Understanding the value chain for Mobile Video Ads

Video ad revenue now accounts for a large proportion of most casual free to play mobile games. Companies like Hipster Whale, Futureplay and the publisher Ketchapp have built business models focussed on rewarded video ads. This shows many of the similarities of the shift from premium to freemium. As an indie developer it’s relatively simple to drop a video ad into your game, but do you understand where the money comes from? In this piece we breakdown how the flow of money gets from the advertiser to your bank account.

Disclaimer: I have no affiliation and do not work for any of the partners mentioned, this guide is meant as a reference to understand where value resides and what motivates the companies involved.

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Making Money with Mobile Video Ads

Put simply, you use video ads to earn money and you earn money because advertisers pay to show videos to your players that drive installs of their app. As a rule of thumb the more videos you show the more money you will earn. With that in mind, your intention as a developer should be to increase the view count of videos shown to your users if you want to earn more money.

However, every view does not always equate to cash in the bank. The reason for this is that as an advertiser you want to pay for valuable actions. In the world of mobile, that ultimately means an install of an app. Developers only make money from the players who ultimately watch the full ad, click, then install the app. Every view should give you the best chance that a user will complete the video and are there more likely to install.

Your core KPI to maximising revenue is completed views per daily active user.

As you are unable to control a player’s behaviour after they have watched a video, you should focus on what you can control, the display and timing of the video. Within your games, your core KPI to maximising revenue is completed views per daily active user. Any number above 1 would be considered reasonable and over 4 would be considered very good! So set yourself the challenge of finding out what your current completed views per DAU is, then try to improve it.

Debunking the Myths of Mobile Video Ads

Most of the literature around video ads is unsurprisingly written by ad networks themselves. In each case, they have a mission to encourage the uptake of ads and are likely to involve selection bias to draw more positive conclusions.  On the flipside, game developers who believe that video ads break experiences, ruin gameplay and alienate users might want to change their opinion.

Myth 1 – Video Ads Decrease Retention

Yaniv Nizan gave an interesting report on match 3 games showed decreases in D1 retention of around 0.5% but increases in revenue of over 89% for android or 278% for iOS. In this case, the negligible loss in retention is worthwhile when compared to the revenue earned. In my experience I’ve not seen vast changes in retention due to video ads as fundamentally retention is driven by your ability to bring players back to the game and adverts don’t promote or dissuade players from starting up your app. When video ads are placed in areas where a user opts in to watch and a cooldown timer is used to limit viewing, the rewards and bonus associated with the video can even draw players to come back in order to watch more videos for the rewards!

Myth 2 – Video Ads Lower Engagement

Fuse Powered (a mediation company) analysed 6 million players to show that the 9% of users that watched a video ad were 6X more likely to make a purchase. Again this statistic may be misleading as the 9% of users who watched a video are very likely to be your most engaged users. Video views tend to aggregate at the top end of your player base as they value your in-game currency the highest. Rather than any video ad lowering engagement directly, the cohorts that watch on average remain more engaged in games in general. Don’t make the mistake that the ad itself, led to the engagement. Engagement is created by the desire for the valuable currency to spend in your game. Giving players an opportunity to progress with premium currency without buying an IAP is a strong incentive to engage and keep playing.

Don’t make the mistake that the ad itself, led to the engagement.

Myth 3 – Video Ads Decrease In-App Purchase Revenue

If you analyse the top grossing chart then many of the top grossing free games will not run rewarded video advertising. This might be considered a missed opportunity as video ads have been shown to improve ARPDAU, but in the case of a top grossing game losing highly valuable users to your competition is a bad long term strategy.

That said, there are many games that are top grossing and do have in-app-purchases and rewarded video. It’s a choice that you as a developer will need to gauge via your own data, typically you might look for:

  • If your 90 day LTV of your players is under $1 then you should be looking to increase earnings via video ads.
  • If you have a very large cohort (1 million+ MAU) of players that are actively engaged then you can increase earnings via video ads.
  • If your overall conversion rate from Player → Payer is below 1% then video ads will allow you to leverage the 99% of non-payers.

If the opposite of these statements is true for your game then consider reading the monetisation articles on improving ARPU in the Free to Play Bible. If you have the ability to either A/B test or remote configs then a common technique is to stop showing video ads to your payers or to only switch on video ad monetisation after a period of non-paying days.

The Mobile Video Ads Value Chain

Advertisers (demand)

advertisersWithin the industry, there are many different names for the clients on this side of the value chain: demand, publishers, brands, but I like to use “advertisers” as these are the people who pay for the adverts. Within the mobile video ad space, there are actually a relatively low number of advertisers that make up the majority of spend on the platforms. This is because running effective large campaigns can cost many $100,000+ per day. Overall the number of advertisers on mobile and their total spend continue to grow each year and show no sign of slowing.

It’s important to understand that an advertiser will only run a campaign (a video ad on an advertising network) if they are going to generate more value than the cost of the campaign. In simple terms, they usually need to equate an ad campaign to an LTV > CPI to be able to continue to run the ads.

One of the reasons rewarded video ads have become so popular is their ability to actually drive views. Every video watched is opt-in from the player who has chosen to spend the next 30 seconds to watch whatever is presented to them in order to receive a valuable reward. This works well for both gamers and advertisers as people want to watch the video at that point in time. This is why rewarded video has been one of the areas where advertisers have continued to spend big.

Video Ad Networks

Ad networks can get a bad rep… but they are good for one thing… they tend to throw lavish parties with lots of free drinks! 🎉

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You may not like Ad guys, but they’re your best bet for driving revenue from high DAU – Low LTV games.

An ad network’s role is to talk to advertisers (i.e. Machine Zone) to run a campaign to promote apps across their network. Each campaign has different targeting (French/Dutch/German, Women, over 25) and objectives (Drive installs) and the network aims to optimise against achieving that objective. Every Ad Network has positives and negatives which can be hard to find out in advance. However, unlike the old days of print or tv advertising, a number of standard convention KPI’s that all networks provide. Comparing these numbers between networks is key to choosing which network is best for your game.

Acronym eCPM CTR Fill Rate
Meaning Earnings per 1000 views shown Click-thru-rate Requests that receive a video.
Good Value (estimate) $12-20 – T1 Country

$5-10 – T2 Country

1-5% >99%

Ad networks can be private, where you receive content from a single source i.e Unity Ads or be a larger DSP (Demand Side Platforms) i.e Mobvista that aggregate lots of different ad campaigns from multiple sources.

