Snapchat has had no trouble drawing in both millions of users and company advertising through its Discover section, but now it could be introducing a new service that could be a game-changer for some of these partners: shopping.
Joanna Coles, the editor-in-chief for Cosmopolitan Magazine and a member of Snapchat’s board of directors, recently spoke at Re/Code‘s Code/Media conference yesterday, explaining that the ability to shop on the popular app is coming sooner than you think.
“Sweet is a channel on Snapchat that Hearst and Snapchat have done together, and the tagline is ‘Love something new every day,'” Coles explained during the conference. “But at some point, that will morph into an eCommerce platform so you will be able to buy from it.”
As a result, the app could see a boost in revenue, and potential new partners ready to offer its wares for consumers to buy. Coles believes that it will benefit “clearly (through) eCommerce, but I don’t think necessarily the tech bit is quite there, quite yet for how we would like to do it.”
This is the first real confirmation regarding Snapchat looking into eCommerce-based sales through its app, following the hiring of head of commerce Krish Jayaram, previously with Paypal subsidiary Braintree, a year ago.
It has tried out services in the field before, like the introduction of a money-transferring service called Snapcash and the ability to utilize extra features such as photo filters and replays, but this would be its first major foray into selling items from other companies on the app.
Some companies have already expressed interest in such services. Hearst, the company that owns Cosmopolitan, is obviously on board with its Sweet investment, and the Wall Street Journalhas also made it clear that selling subscriptions through the application would help drum up business.
Now it’s just a matter of seeing when Snapchat will make it an official feature, and how much users are willing to spend on its virtual goods.
In H1Z1, players put their survival skills to the ultimate test. Not only must they face a world filled with hordes of flesh eating zombies, they also need to find a way to stay alive against elements and even other players. The game went into Early Access last year, and has taken center stage at a number events, including the H1Z1 Invitational at last year’s TwitchCon.
The game’s development took an unexpected turn recently when it was announced that the game would be split into two standalone games with separate developers focused on them. H1Z1: Just Survive continues with the experience of surviving the zombie apocalypse with limited resources, while H1Z1: King of the Kill has players battling each other in competitive arena-style play.
Candace Brenner, Senior Director of Global Marketing at Daybreak Games, talks to [a]listdaily about the this split, and what it takes to get through the zombie apocalypse.
What led to H1Z1 being split into two games, and can you tell us what the differences are?
We released H1Z1 on Steam Early Access in January of 2015. Over the course of development through feedback on social channels and the forums, as well as in-game analytics, we started to notice that two distinct communities were forming with unique needs and desires.
Those that favored the survival game, now known as H1Z1: Just Survive, are looking for that gritty, survival experience – they want an immersive experience with a focus on crafting, scavenging and base building. Those that leaned towards Battle Royale want a fast-paced, high-intensity shooter, so we created King of the Kill.
On the development side, design decisions were diametrically opposed. When you think about progression and character investment, those decisions really differed between what we now call King of the Kill and Just Survive. Separating H1Z1 into two titles lets each game grow in their own distinguished ways with dedicated development teams, which is really great for the player communities.
How else has H1Z1 changed and grown since it entered Early Access?
Developing a game in Early Access has allowed us to better understand and communicate with our players. We are able to get real-time feedback, make refinements on live features, and make impactful changes to the game. When we first launched H1Z1 on Early Access, we had a little bit of everything but nothing was in its final state.
We treated everything in H1Z1 more like a placeholder because we wanted player feedback to help mold the game into the final product. From zombie appearances to zombie AI, to player characters to animation, nearly everything has evolved in the game since H1Z1’s Early Access launch last year. And in reality, development is never really complete; both H1Z1: Just Survive and H1Z1: King of the Kill will continue grow and develop until launch and beyond through game updates, new features, and more.
The H1Z1 Invitational hosted at least year’s TwitchCon turned out great. Is that a sign that H1Z1: King of the Kill will be developed as an eSport?
We were very happy with last year’s H1Z1 Invitational at TwitchCon – we were the most-watched event at the show with more than 118K concurrent viewers and the tournament was a huge success.
Perhaps the biggest takeaway from the Invitational was how that level of competition resonated with our players. We know that competition is at the core of H1Z1: King of the Kill, but it became even more apparent at TwitchCon. Beyond events like the Invitational, our main focus is on the development of organized play. We want to empower our players to create their own competitive experiences and we have the in-house expertise to create structured organized play and turn it into world-class competitions. We are working on mechanics that allow and encourage organized play, player-hosted games, and player-run tournaments, which will set the foundation for King of the Kill’s competitive future.
