Churn Prediction for Game Industry Based on Cohort Classification Ensemble

In this paper, we present a cohort-based classification approach to the churn prediction for social on-line games. The original metric is proposed and tested on real data showing a good increase in revenue by churn preventing. The core of the approach contains such components as tree-based ensemble classifiers and threshold optimization by decision boundary

Churn Prediction for Game Industry Based on Cohort Classification Ensemble

In this paper, we present a cohort-based classification approach to the churn prediction for social on-line games. The original metric is proposed and tested on real data showing a good increase in revenue by churn preventing. The core of the approach contains such components as tree-based ensemble classifiers and threshold optimization by decision boundary

Towards Design Principles for Data-Driven Decision Making: An Action Design Research Project in the Maritime Industry

Data-driven decision making (DDD) refers to organizational decision-making practices that emphasize the use of data and statistical analysis instead of relying on human judgment only. Various empirical studies provide evidence for the value of DDD, both on individual decision maker level and the organizational level. Yet, the path from data to value is not always an easy one and various organizational and psychological factors mediate and moderate the translation of data-driven insights into better decisions and, subsequently, effective business actions. The current body of academic literature on DDD lacks prescriptive knowledge on how to successfully employ DDD in complex organizational settings. Against this background, this paper reports on an action design research study aimed at designing and implementing IT artifacts for DDD at one of the largest ship engine manufacturers in the world. Our main contribution is a set of design principles highlighting, besides decision quality, the importance of model comprehensibility, domain knowledge, and actionability of results

Comparative models in customer base analysis: parametric model and observation-driven model

This study conducts a dynamic rolling comparison between the Pareto/NBD model (parametric model) and machine learning algorithms (observation-driven models) in customer base analysis, which the literature has not comprehensively investigated before. The aim is to find the comparative edge of these two approaches under customer base analysis and to define the implementation timing of these two paradigms. This research utilizes Pareto/NBD (Abe) as representative of Buy-Till-You-Die (BTYD) models in order to compete with machine learning algorithms and presents the following results. (1) The parametric model wins in transaction frequency prediction, whereas it loses in inactivity prediction. (2) The BTYD model outperforms machine learning in inactivity prediction when the customer base is active, performs better in an inactive customer base when competing with Poisson regression, and wins in a short-term active customer base when competing with a neural network algorithm in transaction frequency prediction. (3) The parametric model benefits more from a short calibration length and a long holdout/target period, which exhibit uncertainty. (4) The covariate effect helps Pareto/NBD (Abe) gain a better predictive result. These findings assist in defining the comparative edge and implementation timing of these two approaches and are useful for modeling and business decision making

Using machine learning to predict customer lifetime value of players in a freemium mobile game: Effect of seasonal features

Freemium business model is currently largely used in the mobile gaming industry. The key idea of the model is that a game can be played for free, and revenue is generated through in-app purchases and advertising. However, the freemium model makes predicting the lifetime value of players, the amount of revenue they will generate, challenging as the revenue distribution is highly skewed and majority of revenue is generated by a relatively small group of spenders. Predicting lifetime value of players (LTV) is one of the hottest topics in the freemium mobile games industry. Knowing how much revenue players brings games companies competitive advantage as it allows for better user acquisition optimization and financial planning, to name a few. Freemium games have several unique characteristics that set them apart from other similar fields such as online retail and traditional games such as high amount of behavioral data and high skewness of the data as only a very small share of players spend money. This thesis has two objectives. First, different state-of-the-art machine learning models are compared to see which performs the best predicting lifetime values on a 360-day window. The models used haven been proven to be the most accurate by recent studies and include deep multilayer perceptron, random forest, gradient boosted trees as well as linear regression. The second goal of the thesis is to empirically test whether including seasonal features to the prediction dataset improves the model performance. Two different ways of using seasonal features is tested. The first approach is one-hot encoding and second applying sine and cosine transformations to make the seasonal features cyclical, representing better real-life situation. To the knowledge of the author, this is the first time these methods is used literature in freemium game setting. Results show that deep multilayer perceptron performs the best, standing apart from the other models. This suggests that there are some complex relationships in the data that simpler models cannot capture. Against expectations, including seasonal features do not improve performance of most of the models

Sustainable digital marketing under big data: an AI random forest model approach

Digital marketing refers to the process of promoting, selling, and delivering products or services through online platforms and channels using the internet and electronic devices in a digital environment. Its aim is to attract and engage target audiences through various strategies and methods, driving brand promotion and sales growth. The primary objective of this scholarly study is to seamlessly integrate advanced big data analytics and artificial intelligence (AI) technology into the realm of digital marketing, thereby fostering the progression and optimization of sustainable digital marketing practices. First, the characteristics and applications of big data involving vast, diverse, and complex datasets are analyzed. Understanding their attributes and scope of application is essential. Subsequently, a comprehensive investigation into AI-driven learning mechanisms is conducted, culminating in the development of an AI random forest model (RFM) tailored for sustainable digital marketing. Subsequent to this, leveraging a real-world case study involving enterprise X, fundamental customer data is collected and subjected to meticulous analysis. The RFM model, ingeniously crafted in this study, is then deployed to prognosticate the anticipated count of prospective customers for said enterprise. The empirical findings spotlight a pronounced prevalence of university-affiliated individuals across diverse age cohorts. In terms of occupational distribution within the customer base, the categories of workers and educators emerge as dominant, constituting 41% and 31% of the demographic, respectively. Furthermore, the price distribution of patrons exhibits a skewed pattern, whereby the price bracket of 0–150 encompasses 17% of the population, whereas the range of 150–300 captures a notable 52%. These delineated price bands collectively constitute a substantial proportion, whereas the range exceeding 450 embodies a minority, accounting for less than 20%. Notably, the RFM model devised in this scholarly endeavor demonstrates a remarkable proficiency in accurately projecting forthcoming passenger volumes over a seven-day horizon, significantly surpassing the predictive capability of logistic regression. Evidently, the AI-driven RFM model proffered herein excels in the precise anticipation of target customer counts, thereby furnishing a pragmatic foundation for the intelligent evolution of sustainable digital marketing strategies

Can bank interaction during rating measurement of micro and very small enterprises ipso facto Determine the collapse of PD status?

This paper begins with an analysis of trends - over the period 2012-2018 - for total bank loans, non-performing loans, and the number of active, working enterprises. A review survey was done on national data from Italy with a comparison developed on a local subset from the Sardinia Region. Empirical evidence appears to support the hypothesis of the paper: can the rating class assigned by banks - using current IRB and A-IRB systems - to micro and very small enterprises, whose ability to replace financial resources using endogenous means is structurally impaired, ipso facto orient the results of performance in the same terms of PD assigned by the algorithm, thereby upending the principle of cause and effect? The thesis is developed through mathematical modeling that demonstrates the interaction of the measurement tool (the rating algorithm applied by banks) on the collapse of the loan status (default, performing, or some intermediate point) of the assessed micro-entity. Emphasis is given, in conclusion, to the phenomenon using evidence of the intrinsically mutualistic link of the two populations of banks and (micro) enterprises provided by a system of differential equation