As mobile game developers struggle to understand the new industry landscape after Apple cracked down on incentivized downloads and offer walls this week, Pocket Gems, which vaulted to success using this strategy, debuted a new game this week, Tap Pet Hotel, with an offer wall that’s conspicuously absent (see right).
If you open the game today, on the screen where players can pay for virtual currency, there’s a bottom button that would lead to what would be an offer wall. Instead it leads to a screen with filler text saying, “Buy more rooms, collect room revenue and level up to earn more coins!”
While the company’s profit margins may be more compressed without the offer wall, it doesn’t appear to be hurting otherwise. Tap Pet Hotel raced to #2 on both the Top Free and Top Grossing charts in the U.S. (though Apple’s Top Grossing chart doesn’t include revenue earned through incentivized downloads). The company also holds the #1 Top Grossing slot with Tap Zoo.
Apple began rejecting apps with offer walls earlier this week, arguing that they cheat the chart rankings even though the company has tolerated them for a year. Many free-to-play games derive 30 percent or more of their revenue through these walls, which let players earn rewards or virtual currency if they install another developer’s game. When done at scale, this practice allows developers to pay to break into the top of the charts.
Pocket Gems was a poster child for the use of offer walls. The company used to make all of its revenue through them before it turned on in-app payments for virtual currency. Pocket Gems probably had the most symbiotic relationship with a pay-per-install network of any freemium developer out there given its close relationship to Tapjoy, the biggest company in the space. They even shared an investor, Gameview Studios chief executive Riz Virk, who helped finance the company’s first game.
Now several larger developers are racing to take offer walls out of their games. We couldn’t find offer walls in several of TeamLava’s games yesterday and TinyCo’s new title Tiny Zoo doesn’t seem to have one either. That said, we’re hearing anecdotal reports of games with offer walls actually getting through the approval process into app store from multiple sources. Like we wrote on Wednesday, we suspect that Pocket Gems may be one of the companies that has acquired such a large user base that it may be able to cross-promote new games successfully to its existing players without having to rely on incentivized downloads.
Pocket Gems, which raised $5 million from Sequoia Capital last year, has excelled at taking proven genres of casual games to the iPhone. It said earlier this month that it had surpassed 28 million downloads and its title Tap Zoo has consistently ranked among the Top 10 grossing apps for 28 weeks out of its 32-week existence.
Its latest addition Tap Pet Hotel appears to be inspired by any number of virtual pets games that emerged on Facebook in 2008 and 2009, like Zynga’s Petville, Playdom’s Pet Society, Slide’s Superpoke Pets or Crowdstar’s Happy Pets.
In the game, players manage a hotel where they can build special rooms where pets can play, sleep or bathe. It uses classic social gaming-style monetization. Building each room costs earned currency in the game, but players can use a paid currency to speed up tasks. Like in Tap Zoo, a good share of the content is gated and can only be bought with the paid currency.
The launch comes just as several competitors like Andreessen Horowitz-backed TinyCo and Storm8’s TeamLava studio have also released zoo games, which could make it harder for Pocket Gems’ big hit Tap Zoo to stand out.