There are quite a few zombie and survival themed games around. How does H1Z1: Just Survive stand out among them?
H1Z1: Just Survive combines massive scale and community, and adds a layer of zombie, survival and progression to create an authentic post-apocalyptic experience. We are working with our community through Early Access to create a unique world that puts players in that survival mindset; we want to capture the emotion and feelings of being one of the last remaining humans on Earth.
Why do you think so many people love the zombie apocalypse?
End-of-the-world scenarios are very intriguing because it is an automatic world reboot. It tests us at our foundation and allows us to get rid of any labels and redefine ourselves. You are no longer an accountant or a cook… you are a survivor. We get to imagine what life is like at the end of the world? Are you a leader or a follower? What is your role – are you part of a community or are you building a community? What do your last days look like? It’s a balance of humanity and survival. Plus, who doesn’t love zombies?
What is the craziest thing you’ve seen happen in H1Z1?
Last December we hosted the H1Z1 Showdown, which was a remote tournament where 75 of the top Battle Royale players fought against each other for a chance at H1Z1 fame and glory (and the opportunity to create an in-game item skin). The teams were handpicked by their captains, Twitch broadcasters, CDNThe3rd, summit1g, Trick2g, sxyhxy, Ninja, Mr. Grimmmz and Phaze Pyre.
During the broadcast of the Showdown, we did a special exhibition match where the team captains took on an entire server. But there was a catch. The captains were able to wear armor and scavenge for guns, while the others had to fight in underwear and were only allowed to use bow and arrows. The combination created a pretty hilarious fight; it’s crazy to see hundreds of arrows fly over a hill at a single target. Video of the exhibition match is still up.
The idea actually stemmed from one of the Twitch Broadcasters, CDNThe3rd. Leading up to the Showdown, CDNThe3rd used his whitelisted Battle Royale server to regularly host games with varying rulesets, such as Throwables Only, Shotguns Only, NFDY 500, and more.
He produced an awesome video summarizing his game modes here:
What’s the most important thing to keep in mind when surviving the zombie apocalypse?
Find shelter and food ASAP! If Walking Dead taught me anything, it is that leadership is important because the apocalypse can make you go crazy. Also, relationships matter – it’s extremely hard to survive alone but you have to be extra careful about who you trust.
For years now, the DICE Awards has been a showcase for both experienced and up-and-coming game developers, discussing their drive in the art of making games. This year’s show is no exception, as the event has already kicked off with a panel on gaming/magic featuring performer Penn Jillette and Gearbox CEO Randy Pitchford, and another panel featuring game director Hideo Kojima and film director Guillermo del Toro is set to take place later in the week.
So, what can marketers learn from the annual event? Quite a bit, it turns out. While the panels focus on what generally makes games tick, it’s grasping this content for creative purposes that companies can take advantage of, like highlight a particular feature that’s set to be a huge draw for the game.
A majority of panels from the DICE event is streaming all week long, so that those that aren’t in attendance can still learn something from a number of gaming superstars and other media favorites.
The Right Kind of Promotion Works Wonders
“We’ve all had to get innovative to get discovered through a multitude of social media channels,” said Niccolo DeMasi, chairman and CEO of Glu Mobile, when it comes to the reception of games, as well as how they can increase their impact across the likes of Twitch, Facebook and other social means. Obviously this is a huge takeaway on the marketing front, since promoting a game the right way can help it reach new heights.
A key example of that: last year’s hit Rocket League, which found an immense audience through an introduction as a game in Sony’s PlayStation Plus program. In addition, the game has gotten a huge social push since its launch, including consistent streams on Twitch, as well as thousands of mentions on Facebook and Twitter. That, in turn, has made it a hit on other platforms, including Steam and, starting this week, Xbox One.
Immersion and Originality Go a Long Way
Ubisoft’s Tommy Francois also noted that “there needs to be a fight for player immersion and enrich player experiences.” That’s true, as some players feel certain titles act like “cookie cutter” pieces instead of delivering true gaming experiences. However, more titles these days seem to be producing more of an original result.
