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Many casual and social game developers have moved to mobile, but since the economics of mobile and web are very different not all of these transitions have been successful. While helping companies like Rovio, Digital Chocolate, Badoo and many others find their monetization strategy on mobile, we have distinguished key factors that developers should change in their monetization strategies while moving to mobile. Andrei Demenjev is sharing these key points so you can learn from and avoid the mistakes made by early adopters of the mobile platform.
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How app monetization is different from what we have learned from the web?
Andrei DementjevCOO, Fortumo
Platforms
Platforms
New smartphone sales in Q2 2011
Every second smartphone sold is running Android.
Android 43%
Symbian 22%
iOS 18%
RIM 12%
Bada 2% Microsoft 2% Others 1%
Platforms
Smartphones in US (July 2011, comScore mobilens)
iOS and BlackBerry are installed on 49% of US smartphones
Google42%
Apple 27%
RIM 22%
Microsoft 6%
Symbian 2%
Other1%
App store revenues in 2010
82.70%
7.70%
4.90% 4.70%
Nearly 83% of app store revenues are made on iOS.
Platforms
Glu Mobile: Android Revenues make only 1/10 of iOS revenues
Challenge: Why develop for other platforms if iOS is making most of the revenues?
Platforms
iOS has the highest level of competition
by Distimo
Platforms
Rovio Angry Birds:
Android revenue = iOS revenue
Answer:Every platform can bring you money
Keywords:competition, experience, expertise, strategy
Going Global
Challenge: Developers are only aiming at established and rich markets like US and Western Europe
Going global
Android sales in 2011
40% of smartphones are sold in Asia-Pacific
Smartphones vs Feature phones
America: 29% vs Asia 70% vs EMEA 31%
Global reach
Answer:You should have a monetization strategy for every region. Asia Pacific USA Western Europe Middle East Latin America Eastern Europe CIS Africa
App stores
App stores
Challenge: Developers are ignoring alternative app stores
App stores
Alternative stores: Opera Mobile App
Store GetJar Appia (Pocketgear) AndAppStore Handango OnlyAndroid Insyde Market Amazon App Store SlideME Appoke YAAM
Regional stores:
Andronavi (Japan) Wandoujia (China) Appchina (China) Fasmicro App
Store (Africa) HiAPK (China)
Operator stores: Vodafone Live! OrangeWorld O2 Active
Manufacturer stores: HTC Market
Samsung Apps LG smartWorld Shop4Apps
(Motorola)
and many more..
..2 000 000 000 downloads on
GetJar only
Premium vs Freemium
Challenge:Developers rely on premium distribution models.
Premium vs freemium
Percentage of free apps:
Android Marketplace
Windows Phone Marketplace
BlackBerry App World
Nokia Ovi Store
Apple App Store
0% 10% 20% 30% 40% 50% 60%
Premium vs freemium
Why Premium is bad? App stores are full of low quality apps App purchase is an investment Cultural differences Weak and non effective billing solutions Free competitors Limited distribution options Piracy
Premium vs freemium
Why Freemium is good? More downloads Target long tail (just like offers) People are used with free apps Ability to adjust to different ability to pay Better global reach More distribution options Lower dependence from app stores Piracy
Premium vs freemium
75% of top 100 grossing iOS apps are games
65% of them are freemium
Answer:Avoid selling your gamesand use Freemium models!
Earn money from free games
Mobile adsOffers In-game purchasesSponsorships and special deals
Mobile ads
$15 billion in 2011.
Mobile ads
Challenge:Mobile ads makes my game slow and ugly.
Answer:Do it smart!
What's critical: Ad coverage Respect low-end devices Try different advertisers Think about UI and design Place ads on loading screens
Mobile offers
A great way to monetize non-paying users.
Mobile offers
Pros: great for monetizing non paying users global reach
Cons: be careful with what you offer you may be promoting competitors don't overload your game by offers don't replace payments with offers!
In-app purchases
What can be sold? virtual credits extra levels trial version activation extra features personalization banner-free version (weak)
In-app purchases
Consumable goods (virtual credits) 68% of in-app purchases
In-app purchases
Challenge: Developers are using ineffective payment methods
In-app purchases
In-app payment methods:
App store billing (Google checkout) – mostly credit card based,
high store margins.
Mobile operator billing (direct billing, premium sms) – good
coverage and conversion rates, low revenue shares.
Credit cards (Visa, Mastercard) – bad coverage, high revenue
shares, kills conversion rate.
Paypal – works in limited number of the countries
Prepaid cards, kiosks and vouchers – low conversion rates
Direct debit and others...
In-app purchases
or
AnswerAnalyze your user base and select the most suitable payment method and additional methods if needed.
In-app purchases
Challenge: Bad user experience during payment flow
vs
In-app purchases
In-app payment is impulsive Every new screen kills conversion by
10-15% Customers are not yet familiar with
mobile purchases Payment should look secure
Answer: Golden rules of in-app payment: the user should reach to the payment with a maximum of 3 clicks.
In-app purchases
Challenge: Developers don’t benefit from ingame promotion.
Holidays discounts
Achievement based bonuses
Limited time offers
Exclusive items and gifts
In-app purchases
Answer: Active promotion of ingame purchases increases the revenues by 30%!
In-app purchases
Challenge: Developers ignore small details.• Currency
• Localization
• Terms and conditions
• Operator/billing provider logos (+ 15% conversion)
• Helpdesk and customer care
• Track user reviews and comments
• A/B testing
In-app purchases
Answer: Make your payment flow perfect!
In-app purchases
Challenge: Wrong game balance
Game is too difficult => they leave before buying
Game is too easy => they don’t need to buy Too few free levels => they are not yet addicted Too many free levels => they had enough
Answer:Develop the perfect balance for introducing paid content.
In-app purchases
Challenge: Wrong pricing policy
$2 in USA $2 in China
Answer:Adjust the prices according to purchasing power.
In-app purchases
Challenge: Lack of offline mode support.
According to Localytics, 15% of mobile apps are launched while offline .
Answer:Your game should be prepared to work and monetize while offline.
