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iQU's Fraser MacInnes on why focusing on buying users risks damaging your game

Get your priorities right

iQU's Fraser MacInnes on why focusing on buying users risks damaging your game
Fraser MacInnes is a mobile games industry professional who cut his teeth writing for Pocket Gamer. He's now working at iQU, a behavioural knowledge company working in the games sector.

You can read the first two parts of Fraser's data series on segmentation, targeting and gamer profiles here.


When launching a mobile game, or any other game for that matter, there are problems that can only be solved with the right combination of skills, circumstances, timing and an assortment of other sometimes unpredictable variables.

And then there are other, much simpler problems, which can be solved with money.

Marketing old and marketing new

Marketing has traditionally fallen into the latter of these two sets, but modern marketing tropes are not what they were – the idea of money spent on marketing translating into cold hard sales is now being taken to its logical extreme.

It's not enough to effectively communicate the merits of a product or to try to establish some level of exposure and mindshare among target demographics. Hands up if you've heard the term 'audience acquisition'?

We have ended up in the situation where it is possible to buy installs from companies that have access to a vast quantity of eyeballs. There is nothing expressly wrong with this, especially in a market where audience attention spans are low, prices are also low and choice is very high.

It's logical that publishers should need a more dependable way of guaranteeing access to audiences.

The problem is that audience acquisition services lead to some negative consequences, chiefly surrounding how some developers and publishers plan their portfolios.

It's as easy as one, two, three…

It's really just a numbers game. Let's say a developer makes a decent, but vanilla, free-to-play resource management iOS title. The developer, backed by some modest financing, elects to spend ten grand a month on CPI campaigns at $1 per install for six months.

In so doing, said developer amasses about eighty thousand users, based on organic growth of twenty thousand installs on top of the paid ones.

Based on a decent conversion of about 5 percent of installs into paying players, the developer grabs at least 4,000 paying users. Now let's say that the average spend for each of those users (ARPU – average revenue per user) across those six months is about $7 a month – that gives the developer about $117,000 after Apple takes its 30 percent cut.

Let's assume the game burned through about forty grand in development costs, meaning that after marketing (i.e. audience acquisition CPI spend) and development costs have been deducted, the profit margin is pretty low at just $17,000.

The next step is to replicate that minor success, but while spending something closer to $10,000 on development, which - if the same CPI costs are applied - results in a six month profit of $50,000.

Welcome to the world of copy ‘n paste development, where re-skinning a farming resource management game with a shiny new set of ice cream parlour assets - and leaving the code largely unchanged - results in a steady stream of cheap to produce titles.

Repeating this process six times in two and a half years, where CPI and development costs continue to go down as both increasing in-house cross-promotion potential and ever more established code and asset bases are leveraged, can be reasonably lucrative.

Our, conservative back of the envelope calculations suggest a developer could net around $750,000 in that time with six releases, which after development and marketing costs leaves such a company with roughly $25,000 a month to spend.

After rent, bills, travel etc. there's still enough left over to pay a core three man team of savvy industry types a relatively handsome wage approaching $70,000 a year.

Subsistence farmers

There are many small to medium developer/publishers of this type making a good living, but not necessarily building big companies or having runaway successes, which is fine.

It doesn't really speak well of the creative economy of the mobile games industry though. Why use data tenets such as targeting, segmentation and profiles in such a cynical way?

Remember, the above figures are based on only 5 percent of the total audience - which is in some cases generous - ending up as paying users. That means that 95 percent of the people that installed the game as a result of a CPI marketing campaign ad, didn't think it was worth paying for it in the end. Isn't that a bit wasteful?

And doesn't it also speak badly of the intrinsic player value present in each product? Re-skinning games to snare enough users to subsist in the industry, without even attempting to offer something that is in some small way privy to the creative verve of its makers, can't be a good thing.

But now I'm getting all idealistic and very close to biting the hand that feeds me, so I'll bring this back around.

Let's be better and then more, not the other way around

Why buy an audience when you can buy and apply data that will tell you how to be a better creator for your audience? Big data doesn't always have to be about marketing – it can be about improving the gameplay and experience too, where gamer behaviour should enrich the creative process.

Wouldn't that allow us to convince more users to play and experience the games they are interested in?

Shouldn't we be using quality product to convince people to play first and then using audience acquisition services to lubricate the wheels of commerce second?
Part 5: Mobile marketing acronyms
You can follow Fraser's industry commentary on his blog, or else grab bite-size rants via Twitter.

PocketGamer.biz regularly posts content from a variety of guest writers across the games industry. These encompass a wide range of topics and people from different backgrounds and diversities, sharing their opinion on the hottest trending topics, undiscovered gems and what the future of the business holds.