Mobile Army

Now that's fascinating, a great example of where the evolution is changing. So obviously, Tapjoy, there have been some really interesting discussions about the role of incentivised downloads, some positive, some negative, and I think people that are looking at it probably don't understand what's going on in the marketplace.

If you think about it we started with premium games, so back in the day I was charging £6 to download a game, but essentially in the app store things when from that £6 to 59p pretty damn quickly. The reason was you had to have some reason to get the customer past the barrier of paying. Then freemium comes along, and people started saying "I'll look at the free stuff, because there's no barrier to me downloading it." And now we're getting to the stage where, is free enough to get someone to download your game? Given that there might be a thousand games that are all equally good and free? Some are going to be excellent, but how do you know which ones are excellent and which aren't?

You get to a stage where actually you want to incentivise people to download it. And you could look at that as buying customers, but I think that's completely misunderstanding what this does if you're using virtual currency. And this is why Android is so much better as a market for us as a development community, not just Papaya. What incentivised download can do is give you virtual currency to play the game, and what that is is the developer saying that its game is so good that its prepared to give you some starting money to play the game. That's entirely good. The money doesn't go anywhere else. It's either going to get spent on the game I'm currently playing that I see the promotion in, or it's going to get spent in the game I see promoted. It has value, but that money is being fed into the community. And if they like that game they will go on and spend more money.

There's a Darwinian opportunity in Android. You've got to work harder but if you do the rewards are there.

If you look at that value chain working with incentivised downloads like Tapjoy it's brilliant. But then we wanted to do something a bit different, and go a bit further. If you can apply your social graph to the offers that you're presenting, so some of your friends are playing this game, the likelihood that you want that offer instead of something else goes up, so there's a reason you spend time with people, and that's because you have a shared interest. And if you have a shared interest the likelihood that they'll be more than one interest that you share, and the offer will be more relevant to you. And the one rule of anything like this, is how relevant is it? If you want to get advertising to work, it has to be relevant to that user.

So it's a fantastic arrangement that we've got with the Tapjoy guys, I'm really interested to see what happens with it. I think it's just going to completely change the way that people feel about incentivised downloads. The question is, obviously, we have to worry about what we're going to do with Apple, but I genuinely think that Apple need to understand the context in which these kind of things are done. And I think they quite rightly want to protect their audience, but we want to show them that there are opportunities to make the audience have a better time, if you have a well managed virtual currency, and if you have well managed incentivised downloads. So obviously we have to play nice with Apple, and we have a great relationship with them, but I think the opportunity right now is in Android.

Because we can experiment with new models, we can experiment with this integrations between the social and the incentivised download, and I think we will end up having to compete harder, and therefore evolve faster, in the Android market. And those games that do that well in Android are going to be a much better business model than is currently available with Apple. That's a personal view though! The inherent issue of the Android market, namely credit cards, are actually long term strengths because it means if you're creating content for that platform, you have to learn every trick about understanding every trick about marketing that experience, how users are motivated. Because if you don't understand those things you can't compete as effectively, you can't get the same revenue return.

There's a Darwinian opportunity in Android. Namely that you've got to work harder but if you do the rewards are there. And actually the rewards will give you benefits not just in the Android market in the long run.

Our growth has been enormous, we've blown away all expectations. Going from 18 to 37 million is mind blowing, and we're still about 68 per cent in the US as well, so it's all good. And I think what we've worked out is that it's those guys who really understand social games, that really understand the difference between a Facebook or online social game and a mobile game, those guys, we want to nurture them. The more that we can learn from what they do we can help them with getting their content distributed and discovered, monetised.

We want people to come away having had a great time playing these games. We don't want them to end up with a hangover afterwards.

I think those guys are going be generating the value, and we're seeing a great load of pipeline, initially small companies, trying it out, but we're starting to see some really nice names of companies that are thinking the time has come, premium versus freemium argument has been done, freemium has won hands down in mobile particularly, Android more so, in China even more so, so therefore we have to adopt this. So what that really means is we have to get back to who the customer is, and remember that they want to be entertained, and they want to be able to show to their friends what they've got out of an experience.

So that I think is where we'll end up focusing, we just want to nurture those kind of social games and get people excited about the potential and at the end of the day we want people to come away having had a great time playing these games. We don't want them to end up with a hangover afterwards, like we're seeing with the Facebook model, where you play quite an interesting social mechanic, but not always the same kind of long term rewarding game experience that you might want.

I'm not trying to point fingers at any particular game, but the game design models are very different, and if you're constantly playing a psychological war game with your customer, that could be a problem. Let's help them enjoy their content, and give them reasons to spend whatever money they're willing to share while enjoying that content, and what an amazing role that is.