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Developers and publishers traditionally turn to the app store when launching a new game. But publishers are facing three big challenges when they rely on these platforms to generate all their revenue and discoverability, says Miikka Luotio, regional director of Europe at Xsolla.
“The market for new game development is quite saturated, especially for mobile games,” Luotio says. “It’s harder and harder to get your game seen organically in an endless sea of mobile games right now. If you have a strong product in itself, having a cross-platform strategy should be on the radar.”
The platform tax that’s cutting margins
“The most talked-about issue is the so-called 30 percent platform tax on all the mobile platforms,” Luotio says. “Every project, every game, as mobile publishers start scaling, they have to calculate that in and remove it from their profits. The question is, how is that justified?”
The platform tax also raises the bar for the profitability of marketing, and slashes the budget considerably. Some publishers are finding it’s harder than ever to run and sustain a marketing campaign.
How player engagement is hamstrung
The second issue is developers’ lack of control over their own player base. For a mobile-only product hosted in the app stores, the only way to communicate or interact with the player base is within those platforms.
“Not being able to own your own players in your own website, or your own ecosystem, hampers publishers who introduce interesting new economics into their player base, such as web3, NFTs, blockchain and so on, because mobile platforms are not allowing that,” he says.
Moving outside the existing mobile ecosystem gives publishers free rein over creative player engagement. It opens up social mechanics like gifting, and developing better offers that appeal to specific player audiences, like the high spenders.
Tightened privacy is removing visibility
The third challenge is the multiple privacy changes both platforms have made, making tracking near-impossible. Performance-based marketing now is nowhere near as effective as it used to be – and it’s harder to measure the return on investment accurately. Many publishers have had to decrease their marketing spend considerably, and many haven’t yet found a way to compensate.
Mid-core and core games, where the cost for user acquisition can be quite high, already have to bid against each other in performance marketing, as well as in player acquisition. On top of that, the platform tax makes it even harder to acquire new players in a profitable manner.
The opportunities outside the app store
Waiting right outside the app store are a host of tried-and-true, successful ecommerce strategies. The ability to cater to a player, based on their behavior in the game and their purchase behavior, is huge, Luotio says. Right now, developers are missing out on the opportunity to engage players with the kind of offers that keep them happy and gaming.
“In my opinion, a lot of games could double or triple the LTV of their whales, for example, if they were just able to give them smarter offers,” he says. “This kind of ecommerce thinking is a place where the game industry is very behind. They’re missing out on those opportunities to cater to their own players.”
When players start making a game’s web presence their home base, the possibilities of performance marketing return since there are far fewer tracking limitations. It also puts retargeting on the table, which can be extremely effective for user acquisition. Developers can serve up strategic offers to existing players as they browse social media channels, and players can purchase without having to open the game.
“It creates a whole new world of catering to your existing players and developing effective performance marketing strategies,” Luotio says. “You start learning this ecommerce mentality that the mobile industry has kind of missed out on.”
How to bust out of the app store
Publishers are finding ingenious ways to reach their players outside of traditional channels, Luotio says, for a more enriched experience — a win for both sides.
“I see a lot of publishers educating their players around how it’s okay to go outside of the game to buy things, to interact and do things. The game can exist outside of the mobile platform,” he says.
They’re directing their players to leave the app for things like blog content on the game website, events and community features like chat rooms and forums, for instance. They’re creating exclusive web shops, where players can buy hard-to-get items in the game, and introducing a web-exclusive currency that’s only achievable through the web shop. And the more they buy, the more likely they are to keep playing.
“The moment when you take your player base and start offering them things outside of the games themselves, the moment you have control and you start creating intrinsic value for your company and your players that can exist independently of the platforms. That’s when you create a whole new world of catering to your existing players.”
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- How to improve your UA and discoverability
- How to create personalized experiences that improve engagement
- Best practices for your mobile game commerce growth
- How other mobile game developers and publishers increase their revenue
- and more!
- Ilya Utemov, COO, ZiMAD
- Miikka Luotio, Regional Director of Europe, Xsolla
- Mike Minotti, Managing Editor, GamesBeat (moderator)