Ad Networks tend to be very protective of their campaigns and run them exclusively on their own controlled SDKs. Demand side platforms usually allow the advertisers finer grain details of where they want to run their adverts, device, size, geo’s or even within specific apps (blacklist/whitelist). A reasonable list to check out for good ad networks from 2016 is on the Soomla site. If you’re just starting out and focussed on the US market then I would recommend Unity Ads, Applovin and AdColony as 3 networks to start with. Other smaller niche networks can work much better in other countries such as Yandex for the Russian Market. If your game starts to scale significantly, spend more time researching this field in particular.

How Do DSPs Work?

Demand Side Platforms (DSP’s) make it easier for an advertiser to buy across multiple, discrete inventory sources. The aggregate lots of different advertising channels into their single platform. DSP’s may strike a deal directly with a single large app developer for all of their views, or be working in partnership with an ad network to provide extra inventory at peak times. Due to their scale, often larger brands such as Nike or McDonlads would work with DSPs to reach the widest possible audience in the simplest way. With a single login and dashboard – running, reporting and optimising campaigns at large scales becomes much easier.

Facebook – The Biggest, Baddest Ad Network of Them All

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The largest video ad network on mobile is Facebook. Unlike the other ad networks, Facebook handles all the infrastructure and tracking that is needed from the ad network to the store and even controls the display of the advertising in the apps themselves (Facebook / Instagram). This gives Facebook a huge advantage when attracting cash-rich advertisers to spend on their network as they know much more about the user and can present the user with a more relevant video. Facebook fiercely guards this data about their users and advertisers and platforms must abide by Facebook’s rules if they want to use the platform. This helps facebook maintain high-quality ads for its users.

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The total mobile ad spend of 2016 is estimated to be around $40 billion and Facebook has around 1.15 billion mobile users in 2016. This huge user base is also very loyal with 66% of users logging in daily to Facebook; a metric similar to having a very high retaining game. Facebook has created its own consolidated value chain and has simplified the experience of using it from both an advertising and user perspective.

Facebook also has a lot of personal metadata about you that you willingly provide, your, age, sex and location are key pieces of data, but every like, interaction and comment can be used to guess what type of person you are. All this information allows facebook to show more relevant ads to you that you are more likely to click on and install. Inevitably this is why facebook can command higher prices for similar advertising space.

Mediation

mediation.jpgMediation companies (Fyber / Supersonic) and Supply Side platforms (SSP’s) we’re setup to help developers to optimise the delivery of advertising within their app. Their role is to switch seamlessly between ad networks in order to maximise your fill rate (the number of videos shown per request made for a video) and to show the highest paying network to your audience depending on their location or other pieces of data they have collected.

The real benefit to mediation is that as a developer you can remotely control and change your ad viewing, ad caps, network priorities and revenue reporting in one place. This benefit can save you many hours of laborious report checking and analysis to find out exactly which networks have been profitable for your game. There is no single best network or best setup: track, analyse and review on a weekly or monthly basis and adjust on what you see.

There is no single best network or best setup: track, analyse and review on a weekly or monthly basis

Mediation is usually free for developers. Although this noble endeavour of making a developer more money, most independent mediators have now been acquired or aggregated into ad networks themselves: Fyber by RNTS Media for $190 million and Supersonic by IronSource for an undisclosed fee. This allows a mediator to force a percentage of the views to their ad network of choice for which they might be reimbursed.

As a game developer adding a mediator requires a small amount of work, but it often provides you with a much more stable platform to track, analyse and review your ad networks. For that reason, I would always recommend either using a mediator or mediating SDKs yourself using a simple remote config to switch between ad network providers.

Game Developer (Supply)

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You sit in the middle of the value chain. Creators of hit, fun experiences that encourage gamers to play and come back every day. Without a hit game, there would be very few people watching any of the videos.

A game developer’s primary goal is and should always be, make a fun experience that people want to come back and play again. Never lose sight of this when creating a game. Advertising slots around your experience and should not detract from it. Players are not against watching videos in order to earn valuable virtual currency. However, if there are intrusive or large un-skippable video at awkward periods within the app you are going to frustrate your user base. For videos to be effective and enjoyable you should always make them opt-in to view and allow a gamer to choose when and where to watch. This will increase engagement and video completes.

You have the audience, fundamentally that is where the value lies

You’re also the decision maker to which SDKs will be integrated. There is a lot of value to the ad companies if they can have their SDK in your game. If you have a very large audience (1 million+ DAU) then you may be able to negotiate better rates with partners. Put your business hat on and be shrewd! You have the audience, fundamentally that is where the value lies. The data of how your users play, who your users are and whether they have paid or not are all pieces of information that are highly lucrative to all parties across the value chain.

Attribution

attribution.jpgAttribution sits after the video has been shown to the user. These companies are responsible for tracking the install and reporting back to the Networks who was responsible for driving this user to install the game. They act as a 3rd party intermediary on the whole video ad value chain. They are also one of the only parties in the value chain that are able to charge directly for their service. Usually, they make money by charging advertisers a cost per install tracked and so add a layer of cost to any ad campaign.

Fraud prevention is becoming more and more important as the rate of fraud is increasing with an estimation that almost 34% of all traffic is susceptible to fraud. Fraudulent traffic, such as fake installs or click-stuffing damages the whole ecosystem as it results in bad traffic. Advertisers see less value and so stop spending money on the network. Attribution attempts to pick up on these fraudulent users quickly and ban them from the ecosystem.

Third party intermediary ad networks rely on attribution to determine which ad network served the ad that led to the last click before install. This makes a big difference if you are a large publisher who is running tens if not hundreds of campaigns on multiple sources because you only want to pay once for the install. There are a large number of legal hoops that an attribution network jumps though to ensure trust for its clicks. As a smaller developer, you may not need to add in attribution if you are running a small ad campaign on a single source. Facebook and Google and many of the other video ad networks provide valid attribution for free if you advertise on their networks and you use their SDKs.

As mobile video spend grows, fraud becomes more lucrative and this part of the value chain will become more and more important for advertisers.

Stores (Apple and Google)

All installs occur via Apple and Google and so all clicks created by videos will end with a visit to their respective stores. As neither Apple nor Google gives much information about what users do on the stores it was the black box of the mobile world. Since 2015 both stores have started to give some data back to game developers in the form of store analytics, but they don’t provide this data to ad partners directly and so the post-click journey of a user is not visible and therefore hard to optimise for.

The stores add direct value to the whole chain as installs of games drive new users who may purchase in-app purchases or create brand loyalty and awareness by apps rising up the charts. The fact that there are only two major stores left in mobile, show the power they both wield and staying on the right side of both Apple and Google is a must for any mobile developer.

