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Why the mobile game industry needs intelligent revenue management

Why the mobile game industry needs intelligent revenue management

This is a sponsored guest colum from intelligent revenue management company wappier

For better or worse, there’s no industry quite like mobile gaming.

Today it accounts for roughly 80% of app store revenue and more than $50 billion in total market value, with the latter expected to hit $180 billion by 2021.

Evidence suggests, however, that mobile game publishers will need to change their attitudes towards growth sooner rather than later if they’re going to survive long enough to see their industry thrive.

Vanishing frontiers

The rest of the commercial world operates quite differently from mobile gaming as far as marketing is concerned.

In more mature industries like telecoms or automotive manufacturing, any first-to-market advantage opportunities have long since dried up.

As the cost of customer acquisition rose prohibitively, retention became a higher priority, and budgets shifted accordingly. These industries now allocate just a third of their marketing spend to customer acquisition and the remainder to activation and retention.

CPIs have never been higher, and with so many developers competing in a hit-driven business, it’s only going to get more difficult to keep paid UA net-positive.

Meanwhile, it’s not uncommon for mobile game marketers to allocate 90% of their marketing resources to paid user acquisition. It’s a gold rush mentality that’s been embraced by most game publishers, but it won’t last forever.

App stores are getting more crowded every day, with more than 4.3 million games now competing for a user base that is approaching saturation.

Consequently CPIs have never been higher, and with so many developers competing in what has proven to be a hit-driven business, it’s only going to get more difficult to keep paid UA net-positive.

Scaling up retention headcount might seem like the solution, but what’s worked for previous industries won’t work for mobile gaming.

Where multinational brands like Ford, Coca Cola and Vodafone have dedicated hundreds of marketers to regional customer retention initiatives, most mobile developers are required to make due with teams of 2 or 3 to manage what is often a customer base of millions.

Unlike traditional marketing, game developers often see an aggressive content release cycle as the only tool at their disposal when it comes to improving retention, which only addresses part of the challenge.

Instead, technically advanced products require equally advanced retention and monetization solutions. They require, what we at wappier call, Intelligent Revenue Management.

Following the recent news of our $4 million funding round, we wanted to explore this topic in greater detail.

Intelligent revenue management

Mobile game marketers need to go beyond conventional marketing automation if they’re going to remain sustainable. They need to take the same level of sophistication and ingenuity they’ve applied to user acquisition and turn it towards the post-acquisition player lifecycle.

This includes bringing to bear the full power of state-of-the-art machine learning and artificial intelligence to consistently predict and deliver “next best action” opportunities at a user level, at scale.

The wappier Intelligent Revenue Management Platform combines prescriptive analytics, built-to-purpose data visualizations, and self-optimizing personalization systems.

It’s long been the dream of live ops and growth management teams, but at wappier, we’re making this kind of automated live ops a reality.

Designed and developed by marketing and data science experts with nearly 20 years of experience running loyalty and mobile marketing campaigns, the wappier Intelligent Revenue Management Platform combines prescriptive analytics, built-to-purpose data visualizations, and self-optimizing personalization systems to affect meaningful change for mobile game publishers.

Combined, these solutions improve engagement, retention, and monetization metrics at negligible overhead cost to the publisher. For mobile game publishers, this means turnkey solutions for effective Personalized Loyalty Programs and Global Pricing Optimization.

Automated loyalty, retention, and monetization

Our Automated Loyalty solution offers fully automated, closed-loop, personalized player experiences with over 30 pre-built, engagement and retention features right out of the box.

These best practice features are optimized with in-game data and continue to improve as they learn from player behavior. Each can be fully customized to match your game’s look and feel, creating a seamlessly native player experience.  

Once implemented, wappier’s machine-learning combines aggregated data sets from hundreds of related in-game events and rewards, analyzes the outcomes to predict player behavior, and delivers an ideal “next best action” designed to maximize the value of every single player.

This could be an incentivized ad impression, a first purchase discount, or a personalised IAP bundle. Whatever has been algorithmically proven to increase value within each player segment is what gets delivered.

Publishers are able to reward and retain their highest spenders, test secondary monetization options with lower value segments to improve payer conversions, and maximize engagement across their entire player base, all without writing a single line of code.

To date, wappier Loyalty Programs have been implemented in over 80 mobile games across multiple categories, driving dramatic improvements to retention, gameplay progression, and revenue including the following:

  • 21% Higher Day 1 Retention
  • 24% Higher Time Spent in Game
  • 25% More Transactions per Payer
  • 75% Higher Cumulative ARPU

Global pricing optimization

Even the world’s best mobile games leave money on the table due simply to the fact that they price their IAPs for the US market and let App Stores adjust prices according to currency exchange rates for different countries.

Simply put, their IAPs are mispriced for the majority of players around the world.  

This approach, while practical, fails to take into account the myriad cultural and economic factors that impact purchasing decisions at the global level, including:

  • Macroeconomic factors like GDP, propensity to consume, exchange rate, and unemployment rates
  • Microeconomic factors like smartphone prices and the cost of housing
  • Game market statistics like revenue and growth projections and the total number of users
  • Mobile technology statistics, such as smartphone penetration, and mix of iOS vs Android
  • Device and game context, such as device type or game genre
  • Player and gameplay context like DAU, MAU, level, events per day, or purchase history
  • Temporal elements like seasonality and trends

The wappier Intelligent Revenue Management Platform is the only pricing optimization system that leverages machine learning to quantify the weighted relationship between these factors and more when determining ideal price points.

With little to no overhead cost, it allows publishers to optimize IAP pricing on a per-country basis, increasing overall transaction frequency and revenue by anywhere between 20% to 80% each month.

As the golden age of mobile game publishing draws to a close, only those who invest time and energy into keeping the customers they have and maximizing revenue from those customers will continue to prosper.

That’s why we started wappier. Today, we process over 2 billion data facts per day and deliver optimal gaming experiences to millions of players all over the world.

To learn more, or to see wappier’s full platform in action, contact our team to learn more and schedule a demo.

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Elle Bent SEO at Chamoji
Nice article.