Evolving Monetization Strategies in Mobile Gaming

This is Matt Reustle and today we are breaking down the mobile gaming industry. It was several months ago that I was reading an industry report for our Business Breakdown on Electronic Arts. I was shocked to see that mobile gaming was now 50% of the overall gaming market. What really stood out to me was just how different the business model is. You have smaller game developers operating with a completely different monetization model. It's the same industry but with drastically different strategies.

To break down the industry, I'm joined by Eric Seufert. Eric spent his early career in the heart of mobile gaming, notably as a Vice President at Rovio, which developed Angry Birds. Today, Eric is the creator of Mobile Dev Memo, a publication focused on mobile monetization. For this conversation, Eric details the history and inflection points for mobile gaming, what the market structure looks like today, and how regulation and privacy have impacted the business model and strategies. 

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. 

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Show Notes

(00:02:24) - (First question) The year mobile gaming took off and the leaders in game development at that time

(00:04:34) - The evolution of mobile game publishers since 2012  

(00:08:50) - Mobile gaming business models; why “freemium” has thrived  

(00:14:04) - The 95% rule for freemium; revenue per user is not as important when working truly within a freemium model   

(00:21:18) - The ratio of average user retention vs great user retention; and measuring retention using DX values 

(00:24:19) - Comparing game revenue before and after the decline curve of user base at the 30 day mark

(00:29:23) - How much in-game advertising revenue makes up in the total revenue for a game

(00:34:22) - The current business model for mobile gaming; 25 good games vs 1 viral hit game

(00:37:32) - Balancing in-game advertising between outside revenue and a developer’s gaming portfolio; determining high-potential players based on their immediate in-game behavior 

(00:43:17) - Eco-system development or consolidation; The enduring theme that Eric expects to stick around for the next 3-5 years

(00:47:18) - The overall health of the mobile gaming market; how the Digital Markets Act in Europe may lead to the fracturing of app stores and the benefits to the industry of that