Conclusion – What should I do now?

With a clearer idea of the value chain in the mobile ad space, you should understand what value companies provide and who to talk to at different stages of development. Try to take some action in your current project to improve ad implementation:

Small Game (10k MAU) – If you are not using a mediation company, find one. Get 2-3 ad networks that you know and trust and add video ads to your shop for free gems. Focus on observing the number of views and as the game grows, get better at event tracking how your users interact with video. Use this to learn what a baseline is for video views in your game.

Mid Game (100k MAU) – Now it’s about increasing video views and increasing your revenue from each view. Work with your product team to think of more innovative placements to access the video, spend time making it fit within your theme, if you can A/B test ideas do this to increase completed views per DAU. In unison set out to talk to more varied ad networks who work in different Geos, Audiences or game types, you could start making more money in non-western countries etc. Try to get 4-5 networks in.

Large Game (1M MAU+) – You are likely to have a reasonable setup here and a person who is more dedicated on marketing or revenue generation. You may be working with 5-10 networks now, avoid SDK bloat. Can you work directly with a DSP? Can you cut a direct deal with an ad network? Can you approach an advertiser or a game company directly?

If video ads start to make over 50% of your revenue, can you create new features to increase views? Remember to continually compare networks revenue and tracking numbers. Work on a bi-weekly rotation to promote or demote networks within your app based on performance in particular GEOs.

In the future, I’ll be writing more article on video ads, in particular how to optimise in-game placement and get more completed views per DAU. Stay tuned!

Mobile Monetization 101: The First Steps

“We should have thought of monetization from the start”

Countless free to play games have launched and failed, and this is a constant regret many game teams have. They should have done more in the beginning to think about monetization. They should’ve been thinking a lot deeper about how their game was going to make money instead of just making a good game.

Learning how to evaluate monetization early is difficult. Most resources talk about clever monetization mechanics (ex. Pricing of in-app purchases, limited time offers, VIP systems, sales, etc.) but rarely is there much information about how to tell if your early prototype has what’s necessary to eventually monetize. The common remark to monetization is that good monetization can only come from good retention, as if just making a fun game will inherently make your game monetize. Anyone that’s launched a free to play game knows this isn’t completely correct.

The truth is that monetization and retention are strongly interconnected and you need to think about both as early as possible within your game. Monetization is not something that you can stumble into if you want to compete on the AppStore. 

But before you start obsessing over your in-app purchase prices and before you start obsessing over sneaky monetization mechanics  — you need to figure out how your game is going to survive as a free to play game. The best way to set up monetization in your game is to ensure that your game has 3 things:

  1. A clear definition of what you are primarily selling
  2. Assurances that your systems will last for years
  3. Ways of pulling the player to the end game

Completing these 3 steps will allow you to set up your game to monetize to its full potential.

Step 1: What are you Selling?

Every top grossing free to play game primarily sells the means to progress.

Progress is the strongest driver of monetization. The top grossing games don’t sell content (ex. DLCs), they sell progress towards an end game.

Progress comes in many forms and sizes. It could mean moving forward on a map. Progress could mean building up a farm. Progress could mean collecting and upgrading characters. To start, you need to define what progress means for your game.

Let’s take a look at 2 games, and what progress means for them:

Candy Crush

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Candy Crush’s core progress is to move forward on a map. Candy Crush focuses all of their monetization mechanics to help progress on the map. They sell boosts, extra moves or charms which all help you progress.

Star Wars Galaxy of Heroes

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Galaxy of heroes is all about upgrading & collecting heroes. Each game mode promotes the need to have a large collection of characters. As the game progresses, it demands an increasing upgrade level of your characters, requiring you to progress. They sell the means to progress faster: currencies to train your characters, the ability to fight battles instantaneously, and loot cards to unlock characters faster than your normally can.

Every top grossing game has a long path of progress which is the main focus of their monetization.

You must define the core progress for your game. What do you see players building over a long period of time?

Just to give more examples, here are some of the Top Grossing games’ Core Progress:

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For each of these games, this core progress is the central focus of their monetization strategy. All monetization mechanics give options for the players to speed up their progress.

When you’ve discovered what your core progress is — what the key central point you are going to be selling — then you can start designing monetization mechanics that speed up the player’s progress in interesting ways. You can start designing mechanics that pace the player’s progress giving you opportunities to monetize.

But there is one important step you need to do before you can start creating monetization mechanics: you need to ensure this core progress will actually last. Otherwise you won’t be selling progress for very long.

Step 2: How long will it last?

What you are selling must be able to scale for years.

It doesn’t matter how many monetization tricks you’ve got in your game. If what you’re selling won’t last, you won’t be successful.

This is usually where systems begin to show weakness. Not many systems can last for years. Many of the games that we all loved growing up were great games, but only lasted 10 or 20 hours before the system would crack. These games aren’t well suited for free to play.

An example of this happened when I was working on a racing game prototype. The core of the game was to race against an opponent to the finish while avoiding obstacles.

Our core progress was upgrading your car (similar to CSR Racing). The player collected loot from races to purchase upgrades which would improve their car’s stats. To progress in the game, the player needed higher and higher stats. The key stats to progress were: Speed, Handling, Acceleration and Boost/Nitro. As we tested out the game, we noticed: the more you improved the Speed stat, the harder the game became. The player’s cars were moving faster, which meant that the obstacles were becoming harder to avoid. We had a very limited cap that the speed could be upgraded to without demanding way too much skill from players.

With this cap in mind, we tried many things to avoid the issue. We made all obstacles travel with the player based on the player’s speed to make high speeds more manageable (instead of stationary obstacles, we switched to cars driving with the player on a highway). We adjusted the opposing AI’s speed based on your upgrade level to ensure that each upgrade was necessary. We tried many weird tricks to get the system to work, but all of them fell apart and were making the gameplay feel confusing.

In the end, the cap on our speed stat wasn’t high enough. In order for the game to be successful we needed the cars from the beginning of the game to be much, much slower than the cars at the end of the game. If we wanted the end of the game to take a months to reach, yet each upgrade along the way to feel meaningful to progress, the “Speed” stat was just not going to work.

This was a signal that our system wasn’t going to scale, and our game was not going to work as free to play.

Compare this Speed stat problem to a regular RPG system with Health and Attack. This system can scale almost infinitely.  A 200 HP monster when you have 20 attack is the same as a  200,000 HP monster when you have 20,000 attack. Attack and Health counter each other, allowing both to grow infinitely large. Speed had no counter stat, which made its growth eventually constrained. This is why many free to play games rely on an RPG system of Health vs Attack (ex. Clash Royale, Clash of Clans, Best Fiends, Puzzles and Dragons, Summoner’s War) this simple system can scale.

