The PocketGamer.biz Mobile Mavens is our panel of experts drawn from all sectors of the mobile gaming industry.
PocketGamer.biz editor-at-large Jon Jordan recently took time out to discuss the industry's current obsession with user acquisition, suggesting it could eventually lead to its downfall.
So, we asked the Mavens:
Has the industry become too fixated with acquiring users rather than actually holding onto them, and have developers lost sight of the quality of their games as a result?
Spending on user acquisition just feels wrong to most developers for many reasons, but isn't it just the extension of marketing in a world where you can now measure everything and get precisely what you pay for?
Most product marketing campaigns are about user acquisition, but it's never been as easy to pay specifically for the results you want, rather than pay for what you think will generate those results.
The multi-million dollar marketing budgets for console games are all about user acquisition after all, but somehow it doesn't seem wrong when the marketing and purchase are more disconnected as they are.
But, ultimately, if your game is generating enough revenue per download that you can buy users and still make a decent profit, then it's basic business to spend on user acquisition.
This doesn't seem to be the case for the examples Jon refers to, though, which of course are unsustainable, and if nothing else, hopefully a few devs can benefit from them from their ad revenue.
For me though, if your game needs heavy user acquisition spend, then spend that money on the game, and make a better game.
Oscar Clark has been a pioneer in online, mobile, and console social games services since 1998. He is also author of the book, Games As A Service – How Free To Play Design Can Make Better Games.
Whether its spending money to buy market share or to buy users for your app, they both have short term tactical usefulness. But neither are a strategy.
As a trained marketeer, I'm frustrated by companies who focus only on performance measured advertising. Okay, it's tougher to find your audience, but marketing is more than just advertising. The classical approach is use the four P's - Product, Price, Place and Promotion - although essentially I'd argue it's all about people.
When it comes to the product, you have to ask, does it satisfy a known customer need? Does it entertain? If it does, then that should drive a level of retention and awareness. Social games originally came out of the principle that if players like the game they will tell others - we just had to make that easy. Instead, we have fixated on forcing virality often treating your friends as resource generators.
Price has been fixed for us to some extend - i.e. free. But here incentivised download sand careful planning of the virtual goods including consumables and durables has a marked effect on lifetime value. There isn't a rush for users to start spending as we know it takes 8-12 days for a 'true fan' - spending $100 plus per month - to start paying.
In terms of place, for online products it is all about where the player is. To understand this properly, we have to look at what they do when they are not playing games.
Great reviews in specialist games press like Pocket Gamer are vital for credibility for the advocate gamers, but we also have to talk to our more mainstream players who may be more interested in Hollyoaks or the V Festival.
Of course they might also be looking for other apps on the AppStore or GooglePlay.
Sadly these portals aren't really designed to help you get your app discovered, but if you try to understand the algorithms, respond to poor reviews, make as polished a game as possible and deliver on what matters to the editors (e.g. build personal trust, first to show OS features, deliver full localisation, etc) you have a chance to get featured.
Of course, you could always look to uses of other apps and leverage cross promotion services like our own AppFlood.
Promotion is about using all the channels available to you to get to that audience and using them to create a story that builds up using press, advertising, cross-promotion, flyers, outdoor posters, social games platforms, social media, YouTube videos, etc. We need to build context if we want users to act on our advertising.
We also have to use coordinate our budgets and all the channels available to us to tell our games story as effectively as possible and make sure create excitement and anticipation.
Getting this right is not easy, but it's something every business has to understand to succeed. What happens when you fail to tell your story well? Perhaps you end up spending a huge amount of money trying to buy customers to cover up that failure.
The fixation of user acquisition is a symptom of a deeper problem. It is hard and expensive to get users and most of these users provide not enough value to break even with the cost.
This is why engagement should be a chart in the store instead of sales. I think most consumers think a game would provide high engagement if it is listed high on a sales chart, but we know that isn't always the case.
