"The friction around alternative distribution is starting to come down"

• Regulation has opened up new distribution opportunities that were largely unavailable to developers several years ago.
• Horbach argues that developers should focus on finding the right distribution mix for each game rather than relying on a single channel.
• Mobile game distribution to become more fragmented, says Horbach, with regional, genre-specific and direct-to-consumer channels sitting alongside the major app stores.

For years, mobile game distribution has largely revolved around two dominant platforms, with developers building their businesses around the big names of Apple’s App Store and Google Play.

During this time, alternative app stores have existed, but studios have treated them as a secondary consideration in the West.

However, in the last couple of years, that dynamic has become more complex. Regulatory intervention in markets such as the EU, growing investment in direct-to-consumer models and other factors such as rising user acquisition costs have created a landscape where developers might look beyond traditional app stores and methods. 

For Flexion, which has built its business around distributing mobile games across alternative app stores, the shift represents a significant change in the market. 

Changing distribution landscape

Speaking to PocketGamer.biz, Flexion general manager Horbach Victor Horbach says the shift is not necessarily about alternative stores replacing Apple or Google, but he instead sees developers beginning to think more seriously about how different distribution channels can work alongside one another.

“Alternative stores have actually been a significant part of the ecosystem in some regions, China being the obvious example,” he says. “But globally, and particularly as an alternative to Apple and Google, there is definitely stronger momentum now.”

He points to regulatory pressure and the changes being triggered by Apple and Google as the core shift.

“The friction around alternative distribution is starting to come down and that changes the opportunity quite significantly,” Horbach says. 

For developers, however, he argues that the opportunity goes beyond simply finding stores with lower commissions. The bigger change is the ability to build a broader distribution strategy, which he says include better economics, access to new users and potentially a stronger presence in certain regions or channels. 

A shifting balance of power

Horbach believes that the relationship has already started to change, particularly as D2C has become a more established part of the mobile games business. 

“Five years ago, web shops were effectively off limits and developers taking payments or distribution outside the major platforms could face serious consequences,” he says. “Today, D2C has become an established part of the industry and I think that will be very difficult to reverse.”

At the same time, Horbach points to the changing economics of user acquisition, with organic discovery through the major app stores being less powerful than it once was, while paid acquisition has become incredibly important but also expensive. 

“If developers are bringing the users themselves, it naturally raises the question of how much value the platform is providing in return,” Horbach says. “Alternative stores add another layer of choice. Some bring their own audiences, their own promotional opportunities and their own distribution. The more genuine options developers have, the stronger their position becomes.”

The practical barriers and regulation

Horbach notes two major barriers for developers looking to expand across multiple stores. 

“The first is technical and operational. Every additional store brings its own requirements, integrations, testing, updates and user support. Developers still need to maintain product parity and make sure the player experience is just as good as it is on Google Play or the App Store. Doing that across multiple channels can become surprisingly complicated.” 

“The second barrier is commercial. Simply putting a game into another store doesn't automatically create incremental revenue. You need to work the channel: promotions, storefront visibility, UA tests, local opportunities and so on.” 

Some of the technical work however, may be becoming easier. Horbach points to AI-assisted development as one factor that is already reducing some of the integration work that is involved when trying to support different channels. 

The underlying challenge remains though, developers need to understand the individual stores and put resources behind them if they want them to become meaningful distribution channels. 

Another aspect is the role of regulation and how this is changing the landscape.

“Without regulation, I don't think we would have anything close to the level of competition we are beginning to see today. The web shop market probably wouldn't exist in its current form and the economics of mobile distribution would have remained largely untouched.” 

He explains that the significance is not just that regulation has changed the rules around existing platforms. He says that it has created room for different commercial models and distribution options to emerge entirely. 

“Not all of them will succeed, of course, but developers now have choices that simply weren’t available a few years ago. That alone is a major change.”

Launching Exprexion

Horbach distinguishes between improving the economics of existing distribution and genuinely changing how games reach players.

“If developers simply get a better payout from a store but continue competing for exactly the same users through the same UA channels, a lot of that additional margin can ultimately flow back into user acquisition,” he says. 

The bigger opportunity comes when developers can reach genuinely different audiences and distribution routes, he notes. That could mean different stores serving different regions or even genres, while D2C gives studios better control over their relationship with players. 

This changing landscape is also the context for Flexion's launch of Exprexion earlier this year.

The suite brings together Flexion’s existing work in alternative app store distribution with newer approaches to creator-led marketing and D2C sales.

“What we've seen is that developers have been watching the regulatory changes very closely, but many have understandably been cautious about doing anything that might put their relationship with Google or Apple at risk,” says Horbach. “I think that ‘fear factor’ is now largely gone.” 

There has, however, still been uncertainty around which alternative models would gain traction, and the market can be tough to predict in terms of which stores would gain scale and which models would work. 

This uncertainty is one reason Flexion developed Exprexion, Horbach says. 

“The idea isn't to predict one winner. It's to remove as much of the technical and operational complexity and give developers the ability to participate across different distribution models.” 

A fragmented future

Horbach expects the mobile distribution landscape to become more fragmented over the coming years, but he also argues that fragmentation does not necessarily mean a worse experience for developers or players.

“There will still be large global app stores, of course, but probably with less dominance than they have today,” he says. “Alongside them I expect to see strong regional stores, more curated or genre-specific stores, D2C distribution and potentially entirely new channels that we haven't really scaled yet.” 

He also believes studios will need to look beyond the headline commission rate when making decisions around which channels make sense for their games. 

“And I wouldn't look only at the store commission,” he says. “Look at the whole equation: distribution costs, access to users, UA opportunities, organic reach, payment economics and how much control you have over the relationship with the player.” 

Many established developers already have the information needed to start making those decisions, according to Horbach. Rather than trying to predict exactly which model will dominate the market in the next few years, he encourages developers to start experimenting now. 

“The winners will probably be the developers that have the flexibility to follow their players wherever the best opportunities emerge.”