iPhone Money

The problem with a lot of free-to-play iOS games is that…well, they’re free. Sure, that’s great for consumers, but publishers can have a pretty rough time turning a profit if not enough players are making micro-transactions. This makes it important for iOS advertisers to look at how expensive it is to gain new app users, especially if that price is rising, as it did in June.

The cost per loyal user rate rose 14.3 percent from May to June, increasing from $1.26 per user to $1.44 according to Fiksu, a mobile app user acquisition platform.

Developers have been lamenting the increasing costs of marketing mobile iOS games, but Fiksu vice president Craig Palli told GamesBeat that the cost per loyal user price has consistently been hovering around $1.40.

“Anything within the $1.40 to $1.50 range is very much still in the normal range,” Palli said in an interview with GamesBeat. “The all time high is $1.81, and the all time low is $1.14.”

“Mobile marketers need to think real carefully about their user acquisition,” continued Palli. “If $1.40 per loyal user is not a good number for them, then they need to think of it more in line with a portfolio. If you look at a lot of the larger game developers, they look at acquisition not for one game, but as they cross-pollinate that user across multiple games, (they ask) is that a better return for investment?”

Still, sold out distribution channels for iOS games is making marketing more challenging for smaller developers, especially those with a limited portfolio of titles. We’ll have to wait to see if these independent game makers can compete with the better funded mega-publishers in the long run.

In a separate report, mobile monetization and user acquisition firm W3i reported that the average advertiser cost-per-install rate (CPI) has increased by 70 percent on Android and 56 percent on iOS. The increase is due to mobile gaming giants like DeNA and Gree entering the U.S. mobile game market, W3i said. CPI rates are particularly high during holiday weekends.

Robert Weber, co-founder of W3i, said that the entire user acquisition market is undergoing a sea change that will require mobile developers to re-think how they obtain and monetize their users.