Barring a couple of examples like Minecraft and Monument Valley the conventional wisdom is that you can’t charge for mobile games. That, unlike other digital stores like Steam, the users are too casual, the competition too severe and the availability of choice too damned high. In this world your main option (so they say) is to go free-to-play. You have to build a game-as-a-service, be thinking in terms of endless retention and open loops. You have to play psychological tricks to get players over the penny gap. And to do that, goes the thinking, involves using a variety of by-the-book tropes.
I’ve never bought into this narrative. I’ve often felt that the payment problem with premium mobile games isn’t an inherent law of the universe. Smartphones are perfectly fine game devices just like any other and, even if their players do trend casual, that shouldn’t mean they behave intrinsically differently for all time. Casual gamers have happily paid in other platforms like Nintendo’s DS and Wii, as well as on PC for companies like Big Fish. No the premium problem on mobile has always struck me as a perception issue. It’s about how mobile games are marketed.
The Self-Made Trap
The medium, as Marshall McLuhan famously said, is the message. He argued that the form of a medium itself influences how messages delivered through it are received, and therefore changing what they actually say. Taking a leaf from McLuhan then, I submit that the message is the product. The tone, approach and strategy of how marketing is conducted shapes what kinds of product can be allowed by a product’s developer. What kind of ad you’ll run determines what kind of game you’ll believe can work, and therefore what kind of game you’ll fund and make.
One of the maxims of the mobile/social revolution is that big and stupid advertising is a mortal sin. Such tactics are considered inferior because they aren’t data-driven. New wave game makers, publishers, API providers and platforms consider themselves smarter than lumbering hulks like EA. “Look at the stupid money that big game publishers splurge”, they say. “Look at how incompetent they are, how old school, how TV generation, how Hollywood.” Instead they favor the model of performance marketing, that is to say targeted advertising with measurable results. This new wave of game studios (which I previous dubbed the San Francisco Revolution before then declaring it over) are all performance marketing wonks.
Ever since Google Adsense the technology world has asserted that advertising should be measurable rather than not. In the world of products and services a lot of money is poured down deep marketing wells creating ads with little effect. How many times have you seen, for example, that Taco Bell ad trying to excite you with a new and snazzily named recipe of corn tortilla, mincemeat and cheese? Can you remember what it was called? Of course not. Many marketing gurus over the last twenty years have made a similar point, like Seth Godin and his hilarious talks about how big companies fuel clutter.
Arguably Taco Bell is wasting its time making those ads, but we can’t know for sure. They are not meaningfully measurable. They’re cloaked in woolly terms about brand value and market presence, stuff that either feels like it’s more valuable than saffron or utter bullshit. Most modern thinking seems to incline toward the latter, and we see case after case in book after book showing how markets operate in a more tribal and fragmented manner (less “Ford F150 Built Tough”, more “Tesla”) than in the three-channel days of television. Thus smarter advertising, targeted campaigns, word of mouth, social value and numerous other lower-cost/higher-intelligence approaches are considered superior.
This is the tradition which frames how San Francisco (the revolution, not the place) game companies think. It’s simply taken as read, a mantra repeated from studio to studio as fact. New developers portray themselves as smarter-through-metrics, as lean, as sensitive to audiences, as tribal and as able to respond. Go to any conference and you hear folks talk up advertising platforms saying they offer premium installs, better tracking, quality not quantity. They believe that they’re disrupting the old with the new and finding a less Hollywood-stupid way of doing things.
But no. Though they talk “lean” and “market fit” such developers usually clone each other’s games to the hilt and blindly follow each others’ leads. They know nothing about fit. Though they claim to follow a story of providing value to players and encouraging some to pay, they actually behave like Vegas casinos, squeezing, hustling and pushing players into pinch points. Though they claim they don’t make Vegas-sized bets and instead talk “tribal” marketing, what they actually do is mass-purchase classified advertising and run it blindly to a couple of demographics.
And they’re trapped.
At certain points in any platform’s life cycle dumb advertising is just fine. New platforms often have green-fields phases where the most important task is simply to grab attention. I’ve always maintained, for example, that this was the smartest thing that the early Zynga (both in viral and paid ads) ever did. The problem came afterwards, when the platform had settled down and audiences expected more. That’s when performance-only got them into trouble because its promises were never realized.
In theory performance marketing in games should be like direct marketing to valued customers. For example my wife is a member of a wine club that regularly sends her emails about great wines at good prices and with an opportunity to buy. That’s good direct marketing at work because she anticipates it. Her club doesn’t need to bombard her in the hope that she’ll click. But with game companies it’s rarely like that. It’s great in theory to assemble usage metrics to fine-tune campaigns and find the right audiences, but in practise it’s little more than spam marketing and playing a game of razor-thin conversion increases. Unless you have an audience anticipating your communication, all you’re doing is trying to find better ways to drive clicks.
