By Magnus Alm, CMO, Palringo
There are more than 1,000,000 apps in the App Store and the same goes for Google PLAY. Needless to say, there is a discoverability issue for developers. A few lucky ones are able to get that global hit which turns into a viral phenomenon, such as Flappy Bird. But what about the rest?
Millions, if not billions, of funds are invested into developing mobile games each year. There is good reason for that. Apple recently announced that their App Store had generated $10 billion during 2013 and more than $1 billion in December alone. Yet surprisingly few developers invest money or resources into marketing. According to a survey by marketing firm App Promo, 52% of developers devote 5% or less of their time to promote their app. Even more astounding is that 52% of the developers had zero marketing budget, even though 91% of them believed marketing was key to success in the App Store. The reason more often than not is that the developer is mainly driven by passion for developing games, rather than marketing them. No surprise, as the games industry has always relied heavily on passionate individuals rather than rigid corporate structure and marketing plans. The mobile market is an open marketplace where everything you need to know about publishing on the appstore is more or less public knowledge. The hard part is refining that knowledge, which is tedious work. The finer details, the tips and tricks you need to master, can result in costly failures until you get it right.
The need for publishers has always been apparent and is indeed still a relevant value proposition for developers in the age of mobile gaming. However, the current publishing models often stem directly from console and PC games development, which is a very different market. Few publishers truly understand and value the difference of publishing a console game compared to a mobile game. The business model for mobile has revolutionised the games industry, with in app purchases and free to play as dominant forces. But it is led by new and clever startups rather than the old publishing dinosaurs of yesterday. These startups are able to navigate through a rapidly changing landscape and adapt at any given time. They know how to leverage ad spend to reach and maintain good chart positions in the app stores. Another key area is that they analyse what is happening within their games and refine them constantly with updates, in order to optimise performance. Few developers have the insight, funds or (to be frank) interest in keeping track of all of these areas. That is why most developers would have a lot to gain by siding with the right publisher. A telling number is that according to analytics firm Distimo only 2% of the Top 250 developers for iPhone apps in the U.S. App Store were newcomers in 2013. The other 98% were established developers and publishers.
A big problem for most publishers looking to establish themselves within the app ecosystem is that they do not have access to a true network of users. They might have a cross game ad system, in order to benefit from previous successful releases. But they do not outright “own” their users, meaning they lack a direct and open link of communication to the end user. The more direct that link is, the more efficient and valuable it is. That is why there is a strong trend among messaging and social platforms to get into games publishing right now. They understand their users behaviour, their specific appetite for content and sometimes even regional appeal. Giving the developer access to insights and long term retention mechanisms (such as messaging) is beneficial for both publisher and developer. Compared to a marketing platform like a social app, the shotgun approach of banner advertising is very indirect, costly and a lot less effective. If the publisher has direct access to users, as opposed to indirect access to a network of users, that publisher has real value.
When deciding whom to work with the developer should shop around and scrutinise every offer. In the end, the publishers who have access to a large network of users, know their target audience and have marketing capital to spend will prevail. Developers shouldn’t expect less.
Looking forward we will probably see more messaging and social apps entering games publishing. We will also see niche publishers, similar to smaller record labels, as the app stores grow their user base. Most importantly, the cooperation between the developers and the publishers will be based on a mutual understanding of each other’s businesses and user base.