One of my earlier jobs was to manage a free2play gaming company in the Middle East. Over years, this gaming company was found in the alexa.com rankings in the top ten most visited pages in all the MENA countries. A tremendous success story, and funny enough an e-commerce website before e-commerce had even arrived. It showcased how performance Marketing can work in the middle east and the audience of this game created enough demand to purchase virtual gold online to create 2 payment companies still existing today.

Free2play is a model in which the overall consumption of a product tends to be free, while certain add ons and features are charged after the need for this particular service or feature is created. While first deployed in Browser games like Travian and in Massive Multiplayer online games MMOG- it eventually arrived on the mobile phones.

Millions of players are spending hours per day in mobile games that are based on this model. The leading company at this moment seems to be the Finnish developer “Supercell” with the apparently “most grossing” game called Clash of Clans.

This game generates globally 2 Million USD – Every Day. The clone of this game is named Clash of Kings, created by Chinese company Elex. They are not far behind on the revenue potential. Hundreds of game companies try to create games that create a lot of revenue. The game itself is only half the way from my perspective and experience. The companies making the real money are developing and publishing simultaneously. They control the acquisition cost and Life Time Value influencing parameters.

Mobile gaming success is not as abstract as it may seem on the first glance. Identify clients that will like your product, use it all the time and willing to buy complementary up-selling items. You work on making them happy and they give you loyalty and more revenues.

In my world, a game is developed in a beta and then tested with audience. Product development eliminates bugs and you put it in the shop. Many developers then stop and hope that through any kind of magic Millions of clients start downloading – this will not happen. Of course you need promotion  – finding users that are likely to install and leading them into the store to download. In the fewest cases the App stores will create a promotion for the developer. The stores obviously have a commercial interest in promoting the games that are making the most money, as they are participating around 30 % on the success of any game. 0O

So without promo from the store, many developers try to put a link here and there, cheap guerrilla tactics that hopefully work and try to use viral features and social channels to create an impactful campaign with the target to increase the installed base.  App store optimisation is praised to be a game changer, but eventually catalyses only the conversion to an install. So how do companies like Supercell or King.com scale up? They do not only rely on the mercy of an app store to set up promos?!

the leading game companies understand that they have to invest in marketing heavily, but need to remain in control of the risk. So as described in my previous post here, they target varying audiences through varying channels and track the results of iterated advertising material. The isolation of the iterated parameters allows to identify what works to reduce acquisition cost. The measurement of success parameters with professional tools like Adjust allows to follow user journey, retention, purchasing behaviour. behind the game there is a lot of identification and tracking done. All of this only to identify Life time value on account and aggregation levels.

Through this, they retain in control over acquisition cost and Life time value. And they can invest unlimited  funds into the promotion of their game until the cost per acquisition becomes higher then aggregated LTVs. If the delta is very positive an scalable, they receive massive investments for their proof of concept and are valued extremely high as “Unicorns”.

Your comment and discussions are welcome!