So that makes guessing what is going to happen in the next five years pretty hard. After all, while the pace of change may have slowed a little recently with business models establishing themselves and hardware taking smaller steps forward, there is always the chance that something new will emerge from nowhere and change everything.
To help us gauge what lies ahead, we felt it was best to get the advice of industry experts and analysts to help us stare into the tea leaves and divine the shape of things to come. B pitching each of them five questions, we hope that the collective wisdom of this crowd will help us to unearth the shape of things to come in mobile gaming, providing us all with a light to guide us into the murky mists of the future. But before we get started, it’s worth meeting our panel of experts so we can understand how exactly they have reached their interesting conclusions.
Question 1
IN THE NEXT FIVE YEARS, WHAT KIND OF SOLUTIONS DO YOU THINK WILL EMERGE TO THE PROBLEM OF “DISCOVERABILITY” IN THE MOBILE MARKET?
Getting a mobile game in front of consumers remains one of the biggest challenges for developers worldwide. With app store discovery often heavily reliant on elusive premium “featured” spots and ever increasing CPI costs making the free charts the preserve of the money rich, the battle to actually get your game noticed is intensifying every day.
Recent developments have suggested there are ways for developers to fight back without breaking the bank. The emergence of App Store Optimisation, and in particular keyword analysis, as a growth field has helped developers to fine tune their organic search, while many developers are improving their physical marketing efforts to reach consumers. But, despite these positive signs, the issue of app store discoverability remains one of the million dollar, industry defining questions that needs to be answered.
KYU LEE: The discovery problem will never be truly solved since new discovery solutions will eventually become overcrowded. Deck features will slowly lose their potency, while viral social channels and search will become more important.
THORBJÖRN WARIN: I don’t think there will be anything radical at all I think maybe the charts and the app stores will be a bit smarter, more suited to things that I spend a lot of time in and promote something more relevant that I’m interested in. So i think there will be algorithms and more personalised things, so we’ll end up maybe seeing a working version of Genius in the future.
As for cost per aquisition, I don’t buy this whole argument that CPI prices are so high and are getting out of control, people who are saying that don’t understand basics of the economy. The way I see it most of the people complaining about discoverability and complaining about high CPIs are, at the end of the day, making s****y games. If they’re paying unsustainable CPIs for their businesses then they’re not going to be in businesses for very long. So the people who are paying the high CPIs are the ones who can afford so: if you’re spending ten bucks to buy a user and they’re only making five per user then something is going to have to change.
JAMES KAYE: That’s a really interesting question. It’s a hard one to predict. I think if you look at the mobile market now you’ve got the paid for mobile advertising side and I think anyone who is in that world will be aware of developments in RTB that’ll allow people to bid on a real time basis on a number of things so that’ll improve things.
The world of analytics is also getting incredibly powerful and that’s split into two, so Flurry style analytics that look at what your players are doing and how they’re doing and the work being done by Hasoffers who are pushing things like attribution analytics to work out your advertising effectiveness.
That’s going to get sophisticated and I think app marketing and app advertising will soon become the preserve of very mathematically competent data companies and people who have the capability to deploy very smart data analysts, hiring people from Harvard, Oxford and Cambridge, to look at the data and make smart decisions.
MIKE ROSE: Ha, if I knew the answer to that, I’d be a billionaire by now! Discoverability has always been an issue for all devs on all platforms, and especially on mobile. The only sorts of solutions I can see are having more curated lists, allowing people to follow other’s who they trust, and seeing directly what they are playing, downloading and rating, such that they can follow them and do the same. So say, you’d follow me on the App Store, and each week you’d find lists of my top games, generated from how much I’m playing certain games, and how highly I rate them.
ALEX BUBB: This is something we’ve been looking at this year at Nokia and I think I see it going one of two ways. Either there will be a super clever algorithm that makes recommendations or there will be a method that empowers the users.
For my money, it’s going to be the latter and we’ve built AppSocial for that purposes. It helps users to discover and share apps using Social Media dynamics – users are rated on their recommendations and the quality of their lists and that’s the key. It’s not search based like the App Store, but it’ll always be there for users and for me it’s all about users recommending apps to one another.
WILL FREEMAN: Hahaha I wish I had a really succinct direct answer to that question! I am noticing that lots of smaller teams, indies, start ups and micro studios are taking a rather traditional and less than high tech move to traditional marketing and promotional channels such as finally embracing PR techniques and lots of studios are relying on traditional things like mailouts and launch events.
