E3 2013: Platform holders need to deal with high user acquisition costs says Ubisoft’s Chris Early
Panel conclusions from Nvidia, Microsoft, Sony and Sega
E3 isn’t really the show for panel talks, but kicking off Wednesday morning, IDC and App Annie organised a panel talking about the future of mobile and portable games.
Setting the scene, App Annie Bertrand Schmitt pointed to the main trends; the rise of Google Play, albeit still smaller in ARPU terms than the App Store.
Japan, Korea and the US are the main drivers of revenue growth on Google Play.
Still, in terms of ARPU, dedicated gaming portable have almost double the ARPU of smartphones and tablets, although of course there are fewer portable consoles in the market.
For a company like Sony, the metavision now is all about cross-platform.
“We’re joining the dots,” said Sarah Thomson, senior manager, PlayStation Mobile, Sony, point out to the cross play between PS Vita and PlayStation 4 as one example.
“And with Gaikai, in future you’ll be able to play games everywhere.”
“We want to create entertainment for you on any device, any time, anywhere,” echoed Sega’s director of mobile business, David Zemke.
Kelly Malone, director, business development, Windows Phone, at Microsoft, was looking for the impact of emerging markets, with billions of people moving from feature phones to smart phones.
I think the biggest change for Ubisoft is companion gaming,” said Chris Early, VP, digital publishing at Ubisoft.
“These are not the same experiences but they are inter-related.”
Enter the IAP indies
When it comes to how the new ecosystem has disrupted the industry, it’s all about IAP.
“IAP has levelled the playing field for indies,” said Microsoft’s Malone.
“You don’t need a brand to get people to play your game now. They can just try it, and companies that have worked out how to retail consumables, have do very well.”
He pointed out Russian publisher Game Insight as an example.
Sony is all about indies too.
“We’re free-to-play on all our platforms now, and I think that enables indies to get into the ecosystem easily. Mobile is the gateway drug to getting into the Sony ecosystem,” Thomson said
“You can start with mobile and then move up to PS Vita and PlayStation 3 and 4.”
Even with hardcore Nvidia gamers, Bill Rehbock, GM TegraZone and mobile games, Nvidia said that it was seeing very strong engagement with IAP, thanks to accessibly.
"We're seeing click-thru rates of 70 percent to Google Play," he revealed.
Chris Early said the big issue for Ubisoft was it hadn’t started its games using the IAP model for design reasons.
Nutty Fluffies is one example of a game that started paid and was rework as a F2P experience, although not that successfully.
10,000 foot view
How does the cloud fit into this picture?
Nvidia has plenty to say about that.
“We’re all about ensuring the quality of service with our GRID solution, including dealing with heat issues, and server placement,” said Rehbock.
“It’s about being able to get to a game as easy as you change a TV channel.” he added. “People don’t want to change the disk any more.”
Thomson pointed to the eventual vision that gamers would be able to play any game, including legacy games, via the cloud.
“Sony is working very hard towards this,” she said.
The big arrow
But, to end the panel, both Ubisoft and Sega complained about the cost of user acquisition.
Zemke was worried that discovery was key to breakout experience and that the high costs of user acquisition could squeeze out indies.
“Platform holders need to deal with the cost of user acquisition,” Chris Early said.
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