5 Trends in Mobile Gaming for 2015

1. 5 Trends in Mobile Gaming For
2015 (and beyond)
Eric Seufert
PwC Outlook Conference, Amsterdam
October 9, 2014

2. Who am I?

3. Who am I?
Freemium Economics

4. Who am I?
Freemium Economics
Head of Marketing at Wooga

5. Who am I?
Freemium Economics
Head of Marketing at Wooga
Mobile Dev Memo

6. Where are we now?

7. Where are we now?
• 4 of Top 10 grossing apps (US /
iPhone) published by 2 devs
Top 10 Grossing Chart, US / iPhone, October 2 2014

8. Where are we now?
• 4 of Top 10 grossing apps (US /
iPhone) published by 2 devs
• 6 / 10 Top 10 grossing apps are
games
Top 10 Grossing Chart, US / iPhone, October 2 2014

9. Where are we now?
• 4 of Top 10 grossing apps (US /
iPhone) published by 2 devs
• 6 / 10 Top 10 grossing apps are
games
• 8/10 Top Grossing apps were first
published in 2012 or earlier (Game
of War and Farm Heroes Saga were
first published in 2013)
Top 10 Grossing Chart, US / iPhone, October 2 2014

10. Where are we now?
• 4 of Top 10 grossing apps (US /
iPhone) published by 2 devs
• 6 / 10 Top 10 grossing apps are
games
• 8/10 Top Grossing apps were first
published in 2012 or earlier (Game
of War and Farm Heroes Saga were
first published in 2013)
• Supercell (Clash of Clans, Hay Day)
and King (Candy Crush Saga, Farm
Heroes Saga) spend (reportedly)
$1MM per day on marketing*
*http://mobiledevmemo.com/brand-advertising-mobile-cpi-prices/
Top 10 Grossing Chart, US / iPhone, October 2 2014

11. Where are we now?
Four companies own apps that
generate 70% of the unique visitors to
the Top 25 mobile apps*
*http://mobiledevmemo.com/the-problem-with-app-store-distribution-in-3-charts/

12. Where are we now?
Most smartphone users
download 0 new apps
per month*
*http://mobiledevmemo.com/the-problem-with-app-store-distribution-in-3-charts/

13. Where are we now?
Nearly half of all time
spent in mobile apps is
devoted to users’ single
favorite apps*
*http://mobiledevmemo.com/the-problem-with-app-store-distribution-in-3-charts/

14. Where are we now?
Brand advertisers are
spending just 20% of their
budgets on mobile now and
will increase that share to
35% by 2018*
*http://mobiledevmemo.com/why-mobile-marketing-costs-rising/

15. Where are we now?
VC funding into the gaming sector
is down by 6% in H1 2014 against
the 2013 run rate*
*http://mobiledevmemo.com/why-mobile-marketing-costs-rising/

16. Where are we now?
Advertising (UA) opportunities are
growing…in low ARPU regions*
*http://investor.fb.com/secfiling.cfm?filingID=1326801-14-32&CIK=1326801

17. Where are we now?
Advertising (UA) opportunities are
growing…in low ARPU regions*
*http://investor.fb.com/secfiling.cfm?filingID=1326801-14-32&CIK=1326801

18. Where are we now?
Advertising (UA) opportunities are
growing…in low ARPU regions*
*http://investor.fb.com/secfiling.cfm?filingID=1326801-14-32&CIK=1326801

19. Where are we now?
Advertising (UA) opportunities are
growing…in low ARPU regions*
*http://investor.fb.com/secfiling.cfm?filingID=1326801-14-32&CIK=1326801

20. Where are we now?
Advertising (UA) opportunities are
growing…in low ARPU regions*
“
“
-- Facebook 10Q, Q2 2014
*http://investor.fb.com/secfiling.cfm?filingID=1326801-14-32&CIK=1326801

21. But…it’s not all bad.

22. But…it’s not all bad.
Mobile is growing:
1,600.00
1,400.00
1,200.00
1,000.00
800.00
600.00
400.00
200.00
0.00
Smartphone Shipments, 2013 vs. 2017
China USA UK Japan Brazil India Others Total
2013 Shipments
2017 Shipments
Source: IDC

23. But…it’s not all bad.
Mobile gaming is growing:
Source: Gartner
Mobile Gaming Revenues ($BB), Worldwide
$9.280
$13.208
$17.146
$22.009
$25.000
$20.000
$15.000
$10.000
$5.000
$-
2012 2013 2014 2015

24. But…it’s not all bad.
Consumers have come to terms with mobile ads:
Source: xAd / Telmetrics

25. Five Trends in Mobile Gaming For 2015
and Beyond
1. Fundamental evolution of “App Install Ad” format
2. “App constellations” causing app store chart position
inflation
3. Increasing overall monetization
4. Increasing platform “lock in”
5. More franchise tie-ins

26. Five Trends in Mobile Gaming For 2015
and Beyond
1. Fundamental evolution of “App Install Ad” format
2. “App constellations” causing app store chart position
inflation
3. Increasing overall monetization
4. Increasing platform “lock in”
5. More franchise tie-ins

27. Fundamental evolution of “App Install Ad” format

28. Fundamental evolution of “App Install Ad” format

29. Fundamental evolution of “App Install Ad” format
• Infrastructure of mobile advertising ecosystem designed for
mobile gaming. New verticals are beginning to shift into
mobile advertising
• Brand money;
• Travel (20% YoY increase in mobile travel bookings H1
2013-2014*).
*http://mobiledevmemo.com/why-mobile-marketing-costs-rising/

30. Fundamental evolution of “App Install Ad” format
• Retargeting and deep-linking allow for better and more natural
ad formats than traditional mobile app install ad:

31. Fundamental evolution of “App Install Ad” format
• Native ads are less intrusive and context-aware:

32. Fundamental evolution of “App Install Ad” format
• Imaginative new ad formats will obfuscate / abstract away the
advertising dynamic:
• TinyLoot: paying users to watch ads and engage with new
apps;
• LoopMe: users rate ads and only see ad types they enjoy.

