Presented by Xsolla
In this VB Live event, learn how developers of any size can not only sell their content directly to players, but expand into regions where credit cards are not the primary method of payment, lower their overhead, improve UA and discoverability and more.
The mobile games market was built on the shoulders of two large app stores, but that dynamic is irrevocably changing. Publishers have significantly more choice and more control over their audience, their marketing, and their payments, from the payment methods they choose to how much they get paid.
“Whether it’s payments outside of the app stores, or NFTs and blockchain, the industry and the creative people working in it have already evolved beyond these platforms,” says Miikka Luotio, director of business development, Europe. “They’re coming up with new business models, better ways to entertain their players, and innovative ways to allow their players to monetize.”
How the mobile landscape is changing
It started with the legal battle between Apple and Epic, which loosened the App Store’s grip on developer profits. Developers are now allowed to steer their users to other payment systems. In that way, developers bypass the App Store’s 30% commission and can offer their players better prices, more ways to pay, and better user experiences.
“The latest regulations made people start to ask questions,” Luotio says. “Is this really good for free commerce, to have such a restricted set of options controlled by two companies?”
It’s become a global question. Legal challenges to the dominance of the two app stores have come recently from Korea, the Netherlands, and regulating parties across Europe. Now the snowball has started rolling down the hill, and the momentum is there, Luotio says.
Many countries are seeing app store rules as restrictions on their local businesses. And as the payment conversation continues, it’s become clear that many audiences are being left behind, because these large platforms don’t offer local payment methods.
“Publishers need to offer choices to their audience, and even governments and their regulatory authorities realize this,” he says. “Which means that it’s time to democratize parts of those restrictions, allowing more options for publishers and individual companies. In the mobile games community, the people I talk to are excited about the implications of this larger conversation.”
This wave of change is a major opportunity for mobile game publishers. It’s easier than ever for developers to break free of the app store and implement cross-platform functionality, own their customer base, develop customer relationships directly with their players, and monetize in brand-new ways.
New revenue opportunities for publishers
Just being able to offer a broader variety of payment methods has unlocked major new revenue streams for mobile game developers. Many of the major global markets, including Asia, Russia, Latin America, India, and China have huge swaths of customers who don’t have access to international credit cards, or international ewallets like Paypal.
“It’s significant for businesses to understand that their monetization hasn’t been great in these emerging regions because they haven’t been able to cover the payment methods that the majority of the people in those regions and countries want to use,” Luotio says. “We want to make publishers aware of what they’ve been missing out on, and what could be the growth they could tap into if they go beyond the app platforms.”
Since so many customers have only been able use local payment methods, they’ve been left out of the equation. For instance, Xsolla found that offering local payment methods in areas like Latin America and South Korea could increase payments coverage of the market by up to 60%.
Owning the relationship with players and their data
But while some regulations in the app stores have loosened, privacy restrictions have gotten tighter, significantly narrowing the options for direct performance marketing and making it far less profitable. But those same rules don’t exist in the same way on the web.
“There’s a bit more freedom in how you handle user acquisition for a web shop, browser game, or PC version, and you’re able to track much more accurately,” Luotio said. “You can attribute the players that you acquire through different social networks running user acquisition campaigns.”
Customer relationship management, which is becoming more and more important for free-to-play games on every platform, is far more effective when you own your players. When you expand beyond the app stores, you no longer have to rely on those platforms to host your user accounts. You have your own user account system, and having access to that data makes understanding and catering to your most valuable players more flexible.
“Publishers are realizing that it’s not about just getting new players,” he says. “It’s finding the best ways to cater to your existing, most loyal players, and giving them what they want in a very customized way. When you control the community and aren’t hampered by any platforms in between, you can take better care of your top players.”
One Xsolla partner with a very popular mobile game launched a web store to target their most valuable players, offering special deals for loyal fans. Word started to spread that there was a new destination to land more engaging, value-add offers, and it snowballed, getting to the point where the publisher was making more money from the web shop than they were making on the mobile platform, Luotio says.
“We’re certainly seeing similar results elsewhere,” he says. “In every case, the special offer web shop approach has always been a positive return on the investment so far, from all our partners, especially for games that have been out there for a while, have reached a certain scale, and have a core audience.”
Best practices for commerce growth
The best practice for games that have started to scale is to run a pilot test to see how your community would react if you allow them to monetize outside of the app stores.
“Doing a proof of concept is something that, especially for games at scale, can help you start growing again,” he says. “If your game revenue has plateaued a little, try a proof of concept, especially targeting those markets that you haven’t reached before with different payment methods.”
He’s found that the markets that make a big difference have been Latin America, South Korea, Russia, and China.
Secondly, as you make moves to break free of the app stores, he warns that you should still make sure you maintain good relationships with the platforms, because you’ll still always gain a lot by being featured in the app store.
“The important thing is to offer value that isn’t conflicting with the existing options that you have within the mobile game itself,” he says. “You need to come up with offers that supplement what you’re already selling directly in the game. Create new, unique offers, bundles of things that you can buy in the mobile game that present a better value offer.”
To learn more about how to take advantage of new revenue streams, break free of the app stores, and find new ways to monetize your players, don’t miss this VB Live event!
- How to break free of the mobile app store
- Best practices for commerce growth
- How mobile developers can reach revenue goals
- Real-world case studies from successful mobile game developers and publishers
- Taewon Yun, Chief Business Officer, Super Evil Megacorp
- Tugay Alyıldız, Co-founding CEO, Veloxia Technology
- Miikka Luotio, Director of Business Development, Europe, Xsolla
- Dean Takahashi, Lead Writer, GamesBeat (moderator)