By any measure of value, audience size, or growth, mobile is the dominant form of gaming media. Already immensely popular due to its accessibility and wide range of content, the COVID-19 pandemic created hundreds of millions of new mobile players and increased the playtime and appetite to spend of existing gamers. With over a billion weekly game downloads on the Apple App Store and Google Play, resulting in more than $1.7 billion in weekly spend, the mobile game industry is clearly booming.

It’s also super top-heavy, fueled by the significant revenue of a few thousand games; chief among them smash hits such as PUBG Mobile, Coin Master, and Candy Crush. As of August, seven mobile games that pull in over $100 million in an average month. Another 810 gross at least $1 million monthly. These figures are astounding and a testament to world-class game development, intelligent marketing, the virality of quality gaming content, and a little sprinkle of magic dust for luck. Dig a little deeper into the two dominant mobile stores and you’ll see that between them they house around 1.5 million games. Some basic math would suggest that well under 1% of the available games are making approximately a quarter of the revenue.

Tough, right?

For every successful business startup, there are dozens of others that underperform or go bust. The markets and consumers decide. Well, yes, to a point. The issue for mobile games is that big tech players such as Apple and Google are taking an increasingly privacy-first approach that stacks the odds of success firmly against newcomers and smaller publishers. Even Facebook, for many years the primary source for acquiring new players due to the granularity of its targeting, is rebuilding its ads platform in response to a drop in effectiveness following Apple’s abolishment of its Identifier for Advertisers (IDFA). As the big tech platforms undertake such dramatic shifts in the data they allow advertisers to access, the chances of a new indie game being discovered and becoming a commercial success beyond 2021 are fading further.


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2021: The privacy-first year

For smaller mobile games, pursuing a paid model is a surefire way to stop your game getting off the ground, while achieving the scale to monetize solely with in-app purchases is rare. So monetizing with ads is the primary revenue driver, enabling publishers to generate income from every player. Most mobile games are typically highly reliant on marketing and advertising to get their brand out there and attract and monetize users. While mobile ads aren’t universally well-regarded, the majority of the mobile player base appreciates the value exchange they offer.

This value exchange has been powered by access to incredibly granular user data that enables three things:

  1.  Showing the right ad content to the right user at the right time.
  2. Advertising your game to players of other games who are likely to enjoy your content.
  3. Attributing installs to a certain marketing channel, i.e., figuring out where your game’s users are coming from, and whether the money you spent on advertising was worthwhile.

2021, and specifically the changes introduced by Apple in its iOS14 update, have thrown the status quo of mobile marketing into disarray. In killing its IDFA in the name of privacy, Apple has drastically limited the user data available to advertisers. This means that games — for so long able to use IDFAs or other user information to link identities through deterministic attribution — can no longer figure out how to effectively acquire new players. While iOS users are able to opt-in to sharing their data with the apps they use – and many consumers who understand the value exchange with their favorite mobile games are doing so – this still only makes up around 25% of iOS users. As a result, deterministic attribution as we know it has been killed off, and advertising spend on iOS subsequently fell by about one-third between June 1 and July 1.

Over the same period the spend on Android platforms rose by 10%, with advertisers switching budgets to Google Play and other large Android ecosystems such as Huawei AppGallery or the Samsung Galaxy Store. However, the direction of travel on Android is significantly privacy-first too, meaning the ad spend boom it’s currently experiencing may well be short-lived. When advertisers’ access to granular user data is curtailed on Android, it’s fair to say mobile gaming’s business model will be significantly damaged.

WTF is data science anyway?

Above: Let’s go fishing — for mobile marketing tactics!

Image Credit: Kawlee

While games are now lacking familiar user data to inform their marketing, they certainly aren’t lacking other data sources. In fact, they’re absolutely drowning in data — it’s just that it’s aggregated, hard to analyze and has rarely been used before by the majority of app publishers. The cold, hard currency of clicks has been replaced by elusive signals that need to be teased out.

This means that the importance of data has never been as great as it is today, or more accurately, the ability to turn data into insight. Publishers that were relying  solely on Mobile Measurement Partners (MMPs) to acquire the best players are in disarray because crucial insights are simply no longer available. These third parties no longer have all the answers, meaning games’ tried-and-tested growth strategies are paralyzed and the era of MMP-centric marketing is over. Indies, small, and even medium-sized game developers are finding themselves Googling stuff like “data science for user acquisition”.

Large, multinational publishers like Zynga, Rovio, and King are far better-placed to adapt to the new normal. They have sizable data science and research & development departments mining user insights in-house. With access to significant amounts of capital, they can likewise bring more data and more users into their ecosystems by acquiring smaller publishers. Zynga has recently bought Rollic Games, while Rovio purchased Ruby Games — both successful Turkish studios and publishers.

To bridge the gap, most publishers are resorting to a technique called fingerprinting, a bootlegged form of probabilistic attribution that doesn’t rely on deterministic user-level data. But this only works for ad networks that use links in their ads, meaning it does not work for Facebook, Google, or Snapchat. Apple has come out against fingerprinting, and it’s not unlikely that it will be shut down for privacy reasons on iOS15. Even if it doesn’t, the effectiveness of fingerprinting will decline due to the release of iOS15’s Private Relay service, which basically removes the main probabilistic signal for users with iCloud – their IP address.

So, game over for indies, then?

Above: No, this isn’t a reminder for tax day. It’s for iOS 15.

Image Credit: Apple

Ninety-nine percent of publishers simply don’t have access to in-house data scientists or the reported $100 million development and marketing budget of runaway successes like Genshin Impact. So beyond praying that cloud gaming or subscription services like Apple Arcade suddenly achieve the scale needed to meaningfully disrupt the market, or hoping to be talent-spotted by a large studio, are smaller mobile games destined to fail? Not necessarily, because when Apple closes a door, it opens a window. I’ll keep it light, but iOS15 will put all SKAdNetwork data — marketing data that comes from Apple but is deliberately disconnected from user identities to maintain privacy – into the hands of mobile game developers.

This Apple-centric form of attribution will give developers first-hand access to data that was previously the preserve of ad networks and enable them to compare it with what ad networks have been telling them (expect data discrepancies!). When combined with deterministic attribution using data from users that have consented to sharing, and probabilistic attribution, this will make up the bulk of mobile games’ marketing insight. Reconciling this data will be the biggest marketing challenge for mobile games. It will require new tools and training to help smaller studios and publishers collect, verify and analyze their new data, and offset some of the friction of adjusting to an unfamiliar marketing environment.

I’m not going to sugarcoat things. The confusion that 99% of mobile game companies are feeling about the privacy-first world and move to Apple-centric (and soon Android-centric) attribution is an opportunity for big mobile gaming players to further entrench their advantages. But with the strategy and tools at their disposal, I’d wager that the creativity, agility and sheer passion of indie and small developers means great IP will always have a chance.

We haven’t seen our last InnerSloth.

As Tenjin’s marketing director, Roman Garbar uses his extensive knowledge of mobile marketing analytics to educate indie and mid-size publishers on how to grow their games.

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