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Regardless of the measure of value, audience size or growth, mobile is the dominant form of gaming media. Already immensely popular due to its accessibility and wide range of content, the pandemic of COVID-19 has created hundreds of millions of new mobile gamers and increased playtime and spending appetite for existing gamers. With over a billion weekly game downloads from the Apple App Store and Google Play, which represents over $ 1.7 billion in weekly spend, the mobile game industry is clearly booming.
It’s also super heavy, fueled by the significant revenue from a few thousand games; the main one of them is hits like PUBG Mobile, Coin Master and Candy Crush. In August, seven mobile games grossing over $ 100 million per month on average. Another 810 gross of at least $ 1 million per month. These numbers are astounding and are a testament to world-class game development, smart marketing, the virality of great gaming content, and a little bit of magic dust for luck. Dig a little deeper into the two dominant mobile stores and you’ll see that between them they’re home to around 1.5 million games. Some basic calculations suggest that well under 1% of available games generate around a quarter of revenue.
For every successful business start-up, there are dozens more that underperform or go bankrupt. Markets and consumers decide. Well, yes, up to a point. The problem for mobile games is that big tech players like Apple and Google are taking an increasingly privacy-focused approach that firmly stacks the odds of success against newcomers and smaller publishers. Even Facebook, for many years the primary source of new player acquisition due to the granularity of its targeting, is rebuilding its advertising platform in response to declining efficiency following Apple’s removal of its username for users. advertisers (IDFA). As big tech platforms make such dramatic changes in the data they allow advertisers to access, the odds of a new indie game being discovered and becoming a commercial success beyond 2021 are fading further.
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2021: the first year of private life
For small mobile games, pursuing a paid model is a surefire way to stop your game from starting, while reaching the ladder to monetize only with in-app purchases is rare. Monetization with ads is therefore the main driver of revenue, allowing publishers to generate revenue for each player. Most mobile games typically rely heavily on marketing and advertising to build brand awareness and attract and monetize users. While mobile ads are not universally liked, the majority of mobile gamers appreciate the exchange of value they offer.
This exchange of value has been fueled by access to incredibly granular user data that enables three things:
- Show the right advertising content to the right user at the right time.
- Advertise your game to players of other games who may like your content.
- Assign installs to a certain marketing channel – that is, determine where your game users are coming from and whether the money you spent on advertising was worth it.
2021, and in particular the changes Apple introduced in its iOS14 update, has shaken the status quo in mobile marketing. By killing its IDFA in the name of privacy, Apple has significantly limited the user data available to advertisers. This means that games – for so long able to use IDFA or other user information to bind identities through deterministic attribution – can no longer figure out how to effectively acquire new players. While iOS users can choose to share their data with the apps they use – and many consumers who understand value trading with their favorite mobile games do – it still only accounts for around 25% of iOS users. As a result, deterministic attribution as we know it was removed, and ad spend on iOS subsequently fell by about a third between June 1 and July 1.
During the same period, spending on Android platforms increased by 10%, with advertisers shifting budgets to Google Play and other large Android ecosystems such as the Huawei AppGallery or the Samsung Galaxy Store. However, the direction of travel on Android is also heavily focused on privacy, which means that the ad spend boom it is currently experiencing may well be short-lived. When advertisers’ access to granular user data is limited on Android, it’s fair to say that the mobile gaming business model will be significantly damaged.
WTF is data science anyway?
While games now lack familiar user data to inform their marketing, there is certainly no shortage of other data sources. In fact, they are absolutely drowned in data – it’s just that they are aggregated, difficult to analyze, and have rarely been used before by the majority of app vendors. The cold, hard currency of clicks has been replaced with elusive signals that must be unmasked.
This means that the importance of data has never been greater than it is today, or more precisely, the ability to transform data into information. Publishers who relied solely on Mobile Measurement Partners (MMPs) to acquire the best players are in disarray because crucial information is simply no longer available. These third parties no longer have all the answers, which means that games’ proven growth strategies are crippled and the era of MMP-centric marketing is over. Small and even mid-sized independent game developers find themselves searching Google for things like “data science for user acquisition.”
Big multinational publishers like Zynga, Rovio and King are in a much better position to adapt to the new normal. They have large data science and research and development departments that leverage user information internally. With access to significant capital, they can also bring more data and more users into their ecosystems by acquiring smaller publishers. Zynga recently bought Rollic Games, while Rovio bought Ruby Games, two successful Turkish studios and publishers.
To close the gap, most publishers use a technique called fingerprinting, a hacked form of probabilistic attribution that doesn’t rely on deterministic user-level data. But it only works for ad networks that use links in their ads, which means it doesn’t work for Facebook, Google, or Snapchat. Apple has spoken out against fingerprints, and it’s not unlikely that it will be shut down for privacy concerns on iOS15. Even if not, the effectiveness of fingerprints will decrease due to the release of iOS15’s Private Relay service, which essentially removes the main probabilistic signal for iCloud users – their IP address.
So, game over for the indies?
Ninety-nine percent of publishers simply don’t have access to in-house data scientists or the $ 100 million development and marketing budget advertised for runaway hits like Genshin Impact. So beyond praying that cloud gaming or subscription services like Apple Arcade suddenly reach the scale needed to significantly disrupt the market, or hope to be spotted by a big studio, small mobile games are they doomed to failure? Not necessarily, because when Apple closes a door, it opens a window. I’ll keep it light, but iOS15 will put all SKAdNetwork data – marketing data sourced from Apple but deliberately disconnected from user identities to preserve privacy – in the hands of mobile game developers.
This Apple-centric form of attribution will give developers direct access to data that was previously the preserve of ad networks and allow them to compare it to what ad networks have told them (expect data discrepancies). !). Combined with deterministic attribution using data from users who have consented to the sharing and probabilistic attribution, this will constitute the bulk of mobile gaming marketing information. Reconciling this data will be the biggest marketing challenge for mobile games. This will require new tools and training to help small studios and publishers collect, verify and analyze their new data, and offset some of the friction associated with adjusting to an unfamiliar marketing environment.
I’m not going to water it down. The confusion 99% of mobile game companies are feeling about the privacy-centric world and shifting to Apple-centric (and soon Android-centric) attribution is an opportunity for the big mobile game players to further step up their advantages. But with the strategy and the tools at their disposal, I’d bet the creativity, agility, and passion of independent developers and small developers means that great IP will always have a chance.
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As Tenjin’s Marketing Director, Roman Garbar uses his in-depth knowledge of mobile marketing analytics to educate independent and mid-sized publishers on how to develop their games..
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