As the mobile games industry continues to grow, it’s altered the landscape of the gaming industry forever. While some of long-time game publishers are still thriving by adapting to the changes, others have departed (like THQ). Meanwhile, new companies have grown to join the ranks of the game companies with more than one billion dollars in annual revenue, though that is still a select club.
One of the companies to become a giant in the last decade is Japanese mobile game publisher DeNA, which is busy expanding its scope beyond Japan. With games like Star Wars: Galactic Defense, Marvel Mighty Heroes, and Transformers: Battle Tactics, DeNA is gaining ground in China, North America, and beyond. The company took a dramatic step earlier this year by announcing a business alliance with Nintendo, working together to create mobile games using Nintendo’s world-class intellectual property (IP).
DeNA West, the company’s San Francisco-based studio, is headed by CEO Shintaro Asako, who took some time from his busy day to speak with [a]listdaily about succeeding with mobile games
What’s the key to getting a good audience for your mobile game?
Your game has to be discoverable and sexy enough that people find your game and decide to download it, that’s really the first step. If you use [licensed] IP, chances are high that people will want to try your game. If you are not using [licensed] IP, you’d better have extremely interesting icons, or a massively effective marketing campaign, or convince Apple and Google to promote your game — whatever that is, you have to make your game discoverable. Not only that, then it has to be good enough, out of many other games, that the user decides try your game. There are tens of thousands of games available every day, and becoming one of the one or two games that people decide to try is pretty hard.
The game has to grab your attention right away. It has to be easy to understand, and there’s a mini game that keeps you coming back. Then, after a few days, you realize the game is not about that, it’s about a much deeper cycle.
We’ve seen more and more mobile games based on licenses like Star Wars, Marvel, Kim Kardashian, and The Walking Dead. Will licensed IP be used more often in the future to bring in players to mobile games Is it really that effective?
It’s become a really difficult market for small and medium sized studios. The top ten mobile publishers have over a billion dollar valuation, so they tend to acquire bigger IP to distinguish their games from the rest of them. Those IP based titles give you must more efficient user acquisition. Some people spend a million dollars to create a game, some spend five million dollars to create a game. But really, the marketing the game — especially user acquisition — is way more expensive than creating the game itself. The reality is that by using IP, you get much better CPI (cost per install), versus a non-IP based title. So even if you have to pay 15 percent or even 20 percent to the IP holder, the efficiency of acquiring a user is quite high.
DeNA has entered into a historic partnership with Nintendo to create mobile games based on Nintendo’s IP. What’s the potential for these games in a mobile marketplace that’s already crowded with titles?
Hundreds of millions of people have bought Nintendo consoles. Those are people who decided to spend a minimum of $200 just to get access to Nintendo IP. That number is already twice as big as the Candy Crush total user base. Not only that, every single person buying Nintendo devices spends an average of about $100 per year on software. So I have no question that when Nintendo’s mobile games come out, at least 150 or 200 million people will try it. These people are super core Nintendo fans who used to spending $150 to $250 just to access the content.
What marketing strategy do you think will be necessary for Nintendo’s mobile games
We know Nintendo IP is powerful, but we need to let people know the game is coming out. From that perspective I think mass marketing makes sense for Nintendo games. Usually you have more on digital marketing and later on the mass marketing kicks in, because you don’t want to start mass marketing until you’ve evaluated LTV (long-term value), because otherwise you might be wasting money. When you have strong IP like Nintendo you can kind of predict what kind of installs you can get, so to reach the level of mass-marketing isn’t that much of a risk.
There’s been several high-profile TV advertising campaigns for mobile games, during the last year. Will we be seeing more TV advertising for mobile games from DeNA?
While we haven’t spent a significant amount of money on TV advertising in the US, I think the best target TV program is something you have to see live, like sports. We try to measure the effectiveness of our marketing campaigns, and if you watch the TV program on a delay I can’t do that. That’s why we want to pick live games so that we can see if the installs spike up, so we know exactly who came in through the TV commercial. Then we can keep track of these people and how much money they spend.