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7 things you could have learned at Pocket Gamer's GGS Track @ GMIC

7 things you could have learned at Pocket Gamer's GGS Track @ GMIC

The Pocket Gamer Global Game Stars Track @ GMIC served up a stellar lineup of speakers in San Francisco early this month.

Big names took to the stage to impart their insight into how to best acquire, engage and monetise users, get funded, and launch a breakout game.

Of course, we're not ones to hold a grudge against folk who couldn't make it, so here for your delictation is a rundown of the key takeaways from the sessions:

You're going to need money!

Kristian Segerstrale, co-founder of Initial Capital, presented the opening keynote, "Funding the Future of Mobile Games" with a bullish outlook for 2014.

"The future is awesome," he opened, explaining how market velocity is being fueled by the billion mobile devices sold this year, the billions of iOS and Android downloads, and the billions in valuations of mobile game titans like Supercell and King.

While growth is accelerating and geneating opportunities for new entrants, global powerhouses are being created with huge pools of cash driving the cost of marketing into the stratosphere.

"Investing in brand can drive down CPA but to compete devs will need a minimum of a million budget," Segerstrale added, detailing the pros and cons of funding mobile game startup with publisher financing, seed investment and strategic partnering.

Publishers provide financing, marketing and monetization expertise, access to technology, data and cross-promotion networks, and development assistance, but take 70-80 percent of revenue and your IP, you can no longer take VC money and you lose the ability to scale independently.

"It's a good option if you can't get funding elsewhere, but with the exception of country-specific publishers, know that there is no middle man that can make more money for you than self-publishing it yourself," he concluded.

On the subject of VCs, Strategic Partners will buy a share of your company at any stage, offer marketing and product expertise, and provide access to channels to market, technology and data.

You keep all revenue and profits to reinvest but dilute your shareholding, invite governance around you (board etc.) and create potential misalignment for further financing.

It's a good option if you're seeking to scale and if you partner with Nexon, Softbank or Tencent you have an edge up on Asia if that's what you're seeking, but if things go awry, it's difficult to get divorced.

Seed investors buy 15-30 percent of your company for $300,000 to $2 million. They have broad expertise in product, marketing and M&A, assist in company growth, further financing, and distribution channels, and look out for you as shareholders.

You keep and reinvest all revenue and profits so it's a good option if you want to realize the value of your shares one day.

To secure funding, investors will take a close look at your talent, particulary what the lead coder and artist have made together and what they've done previously.

Also under the microscope will be your creative vision and passion for a style of game, your market awareness, and a healthy balance between the desire to make what you love to play with what you think the market will love.

Chemistry between the team and investors is also important, as well as your location - some investors will only fund in their backyard to be close to their portfolio companies.

If you're launching in Asia, culturalisation is everything

Pocket Gamer's Chris James moderated the Spotlight Asia panel which focused on the market characteristics unique to China, Korea and Japan.

The panel featured regional experts Lei Zhang, president & GM of Chukong USA, Joshua Galloway, strategic advisor at iDreamSky, Rick Liu, VP Asia Pacific & Latin America at NativeX, and Thomas Lee, evangelist at WemoLab.

Chris James opened with a look at the various market sizes, touching on Japan at $5.1 billion with a population of 126 million population, 30 percent smartphone penetration, (53 percent iOS, 45 percent Android), and China at $1.2 billion with a population of 1.36 billion, 300 million smartphones (20 percent iOS, 51 percent Android, 23 percent Symbian).

South Korea, meanwhile, comes in at $864 million with a population of 50 million, 73 percent smartphone penetration (iOS 10 percent, Android 90 percent, with 61 percent playing games at $5.27 ARPU.)

"Chinese CPI varies month to month but usually is about a quarter of the cost of users in USA," offered Rick Liu of NativeX.

"Last month the cost to acquire a user in America was $1.84 and for a user in China it was 42c. The CTR across geos is relatively similar and depends on the ad format but the main difference in pricing is due to the average revenue per daily active user - the amount users are spending on IAP in the game.

"In western countries and in some Asian countries - Korea, Japan - it is among the highest in the world so users are worth more."

Zhang of Chukong added that "CPI for iOS in China is $1.50 to $5, Android is about a quarter."