I am scared to think of how expensive user acquisition is going to get if online gambling gets approved in the USA.
User acquisition, by its very name, suggests that it is highly prized by companies seeking market share over profit. This stems from the way many larger companies are evaluated.
Many small games companies are obsessed with things like user acquisition that, in reality, require massive scaling up to properly take advantage of.
It would be very helpful if a number of such smaller companies got together and pooled their user acquisition information and cross promoted their titles, so they can continue to act like successful smaller companies rather than aiming to go it alone and make it really big, which in reality is about a a thousand in one shot to pull off.
Well the user acquisition arms race definitely killed Facebook gaming. However, I don't think that mobile gaming is doomed. More like just the freemium aspect of mobile will be doomed.
What you are seeing is a mad rush for market share - just throwing money in search of daily active users (DAU) and monthly active users (MAU) so firms can raise their valuation and dump their company into someone else's lap.
It's basically a high stakes game of hot potato where you have to pay increasingly huge sums of money to bedazzle the potato, add faux diamonds, maybe a bit of gold plating to make it seem attractive enough for your rich neighbour to want to buy it. Sooner or later someone will end up with a rotten potato with a bunch of junk haphazardly glued all around it Katamari style.
While I do think this behaviour is very short term minded and is creating quite the bubble that will eventually burst, I think Apple's App Store has enough diversity to ensure the whole mobile industry won't come crashing down.
Android is very dependent on freemium and in order to compete in the freemium space you need to adopt aggressive cross promotion and user acquisition strategies, which will eventually collapse and with that the entirety of the Android market place.
With Apple, though, freemium may currently be dominating the top grossing charts, but there is also a healthly paid segment at both low and high price points.
Say what you will about Square Enix, but I think it's great that it is committed to blazing a trail for high priced premium games - although I think Final Fantasy Dimensions looks like garbage,I love The World Ends With You.
When the freemium bubble bursts users will shift back to paid in a big way and hopefully we will see more top rated PSP and DS games coming to the platform.
It's a shame, but I think that any company that is doubling down on freemium is going to be gone in the next couple years. There are some awesome companies that make great paid gaming experiences that are moving haphazardly into freemium because it's the popular thing, but they are jumping on at the top of the bubble.
These aggressive user acquisition campaigns will eventually confuse gamers. They will get sick of trying out an overly hyped free game to only find out that it's the exact same game style as everything else with a slightly different skin. I believe that free will eventually be a stigma that will prevent people from trying the few really awesome freemium titles that are available.
User acquisition strategies don't even really work for paid apps, so while the free charts are artificially inflated based on how much money people throw at them, paid charts are a little more representative of user engagement.
For us at least, advertising and cross promotions don't work at all. Maybe at the start they had a little impact, but the bump wore off very quickly and we currently don't climb a single rank when we cross promote. The thing that works the best for us are updates. New content that sparks genuine word of mouth and drives new users.
We are lucky to be in that situation but if I had a game where it didn't work like that, I would probably focus on something new instead of artificially inflating it.
Since founding Tag Games in 2006 Paul has built the studio from humble beginnings to become one of the most respected and successful mobile and handheld developers in Europe.
He began a long, and some might say, distinguished, games industry career at legendary developer DMA Design, playing a key role in the development of the GTA series
Interesting points thus far.
I agree we are in a user acquisition bubble with spiralling costs, and the big players are playing last man standing for market share.
We've seen it all before, even in the relatively young mobile gaming industry. Will it spell the end for the industry? Of course not. Neither will it spell the end for freemium. What it will do is steadily push the focus back on to a balanced approach to product and marketing.
At the present time, the top end of the market has a crazy focus on user acquisition at any cost, but this isn't reflected all the way down.
As an independent developer, we've often taken a lot of flak for being too product focused and generally not having a clue how to market games ourselves. In many ways I feel this has been the lie of the publishers, presenting an aura of mysticism around marketing to maintain the status quo.
