Gaming industry pricing strategies

THE CHALLENGE

Our client wished to better understand the price sensitivity of their products and the impact of different promotions. This would help maximise value of their current model's life-cycle and inform their strategy for pricing and promoting future models. They had previously attempted this analysis internally but struggled due to noise in the data and limited expertise.

OUR SOLUTION

Approach:
Industry data used for historical weekly sales and main competitors.
Data cleaned and enriched with promotion calendar which tracked their promotions and competitors.
Segmented elasticities and promotion impacts derived through regressions, case studies and Random Forest

Key insights:
Top 5 markets are price sensitive in the short-term. Markets are somewhat price insensitive in the medium-term.
Absolute price is more important than relative price versus competitors in driving volumes.
Volume effect of promotions outweighs price effect. Short, sharp promotions perform better as opposed to extended promotions.

RESULTS

Delivered country level elasticities and promotional impacts which helped guide future pricing and promotions strategy.