"For Korea, Kakao takes 30 percent," added Thomas Lee of WemoLab. "You're giving away a big piece of the pie but every smartphone has Kakao so it's a must. But marketing spend alone doesn't guarantee success, you must localised culturally with a games-as-a service approach." explained Lee.

Facebook is da bomb!

During the fireside chat between Chris DeWolfe, CEO of SGN and Lori Kozlowski, editor at Forbes, DeWolfe couldn't say enough good things about Facebook.

He raved about Facebook canvas as a development tool that enables you to code once and deploy everywhere including iOS and Android, A/B testing with feature changes can be done in minutes rather than weeks on iOS.

Also up for praise was customer acquisition with Facebook's extremely efficient demographic targeting - so efficient, in fact, that Facebook CPIs have been climbing in the last 9 months.

"The mobile gaming space is strikingly different from the console space, where companies develop a game once, shrink-wrap it, put it on a shelf, and hope for the best," said DeWolfe.

"At SGN, we are constantly iterating on our games based on tracking specific KPI's, running multiple versions of the game, and continuous A/B testing. It goes with out saying that great gameplay and innovation are essential for success.

"However, it is just as important to see what's working and not working, so you can quickly pivot away from failures, and pour resources into hits."

UA is a game you can master

The user acquisition panelists delivered a brilliant hour of working the numbers. Chris Akhavan, president of publishing at Glu Mobile, summarised:

"Good rough benchmarks for CPI are around $1.50 on iOS and 50c on Android," offered Akhaven.

"That said, we've seen CPI as low as $0.40 on iOS for high quality, non-incentivised traffic for a game with mass appeal, and as high as $5 for something like a card battle game that reaches more of a targeted niche audience.

"An initial beta budget of around $15k spent on high quality channels should provide a good indication of a game's viability in the marketplace.

"If your game is core monetization and retention metrics are viable, you should have at least $200,000 devoted to launch in Western markets. Don't discount the power of word-of-mouth in driving user acquisition.

"Simultaneously launching your game on iOS and Android will help you capture more of this unmeasurable traffic, as people are bound to recommend games to their friends that may be using a different OS."

Glenn Kiladis, VP & GM at Fiksu added, "Word of mouth also plays a critical role with 37 percent of app users coming through social and SMS."

But Marco DeMiroz, president & CEO at PlayFirst, stressed, "The best UA strategy is a dynamic one that adapts and reacts in real time based on each game's needs, target audience, genre, changing user behaviors, economic model, ROI objectives and competitive UA pricing."

In the view of Mike Cohen, VP & GM at InMobi, things have changed in the last twelve months.

"A year ago the user acquisition conversation was around 'incentivised vs. non-incentivised'," he said.

"Today the conversation has shifted to user quality and LTV. The UA game has changed and there are no shortage of partners that UA managers have to work with - ad networks, agencies, social networks, etc.

"It all comes down to the partner that can give you the best quality users, and that comes from the partners that have the most user data and the greatest scale."

Perry Tam, CEO of Storm8 agreed, claiming that it's "important for game developers to treat user acquisition similar to running a free-to-play gaming business."

He added, "UA buys need close monitoring and consistent iteration in order to be successful. The key is to track and test each one, similar to AB testing on your games. Different partners have varying demographics and game genres that they may specialise in, therefore, offering different values and success rates to game developers.

"Even if one strategy works for others, it does not necessarily mean that they will work for you. Once you find a combination that fits, it makes sense to double down on your efforts and go for a full-blown campaign.

"But like a games-as-a-service strategy, consistent testing and fine tuning is required for effective user acquisition."


Dream it and make it happen

"Predicting the future is easy. Predicting WHEN is hard," Ed Fries opined as he took the audience on a post-lunch journey through time showing how many of today's emerging technologies were foretold in the Victorian era.

Quoting Alan Kay, Fries advised that "the best way to predict the future is to invent it." - a perfect segue into the "Where WIll Mobile Games Go Next?" panel moderated by Pocket Gamer's Martine Paris.

Also speaking were Jay Wright, VP product management at Qualcomm, Chris Early, VP Digital Publishing at Ubisoft, Fabien-Pierre Nicolas, GM Mobile at Perfect World, and Remco van den elzen, CCO and co-founder of Distimo.

