Mobile Games: Making it to the 1%

The following article is a guest post from Eyal Rabinovich, Co-Founder of MoMinis.

Anyone involved in the mobile app industry knows just how much opportunity there is and just how challenging it can be to capture it. Global gaming revenue in 2011 has exceeded $60 billion and within the gaming software market, mobile gaming is experiencing the largest growth opportunity and will represent a $7.5 billion worldwide market by 2015, tripling from $2.7 billion today.

Tens of thousands of apps are launched daily, all attempting to tap into this lucrative and growing market; yet relatively few find success. But ninety-nine percent of all mobile apps disappear sooner or later.

So how do developers and studios get their app or game to become part of the valuable 1% category?

Mobile gaming still in its infancy

Like most emerging technologies and industries, mobile gaming is still in the process of figuring things out. Until the iPhone was launched on January 9, 2007, a mobile phone was something most of us used to make calls on and maybe send and receive text messages.

Today, we use our phones for virtually everything, including playing games. Some games have become so popular they've crossed over into the revenue-generating world of merchandising and became the most recognizable brands today - a situation that every developer or studio would like to be in. That's not so easy though.

While it's still finding its footing, the industry presents us with a very fragmented and diversified landscape. From the different operating systems and device specifications to the various game genres, target demographic, geographies and business models, there is no standardization. This isn't necessarily a bad thing. Consumers certainly benefit from the choice and it gives developers the latitude to be more creative, but it does make things more complicated.

And the landscape is not only changing; it's accelerating. This year the freemium business model accounted for 55 percent of all mobile game revenues, and the app stores are constantly flooded with an endless stream of free games. The result is a risk-free gaming experience for the players who are constantly on the lookout for the latest "shiny new toy." The lifetime of the user is shorter, the circulation of content is faster and turnover is constant in this market.

As risk is constantly shrinking for the players, the developers carry the price of developing and distributing the more than 1.2 million apps out there. For a studio, the cost to develop a simple casual game starts at about $50,000 and up. An independent development team with two or three people can be expected to spend anywhere from five months to two years in development time. It's not only the time and money being invested; it's also reputation and brand.

Once your game is ready, the developer needs to start worrying about getting it discovered, and of course, there are the user acquisition costs which are constantly rising (app marketing costs jumped by 56 percent on iOS and 70% on Android since January this year).

But before getting too discouraged, let's remember two things:

1) $60 billion in revenues for 2011, and; 2) There are some innovative and cost-effective ways to not only address but also leverage the issues mentioned above to your advantage.

Introducing cross promotion

The goal is to have your game discovered and without major out of pocket investment. That's where cross promotion comes in. It's an old marketing concept that is proving to be very effective in mobile gaming.

Traditionally cross promotion was considered to be a form of marketing where customers of one product were targeted with a related product (i.e. Martha Stewart included cook book promotions on The Martha Stewart Show). In mobile games, cross promotion is usually advertisements in one game promoting another game from the same publisher.

Generally, there are three basic cross-promotional guidelines:

1. Properly leverage your potential advertising space.

Since cross promotion is really a form of advertising, the first thing to do is figure out where you can advertise. Map all the spots where you can passively present or actively push your other games. After that, you will need to decide what to push and where. This method of cross promotion is proving to be highly effective in mobile gaming for two reasons:

1) It makes the risk smaller since there are no out-of-pocket expenses. By taking the on role of both the publisher and advertiser, any middleman commissions are eliminated as well.

2) It eliminates any concern about whether or not you are hitting your target market. You are; they're already playing one of your games. And it works (see chart).

This is really the simplest form of cross promotion. A lot more can be learned from advertising networks that use incentives to drive players to perform different actions. While not a new concept for advertisers, incentivized cross promotion is still rarely used by developers to cross promote their own content - and that's a waste.

2. Use cross-game incentives.

Give players a reason to try your other games. This could include anything from cool animation, locked content that can't otherwise be accessed, to virtual currency and items that would normally need to be purchased. Rewarding players increases their engagement in the game and leads to discovery of your new game. This particular method of cross promotion has been shown to triple conversions and revenue.

But cross promotion presents us with an even bigger opportunity because you control the content on the promoting and promoted games, which leads to the third guideline:

3. Develop a tight concept with end-to-end integration.

Once you've been successful in getting a user to play your new game, it's important to continue promoting new ones in the future. It will be easier to do this if you can get them accustomed and comfortable to moving from game to game. In order to effectively do that without having to reinvent the wheel each time, create a coherent concept that is easily recognizable by the user and can last over time. One way to achieve this is by integrating cross-promotional content on both ends in order to create a feeling of continuity.

MoMinis' PlayScape is a good example of how this can be done. As one big cross-promotional gaming platform, players can move around seamlessly from one game to another while earning experience points and virtual currency, and completing missions. Not only do they get exposed to all of the games on the platform but the experience is non-disruptive - users with PlayScape play longer, in a higher frequency and rate it higher than all of the games it promotes (4.7 in Google Play).

The idea here is to promote the games in organic ways. Instead of intruding on the gamers' experience, the promotions can become a part of the experience. This not only greatly enhances the chances of getting a game discovered, but creates deeper engagement between the player and your brand.

Things to consider

It's important to remember that players are looking for diversity, and that presents opportunities for cross promotion. However, gamers don't want to be nagged or bombarded with advertisements - so be mindful when pushing new content.

Beyond that, keep in mind that cross promotion is a trade of its own that relies heavily on data analysis, funnel optimization and testing (and more and more testing). If the idea of cross promotion is sounding more and more interesting, you can take advantage of it by either joining an existing platform or creating one yourself.

It's probably the least expensive way that delivers the greatest chances of success for getting a game discovered. For developers wanting to capture a slice of the market's vast potential, being creative while developing and promoting is a must. But if you have enough content, the attention, and follow the guidelines above, you could be on track to make it to that magical 1 percent.

As a co-founder of MoMinis--a leading games publisher with 25 million users--Eyal Rabinovich specializes in developing and delivering products and ideas. Eyal was also an officer in an elite Israeli Defense Force Navy unit, a Senior Software Engineer at Hedge-Tech Financial Engineering, and Lipman Electronic Engineering Ltd.