For instance, Ubisoft is set to deliver a one-two punch at retail over the next month in terms of immersive experiences. The first-person adventure Far Cry Primal (which ships next week) removes the typical gunplay factor, replacing them with a club, a bow and arrow set, and the ability to convince animals to do your bidding.
In addition, the long-awaited MMO Tom Clancy’s The Division, which arrives at retail on March 8th, promises to be far more engulfing to gamers than previous games in the military series, with an open-world environment, vast multiplayer options and a variety of missions to choose from — improving on the idea of giving players choice.
Finding the Right Attention At the Right Time
During the opening panel for the show this morning, Penn Jillette noted, “Gaming needs to be free of choice. Put the attention where they want it and study what people take for granted.” Making note of “hot trends” in the industry can be just what some companies need in terms of finding a right product for the right time.
For instance, Electronic Arts jumped on the Star Wars bandwagon at just the right time, bringing back the multiplayer game Star Wars: Battlefrontone month before the release of the mega-blockbuster film The Force Awakens.Considering how many players requested its return, EA was more than happy to take advantage of the opportunity. As a result, the game has sold over 13 million copies, and is expected to continue selling well through the year, leading up to the release of the next Star Wars film, Rogue One.
There are several things happening at the DICE Summit over the next couple of days, with companies and developers taking part, including an Awards show that will honor the best of the best in gaming. There are plenty of trends for marketers to learn from games as a result.
Brands have been moving from the usual “brand blog” to “brand as media company,” over the past few years, according to Contently. This in turn notes just how much content marketing has changed, even though it remains more effective than ever.
The company a new report titled Content Marketing 2016: Staffing, Measurement and Effectiveness Across the Industry, which breaks down a number of vital stats in various departments.
There are several takeaways from the report, including the following:
73 percent of marketers actually managed to create more content this past year than they did in 2014.
Lead conversion (32 percent) continues to be the most popular metric for measuring content marketing success, although social shares and likes (19 percent) and page views (15 percent) were close behind.
49 percent of marketers feel their content is either somewhat or very effective.
67 percent of respondents in the poll devoted less than a quarter of overall marketing budget to content, while 63 percent devoted less than 1/10 of overall marketing budget to content marketing technology.
43 percent of companies have two full-time employees (and in some cases, more) handling content marketing, while 64 percent of marketers are creating 90 percent of more of their content in-house.
Email continues to be the most effective organic distribution channel, although Facebook has done rather well when it comes to paid distribution.
30 percent of respondents don’t use any sort of platform or tool in terms of providing data for their content.
When it comes to turnaround time on getting content approved and created for a brand, most of those polled indicated a quick period of around seven days, while less than one percent said that it can take as long as six months.
The biggest challenge that lies with creating content is time, with 37 percent feeling it’s a large factor in getting it done effectively. This makes sense, considering most companies want something that’s going to work right away, and sometimes it can take time to plan it out.
Other reasons included:
Strategy (19 percent)
Distribution (14 percent)
Internal support (14 percent)
Budget (13 percent)
When it comes to programs in need of tweaking to make a marketing plan more effective, 33 percent of those polled state they do it on a monthly basis. Meanwhile, 25 percent say they check on this weekly, and nine percent daily. Only three percent of those feel that such campaigns don’t require tweaking.
When it comes to the growing eSports business, which research firm Newzoo forecasts will grow from $278 million today to over $1 billion by 2019, Wargaming is a growing player. And it’s not from a lack of investment.
Mohamed Fadl, head of global competitive gaming at Wargaming, said at Casual Connect Europe this week that Wargaming has invested $32 million in top level eSports since 2012. The company spent $10 million in its first year, alone.
Wargaming has learned a lot about eSports, and the importance of entertainment value, as it developed its top-tier eSports strategy, as well as its video production capabilities to bring eSports to fans around the world.
“We come from the retail box business, we’re dinosaurs,” said Fadl. “So we adapted to Twitch. Last year we made a lot of changes and World of Tanks has become a bigger audience in the Twitch universe.”
Fadl said the key to Wargaming’s eSports success has come from understanding what is entertaining to its audience. And it’s also about looking beyond short-term profits from ticket sales or merchandising. Wargaming doesn’t charge fans to attend eSports events.
“ESports allows us to connect our brand to the players of tomorrow,” said Fadl. “ESports allows us to connect within a bigger ecosystem.”
Fadl outlined the circular Player Journey which includes and random and single player content, team content, clans, and Wargaming.net League (WGL).