Look at your base gameplay — do the stats scale?

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Health vs Attack: The infinitely scalable system that many of the top free to play games use.

So how do you apply this to an early prototype? How do you ensure that your system will last?

2 basic tools you can use to evaluate your scalability:

  • Model your economy
  • Test your game in the Beginning, Mid and Endgame

Model your Progression

Modelling your game’s economy and progress early is an easy way to give you a sense of just how much content you need and how to pace your game.

Exactly how to do this is a very deep topic that I’d love to cover some day. If you don’t have the skillset on your team to model your economy with a tool like Excel, then you need to get someone who can. Without modelling, it is impossible to see just how you’re going to get your game to last.

But what should the goal be? How long should your game’s progress last?

10,000 hours or $10,000 dollars: that’s how long your system should last.

This of course is just a high level estimate (and easy to remember) but this is a good goal to have if your looking to reach the top grossing charts. Looking at the top games today, they easily go beyond these numbers. Games like Clash of Clans support purchases larger than $10,000 in their games. In comparison to Game Of War, this economy can support a purchases by a single user of over $120,000. These are insane values, but to give you a sense of just how long lasting and resilient these economies are. There is a lot of room in these economies to monetize.

With this model, you have a great tool to show what it will take to last. Compare your model against the models of your competitors in your genre and you’ll have even greater benchmarks for how much content you will need. If you want to beat the competition, your game has to last longer.

Test your Beginning Game, Mid Game, and End Game

When you’ve modelled your game’s economy, you will have a sense of what the beginning game, mid game and end game’s content will be. From this, you can build a prototype which can showcase how the game will feel in the beginning, in the middle and in the end. With this prototype you can ask questions like:

In the beginning, do player progress quickly?
Is each progress step desirable and felt as required by the player?
Is this beginning of the game still engaging or have you taken away too much of the depth?
Is the gameplay easy to get into?

In the midgame, has it sufficiently changed from the beginning game? Does it feel like the game is getting deeper?

In the end game, does the game still work?
Is the amount of skill required to succeed still feel achievable to all of your player types?
Is the end game sufficiently complex and deep? How does my end game depth compare to my competitors?
Is there a dominant strategy, or do you see your end game players debating over best choices?

There are many more questions to ask to ensure the depth of gameplay is there at each stage, but these 3 prototypes can give you a better sense that progress is happening and that your game will work at these 3 stages. This will ensure that the progress that you will be selling is desirable, and that the end game is worth reaching.

Using a model and effectively testing your game at multiple stages in the game is the basics of how to prove your game can last. When your game can last, then you now have the necessary base of a game that can monetize. Now it is time to start driving desire to spend.

Step 3: Why do I care?

You’ve got a core system that can last for years, and a clear definition of what you are selling. All that doesn’t matter if players have no desire to progress.

As free to play games, we are selling virtual items. In reality these things have no value. Our job as game designers is to create systems which create value for our virtual items. When our virtual items have value, we are much more likely to monetize.

Making virtual items valuable is not easy, but thus far most free to play games have focused on 2 ways to do this:

  • Visual progress & teasing a long term vision of the end game
  • Social Pressure

Visual Progress & Tease Long Term Vision

The majority of free to play games use visual progress cues to create a sense of value as you progress through the game. Visual progress can come in many forms, but it must showcase your progress thus far as well as tease future progress. Showcasing your previous progress gives value to your work so far. Gives you real value for your playing time or payments in the past. Teasing the future content gives the “carrot on the stick”. Shows players that there is lots more to come, and hopefully entices them to discover the new content still awaiting them.

The 3 most used examples of visual progress are:

  • The Saga Map
  • Base Expansion
  • Character Collection

#1 The Saga Map

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The Saga map in puzzle games clearly shows the visual progress of the player. Each time you complete a level, you progress on the map. At any time in the future you can scroll through the map and feel good about the progress you’ve made.

At the same time it clouds over the future worlds and hints at the mountain of content yet to come, giving you a reason to continue playing to discover the content.

#2 Base Expansion & Building Progress in Clash of Clans

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Clash of Clans and almost every game like it with a city/base-building component has this to create greater visual progress to the user. Looking at an early level base in Clash of Clans to a late base really shows just how far a player has come. Each time they enter the game they are reminded of their progress. Each base also feels completely customizable and your own. You decide where each piece of wall goes. This creates more attachment to the visual progress — this is your own base.

On top of this, players are teased each time they preview a greater opponent. They can look at the top of the leaderboards and be tempted by how amazing the bases look near the end game.

#3 Characters in Star Wars Galaxy of Heroes

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Looking at your character list in Galaxy of Heroes is the best way to see your progress and be teased of the future content.

You can see each of your characters and how amazing they are. This showcases their value. Just below your characters, you can see transparent versions of the characters you have yet to unlock, enticing you of the future progress pulling you along.

These 3 examples show how the top grossing games use visual progress to create value and desire. Each are also tightly tied to what the core progress is for the game itself.

When your core progress is visual, players are much more likely to feel like it is valuable and worth playing or paying for.  When progress is teased, players are much more likely to stick around to see what happens.

Social Pressure

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Want your game to monetize? Then make sure players are engaged socially within your game!

Deep Social mechanics is the key to building a game that retains the longest and monetizes the strongest. When a player is actively engaged in a lively community of players, then the content in the game is far more valuable. As a player, I am far more likely to spend . We’ve already written a lot about how strong community features in your game will heavily influence how well you can monetize:

  • Dawn of the Dragons (5th Planet Games): conversion rate for non guild members: 3.2% vs. guild members: 23%
  • Tyrant Unleashed (Synapse Games): ARPU for non guild members: $36.59, vs. guild members: $91.60

It is not a coincidence that MMOs like Habbo Hotel (pictured above) monetize so strongly with a core interactions that are quite simple. The deep social interactions that are possible in Habbo Hotel pull players in over a long period of time. Because of this strong social connection, players put a much higher value on looking good, showing off their progress and helping others. As a result players play longer and pay more money.

So when you’re thinking about monetization, make sure that you have truly defined what is going to be pulling players through the game on the long haul. Ensure you have strong visual progress mechanics that show off the player’s progress and tease the late game. Ensure that you have social mechanics which give real value to the content that you’re creating. If players have minimal desire to progress, then it doesn’t matter what monetization tricks you have — they won’t play long enough to spend.