The problem is that entertainment audiences are not commonly in an anticipatory state. The entertainment industry sells untried experiences to audiences that value surprise and hotness instead. Unlike products and services, that means they often don’t want more of the same. Just because a player enjoyed one game does not mean they are a customer for that genre. Some are, becoming franchise fans (the “tribes” of gaming), but those customers become keenly aware of product quality. Many don’t, and instead look to be delighted over and over. They look for the thing that they haven’t done before, and to be surprised.
For both customer types data-driven marketing models struggle. They can only profile the actions that the player already made, correlating her along a number of lines based on previous activity. But if you’ve ever gone to the front page of Amazon to see it offer you five types of router because you recently just bought one, you know what the limits of that model feel like. It tends toward trying to repeat-sell, to sell you the exact same thing again, but you don’t care about that any more.
Game makers often think their marketing is the same as my wife’s wine club, but it’s not. The only reason it “works” is through brute force. Any advertising gets some people to click even if it’s the most useless thing in the world if its scale is large enough, and that can translate into a business. And because this is the shape of most digital marketing – and it essentially relies on overload – this is why the Internet tends to be bad at selling premium things. In many venues the only opportunities for marketing are small graphic panels, banners, cross-promotional bars and whatnot delivered at volumes. They lens the kind of marketing you can build.
In performance marketing the pitch has to be blunt. Something like “Insane Word Puzzle Fun! Play Now!” is the sum total of what can be said. This is why such campaigns often go for the obvious, for the pun or the wink. One example is the “Loot the Booty” campaign for Kabam’s Pirates – Tides of Fortune, featuring images of scantily clad ladies and a claim that the game is banned in 12 countries:
In reality? It’s just a formulaic midcore social game hoping that 5% of respondents will buy coins in it and pushing them to pay. Same as all the rest, in other words, because it has to be. Its marketing only allows that kind of product to exist. These are low quality ads selling low quality products to users who’ve seen a game just like them before and know what to expect. That makes the business of providing these games even more about margins, which depresses the likelihood of the experience being good. The volume of bought advertising has to be very high because its returns will be low, and the resulting commitment to making a great product will be low.
It becomes a negative cycle, one we saw before on Facebook. Facebook had an intrinsic instability in its game marketing for four reasons: 1) The supply of novice users who’d never encountered its tropes eventually ran down. 2) The competition from many identical and commoditized titles turned the ocean red, leading to an increase in deals and offers. 3) The cost of advertising (aka user acquisition) went up up up. 4) This lead previously successful studios to overinvest in trying to make the same game again, exploding headcount and turning previous darling Zynga (and many others) into cautionary tales.
But to get past it takes a change in DNA because you don’t stop becoming a wonk overnight. San Francisco studios tend to have a gap in understanding why performance marketing is limited, and this is why so many social/mobile game studios are institutionally uncreative. They tend to be populated with product manager MBAs with zero feel for design and – like hiring an accountant to be CEO of a movie studio – have overly meat-and-potatoes ideas about what’s important. Many of them have never worked in games prior, don’t know the value of art and experience in the game making process, or tend to think that those qualities are subjective (in the “to be ignored” vein). All of which lenses what kinds of marketing they’ll support and in turn what products they’ll support. But maybe that’s about to change.
Mobile is different to Facebook. On iOS there’s more editorial in the discovery process which means the platform is able to surface innovative titles and thus arrest stagnation. The technology is vastly more capable than Flash-bound Facebook ever was, so there’s more room for innovation and growth. Combine those two traits and we see that mobile is generally a more rounded and diverse market than social networks could be. It has both its Puzzle and Dragon and its Monument Valley titles, its Hay Day and its Minecraft. As a result mobile is on course to become the most revenue-valuable platform of them all, beating even console and PC. It also means it’s big enough for some studios to consider a different approach to marketing.
Such as, for example, Game of War. Game of War is a formulaic take on a genre of “lite strategy” games common in mobile (tablet and phone). The actual game is so-so, but Game of War is doing something very interesting in its marketing strategy. Machine Zone (the studio responsible for the game) cast Kate Upton as the face of the game and then proceeded to shoot some high production value television commercials to promote it. The ads showed Ms Upton leading armies, inspiring soldiers to vanquish dragons and other feats of derring-do. Then – and this is the really interesting bit – they ran these ads in prime time between downs in NFL games with a rumored $40m behind them.