As they back away from CPI and buying chart positions, I’m noticing as a journalist that I’m getting more traditional PR from Indies than from bigger mobile studios who seem to have rolled onto using technology and CPI techniques to gain a bit of momentum which has left a bit of a gap and opportunity for indies to seize those traditional lines. •
Question 2
WHAT KIND OF MONETISATION STRATEGIES AND TACTICS DO YOU THINK GAMES WILL BE DEPLOYING IN FIVE YEARS TIME?
Freemium has emerged as the dominant monetisation strategy in the industry. A report by Flurry into the history of app in July 2013 pricing showed that 90% of apps launched in April 2013 launched at price tier zero, up from 84% in 2012, while the number of apps retailing at the most popular paid price tier of 99% dropped from 10% to 6% in the same period. With consumers willing to tolerate adverts and companies such as Supercell, King and GungHo Interactive dominating the top grossing charts through the use of IAPs, freemium’s ascendancy has seemed unstoppable.
Despite that, a number of developers have remained resolute on the issue of charging for apps. Indie developers like Vlambeer and Fireproof Studios have found success with a paid product while 2K’s decision to launch Triple A title Xcom: Enemy Unknown for $19.99 also appears to have paid off. The question for many is whether so called “premium” games have a future or if freemium (or freemium mechanics) will change their effectiveness forever.
THORBJÖRN WARIN: Well for the casual games for a wide audience, free to play games are going to be dominant for sure even in the next five years, in fact it may even be stronger than it is today for games for the mass market that attract a big audience of millions and millions of users. And looking forward, Xbox One type things will be the niche thing. There’s still an opportunity there for premium games but they’re going to have to be for a much better defined user base and a much more specific demographic.
JAMES KAYE: Free to play is obviously dominant now. The freemium model which is working very well where I know someone who has played through 400 levels of Candy Crush without paying and you’ve got idiots like me playing Hayday and paying £20 before I had to delete it. I also think the paymium model is still an interesting one where people feel they can pay for the product and have a good experience to extend it. I think it’s something that is really comfortable for people, as people get the idea of buying something and paying for more content.
I think the premium model might well die, I mean you’re looking at stuff like Infinity Blade which was held up as the watermark of “oh yeah people will still play for premium games” as well as Real Racing, which had a couple of iterations as a paid game before going free to play. I think it’s a shame that we’ve reached a point where people think paying £2.99 is far too much but then again people have switched to another method of making money that people seem to like and, if that’s the economic reality of things, then I don’t see the problem with that.
ALEX BUBB: I’ll start with an easy answer. Going back to 2006, one of the key learnings we had was building relations with operators to help sell devices and for monetisation purposes, so operator relations is key. That’s particularly important outside the US and key markets where you’ve got to have billing services to connect into operators and stores, so that’s a crucial step.
As for games, it’s certainly the case that Free to play is a success and it is not going away anytime soon. So for developers, maximising the flexibility and the potential of their in app purchases is really important to succeed in the coming years.
KYU LEE: Live operations in mobile gaming is becoming more and more important, and is following the trend of PC online gaming in a lot of ways. We believe that monetization will continue to proceed through use of virtual currencies, and that strategies will evolve as new game mechanics and social elements are introduced. The majority of the sales tactics used in real life will be applied to the digital space, and we will see increased efforts by publishers to introduce their common currency to increase loyalty within their network.
MIKE ROSE: Microtransactions are still very much in their infancy, especially in the West, and developers are still struggling to find a balance between supplied content and in-app purchases – just look at the uproars over microtransactions in console games like Forza 5. In five years, I think we’ll see studios using the microtransactions model in far better ways, such that the vast majority of players will feel like they are getting their money’s worth.
Whether that’s in conjunction with the free-to-play model, or alongside regular premium purchases remains to be seen – I think it heavily depends on whichever platform is soaking up the players at that point.
WILL FREEMAN: From one perspective it seems hard to imagine that free to play is never going away (though at one time it was hard to imagine mobile games amounting to something). But as much as I see people dismissing straight up premium, paying for the entire upfront package as a way of getting your games it seems as if a lot of indie developers are sitting to premium and getting people to pay 69p for their game.
I went to see ustwo the other day and they said they see value in that very first model of paying for a game outright. It’s not that I want to say it’s an emerging trend that is going to dominate but perhaps I feel confident in playing down how quick people are to dismiss premium and I have a feeling it’s going to still be around for a number of years to come.
Question 3
WHAT WILL THE NEXT FIVE YEARS HOLD FOR INDIES DEVELOPING MOBILE GAMES?
The rise of mobile gaming as an established form of gaming has also been in many ways the story of the emergence of the viable indie developer. While breaking through was nearly impossible in the dark days of the operators, mobile and tablet platforms have seen a number of high profile indie hits including Temple Run, Doodle Jump and even Angry Birds demonstrating that it was possible for smaller studios to break through.
