Interview

Backflip's Farrior on why the smart money is on a multi-pronged approach to game monetisation

Less crying, more innovating please

Backflip's Farrior on why the smart money is on a multi-pronged approach to game monetisation
Apparently it appears some executives are just too busy actually running their companies to answer journalists' questions. 

One such is Julian Farrior, CEO of US outfit Backflip Studios, which recently announced a lifetime total of 77 million game installs and 830 million monthly ad impressions.

He's just got back to me with answers to my end of the year/start of the year questions from December.

Still, as it's only just February, they seem pretty relevant.

PocketGamer: What was the most significant event of 2010?

Julian Farrior: At the risk of sounding cliche, I think the emergence of Android as a viable gaming and business platform was pretty significant. In the last three quarters of 2010, 24 percent of our download growth came from Android (from only two titles - Paper Toss and NinJump).

I think this will continue to explode as Google makes strides to improve the platform on multiple levels and as overall adoption increases.

What was the most significant event for Backflip?

Our main goals for 2010 were to extend our reach, grow our free impression network and to further expand our winning game franchises. All three of these exceeded our expectations and played out as big events in 2010.

Our monthly active users grew from 7.7 million in December 2009 to 23 million in December 2010, and our daily active users grew from an average of 775,000 in December 2009 to an average of over 2.1 million in December 2010.

Our impression network, that we use to promote our own free/paid titles in addition to monetising via third party advertisers, grew from 310 million impressions in December 2009 to 830 million impressions in December 2010.

This growth in network and user engagement size has allowed us unparalleled flexibility in how we extract revenue from games, be it through the promotion of premium titles, mobile advertising, virtual goods or marketing incentives.

What was your favourite mobile game of 2010?

I really enjoyed Highborn by Jet Set games. It may in part be influenced by my love of Ultima III during the early 80s (or moving characters from square to square in general), but these folks really nailed an interesting genre that few others have attempted.

The gameplay, humour, simplicity, art and balance are all of the highest quality. I thoroughly enjoyed the whole experience on the first two installments and look forward to future updates.

What do you predict will be the most important industry trends in 2011?

I think there will be many important industry trends in 2011, but I will try to name two that few have talked about.

1. Video interstitials will become the standard for monetising free games through mobile advertising. They have just enough sex appeal to finally lure the big brands (and their budgets) over to mobile gaming, they are much more palatable for the consumer who has to endure them, and their higher eCPMs are undeniably attractive to game developers.

2. Revenue diversification will continue to grow in importance for mobile developers. Far be it from me to cast a shadow on the emerging dominance of virtual goods as the one mobile gaming revenue model to-rule-them-all, but the smart money will continue to have a multi-pronged revenue approach that includes mobile advertising, premium app sales and the fast emerging marketing incentives model (TapJoy etc).

I'm not betting against the high ARPU of virtual goods (as we will have many games that include this in 2011), I'm simply hedging against the future potential of market saturation. I think as eCPMs rise and developers with scale realise they can incentivise user behavior, other high ARPU models will inevitably emerge.

If you could enforce one New Year's resolution, what would it be?

I will reiterate my mantra from last year, "Less crying, more innovating".

I don't care if major game publishers drop their prices, Android devices are fragmented, or if app store distribution continues to be insanely competitive. Mobile gaming continues to be the land of opportunity where smart, nimble and aggressive go a long way. This definitely beats working for a living so by all means enjoy it!

Thanks to Julian for his time (eventually!).
Contributing Editor

A Pocket Gamer co-founder, Jon is Contributing Editor at PG.biz which means he acts like a slightly confused uncle who's forgotten where he's left his glasses. As well as letters and cameras, he likes imaginary numbers and legumes.