The Last Step: Capitalize

You can see that Steps 1, 2 and 3 don’t really talk directly about monetization. There’s not much about skipping timers, VIP programs, limited time offers or designing virtual currencies. It’s because all that doesn’t matter unless you’ve got a long lasting game.

This is really why many monetization topics usually say “think about Retention before you think about Monetization”. What the real crux of it this statement is: don’t think about monetization unless you’ve got a system that can last. Obsessing over monetization mechanics before you’ve got a long lasting system is futile. However if you’ve nailed a long lasting system that can keep players engaged for a long time, the remaining steps to monetize become significantly easier.

When you’ve got a long lasting system, you can start creating mechanics that pull the player faster forward in that progression by paying or playing the way that you want them to. With enough desire to reach the end game, you can drive players to spend repeatedly to reach it. This is where true monetization begins.

More on the ways to capitalize on your long lasting monetization systems coming soon!

Further Reading:

Mid Core Success: Monetization, Michail Katkoff :
http://www.deconstructoroffun.com/2013/11/mid-core-success-part-4-monetization.html?q=monetization

Dimitar Dragonov, Freemium Mobile Games
https://www.amazon.com/Freemium-Mobile-Games-Design-Monetization/dp/1512322172

Critical Mobile Monetization Concepts, Joseph Kim
http://quarterview.com/?p=774

The Tower of Want, Ethan Levy
https://www.youtube.com/watch?v=tBG2G-9vl-M

Deconstructing Marvel Contest of Champions

It’s happened. F2P Mobile is now officially triple A. The major publishers have all put more focus on mobile than on console. (see Bethesda, Nintendo and Konami)

Now we are also starting to see high budget games climb on the top grossing charts.

If you still believe that the AppStore can still have indie success on the Top Grossing, the stakes are rising. Games from now on will need significant investments in their visuals on top of having a strong economy design to succeed.

The proof of triple-A F2P is “Marvel Contest of Champions” by Kabam. Showing their recent commitment to working closely with Hollywood, they’ve brought both AAA visual standards and a strong license to mobile. As a result the game has been downloaded by over 30 million people and taken a dominant spot in the Top 25 grossing:

Screen Shot 2015-06-24 at 6.22.35 PM
But is this game just all glam, but no substance? Can Marvel sustain in the Top Grossing?

The Pitch

Kabam’s approach for Contest of Champions was clear: Take “Injustice: Gods Among Us” and, apply it to a new license. On top of having the license, take learnings from Kabam’s other games and improve the economy design, multiplayer, and ensure that events are strongly tied to its core.

Its a simple premise, but Kabam’s secret formula of events, multiplayer gameplay and monetization is a powerful force. They’ve proven this before with the Hobbit’s mobile game and the Fast and the Furioius mobile game.

Screen Shot 2015-06-24 at 6.26.05 PM

Injustice: Gods Among Us was a game released in March 2013 by DC Comics and Warner Brothers. Its essentially a very simple fighting game at its core with a collectible card game as its meta.

Both Injustice and Contest of Champions are similar to Idle games where it really gives players a “bait and switch”. Based on the screen shots you’d think this was the next Street Fighter or Mortal Kombat. But after the first battle you quickly get introduced to the true intention of the game : collecting the characters and upgrading them. You came for the 3D fighting mechanic, but are quickly hooked in the long haul to collecting the characters.

The Core : Back to Basics

Comparing Injustice to Marvel Contest, Marvel has simpler controls, easier strategy, and much shorter battles. Injustice focuses on building up a combo enough to do a quick-time-event (“Swipe to knock down opponent”) whereas Marvel is more about building up a sustained combo of attacks of choosing whether to jab (which can be defended) or go for a heavy attack which can break defenses.

Fights are much shorter because they’ve cut out the 3v3 battle. Its 1 on 1 like original fighting games with victory based on the first KO.

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Overall I believe the changes make the game better for mobile. Its easier to play and the fights are quicker. This allows players to complete sessions in less time and spend more time in the metagame. However, moving from 3v3 sacrifices some of the strategy in the battle. As a result battles quickly grow pretty tedious, which puts more pressure on the metagame to keep the strategy.

So how did Marvel fill the gap in the Meta?

Unlike Gods Among Us, Kabam also chose to focus on elemental types. This adds more strategy to choosing which hero you bring to different fights. Also to make sure that the simple 1v1 fights don’t push players to collect and invest in only 1 hero, they added elemental types which push players to collect heroes of each element.

Each element has a strength and a weakness. So each time the player enters a match, they run the risk of facing up against an enemy which is their weakness. This adds strategy to choosing who you bring along and making sure you have a spread of different strong heroes for each type.

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Bringing this all together, Kabam really pushes players to be strategic outside the battle. So when you’re playing a online match, players are invited to strategize about which fighter they want to play against an opponent:

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Note here that the Scarlet Witch shouldn’t be paired up against Hulk. The player  should try to find a better matchup.

The Meta : Gacha for the West

This is really where Contest of Champions gets interesting. At the metagame layer, the game delivers on the licensee’s strengths. There are a ton of different Marvel heroes to collect, each of which has their own, stylized 3D model.

marvelcoc1 (1)

Each character feels unique. Each character looks beautiful. As a fan of Marvel, you’re really driven to collect your favorite heroes. However, this is where the monetization and retention come in. To get your favorite hero, you need to get lucky in the Gacha system.

This Gacha system is embodied in the Crystal Vault :

mcoc-crystals

Crystals are a currency that is used to give a random reward. Crystals are earned through timers (daily, every few hours), through play (multiplayer or single player) or from purchase. Each time the player completes one of those actions, they are pulled into the Crystal Storage screen. From here, they can open up a random reward within: A resource or sometimes a new character. Here is an example of a player opening up a crystal:

These Crystals are the most important design decision that Kabam made.

There are 3 reasons for this:

#1: Each time the player earns a crystal, they are brought back to the Crystal Vault

Each time they complete the actions needed for the crystal, they are brought back to the storage area. Each time they are reminded of all the other options they can purchase, and all the other means to progress. Players know that in order to get heroes, they need to earn crystals. In order to earn crystals, they need to pay or play.

#2: Each Crystal is a Lottery

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Each crystal gives a chance of what you want. No crystal ever gives defined rewards. Want that cyclops? Well that’s the top prize in this crystal, so buying the crystal will not guarantee you earning Cyclops. This is gacha done perfectly.

Gacha works because in the beginning players can purchase these gacha packs (crystals) and get great content. Each time they open a crystal they get a brand new hero they’ve never seen before. As time goes on, as a designer you introduce mechanics and promote content that drive players to want rarer and rarer star players. So a player wanting a 4 star rare Cyclops is going to have to purchase many, many gacha packs before they get exactly what they want.