And it’s not alone. Supercell is doing something similar with numerous ads for Clash of Clans and Boom Beach, again in prime time sports. One Boom Beach advert shows three fresh soldiers encountering an identical three who’ve been smoked by flamethrowers in a comedic scene. As with the Game of War ads they are high in production value, looking like trailers for decent animated movies. I find both intriguing and wonder who else is going to do the same. Blizzard, for example, just produced a beautiful trailer for its upcoming Gnomes vs Goblins expansion for Hearthstone. Although availble on multiple platforms, Hearthstone is primarily thought of as a mobile game. Will it soon feature in an ad campaign on TV too, much as Blizzard already does with World of Warcraft?
It leads me to wonder who else could be using these tactics as opposed to hoping that Apple will feature them as a ticket for success. What if, for example, someone had paid to advertise Monument Valley on TV? Might it have sold 50m copies instead of 5m?
Say what you like about the inefficiencies of a console publisher like Sony, EA or Activision, but the one thing they know how to do is sell an experience. They essentially treat a big game much like Marvel treats Age of Ultron. You’ve seen that trailer, right? Of course you have. Everyone has because it was a thing that had to be seen. But why? Because of the promise of experience. It was through that trailer, through the direct watching of it and the supporting social buzz that emerged around it, that we all became excited. It was through a “blockbuster” style of marketing that it told you a story, appealing directly to your right brain and not having to tell you to “Watch Now!” or boast that it’s banned in Ghana.
That Age of Ultron trailer was expensive, but will prove its worth in the long run. You’ll pay to see it, to eat popcorn while seeing it and – if it doesn’t suck – probably pay to own a digital version later too. The medium is the message and the message is the product, remember. In Marvel’s case the medium of cinema sends the message of the big experience, and the message disseminated through a high value trailer leads to the will to make a high value product: a big splashy movie. That’s how it earned the right to be thought of as premium. That’s how games do that too.
Trailers don’t have to cost ten million dollars or feature during the Super Bowl to work. You can be innovative with them and gain buzz another way. However the net effect is the same: High quality experience marketing directly leads to that sense of premium entertainment product, which in turn is why people pay a premium for it. It’s why Netflix dumped a fortune into making House of Cards, why game publishers assemble for E3 and run super-quality infomercials. It’s why, semi-relatedly, folks will pay $700 for an iPhone but expect Android phones to be free.
Now tell me: if I restricted you to a format of postage-stamp sized ads and a mandate that each ad had to generate clicks, how likely do you think you’d be able to use them to create Age of Ultron excitement for a game? Not at all. And knowing that, how likely do you think such a product would be to get funded at your studio? Not at all. The message is the product. And since the message for mobile games is D-grade, so are the games.
The Blockbuster Mobile Game
In many respects the way that marketing (and therefore products) have been handled in mobile games has tended to boil down to strip-mall tactics. It’s penny rich, pound poor, but it doesn’t have to stay that way. Indeed I would argue that it’s unlikely to. The problem with all performance marketing is essentially that it comes with a skinflint attitude, and as such is self-limiting. Whereas blockbuster marketing comes from with an abundance attitude. It asks how much can be spent to inspire, and in so doing what kind of product can be inspiring?
That’s why it works on console despite the colossal sums involved. Consoles don’t have anywhere near the install base that mobile does and yet console game publishers repeatedly sell millions of copies of key games. Indeed they manage to somehow sell to 20, 30, 40 or even 50% of the entire install base in some cases, which is a ludicrous number in the mobile world. That’s because they know how to sell premium.
When mobile game companies lose their arrogance about Hollywood tactics and realize that there’s so much more they can do, I think it will change the mobile game market for the better. The casinos in Las Vegas eventually realized that there was much more value in building a big experience than penny pinching existing crowds, and in the process turned the town from a seedy den of thieves to an adult Disneyland. They thought in terms of experience rather than performance, and lo and behold made far more money in the process.
If we could take that attitude and run with it I think we’d stop being so amazed at the idea that a mobile game could charge up front. Just as movies and other games do, the act of selling actively increases the perception of value and therefore price. The message changes, and so does the product. This virtuous cycle then starts to pay dividends. Apple, for example, is more likely to feature you if you appear to be worth featuring, and a major way to do that is to demonstrate intent. It costs a lot, but with the right kind of game it translates into mega revenue, so it’s worth doing.
Dean Takahashi reckons that we’ll soon see a $2bn mobile game, and maybe he’s right. But in the longer term I think we’ll see a premium-marketed and premium-priced mobile revolution, more LA and less SF, selling to everyone. Who knows how big that will get.