Game Marketing Tips, Analysis, and News

Thursday, May 19, 2011

Smartphone Games Zooming

Some impressive numbers of games being downloaded per day.
Smartphone games are soaring high, with over 5 million games downloaded per day just in the West. OK, 88% of those downloads are free, but that doesn't mean developers aren't making money from them. More than half the games these days have in-app purchases as an option, or are cross-selling other games. Or they are making some money from advertising.

Speaking of which, Angry Birds has now hit the astonishing figure of 200 million downloads. That's over all platforms, of course. Some 5 million of those are on the Chrome browser. However you look at it, though, that's a lot of downloads. Not bad for a $140,000 development cost. Rovio is now planning for an IPO.

Meanwhile, naysayers like Nintendo and the now-infamous Denis Dyack say smartphone games are hurting the game industry. Yeah, tell that to Rovio. Of course, if the average gross is $700 per game, that's not a lot. According to Dyack's quoting an EEDAR conference, that's what they said the average smartphone game brings in. I really don't know where that number came from, but it seems absurdly low. I'm perfectly willing to believe that 90% or more of smartphone games don't really make money, at least not a significant amount. But to really hit an average of $700 there would have to be a whole lot of games making less than that in order to balance out the ones that are making millions.

I think the odds certainly favor a smartphone game not making much money at all. Perhaps that will reduce the number of new games rushing into the market, but it sure doesn't seem to have done much at this point to reduce the number of new games.

Piracy might, though, if you listen to the strident anti-pirate crusaders. Is piracy a problem for smartphone games? Not enough to worry about, say developers.When a game is free, who would bother to pirate it? With most games going to the freemium model, piracy turns out to be a non-issue.

When games are priced lower, piracy goes away. When you can track every customer, and you're selling virtual goods for the game, you don't really need to worry about piracy. Piracy becomes a marketing tool. The worse problem these days is going unnoticed; you really need to be worried if nobody wants to pirate your game.

I do think the smartphone game market is ridiculously crowded, and the tools to let good games stand out are still not that robust or widespread. There are ways and means to make money on smartphone games, and it's not just about being lucky. Good design, excellent execution and smart marketing are all important. Sure, luck is still important to becoming a mega-hit. Persistence is probably the most important quality you can have; keep making good games and eventually one of them will do really well. The real trick is to keep your costs down, and find ways to be profitable without relying on a mega-hit.


  1. I can't see the Freemium model being a longterm solution to piracy. While the model works well for procedural games, it is generally more difficult to translate a traditional linear or story-based game into Freemium without shoehorning and breaking either the gamer's experience or the developer's profits.

    And as a solution to piracy, surely it only works up until pirates inevitably crack the in-app purchases system?

    I am hoping the problem of piracy will be stymied by more modern digital copyright law, which would block piracy websites from the Internet. It's the simplest and most effective solution to the problem of piracy it seems.

  2. I doubt that pirates will be able to crack in-app purchasing, because they won't be that motivated to try. It's not like the reward is a $60 game for free; you get one piece of DLC that probably doesn't cost more than a dollar or two anyway. Besides, both Google and Apple have plenty of advantages in this battle, not the least of which is tracking every customer and download.

    The real protection from piracy comes from pricing; when the price of games is low (or free), the incentive for piracy goes away. Why pirate when you can get a copy you know is not glitched in some way, for free? Or a couple of dollars?

    Many smartphone developers have reported lots of pirated downloads of their games, but many of them just seem to collect the games and never play them. Server usage by pirated copies can be expensive, but as long as you sell enough DLC to pay for the servers and bring in a profit, piracy is then just another marketing method. You turn piracy to your advantage.