Averages Are Useless – On Average

It’s easy to use word “average” to describe something. It’s easy to ask “How much indie games make money on average?”. There’s just one problem: average alone can be pretty useless. Let’s suppose there are 90 games that sell $100, 9 games that sell $1,000 and then there’s one game that sells for $100,000. Now, if you ask: “How much indie games make money on average?” the result would be “for hundred games, the average is $1180″ – which is pretty useless figure. Basically it suggests that there’s not much money for making indie games. From that figure, it would be easy to think that “most games make $1180″.

By looking at the original numbers, you could tell that this is far from true. Instead of only looking at the average, you also need to see the whole scale (or median at least) to make better conclusions. If you would know the Median (which is $100) and Average or could see the whole range (from $100 to $100,000) then you would be in a better position. You could figure out that some games make around $1180 but you can also see that “most games don’t make much” and “there’s still one game that made lots of more in this group”.

Bear in mind that these figures are imaginary just to show that “average” alone doesn’t do much good.

Instead of using average numbers, I like to find our case studies and real-life examples such as these games sales statistics. I wouldn’t base marketing research solely on these stats, but I would use them to see what kind of figures people are making and what kind of marketing was used in these games.

Let’s take another example. Let’s suppose there are two students who (with grades scale of 1 to 5) have finished courses with average grade of 3. It would be easy to assume that “these students are average students” and stop there. What we might miss is how well these students do on different subjects. It might be that the other student could be always getting grade 3 whether it’s leadership or artistic courses. The other might be barely getting 1 for artistic courses, and then 5 to leadership courses. If we are considering hiring a new project manager, it might make sense to understand what lies behind those average grades.

Averages can be deceiving, and even totally useless when used alone. Your team members are individuals not “average people”. Average sales stats alone tell very little about the business. Find out more than just average.

2 thoughts on “Averages Are Useless – On Average

  1. Pingback: Texas hold em regola.

  2. Tim Fisher

    I was reading an article on in-game advertising a little while back and I had to laugh at the following quote: “Games that implement in-game advertising generate an average of 200%-500% more revenue than try-before-you-buy”.

    Btw, did you know that “on average” 80% of statistics are made up on the spot!

    Reply

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