The mobile games industry is on the brink. As Apple’s post-IDFA environment becomes firmly defined and Google formulates its own response, the reliability of proven monetization strategies fluctuates – with an estimated 39% of mobile developers losing money as a result of changes to the IDFA. ‘IDFA.
It was the backdrop for the Pocket Gamer Monetization Summit. But far from being a dismal gathering, it was a chance to talk about how the mobile games industry is finding creative new ways to engage its player base and unlock new revenue opportunities.
Although the summit was held under loose Chatham House rules – you can discuss who was there, but not what was discussed – AdInMo sponsors kindly shared comments from Chris Wright, Chief Technology Officer at AdInMo , who throughout the day enthusiastically pointed out that “true innovation comes from changes in the industry, and we are at another of those changing points.”
Below are excerpts from his panel appearances, interspersed with comments from moderator Oscar Clark, Chief Strategy Officer at Fundamentally Games.
How F2P changed the world, and can ads do the same?
Chris Wright: It was about F2P – which people initially thought was awful and would destroy the industry – but people would build paid games and try to make it work like F2P. The industry slowly got around to building F2P properly and doing analytics, and that kind of stuff happens with ads, they just get thrown around.
We could disable ads for F2P spenders – and that turned out to be a really bad idea
Originally, it didn’t matter because they were interstitials: they were designed to be part of a game, so you used them as a means of monetization. Reward ads represent the first time that ads became more than a way to earn money, but part of the experience.
We did a lot of analysis on how people were playing F2P and we could predict who was going to spend. So we could disable ads for them – and that turned out to be a really bad idea. Spenders also love ads, especially reward ads, because it adds to the experience. Players want a hybrid model.
What we do at AdInMo is really embed in-game ads and do something specific. It’s a recognizable part of any developing industry: when film is born, the people who use it to record theatre. It took 20 years before people thought about taking it out of theater and into movies. People always start with the previous one and build on it. That’s what we do with ads.
Oscar Clark: It’s the same as when I was at Unity Ads: we couldn’t get people to see the value proposition introduction model and how that would support the IAP offering. Often people think of it as a tax, which discourages people from buying in the first place.
It shouldn’t be IAPs versus advertising, but how we build a hybrid model. We recognize that there are different ways to earn money and we recognize that games should generate revenue. How do you get the game ecosystem and content – and potentially further, if we’re thinking about game to win – aligned?
It shouldn’t be IAPs versus advertising, but how we build a hybrid model
Make the connection between IAPs and in-game ads
I’ve thought a lot about in-game advertising in relation to IAPs, and although people traditionally consider ads, IAPs, and the game itself as separate things, but I want to know if we can do it all together ? Rewarded ads were one of the first ways to do this, but what about using ads as placements for IPs?
We know from analysis that it is very difficult for people to spend. Nobody wants ads, nobody wants IAPs, and nobody really wants to spend £40. But if you can encourage and motivate them to spend £3-4 on IAP, have a healthy relationship with the ads, and possibly spend a bit more to buy the game, that’s a good outcome.
But I would say they don’t spend £40 on a game up front, but rather spend that money to get a feel for what they’re going to get. I know I’m splitting hairs, but this is a key difference.
I don’t think ads are going to change that. People expect ads to be shown around the world – on billboards while you walk around, during sports broadcasts, nobody has a problem with ads in the rest of the world. Why should we care about ads being bad in games?
In fact, I think ads are a superpower for gaming: what other platform can you advertise a competing product on without hurting yourself? It’s an incredible thing.
Can you push players back to bring them back?
Flow is a really interesting idea – the idea of having something so important to you, the next time you look at your watch is five hours later. And games are one of the few entertainment mediums that allow you to get involved to the extreme, which is why games have become such a hit.
Advertising should be part of it. Advertising is already a key mechanic, but it needs to support the flow of the game. No one likes interstitials because they interrupt. We need to make sure the ads don’t get in the way of the player enjoying the experience, but wouldn’t it be so much better if it also increased how much they enjoy it while generating revenue for the developer? This needs to be designed from the start, alongside the game.
Taking someone away from a game thinking they’ll come back is a huge risk
When you’re designing a game, design from scratch with lace monetization and integrate it into the experience so it actually works, rather than lag it and interrupt the flow and you get all the problems that we are all used to now.
It’s the old adage: how do you make money from someone who plays your game? You have to make them play your game. If they don’t play, you guarantee they won’t win any money. Retention should therefore be the most important thing – and monetization is secondary to that.
[one panellist asks whether interstitials can be used as a positive gating mechanic that supports retention]
Shortening sessions can also prevent burnout.
To kick someone out of a game thinking they’ll come back is a huge risk. 50-60% of players don’t come back after the first session. Keeping them in the experiences is absolutely essential, but giving them the motivation and reasons to come back is essential for that.