This should be taken with some fairness though. You want to make sure that player’s don’t feel cheated when they spend money. So similar to Hearthstone (each card pack includes 1 rare), Contest also guarantees a certain star tier with each crystal that is paid.

Unlike Injustice: Gods Among Us and Mortal Kombat X (a recent release by Warner Brothers) Kabam chose to offer no direct purchasing of heroes. In Injustice, players can look at the store of all the heroes in the game and directly purchase the hero they want. In Marvel, players have to use Crystals to collect all the heroes they want. This design is more similar to Japanese games like Puzzles and Dragons, and has been a lucrative business for them. By cutting out the direct purchase and going for a more pure-Gacha system like Japanese games, they’ve maximized their revenues.

#3: They offer no direct purchase

Injustice allows players to purchase characters directly. This is a costly mistake for Warner Brothers.

Never allow player’s direct purchase of the content that they want in a Gacha system

Allowing players a direct purchase of the hero they want is a hit to your retention and monetization. You’ve given them the end game content for a single quick purchase.

You can see this also when you compare Mortal Kombat X to Contest of Champions. Mortal Kombat X was recently released by Warner Brothers. Arguably each game is well designed and looks beautiful, but on a Total Revenue to Total Download ratio, Marvel comes out well on top. Kabam is simply far better at monetizing, and offering no direct purchase improves this metric.

Gotta Collect ‘Em All

But the strength of Gacha lies only when you’ve added an additional layer: Rarities. In order for Gacha to work, you need to drive desire to get the absolute rarest items. In the beginning as a player it is alright to get a 1 or 2 star spider man. It feels good to get these heroes. But as you play, you quickly realise that this spider man isn’t going to cut it — you need to play your chances at getting the rarest heroes.

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To do this, Kabam added Star Tiers to their heroes. Each hero can be found in 1 star to 5 star forms. The higher the star rating, the rarer the hero. Having a higher star hero increases their base stats, exponentially increases their potential highest level, and adds passive and active special abilities during the battle. All 3 of these are important to monetization and retention.

Having strong base stats makes the hero feel powerful immediately versus opponents. Making sure that Rare monsters immediately feel good to purchase and easy to dominate opponents with is crucial to drive first time purchases.

Exponentially increasing the maximum potential also increases the amount the player must invest their time and energy to reach the hero’s maximum potential. The higher the star rarity, the more time the player must spend to upgrade the hero to their maximum potential.

Players must collect ISOs to upgrade their heroes.

For players to upgrade their heroes, they must use in different strands of ISOs. ISOs come from actively playing (mostly) so in order to fully upgrade your amazing 3 star champion, you have to collect ISO.

This is essential for Long term retention. This mechanic nudges players commit to training their heroes to receive their full benefit. Without this exponential growth, players would pay for the best hero then forget about actively playing in the game.

 

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Lastly, Adding Passive and Active special abilities in the battle gives visual feedback to the player that what they are doing (collecting rare heroes) is worth it.

Heroes that are 3 stars or more have an extended special ability bar (as shown above in the bottom left). When the player fills up this meter, the hero shows a unique animation and does a lot of damage. You can only trigger this ability if you’ve got the 3 star or higher version of this hero. This is very important to ensure that players feel rewarded and powerful for getting the highest heroes.

Just increasing a virtual number is not rewarding enough for players. Eventually you’re going to have to give players real visible rewards for getting the rare content.

In Summary

Kabam’s Contest of Champions decided to focus their innovation on outside the battle, in the Meta. The Meta for all games is what drives long term retention and strong monetization. This paid off for Kabam.

They focused on creating a pure Gacha system, stripping out elements from Warner Brother’s Injustice: Gods Among Us that was conflicting with what they know to drive strong free to play design:

  • Simpler, shorter battles for better sessions
  • No direct purchase of heroes
  • Engrained crystals into the core game loop
  • Deeper Star Tier system to create more reasons to purchase
  • Elemental system to promote collection of heroes

As a result, Kabam have a top performing game.

To be Continued…

Marvel Contest of Champions innovations and design insights don’t just stop at the Gacha system. Rather than overwhelm you, I’ll put this one on pause for now. Next up I’ll focus on Multiplayer and Session Design.

Stay Tuned!

Understanding Energy Systems

Energy seems to be hated by designers and players alike, so why does it endure as the hallmark of casual F2P games? The fact is that whilst it’s a crude mechanic, it’s also an efficient one, delivering several functions in one easily implementable feature.

This isn’t a defence of energy systems – I’ll follow up with a post on ways of replacing them – but without something fulfilling these roles then it’s unlikely you’ll make a very good game. I’ll talk about energy and timers fairly interchangeably here as they are both pacing systems that function remarkably similarly.

The four main reasons that mobile designers use energy systems are:

  1. Habituation
  2. Content pacing
  3. Monetization
  4. Strategic choices

Habituation

The primary reason that designers use energy systems is to encourage players to play as long and as frequently as they would like. The amount of energy gives an easy way to fix the length of the play session, whilst the energy refill rate determines the play frequency. Energy systems do this by providing the player with closure – the feeling that they have done everything they need to in a game, and that when they return there will be new, fun stuff to do.
farmville2

This is why crop and resource production timers work so well. Players coming back to the game harvest all the crops that have grown whilst they are away – a hugely positive experience. Then they can use the crops to complete deals, craft things and improve their farm. Finally they plant their crops so ready for their next session. As they leave the game there is nothing more for them to do in their farm, so it feels like a natural point to stop playing; but they also know that when they return they can get the satisfaction of harvesting their crops again.

Designers need to be able to control session length and frequency because it allows them to integrate their game into their players’ daily routine. Any activity that becomes part of your daily routine is likely to be something that you keep doing a lot longer than you otherwise might, and long term retention is highly correlated to lifetime value.

Think of the game as chocolate. If you had unlimited chocolate (and limited willpower) you might binge on it to the point you were sick of it. At this point you wouldn’t want to eat chocolate again for a while. Imagine if you got a small piece of chocolate every afternoon with your coffee break though. Now the chocolate enhances your coffee break, but at the same time, you never have enough in one go to get sick of it. Instead you look forward to the chocolate enhanced coffee break, and would miss it if it was taken away from you. As with chocolate, so goes gaming.

Content pacing

The second main reason that designers use energy systems is to pace their content, and to ensure that players consume content at roughly the same rate. Once players have run out of new content to experience, they usually have little interest in a game. It is vital therefore, to ensure that players are not consuming content faster than you can produce it.

