As Advertisers Flock to Mobile Gaming, Developers are Finding New Ways to Compete
The ability to identify and retarget users of top-ranking mobile games in more obscure categories and markets could prove lucrative, and ultimately provide new ways for developers to grow and compete
The mobile phone has not only been a revolution for advertising, but it has also been a revolution for gaming. The old console business has shrunk despite recent successes by the likes of Nintendo with their portable switch console.
It is estimated that by the end of this year, there will be nearly 150 million mobile gamers in the US (versus under 100 million console gamers), meaning nearly 90 per cent of gamers now play on their phones!
The challenge for mobile game developers is that there is too much competition on mobile app stores. That is partly down to the lesser development costs and barriers to entry of the mobile format versus traditional console gaming. As of last year, the App Store for iPhone and iPad offered nearly a million games.
This has caused despair among many indie mobile developers who now see little chance of competing with established titles and franchises. The irony is that, despite lower costs and (in theory) lesser barriers to entry, the mobile gaming market is now arguably as competitive as console gaming.
Nonetheless, the sheer size of the global mobile gaming market – projected to be worth nearly US$145 billion by 2020 with an annual growth rate of 8 per cent – is too appealing for most developers to ignore. The same report expects that half the gaming market will be mobile-driven by 2020.
The "if you can't beat them join them" attitude has led more and more mobile game developers to look for new ways to compete. At the same time, advertisers have moved in on to the space with force.
One of these new tools that has attracted both advertisers and developers is a nifty innovation born out of adtech – or "advertising technology" – which is offering developers the ability to target mobile gamers in specific markets, who have specific titles installed on their devices.
For example, to develop a mobile racing game in North America, we can check the top-ranking racing games in that market and launch an advertising campaign to serve ads just to users who have those top games installed.
A simple search can also be performed to rank the games in descending order of popularity based on whether they are active; in other words, whether they've been opened in the last thirty days – a metric referred to as "app opens".
This is helping indie developers who are buried under thousands of apps to stand out and get eyeballs and clicks from highly targeted users. It is creating a competitive edge for savvy developers while also growing the pie for mobile advertisers.
This is an extreme example, but the ability to identify and retarget users of top-ranking mobile games in more obscure categories and markets could prove lucrative, and ultimately provide new ways for developers to grow and compete.
The alternative is that mobile gaming leaders continue to monopolise their positions and extend their leads, with the little guys further squeezed out of the equation – an outcome that won't be good for competition and is unlikely to be good for gamers.