Qualcomm's Jay Wright

The panel discussed emerging technologies like VR with Qualcomm Vuforia, a software platform that gives mobile apps the ability to see and allows games to enter the physical space.

"It's going to be hard to build games for the new VR devices while the install base is still fairly small," added Nicolas.

"2014 will clearly be the Year of the Tablet reaching 25-30 percent of MAU - versus 20 percent today - with strong growth in Europe and Asia.

"2014 will also be the Year of the Core Gamer with possible MMO and MOBA hits in the West given the level of creativity and a lot of traditional PC talents migrating to mobile.

"And 2014 will be the Year of Cross Platform, with PC, mobile and tablet gaming communities joining together around turn-based experiences."

Get ready for the market to get big

Challenged with the question of how big mobile games will get, Unity CEO David Helgason presented a fascinating analysis.

"56 percent of Americans own smartphones, and those who do spend 50 minutes on games daily," he opened.

"That's 53 billion hours per year just in the US. An average career is 100,000 working hours. So think about it. When the rest of the world catches up, and half of them own a smartphone, that'll be one trillion hours per year, 10 million careers wasted playing games!"

It's Helgason's belief that games as a whole will continue to grow with mobile taking more than half of the market.

"No matter how you slice it, at this early point in the short history of mobile games development all aspects of mobile gaming have a lot of space to grow," he conclued.

"That's whether we mean screen sizes growing from 3.5-inches to an infinite size, absorbing consumer engagement and spend, or global distribution and the significant portion of the 7 billion people on the planet who will be enjoying games and game-like experiences over the next decade."

Focus on engagement and retention

Dean Takahashi of GamesBeat moderated the last panel of the track on monetisation with Mickey Maher, VP business development at Applifier, Giordano Contestabile, VP product & revenue at Tilting Point, and Mike Lu, VP product management of GREE.

"Game developers tend to be more concerned with monetisation whereas they should be focused more on engagement and retention because this leads to paying players," advised Maher.

"Our own research at Applifier revealed that players are more engaged and willing to spend when they're playing with friends, and so we're focused on surfacing better ways to enable gamers to reach their friends, like video replays."

For Contestabile, there is a "huge opportunity for companies that focus on original gameplay and games with a distinctive style."

"They need to support it with across the board marketing activities, as it seems that unfortunately most of the industry is still focused on 'incremental innovation' - to be charitable - and on paying to acquire customers one by one, which clearly isn’t conductive to building long-standing brands.

"Hopefully we'll see more companies taking advantage of this opportunity, rather than everyone playing off the same playbook."

Next up

Pocket Gamer is on a tear delivering the best in after-hours networking in the industry.

Join us for our November Pocket Gamer Mobile Mixer in San Francisco as we return with a What Every Dev Must Know panel moderated by Pocket Gamer's US events editor, Martine Paris, and her lineup of A-list speakers.

Drinks, bites, beats, and more, you won't want to miss it. Free to mobile game professionals, RSVP here.

Pocket Gamer's Martine Paris

You can see our full photo set on Facebook.

For those of you heading to GDC Next, be sure to drop in on the Pocket Gamer Roaring 20s party with Gamevil and Yandex where all of your dev friends will be. Click here for party invite.

And for those of you hankering for a good time in London after the new year, join the UK Pocket Gamer crew for PG Connects: East Meets West. Early tickets right now are an amazing deal, more details here.

Many thanks to Pocket Gamer's Global Game Stars track sponsors UCWeb, Logitech, NativeX, SGN, Distimo, InMobi, Fiksu, HasOffers, Perfect World and Chukong USA, and Pocket Gamer's afterparty sponsors, Qualcomm Vuforia and Everyplay for its generous support.

Thanks also go out to Pocket Gamer's US Events Editor, Martine Paris, for producing this day of outstanding programming, and her volunteer squad Brian Collins, Paul Phileo, Sebastian Valle and Krista Hauser.

Tech reporter Martine Paris covers trends across mobile, games, AR VR, wearables and IoT, the intersection of emerging tech, music, video and culture, and how to get featured, funded and monetized. You can typically find her at shows with a mic in her hand interviewing industry's leading voices. Follow her @contentnow.

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