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Mobile developers are spending more than ever to acquire new gamers, but those new players aren’t spending any more cash on their games.
It cost mobile publishers more than ever to acquire new customers in December. The cost for a new install (CPI) hit $4.36 last month, according to market analysis firm SuperData Research. That’s up more than 288 percent from January 2012 (the month SuperData started tracking this information), when CPI was only $1.30. For a more direct comparison, in December CPI was $2.23. December’s costs were also three times higher than the monthly average for 2013.
The price increase to get a new person playing a game did not equal a larger return on investment. While costs are up 288 percent, the average revenue that each user generates for a game (ARPU) is only up 38 percent in the same timeframe. ARPU was 78 cents in January 2012, and it’s only up to a $1.08 now.
That means developers are spending a lot more for just a little bit more in return.
“Initially, mobile game companies — like social publishers before them — could get by on organic growth alone,” SuperData analyst Joost van Dreunen told GamesBeat. “Now that the market has started to mature, marketing plays an increasingly important role. For the top dogs, this means finding new and clever ways to promote their games, like the cross-promotion efforts we’ve seen between Clash of Clans and Puzzle & Dragons.”
Van Dreunen is referring to the collaboration between GungHo Online and Supercell. GungHo makes the dungeon-crawling match-three game Puzzle & Dragons, and it featured characters from Supercell’s Clash of Clans during an event in October.
“For the bulk of the mobile game companies out there, [marketing] means optimizing the rate of return on their marketing spend by allocating their budgets the best they can,” said van Dreunen. “The focus of a game publisher should, of course, always be on making great games. But formulating a sound, data-driven marketing strategy has quickly become a critical part of the equation and a key competitive edge.”