your game idea and determine which features and mechanics are most likely to resonate with your target audience. Based on your research findings and data-driven recommendations, refine your initial concept to better align with market demand and player interests.

Step 3: Define and Understand Your Target Audience

With a refined game concept in hand, the third step is to clearly define and understand your target audience. Conduct in-depth audience research to gain insights into player demographics, psychographics, motivations, and preferences. Analyze your target audience’s gaming habits, social behaviors, and the values they seek in their gaming experiences. Use this information to develop detailed player personas that represent the key segments of your target audience. These personas will serve as a guide for your game design and marketing decisions, ensuring that your game resonates with your intended players.

At this stage, you don’t want to just make basic, demographic-based personas. It’s important to go deep. To help you create the scientifically-derived personas that will put you on the path to predictably create resonant gaming experiences by understanding what players need on a human level, we’ve created the free Solsten Personas Template.

Step 4: Align Your Game Concept with Audience Needs and Preferences

In the fourth step, leverage the audience insights you’ve gathered to further refine your game concept. Prioritize features, themes, and design choices that align with your target players’ motivations and desires. Validate your refined concept through market testing, focus groups, or player surveys to gather feedback from your intended audience. Use this feedback to iterate on your concept, making adjustments to ensure that your game is well-positioned to meet the needs and preferences of your target players. Throughout the development process, continue to gather and incorporate player feedback to maintain alignment with your target audience’s evolving wants and needs.

Step 5: Craft Your Game’s Unique Value Proposition

The final step in the framework is to craft your game’s unique value proposition based on the refined concept and audience insights you’ve accumulated. Articulate how your game delivers exceptional value to your target audience through innovative mechanics, immersive storytelling, social features, or other key differentiators. Ensure that your value proposition resonates with your target audience and sets your game apart from competitors in the market. Use your value proposition to guide your game’s development, marketing, and user acquisition strategies, ensuring that every aspect of your game aligns with the needs and preferences of your target players.

Let’s take a look at an example of a clear and compelling value proposition for a hypothetical mobile puzzle game called “MindBuster.”

Game Title: MindBuster

Target Audience: Casual mobile gamers aged 25-45 who enjoy challenging puzzle games that provide a sense of accomplishment and relaxation.

Value Proposition: “MindBuster offers a unique, visually stunning puzzle-solving experience that challenges players to think creatively, adapt to ever-evolving gameplay, and find moments of zen amidst the chaos. With daily challenges, personalized difficulty adjustments, and a vibrant community of puzzle enthusiasts, MindBuster is the perfect escape for busy professionals looking to exercise their minds and unwind during their downtime.”

Let’s break down why this value proposition is clear and compelling:

1. It has a Unique Selling Point (USP): The value proposition highlights the game’s unique combination of creative problem-solving, adaptive gameplay, and visually stunning design, setting it apart from other puzzle games in the market.
2. Target Audience Alignment: The value proposition clearly identifies the game’s target audience (casual mobile gamers aged 25-45) and speaks directly to their key motivations and preferences (challenging gameplay, sense of accomplishment, and relaxation).
3. Emotional Appeal: By emphasizing the game’s ability to provide a “zen” experience and a perfect escape for busy professionals, the value proposition taps into the emotional needs and desires of the target audience.
4. Specific Benefits: The value proposition outlines specific features and benefits that the target audience will value, such as daily challenges, personalized difficulty adjustments, and a community of like-minded players.
5. Clear and Concise: The value proposition is expressed in a clear, concise way that is easy for the target audience to understand and remember.

A strong value proposition like this will accomplish multiple goals. It aligns an entire studio around a clear vision, guiding development, marketing, and user acquisition strategies. It ensures that every aspect of the game aligns with the needs and preferences of the target audience. And ultimately, sets a game up to reach its full potential.