User acquisition is a big buzz word in the mobile games space nowadays. But it's not all it's cracked up to be. Acquiring users has gotten expensive, and it won't matter how many you acquire if the churn is so high that they're all leaving your game in a few days. That's why player retention is so important and it's how Yvolver, a new Dallas-based startup, hopes to make a difference.
CEO Steve Nix, former executive at id software and GameStop, believes that most developers should stop paying for user acquisition. It costs more than $3.00 per install to acquire customers and that's only increasing.
"Lately the trend is that costs for paid user acquisition are increasingly prohibitive, especially for mid- and smaller-sized developers. There is a point where paid user acquisition doesn't make good economic sense for some games anymore," Nix told GamesIndustry International. "Hopefully developers are also going to acquire players organically through typical paths like word of mouth, social and online discovery or digital store search.
"The big difference that Yvolver brings to the table - we are much more concerned about the behaviors and value perceived by users already in the game. This makes any users acquired more likely to return to the game, more likely to make a first or second in-app purchase and much more likely to recommend the game to a friend. Every customer acquired, regardless of how they got there, will be that much more valuable to the developer. So to a large degree, we are not replacing acquisition services or methods, we are just making them much more cost effective or viable for the developer."
"Many developers are focused on acquisition as the only tool in their toolbox outside of the gameplay mechanics and changes to their economies that they can directly control themselves"
Nix added that the problem for many developers is that they've become far too concerned with the acquisition part of the equation rather than focusing on engagement.
"Right now, many developers are focused on acquisition as the only tool in their toolbox outside of the gameplay mechanics and changes to their economies that they can directly control themselves. Gameplay mechanics may be difficult to iterate upon quickly or the developer may just not have the resources to make all of the changes that they would like. We know that these same developers are increasingly viewing their acquisition programs as dumping money into a giant leaky budget. Yvolver helps plug the leaky money bucket that acquisition dollars are being poured into by encouraging retention, engagement and in-app spend for those users once acquired," Nix continued.
"There are also a lot of great developers out there that are fantastic at creating a fun, gorgeously crafted games, but they do not have the resources to study user engagement and spending behaviors the way that the major studios can with their dedicated teams. That is all we focus on at Yvolver, so we are excited about improving the health of the business model for developers that may not have the capabilities that our laser-focused team of veteran data science and loyalty experts can quickly bring to their games."
The crux of Yvolver is a loyalty rewards program. In fact, Yvolver teamed with Hal Brierley, who's serving as a key investor and providing counsel on the design of its loyalty services. Brierley is an expert when it comes to loyalty rewards, having been a pioneer in the design of major loyalty programs, including American Airlines AAdvantage, Hilton HHonors and GameStop Power-Up Rewards.
So how does it work? Essentially, Yvolver users are able to build up a monthly Yvolver Score by completing events that are set by the developer in combination with making in-game purchases. Users can then convert their monthly score into prizes - both digital in-game items or power-ups and physical real-world rewards, like electronics, clothing or other goods. The score is persistent across games/apps and different platforms.
And while you might think that a program like this would be intrusive or take away from the experience for some players, Nix insists that it's been designed in a way that won't push away players - besides, that goes against the very thing the company was built for.
"The beauty of this model is that we only make money if the developer is making money through these in-app purchases"
"The core premise of Yvolver is that we only have value for developers if we are creating value for the gamers playing their games. Most of the team here came out of game development and we have been critically focused on every detail of the user experience and making sure that we only add to the enjoyment of the game," Nix said. "We should never be throwing confusing pop-ups out, blocking the user's progression, making them think they have somehow left the game, or all of the distracting stuff that you see in a lot of the ad and offer platforms that are integrated into so many games now. We have worked closely with our game developer partners to make sure that we are respecting their game, and the response so far has been that we are firmly on the right path."
The supporting cast around Nix and Brierley is strong as well, coming from companies like id, GameStop, Zynga, Apple and more. Former Apple App Store games manager Cory Lewis is a co-founder and is leading biz dev, former id lead programmer Jah Raphael is a co-founder and is serving as CTO, and Matt Himelfarb, a managing partner at Dallas Venture Partners is a co-founder and acting as CFO. You can read more about the entire team here.
On the business side of things, Yvolver believes its own interests run in parallel to the developers it's looking to help. Much like a sales associate on a commission, Yvolver only benefits when the developer starts seeing sales.
"We work with our developer partners to build loyalty-driven events and programs that add value for their users and incentivize the behaviors that are most important to the developer. When users engage with the game in these desired ways, combined with that user's in-app spend, they will receive an Yvolver score. The more the desired behaviors and in-app spend happen, the higher the user's score will be. Our revenue is based directly on the Yvolver scores generated in an app in a month. The beauty of this model is that we only make money if the developer is making money through these in-app purchases. We are completely aligned with our development partners, which is important to us," explained Nix.
Yvolver has been in private testing with a number of apps so far, but the company isn't worried about signing tons of developers right away.
"We are not concerned about integrating with two-thousand apps the first year and game count is really a meaningless metric for us... Our data science and account teams are working continuously to become more creative and efficient in the programs that we develop with our partners, and that is how we really think about our progress. We believe gamers will quickly start seeking out titles that have integrated with Yvolver, and gamers will ultimately tell us if we are successful through their behaviors," Nix said.
To kick things off, a beta version of the Yvolver service will launch exclusively with Zombie Gunship Zero from Limbic. The game will be available for download on March 13 and the beta service will follow in the "near future."
Limbic CEO Arash Keshmirian commented, "Running a successful independent mobile games studio has become an increasingly complex challenge during the past two years. Market competition is at an all-time high, and marketing resources are becoming increasingly scarce and expensive. We couldn't be more excited to partner with the Yvolver team to not only help engage and retain our current fan base, but to bring those fans real, added value within the Zombie Gunship Zero experience. It's a win-win for us."