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dharma

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Reply with quote  #1 

To make money in any business there is a simple formula:

Revenue = Revenue/costumer * costumers

Let's say you want to make a lot of money. You need a lot of revenue and keep your costs low.

In the mobile games market this means, either you get a lot of costumers(in our case downloads/traffic) or you make people pay more money (higher revenue/costumer).

Getting downloads is hard, especially for an independent developer. Big companies buy downloads so we can't compete on that level. Getting downloads from search engine optimization is also not really the best way. It relies too much on getting lucky. It's like trying to win the lottery by getting the right combination of keywords. It doesn't help that most keywords with high traffic are also highly competitive.

This seems like a bad long-term business strategy to me. Why? Because we want to get more costumers, not less!

You could also try to get traffic from somewhere else, like social media or youtube, internet forums. There are two strategies: 1. Build a following/fanbase or 2. get a viral hit like "flappy bird"

Forget strategy 2! It again based on luck. No business strategy should rely on luck!

Strategy 1, building a fanbase is definitely better. Look at ketchapp. They have a big following of people. But for this to work, you need to think outside the box. This strategy does not work overnight. And for it to work, you have to have a Unique Selling Point. You have to build a brand, where people look at your game and say: "Hey, this is a game from XYZ". You can't and shouldn't just copy what ketchapp is doing. People don't want another "flappy bird", they want something truly unique.

But there is still one more strategy left. Say you have only 100 people playing you games per day. Imagine one person out of those 100 people pays you $100 a day. You don't have much downloads, but you still get a good revenue. This is of course an extreme example. But I think maybe it is worth exploring this strategy. The big players also use this strategy with in-app-purchases. But for this to work, you have give people something that is really worth $100/day. And this again does take time develop.

So these are all the strategies I can think of right now. There is no "get rich quick" strategy. Maybe someone has better strategies. If so, please let me know!


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IGD3

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Reply with quote  #2 
Hi dharma [smile]

     Good points. I completely agree with the 1st strategy - building fanbase. You are right. People want a compelling game and that's exactly what we need to make.
     However I am not so sure about monetization with few players. One reason is that many players don't want to get charged for big amount of money. As you said, a few players may spend big cash for your game, but I don't think they will spend for many days like this. Many people may hesitate to spend big cash for a mobile game (unless you are making a hardcore game which usually takes several months or probably years).
     Mobile game players these days are used to playing freemium games so I think it's really hard to attract them to spend big cash everyday. I found out that only about 2.3% of Candy Crush Saga players pay for IAPs and that's why King is spending millions of dollars to acquire new players. So I think it's still important to have many players for our games so that we can charge them with fewer cash using IAPs. [smile]
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Martin

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Reply with quote  #3 
Hey Dharma, cool post. Just adding some replies and thoughts below:

Quote:
Keep costs low.


Super important, especially for early start-ups or companies which are still growing.


Quote:
Getting downloads from search engine optimization is also not really the best way. It relies too much on getting lucky. It's like trying to win the lottery by getting the right combination of keywords.


It can seem that way, but there is a formula to it. Luck does play some role, but there's a definite pattern that can be learnt and repeated. It just takes time, practice, testing and tracking.

Quote:
2. get a viral hit like "flappy bird"
Forget strategy 2! It again based on luck. No business strategy should rely on luck!


Totally agree. Going viral has a formula / pattern too, but it's more based on luck.

Quote:
There is no "get rich quick" strategy. 


So so true [smile]

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dharma

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Reply with quote  #4 
Quote:
As you said, a few players may spend big cash for your game, but I don't think they will spend for many days like this.


I agree, retention of those players is certainly an important factor. What I was trying to say was, that you do not necessarily need many costumers to make a good revenue. You have probably heard of the 80/20 principle, which says that 80% percent of your results come from 20% of your effort. That would mean you should focus your efforts on those few people who are willing to pay you 80% of your revenue. I sometimes also fall into the trap of trying to "please all the players". Focus is so important to business (strategy).

Quote:
It can seem that way, but there is a formula to it. Luck does play some role, but there's a definite pattern that can be learnt and repeated. It just takes time, practice, testing and tracking.