“Our audience moves from single player to multiplayer,” Fadl said. “The average lifetime for our audience is eight months, but the more involved they get in competitive gaming the more money they spend and the more time they stay with the game. We don’t make money with eSports viewership. We monetize through the lifetime value of the player journey. The majority of our players will never get to the WGL, but they invest in this content and socialize around it.”
Last year, Wargaming made big changes in how it invests in eSports. In 2014, 81% of its investment went to partners and 19% went to players. Last year, 48% went to partners and 52% went to players.
This year, the company has $3.5 million in prize money, but that’s just part of the ecosystem funding.
Sometimes the key to making a successful business decision is finding the right kind of audience, but that doesn’t always come easy. However, AddThis and Oracle have put together a new report that can help point companies in the right direction.
Called State of the Industry: How Marketers Match Campaigns With the Right Audience, the report covers a number of details about appealing to the right audience. Here are some quick things we surmised from the report:
Creating standard audience segments don’t always come easy
30 percent of those polled indicated there was some sort of problem when it came to understanding how they work.
Conversion is the most sought objective
As for understanding which marketing objectives are preferred when it comes to audience segments, only eight percent noted awareness as a factor. Meanwhile, 37 percent noted that conversion was most important, followed by loyalty (29 percent) and consideration (26 percent).
Finding matches and tracking individuals present highest challenges
When it comes to the biggest challenges of reaching an audience, many feel that finding individuals that match said audience is the biggest obstacle, with 50.5 percent agreeing. However, targeting certain attributes and keywords that will make a difference to said audience is also vital (36.6 percent), as well as identifying said attributes when they really matter (47.3 percent). The most important, however, was tracking individuals across particular channels (58.6 percent).
Understand your audience
Not understanding how audiences are built can have an effect on a marketing program. 34 percent of those polled in the report said they understand such processes either “not too well” or “not at all,” creating confusion with the model as a result.
Building a custom audience can have great effectiveness with a program
“Quality of and trust in the data is what matters whether you are talking about demographic, behavioral or any other targeting mechanism,” said Bryan Sherman, vice president and director of programmatic for Media Tech at DigitasLBi, in the report. “As data becomes a currency, quality data becomes the gold standard. When designing an audience, it is more important to believe in the quality of fewer data inputs than the potential value of many.”
Those that build custom audiences get better results from their campaigns
34 percent of those polled state they’re either “satisfied” or “very satisfied” with such results. Marketers can actually hone in on audience tastes this way, creating a more effective campaign.
“Music can change the world because it can change people.” Those are the words uttered by Bono, lead vocalist of the rock band U2. The saying also largely speaks to the mission behind Skullcandy’s Human Potential Labs program, launched last year to unlock sports and possibilities through music, science and technology.
“We are always interested in how to create innovation in the marketplace, as well as furthering our brand mission to inspire life at full volume,” Sam Paschel, Skullcandy’s chief commercial officer, told [a]listdaily. “(Human Potential Labs) is the best embodiment of these two interests.”
The headphone and audio lifestyle brand largely operates under the marketing slogan “living life at full volume” where music is the underlying driving force. Athletes like Kyrie Irving, Travis Rice and Robbie Maddison are foundational forces in their marketing efforts to understand and identify the typical customer profile.
Paschel says their cross-section of ambassadors have been an inspiration for their sport performance products. “While competition day for athletes is incredibly varied, they all prepare in a similar fashion: high intensity interval training,” he says. “This inspired our in-house product team to make strides as it related to stability and durability of our sport performance line, knowing that if we could develop products to withstand the training demands of our pinnacle athletes, the recreational athlete would benefit.”
Pro athletes are inevitably helping Skullcandy reach markets outside of their Park City, Utah headquarters. “The larger idea that gets us excited is that our brand anthem isn’t just domestic, it’s a global mindset that applies to all cultures,” says Paschel. “The brand is well-received globally with steady and consistent growth – and we’re actively working toward the goal of growing international to be 50 percent of our business.”
Catering to consumers is one thing. But enabling athletes has always been engrained in Skullcandy’s DNA ever since action sports product enthusiast Rick Alden founded the company. The Human Potential Labs program – which is used to assess participants’ response to exercise stimuli and recovery methods – is an extension of that.