As we've seen since the launch of the App Store, quite a few developers have proven themselves very able marketers. It's not something everyone is capable of, but it's surprising how far some understanding of the basic principles - thanks for the recap Oscar! - and hard work will go.
Having fought long and hard, and having spent a huge amount of time and effort learning the long way how to market games effectively, you can be damn sure we aren't going to give that all up just because some of the larger players are playing hard ball with silly money at the top end of the charts.
We will come back fairly rapidly to a balance between product and marketing. In the meantime, some titles will succeed commercially based on brute force user acquisition strategies and some will break from nowhere organically with virtually no marketing but based on game quality, uniqueness and who knows what.
Many will point to the freak breakout hits as proof you don't need to market, but freaks is all they are. They are black swans, outliers if you will and should be discarded from any serious analysis of how to run a profitable and sustainable business in this environment.
Meanwhile, if I have the resources to spend $500,000 marketing a $250,000 game and I can make it work what's the issue? It's a dog eat dog capitalist system we're in, where the winner takes it all and you've got to have big balls to play the game.
The alternative is to stand on the side-lines and spectate.
Personally, I'd rather be in the game, even if we are 6-0 down with five minutes to play having had our star player sent off!
For far too long we've seen developers naively thinking that having spent a year of their lives and $250,000 to make the best game possible it will just magically rise up the charts with a shoestring marketing budget and no plan to speak of.
I think we are all a lot wiser and older now, we know that won't cut the mustard so please Jon don't encourage us to go back to our blinkered old ways of thinking.
I am in total agreement with Paul about losing naivety when it comes to marketing. Every hit game I have ever worked on - on a variety of platforms over the years - has always had strong marketing behind it. This is still the case now even though the nature of the beast has changed, of which user acquisition is a part.
In the past few years we have seen so many small companies who have learnt a few tricks and think they have all the skills publisher needs without even knowing fully what a publisher does.
In my opinion the key weaknesses in small developers acting as publishers usually lie in IP licensing, brand building and marketing.
For our bigger titles, I would happily join forces with a bigger publisher for the marketing support alone, as long as the deal is right of course - meaning getting some money up front relative to the amount of dev risk that has been taken by the developer prior to the deal being done.
Alternatively, there is a perennial discussion about developers working together to share resources in regard to user acquisition, cross promotions etc, but we never seem to quite get it together. This won't solve all of the marketing and discoverability issues but it will give small developers a better fighting chance.
Oscar Clark has been a pioneer in online, mobile, and console social games services since 1998. He is also author of the book, Games As A Service – How Free To Play Design Can Make Better Games.
Please lets not confuse what we all seem to agree is a user acquisition bubble with the sustainability of freemium or the Android Market.
Buying customers, like hope, is not a strategy. Delivering a good repeatable game with no pay wall and then selling virtual goods to happy players is a successful business model.
The Android Market is a Darwinian experience - there will be lots of innovation and change, its has challenges and difficulties, but as long as it remains open it will drive innovation.
[people id="11" name="Brian Baglow"]
I wear both hats. I've worked in marketing for the last 18 plus years and I edit and write a small(ish) blog, supporting a very wide range of developers and games companies.
The issue of marketing is something close to my heart. It's something I'd estimate that more than 80 percent of the companies I work with get wrong. Not a little bit wrong, but seriously, fundamentally wrong.
Discoverability, a saturated market and the focus on user acquisition means that far too many companies either ignore marketing, pay only lip service to it, or throw money at user acquisition, on the basis that it lets them ignore marketing entirely.
The very basic fundamental aspects of marketing simply don't get covered. Telling people who you are and what you're working on, for example. Having a basic press kit, which makes it easy for someone (a blogger, a journalist) simple to write nice things about you don't get done.
Again, to use a personal example, More than 60 percent of the companies I cover on my blog do not have a easily found, downloadable logo on their website, or a lot of information and material on their game(s) in one place.
