The past several years have seen the rise and fall of viral mobile apps that strike gold for several months, falter and then fade away entirely. Games like Angry Birds and Farmville have hit the international spotlight and generated hundreds of millions of downloads, but many of them have crashed and burned.
When a mobile game goes viral, many studios bank on monetizing the hell out of the game for as long as possible. But the nature of mobile games is almost always one of gradual growth and then hockey stick explosion — and when the dust settles, many users delete the app, and the cash flow dries up, signaling a stark end to a beautiful, too-short golden era.
Many studios are grappling with the most effective business strategies to create a viral game while still holding down the fort for a sustainable business. Many strategies have risen to the forefront by the world’s most powerful and successful gaming companies, including Differentiated Advertising, Freemium, Diversification and other alternative strategies.
Along with some other studios, Etermax was one of the first global developers to incorporate mobile ads heavily into the business model. Since we launched our first game, Aworded Crack, in 2011, we have found the most effective way to profit from every ad impression.
2015 saw the development of a new kind of ad called “rewarded video ads,” which rewards users with virtual goods if they watch an in-app video advertisement. This new advertising model convinces users to watch the video as a way to improve their performance in the app. In 2016, this model kept growing, and we have integrated it successfully in our products.
Don’t rely just on free-to-play
At the dawn of the mobile game era, gaming studios generated income mainly by selling their apps in marketplaces like the App Store, Google Play or Amazon. With time and as technology progressed, businesses shifted to a “Freemium” model, where users download applications for free, but there was a catch — they had to download a paid version or buy tools and accessories if they wanted to access all the game’s extra features.
Companies like Rovio and Supercell did just this: by starting out with strong IPs and building their business models around their most successful games. At the same time, they all tried to win over new audiences with other product lines derived from their strongest product.
Today, the prevailing model is based around free applications with in-app microtransactions. In this regard, Finnish company Supercell has chosen to develop its business model focusing on the economy of its game, Clash Royale. It offers mid-core users a plurality of “micro-payments”, a strategy that has proved extremely successful.
However, Supercell knew that if it invested in all its dividends in the company’s core business, it wouldn’t make it through the next 10 years, because the future of mobile gaming remains to be seen, especially as downloads are slowing. Towards the end of 2016, even though the game has remained popular among users, Supercell decided to explore new possibilities, launching a series of animated shorts and opening a store to sell the brand’s merchandising in the United States.
Similarly, Finnish gaming studio Rovio decided to combine freemium and licensing models by focusing on its most valuable brand: Angry Birds. After some years of unsuccessful games, it struck gold with Angry Birds. This game’s popularity turned it into an extremely valuable brand, and Rovio decided to make the most of this. The company launched a dozen games starring these famous characters, and, at the same time, it started centering its business model around licensing. Boosted by the strength of the Angry Birds brand among young audiences, it made the decision to diversify merchandising with different types of products like stuffed animals, clothes, other merchandising and even a movie and a theme park based around the game’s characters.
Subscriptions ‘n’ sports
Even as freemium and diversified models have taken flight, the new subscription model has started to emerge among companies like Glu Mobile (with Frontline Commando) or Supercell (with Boom Beach), which let users access exclusive offers and benefits through a fixed regular fee.
Another trend in the mobile game world is that of esports (mass video game tournaments that originated from PC or console games like League of Legends and Overwatch). Even though the mobile market is relatively new for competitive gaming, Supercell is looking to tap into the success of Clash Royale even further by trying out this new model.
Without a doubt, in a highly competitive industry where companies coexist within a space that is constantly growing and developing, the key to success lies in creating a good mobile marketing strategy and positioning the right product with the help of a deep understanding of the user base, as well as diversifying games around a strong IP.
Maximo Cavazzani is the founder and CEO of Etermax, the Buenos Aires-based mobile gaming company that created Trivia Crack, the hugely successful quiz game that topped Apple’s App Store across 44 countries and was named the most-downloaded free iOS app of 2015.