Skullcandy president Hoby Darling tabbed three-time U.S. Olympian skier Emily Cook to study what’s possible for human potential at the intersection of physical, mental and music. The headphone and audio brand first kicked off their program by partnering with former United States Navy Seal and skydiver Andy Stumpf, who broke the world record for a wingsuit jump (18 miles) and ended up raising nearly $120,000 for the Navy Seal Foundation. Cook and the Skullcandy crew travelled to Florida to learn more about the sport as well as Stumpf’s physiology by hooking him up to their performance lab. The sensors strapped to Stumpf measured his oxygen saturation and heart rate to target muscle groups that seemed to fatigue the most.
Cook, a five-time national champion in aerial skiing who spent 17 years on the U.S. team, leads Skullcandy’s team of in-house athletes and engineers to collaborate with research experts in the sports, medical, military and creative fields. She retired after the 2014 Sochi Games and went from eight hours of training to finding an office identity where she now works with athletes on an individual basis by “helping them narrow down their training.”
“It was important that when I completed my career in skiing, I was ready to transition into doing something that would make a difference afterward, as well as a culture that I was excited about,” Cook told [a]listdaily. “A lot of athletes struggle with that transition. It’s not easy.”
Paschel says Cook has forged partnerships with scientists in sports psychology and physiology as well as holding together a committee where these like minds can work together.
“I had an amazing career. I loved every second of it. It’s a huge honor to represent the United States as an athlete,” Cook continues. “Now, it’s about helping others. Everything we do in our lab is to obtain knowledge going forward toward innovation not just for athletes, but for everyone. We’re excited to share how music makes you better.”
Few brands are as recognizable as Angry Birds, the mobile game that has expanded with multiple spin-off games, a cartoon series, and an upcoming movie featuring an all-star cast. Last July saw the launch of the official sequel, Angry Birds 2, which released with high expectations from both the fans and its developer, Rovio.
Eric Seufert, VP of User Acquisition and Network Engagement at Rovio Entertainment, will discuss how franchise recognition impacts user acquisition at his GDC session, “Taking Flight Again: Planning the Launch of Angry Birds 2.” Furthermore, it will “outline the tactics and channels that were used to achieve more than 20 million installs in the first week of the Angry Birds 2 global launch.”
[a]listdaily speaks with Seufert about the challenges Rovio faced when launching a sequel to a game as big as Angry Birds.
Given the broad recognition of the Angry Birds brand, what were some of the challenges in promoting Angry Birds 2?
One of the big challenges, from a user acquisition perspective, was trying to track the results of our marketing campaigns against the backdrop of the massive volume of media coverage the game’s launch garnered. Mobile user acquisition is a very performance-driven discipline, and the amount of “noise” in the market (that is, the visibility the game enjoyed as a result of the prominence it was given from various media outlets, as well as both Apple and Google) made it difficult to actually try to calculate what our ROI was on various campaigns.
This probably sounds like a good problem to have (and it was!), but it also made us more conservative in spending money on paid user acquisition campaigns, since we wouldn’t be able to easily tell what worked (in terms of generating interest and driving downloads beyond just the direct clicks we achieved) and what didn’t.
What kind of expectations did Rovio have for the game’s launch?
Our expectations didn’t really take the form of a single number: we had a range of installs that we thought we could achieve under different sets of circumstances. That said, 50mm installs was definitely at the very upper end of that range.
What did you learn from the Angry Birds 2 launch? Were there any surprises?
I’d say the biggest surprise, for me personally, was simply how massive the Angry Birds franchise is, and how excited people are about it. This isn’t to say that there was any doubt going into the launch that it would be large, but coming from a strictly mobile gaming background myself, I was blown away by the global scope of the excitement around the launch of the game.
Prior to my time at Rovio, I saw mobile games as a fairly specific form of entertainment that, generally speaking, only appealed to a certain subset of the world. What the launch of Angry Birds 2 taught me is that the entire world can get stirred up over a mobile game: mobile gaming is a truly global, borderless, humanity-wide past time. That was an incredible revelation, and it was a lot of fun to experience!
How different was promoting Angry Birds 2, compared to all-new games like Nibblers?
Any Angry Birds title obviously comes with a built-in fan base numbering in the hundreds of millions (or billions), and the franchise is so unique (in terms of aesthetic style and its premise) that an Angry Birds game is easier to promote than anything I’ve ever witnessed.
With Nibblers specifically, it has been fun (as well as educational) watching the game’s audience develop and evolve over time as the team adds more content and hones the look and feel of the first things players see (e.g. the different artwork in the platform stores or the first-time user session).