33. Five Trends in Mobile Gaming For 2015
and Beyond
1. Fundamental evolution of “App Install Ad” format
2. “App constellations” causing app store chart position
inflation
3. Increasing overall monetization
4. Increasing platform “lock in”
5. More franchise tie-ins

34. “App constellations” causing app store chart
position inflation

35. “App constellations” causing app store chart
position inflation
Top 10 Downloaded Chart, US / iPhone, October 2 2014

36. “App constellations” causing app store chart
position inflation
• 4 of Top 20 downloaded apps (US / iPhone) published by Facebook
• Facebook Messenger (#1), Facebook App (#2), Instagram (#4), and WhatsApp
(#14)

37. “App constellations” causing app store chart
position inflation
• 4 of Top 20 downloaded apps (US / iPhone) published by Facebook
• Facebook Messenger (#1), Facebook App (#2), Instagram (#4), and WhatsApp
(#14)
• 3 of Top 20 downloaded apps published by Google
• YouTube (#5), Google Maps (#15), Google Utilities (#16)

38. “App constellations” causing app store chart
position inflation
• 4 of Top 20 downloaded apps (US / iPhone) published by Facebook
• Facebook Messenger (#1), Facebook App (#2), Instagram (#4), and WhatsApp
(#14)
• 3 of Top 20 downloaded apps published by Google
• YouTube (#5), Google Maps (#15), Google Utilities (#16)
• 5 of Top 20 downloaded apps published by companies that can move users into
mobile from their massive existing user bases
• Pandora
• Pinterest
• Spotify
• Twitter
• iTunes U

39. “App constellations” causing app store chart
position inflation
• Companies that command massive existing user bases and
can unbundle functionality and / or shift traffic to new mobile
apps are conquering the Top Downloaded chart

40. “App constellations” causing app store chart
position inflation
• Companies that command massive existing user bases and
can unbundle functionality and / or shift traffic to new mobile
apps are conquering the Top Downloaded chart
• Chart positions that were previously capable of being
“acquired” via advertising are now occupied by these apps,
causing “chart position inflation”

41. “App constellations” causing app store chart
position inflation
• Companies that command massive existing user bases and
can unbundle functionality and / or shift traffic to new mobile
apps are conquering the Top Downloaded chart
• Chart positions that were previously capable of being
“acquired” via advertising are now occupied by these apps,
causing “chart position inflation”
• Eg. Facebook raised number of downloads needed to
reach #1 with messenger. Previous amount of downloads
needed only reaches #2 now.

42. Five Trends in Mobile Gaming For 2015
and Beyond
1. Fundamental evolution of “App Install Ad” format
2. “App constellations” causing app store chart position
inflation
3. Increasing overall monetization
4. Increasing platform “lock in”
5. More franchise tie-ins

43. Increasing overall monetization

44. Increasing overall monetization
• Tablet shipments are slipping:
Source: Monthly TFT LCD Shipment Database

45. Increasing overall monetization
• Meanwhile, “phablet” shipments are rising and may overtake
both smartphone and tablet shipments
Source: BI Intelligence

46. Increasing overall monetization
• This is a good thing for app developers; users spend more
money on bigger screens.
Source: Distimo

47. Increasing overall monetization
• Meanwhile, CPMs are trending up…which means more
revenue from ads.
Source: Fiksu

48. Five Trends in Mobile Gaming For 2015
and Beyond
1. Fundamental evolution of “App Install Ad” format
2. “App constellations” causing app store chart position
inflation
3. Increasing overall monetization
4. Increasing platform “lock in”
5. More franchise tie-ins

49. Increasing Platform “Lock In”

50. Increasing Platform “Lock In”
• Platform operators are competing to keep developers locked
into proprietary tool chain
• Apple’s upcoming iTunes analytics suite

51. Increasing Platform “Lock In”
• Platform operators are competing to keep developers locked
into proprietary tool chain
• Facebook’s Parse + Audience Network +
Atlas

52. Increasing Platform “Lock In”
• Platform operators are competing to keep developers locked
into proprietary tool chain
• Twitter analytics + app development
platform (Fabric)

53. Five Trends in Mobile Gaming For 2015
and Beyond
1. Fundamental evolution of “App Install Ad” format
2. “App constellations” causing app store chart position
inflation
3. Increasing overall monetization
4. Increasing platform “lock in”
5. More franchise tie-ins

54. More Franchise Tie-ins

55. More Franchise Tie-ins
• Rising marketing costs and chart position inflation incentivize
devs to partner with existing, well-known IP

56. More Franchise Tie-ins
• Rising marketing costs and chart position inflation incentivize
devs to partner with existing, well-known IP

57. More Franchise Tie-ins
• Rising marketing costs and chart position inflation incentivize
devs to partner with existing, well-known IP

58. More Franchise Tie-ins
• Rising marketing costs and chart position inflation incentivize
devs to partner with existing, well-known IP

59. More Franchise Tie-ins
• Rising marketing costs and chart position inflation incentivize
devs to partner with existing, well-known IP

60. Thanks!
• eric@mobiledevmemo.com
• Mobiledevmemo.com
• Twitter.com/eric_seufert