Blogging Inside Social Apps: Monetizing Mobile Games on iOS and Android

We’re at the San Francisco Design center, blogging Inside Network’s third annual Inside Social Apps conference.

Kim-Mai Cutler leads a discussion on “Monetizing Mobile Games on iOS and Android,” joined by TinyCo’s co-founder Suleman Ali, Storm8’s CEO and co-founder Perry Tam,  Pocket Gems chief operating officer Ben Liu and Game Insight’s VP of Business Development Darya Trushkina.

The following is a paraphrased transcript of the discussion.

Kim-Mai: When we first put this panel together, the charts were more predictable. You guys had the top grossing game or a number of titles on iOS and Android. Over the last couple of months, it’s become more volatile. How is that affecting business?

Ben: It’s a different time now. There’s more competition. That’s a challenge and something that’s good for consumers. Lots more choice. It’s an opportunity and a challenge in a sense that developers have to innovate and make new titles.

Perry: We observe and monitor the top grossing chart closely. We don’t make predictions. We’re more in reaction mode. We look at the charts and improve on ourselves. If we see that our app is up top, we double down on marketing and in-house effort, adding new content or features. On the other hand, if we see the app not doing as well, we’re going to scale back.

Kim-Mai: What kind of spending do you need to do to keep it there?

Suleman: I think the volatility of the charts is natural based on where we are and where the market is. There’s tons of fragmentation and people are launching new games all the time. I think what will happen over time is there will be a bunch of people who can generate a large quality of users and generate better games. Companies that can do that will be able to keep their hold on the top grossing charts.

Kim-Mai: We had people say the rankings game doesn’t make sense anymore. What do you think of that? Can you have a lower ranked game and still have a viable business?

Suleman: What I’ve seen from the top grossing charts is that there’s significant revenue growth. An app in the top 25 grossing now is generating 50% more revenue than it was generating 6 months ago. I think what will happen is that fragmentation will increase over the next 2 to 3 months and then consolidation.  The folks who will drive the consolidation will be the big winners.

Kim-Mai: Are we going to see a Zynga of mobile?

Suleman: It’s a really difficult feat. There are few markets dominated by a single player like Zynga. I think it’s more likely that there will be a handful of players — companies like Coke and Pepsi that each hold 25% of the market. It’s much more likely that mobile won’t be a winner takes all market.

Kim-Mai: What about on Android? How important are the charts?

Darya: For us, on Android, we want to be on the top of the charts. For us, it’s not about marketing. It’s about quality of content. For example, we launched Paradise Island as our very first game [on Android]. Without any input into the marketing Paradise Island became the top grossing app and was No. 1 for 26 weeks. When we launched our next title we cross promoted with our own games. Quality of content and loyalty of users was the prime focus of attracting the audience. Unlike iOS, work of mouth is important on Android.  Word of mouth on Android is actually generated by our user base. A lot of younger audience members will say “hey I have this game you need to get” and you cannot buy that with marketing money. Top charts generate higher revenue, but we don’t need to put any significant marketing money behind it because once the content is good, once you have a reputation on the platform and as a developer, your user base will follow you and will grow. We look at it from a long term perspective – we don’t want to be Zynga and grab a huge market share – but we’d like to be more like World of Warcraft.