With Angry Birds, those things are already more or less defined, or at least, they are in the minds of the fan base. This is a huge boon to the franchise, of course, as that recognition makes it really easy to generate lots of downloads (as in the AB2 launch), but it’s also a standard that needs to be carefully considered when we run campaigns. We need to ask ourselves: Does creating this ad “feel” like Angry Birds? When people see this, will they immediately recognize that we’re promoting an Angry Birds game, or do we need to be more conservative with our treatment?
With Nibblers, that same historical precedent doesn’t really exist, so we can be a lot more experimental with how we promote the game. This allows us to test the limits of what the game’s core demographic is, or how we showcase the game’s characters in ads, or what aesthetic tone we use in ad creatives, etc. to a degree that we can’t with Angry Birds games.
What kind of promotions went into the Angry Birds 2 launch?
The Angry Birds 2 launch was a cooperative effort from many different teams at Rovio, and I’m sure that I’m not aware of every single thing that the company did to promote the game, so I won’t even attempt to list them all.
Within the realm of digital marketing, we ran a variety of traditional direct-response advertising campaigns across a number of mobile marketing networks, and we also ran a premium auto-play video campaign on Facebook. We also ran some influencer campaigns.
In what ways have you seen mobile game promotion grow and change over the past few years?
It has definitely become a lot more diverse in terms of the channels used! When I started in mobile user acquisition, the majority of traffic I acquired into games was generated through mobile app install ads purchased through a large number of advertising networks. With Facebook’s advertising platform as large and mature as it is now, I’d guess that many developers simply use Facebook and a modest (maybe 10-15) number of other networks on a regular basis, outside of game launches.
Influencer (e.g. YouTube star) campaigns have also been generating a lot of buzz, but I question whether most developers can use those effectively to drive large volumes of installs. TV and out-of-home campaigns have also become quite popular with the largest developers, but again I wonder if a developer needs a certain existing install base to achieve positive ROI with those — that is, do people need to have already heard of a game, or have friends playing a game, before they react to a television ad in large numbers?.
What do you think it takes for a game, even one as recognizable as Angry Birds, to compete in the mobile games market?
From a user acquisition standpoint, it takes some degree of virality (cooperative / competitive gameplay) and a very strong degree of retention (people stick around with the game for a long time) to compete on the basis of purchasing traffic.
Mobile analytics firm App Annie has released new research – the App Annie Mobile App Forecast – and it makes for some fascinating reading. While we may be seeing slower growth in smartphone sales in mature markets, the global picture still shows tremendous growth left for both app downloads and revenue from smartphone apps. Games will still be responsible for the vast majority of revenue production for mobile apps, but the overall share will shrink in the future as other categories of apps grow even faster than games. These projections have immense implications for all marketers, showing how the mobile market will unfold in the future and where marketers need to be present.
Let’s take a look at the specifics in the App Annie report. Globally, App Annie predicts that mobile app store revenue will grow to $51 billion in 2016, and top $101 billion in 2020. This will be driven by the continued adoption of mobile apps in developing economies around the world, and by the increasing ability of mobile apps to grab greater “wallet share” in mature economies. Games made up 85 percent of mobile revenues in 2015, which represented about $34.8 billion globally according to App Annie. The firm projects that total games revenue will hit $41.5 billion in 2016, and an astounding $74.6 billion in 2020. (That’s roughly equal to the total revenue of the global games market in 2012.)
While the growth projected for games is impressive, other mobile apps will be growing even faster. Games by 2020 will be 75 percent of mobile app revenues. App Annie expects 100 billion game downloads annually by 2020, and non-game apps will be at 182 billion annually in 2020.
Notably, App Annie also projects that apps will be growing substantially in other realms, as the same model looks likely to be applied to VR/AR, wearables, TVs, smart home devices and cars. Not all app types or revenue models apply well to all form factors, of course, but as these new areas grow apps (and revenues) will grow with them. We’ve already seen App Annie begin to track Apple TV app revenue, and it’s not unreasonable to expect a substantial amount of games revenue in the future for VR/AR, smart TVs and microconsoles. Games are already a substantial category for the Apple Watch, at least in terms of downloads. As wearables gain in power and popularity, gaming will certainly have a place in that market.