With certain exceptions, developers can't or won't spend time being excited about their game and getting out into the world and telling people. There's no point. Too many apps. No discoverability. No business model.
The problem with this is that it extends beyond the traditional ideas of what marketing encompasses and infects other aspects of the company's output, creating a bland and dismissive profile for the developer, their games and well, everything.
If you consider that everything you do externally is some kind of marketing (which I'd contend it is - your presence at trade shows, participation in industry forums like this one, entry into awards, getting drunk at the bar with a friendly journalist, your description or copy on the App Store, the icons you use, your business cards, every single god damn screen shot you ever take) then you have to treat everything you do externally as significant and as having an impact on your business and your user acquisition.
There's the argument from NaturalMotion that marketing and PR has no real effect. That;'s only true at a certain level - and also ignores the above idea that you do a hell of a lot more marketing than you realise.
It's cumulative. It's a process. You have to keep going. Not stick out one, appallingly bland press release, then stomp off huffing when it doesn't get picked up, or drive user numbers through the roof.
In short you have to get excited about your company and your games. You've got to be the biggest superfan in the world, because if you're not, then nobody else is going to be. Get people excited. Consumers, existing players, the press - get them all excited.
Let them see you believe in your game. Then use that excitement to tell people - through every channel.
You can already cross promote yourself and feed news, updates and awesome things through multiple channels. How many of you update your blogs, Facebook page, Twitter and personal accounts when someone writes something nice about you?
My point is that, for many developers, marketing and user acquisition are isolated activities which are seen as entirely separate from designing and developing a game. The harsh reality is that if you're making games as a business - and you're not doing work for hire - then you're going to have to treat everything you do externally as some form of 'marketing' and therefore user acquisition.
Sticking a game out, crossing your fingers and wishing isn't a business model.
Talk to people. Talk to everyone. As early as possible. Be enthusiastic and excited. Make it simple for people to find you, share things and say nice things about you. We live in a Google world. As far as Google is concerned noise = signal.
The more information, materials and channels you use, the easier it is for Google to figure out you're important. Then all the clever tagging you've done will pull in people you never expected, from places you never knew.
Then, because everything you've created is enthusiastic, excited and polished, there's a good chance they'll like what they see. Enough to buy, or pass it on, or worst case, not simply dismiss as yet another fucking app.[/people]
As Brian says, talk to everyone.
In particular, talk to me.
I totally like Jon's article!
Its quite simple everything goes over discovery in the current app ecosystem.
There are a few ways to get up the charts this is a short reality check.
Apple, Google or who else can feature and promote you - NaturalMotion is one of the 'lucky' companies in Jons article. I played the game till the end. Good work guys and it wasnt luck you were promoted!
You can have big marketing budgets to use, etc - I think we all know the BIG spenders are here. You can cooperate with others the media, OEMs, operators, other devs, etc. You can have great product and a strong naturally grown user base. Or you can add 'secret sauce'.
At the end of the day, what happens when the promotion is over and the marketing budget is gone?
Without a great user experience, the game will fall down as fast as it was pushed up the chart.
Just keep in mind that, without marketing and promotion, great games aren't discovered.
Product marketing in the app world is way more than just CPI campaigns! Without a great game you still cannot have a sustainable business. Using the VC money to buy up the charts with a low quality game in order to get bought by another company - thats a lottery! Same as releasing a game without any promotion and marketing nowadays.
Will we see the bubble burst? Nope I dont think so. Too many companies are in the ring and the app world is very healthy. If one, two or more companies burst its good for all the others. The demand for great games is there. Consumers love playing games!
Every company or developer has their own way to get up to the charts and to do business. I respect all of those. Will HandyGames spend $2-5 for a download? Not yet. Is it 'game over' for indies? No, but the way up to the top is getting harder as the industry gets older.
Just remember the mobile game industry is in its teenage years it's not easy to understand. I'm happy to have been here from the beginning to see the madness come and go.