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NZGDC13: the business of doing business

Digger deeper into the business of acquiring, maintaining and profiting from app users, Chartboost`s Christine Lee faciltated a panel of three NZ game-makers, the independent Dave Frampton, Runaway`s Tim Nixon and PikPok`s Ander Satterwaite.

Lee offered up some statistics from Chartboost`s research, including the acquisition cost of users through buying advertising ($1.80 a head in NZ), and pitched questions on what and how different companies were doing to attract and develop their user bases.

PikPok offered by far the broadest range of experience, with a stable of games under its belt. Satterwaite noted the across the range, half of the company`s revenue came from paid advertising within its games, half from in-app purchases (IAPs). On a per game basis, he said most split their revenue in the 40-60% range for both ads and IAPs.

As a rule of thumb, Satterwaite said PikPok`s experience was that the more “commercial” the game (Oreo: Twist, Lick, Dunk) the more its revenue split leaned towards advertising, the more hardcore the game (Into the Dead) the more it leaned to IAPs.

That, he said, applied to iTunes. On other platforms, Android for example, the earnings from ads form a far greater percentage of the total across the board – and its a much smaller marketplace. Asked by Lee whether Android iterations of a game developed for iDevices was worth it, he said yes, although not necessarily in its own right.

The Android release of Into the Dead, which came several months after the iTunes release generated a new wave of media coverage and awareness. Satterwaite claimed the for the following month, earnings from the iTunes version jumped back up to where they`d been immediately after release.

A burgeoning number of platforms, now including Google, Amazon and Windows8, made for more iterations, more opportunities, but also some specific issues. Asked whether the Windows8 release had been worthwhile for Dreamworks` Turbo Racing League, Satterwaite observed, “We were paid to it.”

“To be fair,” he added, “of the game`s 9 million downloads to date, 250,000 of them have been for Windows8.”

Runaway`s Nixon suggested Android wasn`t trusted as a place to spend money, and that the company had been “terrified” of the results of Flutter`s Android release – so worried the launch was postponed.

Casual games, he suggested, performed far worse on Android than hardcore ones.

Frampton noted he would (although hasn`t yet) release Blockheads on Android, since the cost of doing so was minimal and the word of mouth the release would generate would help the game.

Harking back to the $1.80 a head player acquisition cost, all speakers admitted they couldn`t countenance such a spend – even for something like Into the Dead (12 million+ downloads).

Nixon queried the validity of the figure, noting it didn`t take into account any knock-on effects, such as a player discovering the game as a “paid-for” acquisition, but then introducing two friends to the game, which effectively reduced the $1.80 acquisition cost to 60c.

He also recommended Nicholas Lovell`s work at GamesBrief, which includes a number of downloadable spreadsheets, for getting a handle on possible results of various acquisition strategies.

The tools the speakers did use to attract players varied from paid advertising, cross-promotion with other games, word of mouth, media, being featured by iTunes, and – in PikPok`s case – promotion within the company`s other games. PikPok sees the best results from advertising within its own stable of games.

Chartboost`s Lee noted that mirrored international experience for other multi-title producers, who see a 12.7% conversion rate from advertising their new game within their own portfolio compared with 10.7% conversion from advertising in another company`s game.

Lee works with PikPok and Frampton`s Majic Jungle, but both were open in their assessment of the pros and cons of using third party services to help drive acquisition. Lee only had to claim “I didn`t pay them to say that” once.

She offered up some stats on best practice in acquisition and what people could do to maximise conversion rates. Drivers included branding, the correlation between the advertising artwork and the in-game artwork, and the biggest driver – perhaps not surprisingly – Apple`s app store logo.

With the advent of the iTunes model, the ability to update games has long progressed beyond patches to fix the things wrong with initial releases, although many would argue the behemoths such as EA still have a considerable way to go on that score.

Tweaking, or fine-tuning off gameplay metrics data, and the ability to introduce additional elements through updates, can considerably increase a game`s income.

Lee asked the panel what strategies they`d found successful or otherwise in that regard.

Nixon noted that Runaway had moved to an all-IAP model, a decision taken with their publisher not to include any advertising. Runaway`s previous Howling Mouse was free to play with the ability to purchase additional, the cost of which topped out at $4. It monetised poorly, Nixon observed.

With Flutter there`s no limit to the amount that a player could spend through IAPs. The conversion rate of players to players who pay was similar for both games (c2%) but Flutter has dome much higher numbers, including some players who`ve spent over $4,000.

Satterwaite acknowledged that the decision to include in-game advertising had been a major culture-shift within the company, and that the company continues to work on trying to achieve the least intrusive way of presenting those ads – including reducing or removing the ads for players who spend money in-game.

Nixon also noted limited-time offers, get it now or it`s gone for good, were successful in driving revenue.

There was consensus that giving players a reason to visit the game regularly was an important driver of revenue. That, as another speaker also discussed, was often a tactic used within social games.

Frampton noted that multi-player or team-play was something he wanted to explore further, believing that might offer some opportunities for monetising content that a single player model didn`t deliver.

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