Energy systems are crucial to minimising inequality in game economies; they ensure that players all consume content at roughly the same rate

PvP games often have an advantage here because their players effectively produce content for each other to consume. In Clash of Clans, each player’s layout of their base is unique and interesting for other players to attack. But Clash of Clans still needs to bring out new units, upgrade levels and features on a regular basis to keep their most engaged players.

Energy systems also help to reduce the “distribution of wealth” in games that exists between highly engaged and less engaged users. By capping the rate that the most engaged players can play, they cannot get too far ahead of the less engaged players. This is important for balancing, as a game should remain interesting for both types of players, and setting a progression rate that is interesting for the slowest players and yet doesn’t allow the fastest players to run out of content can otherwise be a challenge.

Monetization

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Making money is the third reason that designers use energy systems. In casual games energy might typically represent a third of bookings. This is not insignificant, but there are better ways to make money out of games, and monetization alone is a poor reason to go with an energy system. Energy doesn’t typically make for a very exciting or satisfying purchase, as it gives players something that they could get if they waited a bit longer. Most mobile designers realise this and despite the perception of energy systems as a cynical way to extort players, it is rare to see them if they are not needed for habituation and content pacing as well.

Strategic choices

In some games energy systems also provide the player with a strategic choice that they need to make. This comes from having a limited number of energy points to spend each session, and a greater number of possible actions. Players must decide what to spend their energy on, and because of this they usually need to set themselves a longer term goal that they are working towards over several sessions.

For example, in Clash of Clans, because I can only upgrade 2 or 3 buildings at a time, and each one might take anywhere from a few minutes to a few days, I need to work out what I prioritise. Do I upgrade my resource generating buildings first to facilitate further upgrades, my storage space allowing me to raid more, or my defensive buildings to protect what I’ve got? In prioritising my current session, I also create a mid term plan for my future sessions as well, which builds off this. In games where the energy system doesn’t allow the player any real choice in what they do, the system typically feels even more arbitrary and restrictive.

Conclusion

The reason that F2P designers use energy systems is not because they hate players, it’s because energy systems are efficient mechanics to encourage specific play patterns, pace content, monetize a game and provide a player with strategic choices. Designers should be wary of releasing any game without features that cover all these bases one way or another.

There are 3 ways to win on the Mobile App Store (Part 2)

In order to be successful on the App Store a lot has to go right. Since 2012, the App Store has hit a point of maturity. The top grossing charts are in stasis with very little change from month to month. The winners of the App Store have been decided, and now the remaining developers are trying desperately to hold on to their existing market niches. Just recently (January 2014) in a report by Gartner they estimate by 2018 that less than 0.01% of all consumer mobile apps will be deemed a commercial success.

It’s not all so bleak though.

Looking back at the success stories since 2012, you can see some clear patterns of how developers built successes from this difficult market. Some clever developers have managed to launch games that turn a profit despite the trends. From comparing these success stories, I can see 3 clear paths that small developers can take to have a shot at being profitable on the AppStore.

If you don’t have the brand equity of Blizzard, Rovio, or EA, or if you don’t have the marketing budgets of King, Supercell or Zynga, then these 3 paths are really your only option to succeed:

  1. Feature or Bust: do everything you can to get a feature.
  2. Free to Pay your way to the top: optimize for CPI and LTV. Play the performance marketing game.
  3. Viral Sensation: get lucky and build a game that just blows up on its own.

The first option I discussed in my last post. Create an amazing mobile experience and do everything in your power to ensure a featured spot from Apple or Google.

This is the best path for small, creative indie developers. For any developer that can’t fork over $400,000+ for a marketing budget should consider the first option.

But this option comes with limitations. The number of developers fighting for featuring grows by the day. There are limited slots each week that can be used for featuring, and only the top spots will drive the discoverability needed to sustainably bring in a profit. The bar for how much you need to invest into polishing your game is growing week by week. There is also a low revenue ceiling for these types of games. In order to get over $1 million in revenue, you need to have an editor’s choice featuring. This type of feature is not easy to get.

When you fight for featuring, it all comes down to getting the Editor's choice.

When you fight for featuring, it all comes down to getting the Editor’s choice.

As a developer looking to grow beyond just a 10-20 member studio, they must look beyond such a risky path to generating hit games. In order to hit bigger margins on games, you have to move to Free to Play. It is obvious just from glancing at the Top Grossing charts for the last few years that free to play is dominant and is here to stay. Clash of Clans clears over $1M/day according to AppAnnie. The only paid game that has consistently been in the top grossing since 2012 has been Minecraft.

The 2nd Path: Free to Pay your Way to the Top

So if you need to go bigger, how do you find success in the free to play market?

You need:

  1. A game with incredibly strong long term retention
  2. A game with equally strong monetization
  3. Deep pockets to spend on marketing (user acquisition)

A good product is not enough. You need to be able to build a better product than the competitors, that keeps players playing for months longer than the competition, and then outspend them on marketing. If you can’t do these three things, your game will sink like a stone.

Free to Play Games must last for years, not days

Free to Play games are drastically different from traditional console games or paid games on the AppStore. As I discussed last week, if you choose the 1st option to succeed on the AppStore (“Feature or Bust”), your focus is on creating an amazing first experience. Creating just a few days worth of content is entirely okay. Players are fine with a quick, polished experience for their $2.99. You don’t need to sweat out creating months of content for players to consume. However, Free to Play is drastically different: the success of your game hinges on your ability to keep players playing for months, if not years.

In the early days of free to play on mobile, developers focused on creating revenue within the first week of a player playing the game. Players would start a free to play game and be accosted by deals and tricks to get them to spend as quickly as possible. Nowadays this has completely changed. The common approach now is that players that enjoy a game for months are more willing to spend, and will spend much more.

Tracking and optimizing retention is imperative. Ensuring that a substantial (5+%) of players come back 30, 60, 90+ days after opening is crucial to free to play success.

Tracking and optimizing retention is imperative. Ensuring that a substantial (5+%) of players come back 30, 60, 90+ days after opening is crucial to free to play success.

So unlike creating games to be featured (the 1st path), this second path is the exact opposite. Your success hinges on your ability to create a game that lasts for months. Focus should be on mechanics over aesthetics. Mechanics that drive players to return each day for months on end, and ultimately create systems that encourage players to eventually pay.

On top of this, developers will need to make a commitment to this game for many months after the launch. In order to drive the long term retention to where it needs to be, developers must invest heavily in consistent content updates. Updating your game every 2-3 weeks is imperative. As a small developer, this commitment to a single game may be deadly. Free to Play only works for larger developers.

