How Mobile Game Developers Leverage E-Commerce Strategies to Thrive

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Developers and publishers traditionally turn to the App Store when launching a new game. But publishers face three big challenges when relying on these platforms to generate all their revenue and discoverability, explains Miikka Luotio, Regional Director for Europe at Xsolla.

“The new game development market is quite saturated, especially for mobile games,” Luotio says. “It’s getting harder and harder to get your game seen organically in an endless sea of ​​mobile games right now. If you have a strong product on your own, having a cross-platform strategy should be on the radar.

The tax on platforms that reduces margins

“The most discussed issue is the so-called 30% platform tax on all mobile platforms,” says Luotio. “Every project, every game, as mobile publishers start to scale, they have to calculate that and take that out of their profits. The question is, how is that justified?

The platform tax also raises the bar for marketing profitability and significantly reduces the budget. Some publishers are finding it harder than ever to launch and sustain a marketing campaign.

How player engagement is crippled

The second problem is the developers’ lack of control over their own player base. For a mobile-only product hosted in app stores, the only way to communicate or interact with the playerbase is within those platforms.

“Not being able to own your own players on your own website, or your own ecosystem, hampers publishers who introduce interesting new economic data into their player base, such as web3, NFTs, blockchain, etc., because the Mobile platforms don’t allow it,” he says.

Breaking out of the existing mobile ecosystem gives publishers complete freedom to engage creative gamers. This opens up social mechanics like freebies and develops better offers that appeal to specific player audiences, like big spenders.

Enhanced Privacy Removes Visibility

The third challenge is the multiple privacy changes made by both platforms, making tracking nearly impossible. Performance-based marketing is nowhere near as effective as it once was, and it’s harder to accurately measure ROI. Many publishers have had to drastically reduce their marketing spend, and many have yet to find a way to compensate.

Mid-core and core games, where the cost of user acquisition can be quite high, already have to compete against each other in performance marketing, as well as player acquisition. Additionally, the platform tax makes it even more difficult to acquire new players profitably.

Opportunities outside the App Store

Right outside the App Store, you’ll find a host of proven and successful e-commerce strategies. The ability to meet a player’s needs, based on their in-game behavior and purchase behavior, is huge, says Luotio. Right now, developers are missing out on the opportunity to engage players with the kind of offers that make them happy and playing.

“In my opinion, many games could double or triple the LTV of their whales, for example, if they were just able to give them smarter deals,” he says. “This kind of e-commerce thinking is a place where the gaming industry is way behind. They miss out on these opportunities to please their own gamers.

When gamers start making a game’s web presence their home base, the opportunities for performance marketing return because there are far fewer tracking limitations. It also puts retargeting on the table, which can be extremely effective for user acquisition. Developers can provide strategic deals to existing players as they browse social media channels, and players can purchase without having to open the game.

“It creates a whole new world of catering to your existing players and developing effective performance marketing strategies,” says Luotio. “You’re starting to learn that e-commerce mentality that the mobile industry kind of missed out on.”

How to get out of the App Store

Publishers are finding ingenious ways to reach their players outside of traditional channels, Luotio says, for a more enriched experience — a win for both parties.

“I see a lot of publishers educating their players on how it’s okay to go out of the game to buy things, interact and do things. The game can exist outside of the mobile platform,” he says.

They ask their players to leave the app for things like blog content on the game’s website, events, and community features like chat rooms and forums, for example. They are creating exclusive online shops, where players can buy hard-to-get in-game items, and introducing a web-exclusive currency that can only be obtained through the online shop. And the more they buy, the more likely they are to keep playing.

“The moment you take your player base and start offering them things outside of the games themselves, the moment you have control and you start creating intrinsic value for your business and your players that can exist independently platforms. This is when you create a whole new world of restoration for your existing players.

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  • Ilya UtemovCOO, ZiMAD
  • Mikka LuotioRegional Director Europe, Xsolla
  • Mike MinottiEditor-in-Chief, GamesBeat (moderator)

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