I recently posted about the message being the product in mobile (and all things, really). I said that by marketing in a classified-ad/performance-ad sort of model, mobile game makers aren’t selling on experience (like a movie or a AAA game might) and thus don’t believe they can make games that work for experience either. This precludes them from pursuing many potentially innovative games, and results in a kind of game design monoculture that’s proved unstable time and time again.
However the good news is that mobile and tablet aren’t going anywhere, and are far more powerful than other platforms where similar low-quality strategies eventually tapped out (Web, Facebook). Thus the blue ocean for premium mobile is wide open.
Naturally such a statement should be greeted with a degree of skepticism. Some skepticism comes from success bias. This is the lens that looks at the handful of heavyweight games that seem to define the market and hails their approach as the only way while ignoring the legion of other games that tried the same trick but failed. And also regarding games that did something different as non-recurring exceptions. This line of thinking can generally be ignored because it’s always right for two years ago, but never today. A more productive skepticism is to concede that maybe there is potential, but to query its viability.
The conventional free-to-play game is a template that’s easily communicated. It’s a story of fast early development, releasing, measuring, optimizing, pinching for revenue and repeating. Of course that’s not actually what happens. Most successes usually have an X factor like massive marketing, a killer brand like Kim Kardashian or the advantage of platform amnesia. Furthermore the sunk cost for initial development increasingly makes a mockery of the “early, release, optimize” part, so the reality and story tend not to reconcile. But the rational skeptic understands how it’s supposed to work and what to judge individual efforts against.
Can the same be said for other kinds of game, particularly premium games sold on experience? Do Minecraft or Monument Valley really show the way for 100 other games? It’s cool to talk up Funomena’s Luna as an exciting project and think about what it might be. But do it and similar projects constitute a template for success?
An important factor to consider is that finding a viable template is not a question of product quality. Of course small screens can play host to quality games. There are numerous examples of such, from mobile through to handhelds like Nintendo’s DS or Sony’s PS Vita. However there are also many more examples of small screen games that suck, are niche, are noble failures and similar. Any scalable business model for premium has to assume that one hit pays for many failures and if it can’t then the model doesn’t work.
Another factor is the question of scope. A common fear that outside investors have of game development is that it’s a bottomless pit. They look at development costs of games like Grand Theft Auto V ($250m supposedly) and blanch. By contrast those same investors also tend to assume that budgets are recursively scalable (i.e. they can go as low as possible too). Neither the fear nor the assumption are warranted. In the mobile space most full-fledged premium-price projects should currently be doable for between $500k and $1.5m over a timeframe of 7-15 months, a key factor of which is ensuring they look and play great. So any model has to work within those parameters rather than assuming games can be made for a song.
A third factor is the degree and shape of follow-on support. Do these games need to sustain post-launch? I think it’s fair to assume the answer is yes. If so, how? Are they living worlds with continual support and content costs, individual releases with extra content packs or other premium post-purchases? Are they to be franchises with annual release cycles? It’s unlikely that there’s a one-size-fits-all answer to that question but any model needs a firm principle to hold to.
The final factor is the degree and success rate of marketing. Since we’re talking about experience- rather than (or supported by) performance-marketing as the primary means to sell the game, that means we’re talking about video ads, YouTube and TV time, trailers and promotions at events, and courting of the media. None of these tend to be cheap (although they don’t need to break the bank on the first outing of a franchise either) as you’d have to know that they would convert. Otherwise you’re sunk.
Of course there are many other factors, but these are the primaries. A game publishing business working on premium games in mobile needs depth of catalog to cover duds and break-evens, substantial-enough budget to make each game, a concrete following-support strategy and marketing that works. Like a book, movie or music publisher it has to commit enough per project to find some solid hits and not kid itself that everything can scale up and down on a slide rule. Then it has to have a plan for doubling down on the games that work, likely moving onto a blockbuster model around a few key ones in time. Its ultimate goal is to find premium intellectual property, just as in any other media company, and build fortunes on it.
Can that work through mobile? I tend to believe so simply based on the fact that every other game platform manages to do so – and I don’t believe mobile to be some grand exception just because. However that’s just my gut. The truth is I don’t know.
We know from a few test cases that charging a premium can work. Ustwo recently published its numbers for Monument Valley for example, a game released at $4.99 boosted by some occasional sales. It took a year to develop the original game and six months to develop a paid content pack and (after the platform cut) overall the game earned $5.85m in sales. The content pack was less popular with about a 25% upgrade rate, which is not uncommon.
There are others. Five Nights at Freddy’s is one, Geometry Dash another, Plague Inc a third, the original Plants vs Zombies, Goat Simulator, The Room and its sequel, the Infinity Blade games, the remade Oregon Trail and of course Minecraft. You get the hopeful tone in these examples, but unfortunately the data is not readily available to say for sure. So we’re operating from maybes and mights.
What it comes down is a simple calculation: Assuming the need to release 10 games to get to a hit, each with $1m behind it in development, a flexible marketing budget of $10m and $5m on top for all the associated support work (admin, legal, QA, etc) do we have a valid mobile games business? The back of my napkin says “probably”. With such a giant platform as iOS alone it’s hard to see how that would fail.
But is it a business with significant growth potential? That’s trickier. None of the premium games listed above have gone for a proper campaign in the same vein as Game of War, and the one example I cited above (Monument Valley) is on the low side of “hit”. A 4x return is great if you’re the developer who had that success, but it’s small if your template needs that game to pay for another 9 and then also show blockbuster potential on top. Arguably with a major push that could be overcome, but it’s a highly open question.
This, unfortunately, is the nature of blue oceans. Many of the big success stories of the games industry tend to come from nowhere before the facts are known. From Atari all the way through to Zynga and beyond, our history is littered with the unlikely gamble, the hunch and the “I just need you to believe” sort of moments that transform into billion dollar fortunes. Is premium mobile viable as a proposition? Of course it is. Can I prove it? When someone does it, probably.