Luck is just a name for a (complex) pattern we don't understand. The Google Search Algorithm is top secret, and probably pretty complex. It's like a black box. You feed it some input and observe how the output behaves. You give it input until you get the output you desire, in this case downloads. For this you do not have to understand it's inner workings. The problem is now, that the box already gets a lot of input. Many people have apps in the store and the patterns (keywords) for high downloads are getting fewer. This can not be a good long-term strategy. But there is still some hope: The algorithm changes and also the search patterns of people. I think a good strategy here is to focus on current trends and topics.

Quote:
Totally agree. Going viral has a formula / pattern too, but it's more based on luck.


It's too complex, because there are so many factors (social, psychology, economic, trends, coincidence,...). It's probably a magnitude more complex than the Google Search Algorithm. But yes, there are probably some things you can do to improve your chances, like studying human behavior and trends. What I believe is an important factor, is getting people's attention: Make something that is sensational, newsworthy. It doesn't even need to make sense, as long as people are offended, outraged or surprised. You are basically shocking people out of their daily (sometimes zombie like) routine. But to be honest, I'm not a big fan of these tactics. Maybe I'm too idealistic ....

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IGD3

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Reply with quote  #5 
Quote:
Originally Posted by dharma


    You have probably heard of the 80/20 principle, which says that 80% percent of your results come from 20% of your effort. That would mean you should focus your efforts on those few people who are willing to pay you 80% of your revenue.


     
     So I think what you want to say is "Instead of trying to 
monetize all players, put more efforts on something which generates the majority of your revenue".

     Yes, I believe it's a good strategy. I agree with that. [smile] However...

Quote:
What I was trying to say was, that you do not necessarily need many costumers to make a good revenue.

     
     Well, that's another story. As you said, focusing on something which generates majority of revenue is a good technique. But getting many players is still important for long term revenue. Let me give you an example.

     Let's say you have a good game and you made it as a freemium game. You monetize it with IAP with a price of $2.
     
     After some days, you have 100 players. 50 players of them don't pay you anything. Another 50 players pay for your IAP. So you get $100 for that day. You may point out that it's a good revenue with a few players. That's correct. But what about the next day, the next week, the next month? You can't expect that these 50 players will pay you again and again. Even if they are willing to pay, people who play your game for a long time may get bored and finally decide to leave your game.
     
     Therefore getting new players is important for long term revenue. So I still believe that expanding the number of players is really an important factor for long term survival.[smile]
     
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dharma

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Reply with quote  #6 
Quote:
  Therefore getting new players is important for long term revenue. So I still believe that expanding the number of players is really an important factor for long term survival.[smile]


Yes you are certainly right. It is not hard to get 20-100 new users a day from a game. How could we monetize better based on this fact? But still, it seems to me that many people (including myself) get too focused on getting a lot of downloads. This obviously comes from the fact that the advertising model requires a lot of impressions/downloads. My points was that this might not be the best long term money strategy. Focusing on a higher average revenue/costumer is another way to look at things.
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Taptastic Games

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Reply with quote  #7 
Ok let me break that complex formular down into two aspects
Retention: Make something the player want to come back to everyday. This also raises the chance other potential gamers get notice of your game, when they see others playing your game.
Virality: Make something players want to talk about. Add Multiplayer and Social mechanism and build a great user exerperience.

This is even more important than a good monetization strategy and can save you money on marketing.

Less than 5% of players pay for ingame purchases. So you need to try keeping players for a month or more and than make buying an inGame item a great experience, so they want to repeat spending money on your game, because it feels worth it.

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https://play.google.com/store/apps/developer?id=Taptastic+Games
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IGD3

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Reply with quote  #8 
Quote:
Originally Posted by dharma


     But still, it seems to me that many people (including myself) get too focused on getting a lot of downloads.

     
     Yes, you are right. Some people, including big publishers, seem to care so much on user acquisition. King spent over 455 million dollars and SuperCell spent over 400 million dollars on marketing. I don't know if spending that much on marketing is worth or not. But I think that it would be much better if they can use those budget on developing the next great game. [smile]

Quote:
My points was that this might not be the best long term money strategy.

 
     I agree. I also believe that ad-based monetization is not the best model for every game. It requires a lot of downloads and impressions to have a decent revenue. [smile]
     
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umen

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Reply with quote  #9 

I think in today Climate you must create good game , so people will like to comeback to it
avoid 2-3 weeks development game AKA crapwhere games.  

Target for the long tail Strategy . good example is :
for A sync games
Trivia Crack , 

Chess with friends

highly Addictive games with simple mechanics ( if you can even call it mechanics ). 

 

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