iPhone game marketing costs keep rising to "insane" levels

Smaller iOS developers fear being pushed out of a crowded market

At a panel at VentureBeat's GamesBeat 2012 moderated by GamesIndustry International's Steve Peterson, iOS developers shared their woes in marketing their games in a crowded app store. User acquisition costs are rising to the point that many free-to-play titles will spend more on marketing than they'll make in lifetime revenue. The panel was attended by SkyVu Entertainment founder Ben Vu, Machine Zone chief executive officer Gabe Leydon, mobile consultant A.J. Yeakel, and W3i cofounder Rob Weber.

Vu explained that cross-promoting other developers' games via services like Chartboost was his primary method of reaching users, but the rising costs are a big problem.

"This mismatch is insane," Vu said. "You have to pay attention to this, down to the hour or the minute."

Leydon cited costs as high as $7 for acquiring users, up from 50 cents a year ago. He sees a number of "billionaries" coming into the market with large brands to sell, with Asian mobile developers close behind. Weber backed up Leydon's claims, explaining that it's difficult to find the top-end of user acquisition costs.

"The pressure on prices will shoot upward and not slow down until more ad inventory comes online," Leydon said. "There's billionaires in the market who want to win. They are willing to spend $7 a download. This is going to be a long, tough fight."

"You can't predict how the bigger companies will spend," said Weber. "But it's about finding the right volume and the right level of profitability for a game and doing it on a large scale. It's a huge, full-time job."

Great content pushes games through word-of-mouth, but social networks like Twitter and Facebook also helps keep acquisition costs lower according to Leydon. Vu said he was also looking to improve the branding on his Battle Bears game by licensing the IP for a possible toyline and television show.

"We are working on the core product and the core brand and making it freakin' awesome," Vu said.

While Apple App Store is the most lucrative mobile market, that is beginning to come with its own set of issues, many of which don't exist on the Android-based Google Play Store and Amazon AppStore. Microsoft will also be entering the race with its Windows Store this morning. Unfortunately, on the Apple App Store itself, there seems to be no cure-all in sight.

"That's just more things to worry about," Vu said. "I'm pulling my hair out."

More stories

The average cost to acquire a mobile game user plummeted this year

Liftoff: But the cost to convert that user into a paying player has been on the rise over the last two years

By Rebekah Valentine

Bunch raises $20m toward multiplayer social platform expansion

Investment led by General Catalyst, included Take-Two, Ubisoft, Supercell, EA, and Riot

By Rebekah Valentine

Latest comments (3)

It's true, you can no longer simply publish a game and expect an audience to follow, but the smaller indie developers can be quicker and smarter than the big players. If your looking for inspiration check out the Guerrilla marketing series and a particularly useful book The Power of Influence by Sarah Prout . Good luck!
0Sign inorRegisterto rate and reply
Paul Johnson Managing Director / Lead code monkey, Rubicon Development8 years ago
Or just step out of the arms race. The beauty of the appstore is that tiny studios have an equal ability to publish as that of the EAs and Zyngas. That right there levels the playing field.

Can't get 20 million downloads? If you're a 3 man studio, do you need 20 million downloads?

Seriously, we spent no dollars on marketing our first game and it turned a decent profit. We've spent $8,000 on a PR firm to launch our sequel this time around.

Seeing as we didn't spent $20M on marketing, we don't need to make $21M in profit.

If you want to stand out, make something that stands out and people will still talk about it. Want to make another farmville clone? Nobody forced you.
0Sign inorRegisterto rate and reply
Bruce Everiss Marketing Consultant 8 years ago
1) If you app is less than excellent in the app store you are dead. Standards are much higher than for console games.
2) The app store itself is utterly useless for discoverability.
3) So think who you are trying to reach and then work out the most effective way to reach them. Clue: It isn't Chartboost!
4) Bigger publishers have a huge, immense, gigantic advantage on the app store because they can cross promote. Hence Chillingo can get something in the charts at a cost of zero whilst an indie with the same game would be invisible.
0Sign inorRegisterto rate and reply

Sign in to contribute

Need an account? Register now.