But as the market has matured, indie developers have increasingly found themselves under pressure. With larger rivals mobilising resources to optimise freemium games and CPI spends pushing them out of the markets, the survival of indie developers and their likelihood of success has hinged often on the exploitation of the paid market alone. Can indies hold out against the increasing challenges within the sectors?
MIKE ROSE: As many developers have been commenting recently, mobile has become such a minefield. Thousands of games launch each day on the App Store, and even if you manage to get spotted, you’llmost likely have a week in the limelight and that’s about it. Success rates on mobile are dropping fast, and I’m seeing more and more developers jumping back on the PC and console bandwagon, where the player numbers are lower, but the chances of being spotted are far higher.
I think we’re going to continue seeing massive numbers of developers trying their luck on mobile for years to come, but I think the situation can only get worse for mobile devs really. Put it this way – if you’re a mobile developer and you don’t have bags of cash to throw at advertising, your chances of being success are next-to-nothing, and that can only get worse.
KYU LEE: Consolidation will continue to occur and the large companies will only grow larger. The need for bigger budgets and bigger teams to succeed is already apparent in mobile today, and this will only be further accelerated down the road. We believe true indie games will become a niche section in mobile gaming in a commercial point of view. Though this won’t diminish the number of creative indie devs around the world, the need to partner with publishers or collaborate with fellow indie devs will likely increase.
WILL FREEMAN: It’s going to be tough for them that’s certainly the case particularly as the CPI/CPA bubble continues but on the positive side of the coin, in the entire games market, there has been a rise of the indie and what that has meant is that be it platform holders, tool providers or even periphery services like PR I’ve seen them all having to restructure what they offer so they can serve smaller teams with smaller budgets. So tool providers are having to deliver a reappropriated tool at a different price point in a way that works for small teams and that’s certainly a challenge for them but it certainly works for them. What I’d say more succinctly that the supporting industry is restructuring to support them so there are reasons to be positive as an indie looking to work on mobile.
I think it’s going to be really tough to make it really big on mobile but there are an increasing number of companies looking to support them.
THORBJÖRN WARIN: I think there is a very strong future for anyone who makes really good games. If you want to see a success story, look at Helsinki and at Frogmind, the makers of Badland. They were two dudes making a game out of a basement that became a global success and that’s made them millions and there’ll be a couple of cases like that every year. But every little indie developer with a cool idea is not going to make it but that’s true of any business, whether you’re an e-commerce start up or you’re making strawberry jam, one in ten succeed and 90% fails – that’s just how it is ALEX BUBB: It’s always a positive future for indies; the trends are mainly positive for them and there’s no point focusing on the negatives. I think the whole trend of global app stores and middleware will keep it attractive for indies but there will be some challenges for them to face, like rising developer costs and changes in gamings financial model.
What they will need to do well is move on from the one hit model of 2009. Those days are becoming rarer so more need to apply the long tail focus and move more towards Free to Play, by integrating analysis and a business focus to move forwards and prove a success. There are some difficult challenges for them to face in the next five years but the outlook should always be optimistic.
Question 4
HOW WILL DEVELOPERS NEGOTIATE THE PROBLEM OF PLATFORM AND APP STORE FRAGMENTATION IN THE COMING YEARS?
The arrival of the App Store in 2008 was something of a godsend for the mobile gaming industry. By shattering operator control, providing an eco system capable of handling commercial considerations and market leadership for an OS that broke, the App Store helped to create a consolidated platform that worked in developers favours.
In 2013 however, the fragmentation problem is returning. Competitors such as Google, Microsoft and Amazon have entered the mobile market with their own stores and OS’ while certain territories such as China have an app store ecosystem that acts completely differently to any others across the world. How then do developers continue to release great apps while negotiating a new cross platform, cross territory landscape?
KYU LEE: Although the whole worldwide distribution channel of apps have been unified channels like App Store and Google Play, more regional specialties are getting more important, and for this reason, developers will have to work more with local publishers.
MIKE ROSE: I think the issue of fragmentation is already disappearing, thanks to engines like Unity. Just a year ago, I’d constantly read about how developers are having massive problems with mobile fragmentation, especially on Android. Now I can’t remember the last time I read about fragmentation, and game engines that allow you to publish to multiple platforms are definitely helping. Of course, you’ve still got the issue of older devices and OSs not being able to handle newer games, and whether or not it’s worth supporting those devices – but even that isn’t such an issue anymore. I read recently that around 75 percent of iOS users have iOS 7 on their devices, while on the Android side, there are some clear contenders that are worth aiming for to scoop up the majority of the devices and operating systems (like the Samsung Galaxy S series, for example).
