Are paid games really doomed?

The mobile landscape has changed rapidly in the last two years. The majority of apps are free now and most of the existing marketing strategies focus on paid user acquisition. Unfortunately, paid installs don’t work for premium games. Why? Because the majority of paid games have a low user Life Time Value (LTV).

If you sell a game for $1.99 you can, simply said, invest a maximum of $1.40 on a paid install after Apple’s cut. If you count a viral co-efficient, it could be more but it more than likely won’t be over $2 which is actually a pricing baseline for Tier 1 countries on iOS (more about CPI by country at Chartboost blog).

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Incentivized traffic won’t work either. According to Dimitri Haussmann, former dev relations manager at Fyber, “nobody will buy a $1.99 game just to get some free coins in another game. Incentivized traffic only works for free titles. It is cheaper than normal traffic and there you have to make sure to also keep the traffic after it is incoming.” Martin Chamrad from Craneballs adds that “despite the price per install which could be $0.50, the quality of acquired users is low. We tried it and the math is not working for us.”

Wait, what about Facebook ads? The real-time bidding system is also against paid games because you have a fairly poor install volume for a low bid of about $0.50. If you need higher traffic, the bid has to be between $1-2.

So, are paid games doomed? Well, not really. There’s still space for some action.

1. Increase the LTV

I’ve recently approached Kamo Asatryan, Co-Founder and CEO of Revsmirk. My question to him was about how to get more users to Octagon which is a paid game with high retention and virality. “My main recommendation would be to add in IAP. With IAP we have seen fairly high LTVs that allow those properties to pay anywhere between $2 and $6 per install.

2. Approach Youtubers

YouTube and Twitch are becoming much bigger players and their reach is quite often significantly wider than traditional review magazines and sites. Emily Morganti, a PR expert which we hired in 2012 comments on this change as she says “Press lists for game shows like PAX are full of YouTubers. That wasn’t true a few years ago. Almost all of the gaming magazines have disappeared over the last ten years, game journalism is changing.

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3. Promote with Free App A Day

Fortunately, only French AppGratis suffered from the Apple ban back in 2013. Other services such as AppTurbo, App-O-Day or Monster Free Apps still operate. Their reach can bring up to 200 000 downloads a day. Each service has some dominant countries but in general it’s not a problem to get traffic from countries such as Russia, Germany, the UK or even emerging Brazil. If you have a high quality paid app, you should go and try this type of promotion and combine it with monetization through ads.

4. Cross-promote your games

One thing that works pretty well for Octagon is a model of free Mac and PC versions. Both have App Store and Google Play buttons right on the main screen so it’s super easy to download mobile versions if you like the desktop game. The Mac version has already reached 400 000 downloads and it reached #3 overall in the Mac App Store in the US. The PC version available only on the microsite at www.octagongame.com has over 26 000 downloads without any promotion at all. The conversion is in single digits but we definitely see correlations between the desktop and mobile versions.

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Below are Bit.ly statistics of Octagon PC version downloads directly from the microsite

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5. Aim for being featured

Tom Krcha, Product Manager at Adobe who helped launch the Botanicula game in the mobile space, recommends to “try everything to get a featured spot in the App Store”. There’s nothing as powerful as a good spot on the home page or in some collection. This means to create absolutely top notch products, find ways how to connect to Apple or Google dev relations teams and build a relationship with them.

I, as someone who isn’t in love with the current freemium model, believe there is still space for premium games. I hope these 4 ideas will help you market paid games and earn enough cash to produce new original titles. If you would like to recommend additional strategies, feel free to post them in the comments section or tweet me at @Flow_Studio.

Bonus Tip
If you feel that paid games are doomed, please try IDDQD or IDKFA 🙂

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