The Saturated Mobile App Market

The Smartphone era has changed the face of not just mobile gaming but gaming general, it has changed the way user view and appreciate games.  In the past the gaming experience use to be a process.  You first do your research, than you go to the store, you purchase the game, you rush home and smell the new plastic game smell thingy, and than you open it.  Before you throw it into the console that’s connected to your TV, you glance through the manual mentally preparing for the epic adventure you were going to experience, and tha
n you let the games begin. Unfortunately, these hurdles were too exhausting for your average user causing the gaming industry to stay stagnant for years as the hard core appreciated the art form but become too niche.

The mobile gaming renaissance has brought forth a new voice where your average consumer’s opinions have become a lot more represented in the choices of the game design today, versus the console and PC gaming era where the gaming market was voices were the Creative Directors vision and the voice of the hard core players on forums.  The gaming market changed dramatically over the last 10 years and here are reasons why:

  • Smartphone Revolution: The penetration rate of the smartphone has trickled all the way down to the laggards as the technology is evidently a lot more superior to its predecessor, The feature phone. During the release, (2005) this technology was so powerful that at that time, you can potentially create a game that was PS2 of quality, which was ground breaking at the time, since feature phone specs were limited at the time, essentially mobile game was stuck in the game boy era for years.  When the Smartphone was released, this created a huge demand of users that were embraced playing games on their smartphone.  This marked a new blue ocean market and many billion dollar valuation start ups arose, and cemented itself as the next big emerging market.  This forced the large developers hand in entering this market and learn with everyone else the essence of releasing a great ‘mobile’ game.  As the market grew, it was becoming clear that the console and PC market were in consolidation mode as the market shifted into an open market.  The publishers lost control of market and we were experiencing a gaming market never to be experienced before with a tidal wave of apps that users were able to choose from.  This over supply has shifted the minds of the end users, and the developers and it became clear that the once great publishers have lost complete control of the market.
  • Freemium Games: When Apple and Google announced their app store, a lot of developers were discussing between each other on how to effectively price their games. In the past,  publishing platforms  (ie. Microsoft, Sony) established their prices points and it was a lot easier to forecast revenue. This time around Apple and Google, let the developers set their own price points which created a lot of concerns for the top devs and publishers and the lack of controlling the market. During the release of the App store, Top publishers and Developers were setting their Price points at $10.00 (Triple A titles), $5.00 (Mid Core Titles) and $1.00 (Light Games).  As more and more developers entered the market the smartphone market grew exponentially, causing the supply of the app market to out grow the demand of the smartphone user.  This in turn, made Indie Developers turn to the freemium tactics as it was their only form to get users into their game versus your larger publisher who had advertising dollars to promote their games.  Freemium started hittting its stride once Apple and Google implemented their in-game monetization API.  Freemium apps became an instant success as the app store saw nothing but free games hit the top grossing app.  With the popularity of freemium games flooding the market, end users became accustom to the notion that they didnt have to pay for an app to play therefore providing them with more say in the game design. Because of mobile, Free become the expected option for mobile gaming.
  • Introduction to Advanced Analytics :  As the mobile social market started to become a massive cash cow, many companies started entering, exploiting and profiting from this market. Millionaires were made over night, money was spent excessively, companies were experiencing ridiculous valuations and the it was quite evident the social gaming bubble has arrived.  But for every bubble, a burst was inevitable.  The aftermath, brought upon a new concepts to mitigate risk and to take advantage of opportunity.  This was the introduction of KPI (Key Performance Metrics)  In the past, publishers had to power to control the supply in the market and also controlled the price points.  What Apple and Google have done was change this monopoly into a free market, relinquishing all power from the publishers and handing it right to the palms of the end users.  This is why, User acquisition has become a top discussion in the past 2-3 years and the difficulties of obtaining them.  Since supply far exceeds demand in the app market today, every users has become more and more important in the mobile space, due to everything being practically free.  Which is why 3 main KPI data are always tracked in any game during testing and release.  Retention / Monetization / K factor.  All publishers now would like to know and track these KPI’s before even considering publishing a game as it reveals the actual health and revenue projections of that game.  KPI analytics has changed the face of gaming as advance analytics has really forced the hands of any game designers to be creative as executives demand their games to hit their required benchmark KPI before releasing any marketing dollars were committed.  This vicious cycle of developing / testing / developing / testing has destroyed a lot of the creative game minds and forced them to sink to a “me too” design mechanics because it had to meet certain ‘KPI’ requirements. This is probably why you see so many of the same type of games in the app store today. The introduction of, KPI has effectively controlled a free creative market into a structured one.

What people don’t understand is that gaming is still under the Entertainment umbrella, therefore when users are planning their day, or boredom busting, you are potentially grouped into a pool right now in this social age, with the facebooks, whatsapps, twitters, and the Netflix of the world.  What I mean by this is that, when a user has free time Smartphone is powerful enough now, that users have the choice of whether they want to play a new game, or chat with their friends on whatsapp, or watch a movie on Netflix.  The game genre now are competing with the other categories of entertainment versus in the past, Game devs and Publishers created a one way funnel for users to spend money on their console and purchase games exclusively for their console.  Since consumers invested into their products, they sometimes forced themselves to play, even if they didn’t even want to because they’ve invested in the game.Where as, the freemium market we live today, handcuffs nobody to be loyal to any game and this is concept has effectively changed the ideology of what the gaming market is today versus yesterday.

This new voice, like it or not, has become the new voice of what gaming has become in this generation, and the reality is, since the birth of the Smartphone, the gaming market has grown almost 25 fold.

In 2008 the Global Gaming market was reported to surpass $4.8 Billion Dollar, but in the 2017 its reported to exceed over $102.9 Billion Dollar.

Revolutions are disruptive and it has really shaken the gaming or the entertainment industry in a big way during the last 10 years.

Tags:

  • 15+ year mobile application industry veteran, probably product managing multiple apps. If he's not busy running this website, you can probably find him at the gym shooting half court shots, while playing the latest mobile rpg game.

Sponsor

You May Also Like

The Dissolution of DeNa Global Inc.

On October 18, 2016, DeNa Global and other overseas subsidiaries has completed all the ...

KPI : Arpdau vs Arpdac

Arpdau (Average Revenue Per Daily Active User) is a metric executive level track to ...

The Service Offering in Top Grossing Ranked Apps

The Top grossing rank for their selective region is a reflection of what popular ...