Stateside

Stateside: Why King's word isn't law when it comes to pulling in-app advertising

But the firm isn't royally wrong, either

Stateside: Why King's word isn't law when it comes to pulling in-app advertising
Chicago-based Carter Dotson is a senior writer at 148Apps.com, which was acquired by PocketGamer.biz publisher Steel Media in 2012.

King recently sent its most prized messenger down to the bottom of the mountain to deliver a royal decree to the huddled masses – all naturally trying to beat just one more level on Candy Crush Saga.

"Ye glorious leader hath decreed there shalt not be advertisements in thy games any more!" he boomed, commanding the attention of the peasants licking at his feet.

"Now begone, oh worthless subjects! Forsooth! Begads! And other questionable medieval lexicon!"

Well, it probably didn't happen quite like that, but the point remains: King has ditched external adverts as a source of revenue entirely, instead betting the farm (or castle) on in-app purchases.

Sure, the firm will continue to cross-promote their own games, but those ads that pop up after levels encouraging downloads of other games? Gone, entirely.

It's the kind of move that, thanks in part of Candy Crush Saga's dominant position on mobile right now, begs the question as to whether King is striking out on its own here, or whether other developers should follow the firm's lead and also cast their ads into the kingdom's dungeon.

Money matters

Should they? Well, not necessarily.

King's move is a very context-dependent decision that developers should only consider if their revenues are such that they feel they can take advantage of the benefits of going ad free without suffering financially.

First, lets consider the fact that King is currently making Scrooge McDuck levels of money.

We can't say just how big the revenues are at the firm, but considering Supercell has been known to pull in $2.4 million a day on the back of two top five iOS games, it's fair to say that Candy Crush Saga's run at the top of both iOS and Android (not to mention its Facebook revenue and the rest of King's portfolio) suggests the firm could easily be matching that $2.4 million a day, if not exceeding it.

The long and short of it is, King's in-app purchases are healthy enough to ensure it's making a lot of money with or without in-app advertising.


Candy Crush Saga

Now, consider the unique nature of mobile game advertising: it's predominantly ads for other games.

That's quite a weird proposition when you think about it. It would be like walking into your local supermarkets and, every few minutes, huge signs would drop down from the ceiling in front of your face pointing you in the direction of a rival store.

Sure, it's making money for the shop selling the ad space, but it's obtrusive and is driving customers away to competitors. That's what mobile game advertising does.

'Unique position'

Taking that on board, King's perspective suddenly becomes a lot easier to comprehend.

King's in-app purchases are absurdly valuable, so – beyond what comparatively amounts to a few pennies and the old gold brick – what's to be gained from continually driving customers away to competitors?

Why not try to keep the Candy Crushers within Candy Crush, helping them spend more money rather than testing their patience with pop-up banners? It's a win-win, and for King it makes total sense.

Consumer tolerance for advertising of any kind is arguably falling apart, too. Think about how Netflix and 'binge viewing' have taken off - seamless experiences are the ideal for any form of entertainment.

So, in a market where it's now possible to get money directly from customers without disturbing that seamlessness, why keep poking them in the eye with ads to earn money from them indirectly, too?

Because, for those without King's obvious riches, this ad-free approach isn't really an option.

According to PikPok's Mario Wynands, King is in "a fairly unique and privileged position", with the company "able to make strategic monetisation decisions in a way that's not necessarily available to other developers or publishers."

Follow the leader?

King is making the kind of "screw yoy" money that only a select few others are even coming close to matching.

In the case of PikPok – hardly an unsuccessful outfit in the mobile arena – advertising remains a necessity for monetisation of individual games (and one that may cause top grossing rankings to undershoot the true success of their titles), but not for monetisation as a whole.

"Advertising represents a significant proportion of PikPok mobile revenues, so we won’t be following the lead of King any time soon," said Wynands .

"But while I'd certainly recommend all developers and publishers consider advertising as part of their monetisation strategy, I don’t suggest it is necessary for financial success. Every app is different, and the monetisation methods should be tailored to the experience and the consumer."

The long and short of it is, it's pretty damn good to be King right now.

The firm's in a position where the non-monetary benefits of shutting down a revenue source can be evaluated without risking landing the company in financial trouble. Indeed, King won't just remain moderately successful post in-app advertising, but likely incredibly so.

For the developer who only has an inflatable kiddie pool full of singles to dive into when trying to show off their wealth, however, this is one case where following the leader may not be the best idea.

Stateside columnist

Freelance writer covering mobile and gaming for @toucharcade, @Gamezebo, and more!

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Rik Haandrikman
This isn't anything new. We ditched advertising in and around our games 5 years ago. It's a bit of a fable that the biggest opportunity from in app purchases is that they've allowed game developers to monetize more people by offering microtransactions. What it has allowed us (and many others) to do is make a bundle off of the whales. Suddenly your most engaged users aren't limited to giving you 60 bucks to buy your game once. They're not even limited to a 15 dollar a month subscription. They can spend as much as they want. Nobody's getting rich off of the few percent that spend a dollar a month. We're getting rich off of the tenth of a percent that spends hundreds a month. The longer someone plays your game, the deeper the player's connection will be and the likelier it is that you'll be able to turn them into a 0,1 percenter. All ads do is give users an 'out'. It's simple math: Adding ads brings in additional revenue now, but it might limit LTR on the long run. If the hit your LTR takes is bigger than the revenue added by the ads, you lose them.