The rapid growth of smartphones in markets like India, and in developing nations in Africa, represents enormous new market opportunities. While it’s hard to make games that easily cross cultural and language barriers, the global success of games like Candy Crush Saga and Minecraft show that it’s quite possible to create games with world-wide appeal, however hard it might be. Marketers that can find ways to surf this wave of mobile growth will find success in the bright app future ahead.
The [a]listdaily caught up with one of the authors of the study, Sameer Singh, Senior Industry Analysis Manager at App Annie, to find out more about the future of mobile apps.
Mobile users don’t seem to download new apps very often, something of great concern to game publishers. Will this change in the coming years?
Actually, our forecast figures show that 111.2 billion new apps were downloaded by users in 2015. Across a base of 2.6 billion devices, that’s an average of 42.8 new app downloads per device over the course of the year. Even if we zoom in on games, our numbers show 45.4 billion downloads in 2015. So clearly, the perception that users no longer download apps is inaccurate. In addition, we expect the number of new app downloads per device to grow over the forecast period. Of course, the level of growth varies by region. As we’ve shown in our “App Market Maturity Model,” download growth may be slower in mature markets like the United States because the number of new smartphone owners is lower. However, this coincides with increased app usage and accelerating revenue growth as users settle on their go-to apps.
Time spent on apps in Android phones grew, according to your report. How much has time spent on games grown?
According to our Usage Intelligence data, time spent in the Games category on Android smartphones grew 36 percent worldwide (excluding China) from 2014 to 2015. This shows that net new smartphone users are still contributing to usage growth in a relatively mature category like Games. Meanwhile, overall growth is being driven by categories like media and video, shopping and transportation.
You project much of the growth in game monetization to come from greater monetization in mature markets. Do you think that mobile game monetization in the US and Europe could begin to resemble the much higher monetization we currently see in Japan and Korea?
Games are deeply rooted in Japanese and South Korean culture, so game monetization levels are significantly higher than in Western markets. We do expect to see monetization accelerate meaningfully in the West from an already impressive base. However, the watermark set by Japan and South Korea will remain out of reach at least in the near future.
How do you see mobile advertising growing over the next few years? Will this become a more important source of revenue for games?
Our revenue forecast is restricted to app store revenue and does not take into account revenue from advertising. That said, we expect advertising revenue to experience strong growth in concert with the number of net new smartphone users and app usage.
Are mobile game revenues going to become more or less concentrated in the top-10 grossing games over the next few years? Why?
Competition in the mobile gaming space has intensified in recent years. We’ve actually explored this topic in-depth in previous reports – 2015 Retrospective and Rise of the Indies. Our analysis shows that revenue concentration in mobile gaming has declined precipitously over the past few years, even as industry revenues grew. We don’t expect to see any change in this trend in the near future. Part of this is because, smartphone growth has attracted multiple players and investors. Even companies that previously focused exclusively on platforms like consoles and PCs have been making the jump to mobile. This has led to a notable increase in the number of high quality games available. Even Indie publishers have stepped up their efforts to grab a piece of the pie.
The impact of eCommerce is already evident, but mCommerce (mobile commerce) is a category that’s set to see its own level of growth over the year, according to eMarketer.
Up to 95.1 million Americans, aged 14 and up, will make some form of purchase via a smartphone, which is just over 51 percent of digital buyers.
“Most shoppers regularly browse and research on their smartphones, but they’re now also making purchases with them,” said Yory Wurmser, retail analyst for eMarketer. “As mobile sites become better optimized and screen sizes grow, it’s becoming easier for shoppers to complete the purchase on the smartphone, which will drive mCommerce numbers up for the next several years.”
That number will continue to rise over the next few years, and is expected to grow up to 55.1 percent of all digital buyers and reaching nearly 110 million Americans by 2020.
Sales will reach a peak next year, getting to $75.51 billion in mCommerce sales via smartphone, which comes out to about half of all mCommerce sales,. That’s a 48 percent increase from what’s estimated for this year, and is expected to rise up to $129.44 billion by 2020.
That’s not to say it’ll be easygoing. Most consumers start shopping sessions on smartphones without finishing them. 165.8 million Americans 14 and up (78.5 percent of all digital shoppers in the US) will look around for bargains on their devices, but won’t complete the sale using the device.
“In order to get people to make purchases on their phones, retailers need to make it as easy as possible for consumers,” noted Wurmser. “That means fully optimized mobile websites, a checkout process with few steps, and fully personalized merchandising.”
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