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During gameplay, a user creates a continual loop of actions and responses that keep the game state changing. This means that at any given moment, there can be many features of user behavior that change value. A first step toward isolating which features to employ during the analytical process could be a comprehensive and detailed list of all possible interactions between the game and its players. Designers are extremely knowledgeable about all possible interactions between the game and players; it's beneficial to harness that knowledge and involve designers from the beginning by asking them to compile such lists.
Secondly, considering the sheer number of variables involved even in the simplest game, it is necessary to reduce the complexity through a knowledge-driven factor reduction: Designers can easily identify isomorphic interactions. These are groups of similar interactions, behaviors, and state changes that are essentially similar even if formally slightly different. For example "restoring 5 HP with a bandage" or "healing 50 HP with a potion" are formally different but essentially similar behaviors. The isomorphic interactions are then grouped into larger domains. Lastly, it's required to identify measures that capture all isomorphic interactions belonging to each domain. For example, for the domain "healing," it's not necessary to track the number of potions and bandages used, but just record every state change to the variable "health."
These domains have not been derived through objective factor reduction; there is a clear interpretive bias any time humans are asked to group elements in categories, even if designers have exhaustive expert knowledge. These larger domains can potentially contain all the possible behaviors that players can express in a game and at the same time help select which game variables should be monitored, and how.
Machine learning is a field of study that gives computers the ability to learn without being explicitly programmed. More than an alternative to designer-driven strategies, automated feature selection is a complementary approach to reducing the complexity of the hundreds of state changes generated by player-game interactions. Traditionally, automated approaches are applied to existing datasets, relational databases, or data warehouses, meaning that the process of analyzing game systems, defining variables, and establishing measures for such variables, falls outside of the scope of automated strategies; humans already have defined which variables to track and how. Therefore, automated approaches individuate only the most relevant and the most discriminating features out of all the variables monitored.
Automated feature selection relies on algorithms to search the attribute space and drop features that are highly correlated to others; algorithms can range from simple to complex. Methods include approaches such as clustering, classification, prediction, and sequence mining. These can be applied to find the most relevant features, since the presence of features that are not relevant for the definition of types affects the similarity measure, degrading the quality of the clusters found by the algorithm.
In a situation with infinite resources, it is possible to track, store, and analyze every user-initiated action -- all the server-side system information, every fraction of a move of an avatar, every purchase, every chat message, every button press, even every keystroke. Doing so will likely cause bandwidth issues, and will require substantial resources to add the message hooks into the game code, but in theory, this brute-force approach to game analytics is possible.
However, it leads to very large datasets, which in turn leads to huge resource requirements in order to transform and analyze them. For example, tracking weapon type, weapon modifications, range, damage, target, kills, player and target positions, bullet trajectory, and so on, will enable a very in-depth analysis of weapon use in an FPS. However, the key metrics to evaluate weapon balancing could just be range, damage done, and the frequency of use of each weapon. Adding a number of additional variables/features may not add any new relevant insights, or may even add noise or confusion to the analysis. Similarly, it may not be necessary to log behavioral telemetry from all players of a game, but only a percentage (this is of course not the case when it comes to sales records, because you will need to track all revenue).
In general, if selected correctly, the first variables/features that are tracked, collected, and analyzed will provide a lot of insight into user behavior. As more and more detailed aspects of user behavior are tracked, costs of storage, processing, and analysis increase, but the rate of added value from the information contained in the telemetry data diminishes.