If you don’t think you can create a game that will last for months on first launch, then rethink your path to be successful in this market.

LTV > CPI is all that matters

The second step to creating a successful free to play game is to make the magic formula work : Your game’s LTV must be greater than CPI.

LTV : Lifetime Value. This is the amount of money an average player will spend throughout their entire time playing your game. This is a reflection of your retention curve (how long players will remain in your game) multiplied by your game’s ability to monetize over that curve. To increase: retain players for longer and monetize on that game better.

CPI : Cost per Install. This is the average cost marketing must spend in order to push a customer all the way until the point of installing and opening up the game. This number is heavily dependant on marketing as well as the theme and art style of your game. How costly is it to acquire a player that likes your game enough to install it? Word of mouth, brand recognition, reddit posts all come into this. If you have a large user base that you can get to download your game for free, even better.

Optimizing these two numbers is the only way to success with Free to Play games.

As a small developer, how can you make this equation work?

First off, you need an amazing game. That’s not an easy accomplishment, but must be the base for making the LTV vs CPI equation work. Assuming you’ve got a healthy LTV (over $2) then it makes sense to start looking into smart ways of acquiring users.

As a small developer, you don’t need to be in the Top 10 grossing charts to bring in a profit on a free to play game. CPI scales with volume. So purchasing 2,000 new players a day can have a much smaller cost per install than purchasing the 20,000 new players required for a massive blockbuster. As a small developer you can be smart about purchasing enough volume of users to pay the bills and avoiding the big spenders.

Otherwise, as a small developer you’ll need to find a publisher or an investor to fork over the necessary cash to drive serious marketing out of the game. Dimitar Draganov mentioned in “Freemium Mobile Games : Design & Monetization” that a marketing budget must be minimum $400K. That was back in 2013. This baseline has only increased since then. According to AppAnnie and Flurry this trend will most likely continue to climb as long as the biggest developers have strong LTVs and can afford the CPIs.

The 3rd Path : Viral Sensation

This is the most elusive and undocumented of the paths. I myself have had no experience creating games like this, but have only watched as some games have become successful using this route.

Games like Words with Friends, Draw Something, Flappy Bird, Fun Run, Canabalt, and QuizUp are all games that drove a massive audience to their game by virality and word of mouth alone. They didn’t need featuring from Apple, many didn’t spend a dime on marketing.

https://itunes.apple.com/ca/app/fun-run-multiplayer-race/id547201991?mt=8

https://itunes.apple.com/ca/app/fun-run-multiplayer-race/id547201991?mt=8

Fun Run Multiplayer was built by a bunch of students for a school project. They polished and launched it on the AppStore themselves. It became a massive hit with a younger crowd (13-18 year olds) which resulted in the game reaching a dominant Top Free ranking position. They even managed to creep into the Top Grossing charts for a limited time. How they did this? I can only speculate. Focusing on a younger demographic that is more likely to spread games via word of mouth at school when all their friends have iPod touches or iPhones improves your chances of being viral. Ultimately they did not need to be featured or pay for marketing.

PewDiePie : https://www.youtube.com/watch?v=lQz6xhlOt18

PewDiePie : https://www.youtube.com/watch?v=lQz6xhlOt18

Flappy Bird was a massive news headline in early 2014. It left the mobile development world speechless why a game so simple could traverse the charts so easily. Tech Crunch did an excellent write up on the Flappy Bird phenomenon: http://techcrunch.com/2014/02/14/why-fads-fade-the-inevitable-death-of-flappy-bird/ . The game was incredibly addictive: it gave players always a reason to try once more. The player’s reason for failing was always blatantly obvious: tap better next time! This game again was for a younger audience — but captured an even wider one than Fun Run. This was a game that was so frustrating that players couldn’t help but tell their friends about it. It shot up on discussion boards everywhere. People naturally wanted to share their scores and their stories from playing this game.

https://play.google.com/store/apps/details?id=com.quizup.core&hl=en

https://play.google.com/store/apps/details?id=com.quizup.core&hl=en

Games like QuizUp, Draw Something and Words with Friends did something different. They built games that word of mouth and virality was at its core. You can’t play these games unless you get your friends to play it. Friends themselves are constantly prodding you to play one more turn. This drove massive growth for these games. Everyone was playing — to the point that Zynga purchased Newtoy (Words with Friends developer) and OMGPOP (Draw Something developer). These games were quick to rise and fall, but it was long enough for the developers.

Most of these games are very broad audience games. They appeal to a wide range of player types and demographics; this supports the game’s viral ability. You can’t create games that are niche that depend on word of mouth.

However, these games are risky. Words with friends didn’t even show signs of life until more than 6 months after their first launch. Most companies would have put the game to rest long before the game got the attention of the public. But when the game took off, it took off like a rocket.

Yet with all of these games, what goes up must come down. These games float in the top charts for awhile, but then sink incredibly quickly. Unpredictably, these fads are over almost as quickly as they came. So developers must seek to make money while they can. This success is fleeting.

Going for a viral hit is by far the most elusive path to choose. Its always difficult to see what games will become a viral sensation. But regardless, each year, one developer always wins the lottery. There will always be stories of developers arguing that you don’t need to sink years in to making beautiful games (the 1st path) or spend a dime on marketing (the 2nd path) to succeed. If we all could be so lucky.

In Summary

This market is incredibly tough, but in summary there are 3 distinct routes that a developer can take today that can lead to success :

  • Feature or Bust
    Focus on featuring from Apple and Google.
    Go paid, not free.
    Focus on experience, not on monetization.
    Build games with an incredibly strong aesthetic experience.
    Don’t fuss with a massive amount of content.
    Focus on an experience that is a polished and fun few hours.
  • Free to Pay to the Top
    Build a game that will retain players for months, even years.
    Find ways to optimize your LTV with retention and monetization.
    Find a way to get $400K+ for a marketing budget to push the game to the top.
    Hope that LTV > CPI, and that the game can sustain in the Top Grossing Ranks.
  • Viral Sensation
    Incredibly risky, and not much is known how to accomplish.
    Aim for a broad audience game that enforces word of mouth marketing.
    Pray that it eventually takes off.

Each of the big successes since 2012 have gone down one of these 3 paths. Each of these successes have spoken at length how they’ve won the lottery that is the AppStore. The mobile industry in 2015 will surely bring some surprises. For the rest of us that can’t count on surprises, looking for an equation for how to build a hit game, this is as close as you can get.

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