WILL FREEMAN: I think the way I see development, I recognise that and it’s easy to play it down and say there is just Google Play or the App Store, but I think the way developers are responding to it again, and this may be my perspective from being Editor at Develop Magazine all those years, is that tools provided, like Marmalade and Unity, are not just about providing cross platform development tools but providing tools that allow you to port or target as many app stores as possible.
That’s where tools for mobile and mobile game development are trying to distinguish themselves and the battleground for those tools is like when marmalade lets you work from a C++ code base and get it out on platforms. So that’s not developers doing something in response to the problem, it’s something that tools are doing to help as a response a problem. That seems to be where that is all happening at the moment and the developers of those tools are winning the hearts of developers by saying “look how easy we make it to target multiple platforms and distribution channels”.
ALEX BUBB: Middleware platforms like Unity and solutions like that are proving to be ultra successful and will continue to be in the coming years. But interestingly, developers are more and more bringing monetisation and enabling services together. So rather than attempting integration wit stores globally, I think developers are increasingly developing in house solutions that use a cloud based infrastructure to support their proposition.
Ultimately, the goal is to maintain one single code base for the sake of ease particularly for Free to Play developers. That is the real challenge, so dealing with that fragmentation and APIs is more important than worrying about App Store fragmentation.
THORBJÖRN WARIN: Well I think for most developers, China, Korea and Japan will be the ones they adapt for but for most of them it’s going to be Google Play and Apple’s App Store. Period. Of course, you can build a small business focusing on a specific smaller store and focusing on that but it’s only going to be 1% or 2% of your market. In terms of the market, Google Play is going to be Volkswagen and Mercedes Apple.
Question 5
HOW MUCH IMPACT WILL WEARABLE TECH HAVE ON THE FUTURE OF MOBILE GAMING?
The great unknown in the future of mobile gaming is the impact of wearable tech on the industry. Theoretically, it could lead to a transformation in the industry not seen since the iPhone launched. Devices such as Google Glasses and the Samsung Galaxy Gear could offer a new dimension for mobile gaming, taking it out of the restrictions of a screen and allowing developers to impose it on the world; a truly mobile and adaptive form of gaming.
Yet at the same time, scepticism around the technology is difficult to dispel. Questions about the overall utility of wearable tech as a mass consumer device and the privacy debate surrounding Google Glasses have meant that there is little agreement on what role wearables are likely to play in the near future.
MIKE ROSE: I love the idea of wearable tech being massive in video games in the future, but I can’t see it haven’t as massive an impact as some people are hoping. The vast majority of people playing mobile games are doing so on a commute, in bed, on the toilet, while lounging around the house... and they want to just pick up their phone or tablet, get a game on, enjoy themselves, and then put it down, all with little effort.
Once you start introducing middlemen into the equation, like extra kit they have to activate and/or wear on themselves, it becomes more of an effort. If it’s a passive item, like the way in which fitness tracking tools are, then it’s far more likely to take off. Otherwise, it’ll be fun to fiddle around with for a while, but ultimately throwaway.
WILL FREEMAN: I would love it to have a profound effect and anyone who is sceptical about wearable technology, it’s always talked about as if it’s in the future but watches are wearable technology and it’s an everyday part of our lives. There’s definitely the potential for wearable tech and the consumer market is open to it; watches have been around for a long time!
Will it actually happen? I don’t know. I spoke to A and A who are working on one of the early Google Glasses but, guess what, I’m going to talk about porting technology again and for a developer trying to create a game for wearable tech at the moment there are really a lot of hurdles in terms of development tools and the eco system and it doesn’t really matter what tools there are or how powerful they are or how much potential they boast if there isn’t an ecosystem to support it or to get games on there then it is going to struggle. But I think there’s an open mindedness from the consumers and an open mindedness from developers and an enthusiasm; it’s just about building an eco system and bridging the gap between them.
ALEX BUBB: I wouldn’t say it’ll have a big impact but it could be complementary. As a kid, I used to loved the idea of a smart watch and found it interesting (though I’m not sold on glasses) but they could bring complementary scope for developers. The world would be boring without developers willing to try things and this is an opportunity but I don’t see a big ecosystem being born.
JAMES KAYE: I’m often sceptical about things that try to fundamentally change the nature of the experience. If you look at the experience of people playing mobile games, at the moment you’re sitting on the train or lying in bed – you don’t want to do too much. It’s like the old days where people went crazy about location based gaming and I think “people can’t be bothered to run around the town being a zombie”, games are about chilling out and having an escape not running around loads. So when people ask me about Google Glass and other technology, I don’t know about it at all. It looks fun but can you change the fact that gaming is quite a quiet and insular way of relaxing. They’re all novel ideas but it’s quite an individual thing and I’m sceptical that they’ll really add anything.