251. LIVE from San Francisco with Special Guest Stars
Nov 12, 2024
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Matt Harris, who oversees product management at Activision Blizzard Media, and Joseph Kim, known as JK and currently building a studio in India, dive into the future of gaming. They discuss the rise of unconventional advertising models and the evolving monetization strategies in the gaming landscape. The conversation shifts to the challenges smaller studios face amid industry giants and explores Netflix's attempts in the gaming world. They also touch on how AI is reshaping marketing strategies and the integration of games into popular media for user engagement.
The podcast emphasizes the necessity for innovative monetization strategies as traditional models become unsustainable for developers in the gaming industry.
Experts discussed the revival of incentivized marketing, highlighting its evolution towards enhancing user engagement rather than just increasing installations.
The conversation focused on the challenges faced by small and mid-sized studios in a competitive landscape dominated by larger companies and their substantial budgets.
Deep dives
Heroic Labs GameStack for Game Development
Heroic Labs GameStack offers a comprehensive suite of tools designed to aid developers in creating successful gaming titles. Key components include Nakama, a powerful backend game server, Hero, a game development framework that simplifies the creation process, Satori for live operations, and Heroic Cloud which provides scalable infrastructure. This technology allows game developers to focus on creativity while reducing technical risks and operational challenges. As a result, developers can scale their products effectively and engage in operations with confidence.
Challenges of Monetization in Gaming
A significant discussion centered around the current monetization models in the gaming industry, particularly regarding User Acquisition (UA) strategies. The panel expressed concern over the trend of displaying ads for competing games within one’s own game environment, highlighting how such practices may not exist in other entertainment sectors. As a result, developers are left with the challenge of monetizing a large audience primarily through advertisements, while only a small fraction engages in in-app purchases (IAPs). This raises critical questions about the sustainability of such monetization approaches, emphasizing the need for innovative and effective methods to expand beyond traditional advertising models.
The Resurgence of Incentivized Marketing
Incentivized marketing strategies have seen a revival, as industry experts discuss the changing landscape of user acquisition. Historically, incentivized traffic was prevalent but faced challenges with user engagement and retention. With new regulations and optimization tactics, the focus has shifted to incentivizing players to engage with a game rather than merely install it. As a result, companies are now seeing improved retention rates and higher-quality user engagement through refined incentivized models.
Ad Performance Challenges and Opportunities
The panel delved into the complexities of advertising performance and how it affects user acquisition strategies in gaming. There is a consensus that performance-based advertising yields the highest returns, but the competition for ad space can lead to diminishing returns, especially within the rapidly evolving mobile game landscape. Small and mid-sized studios face difficulties scaling their advertising efforts compared to larger companies with substantial budgets. More sophisticated targeting and matching capabilities could improve overall marketing efficiency and yield high-value players, although many still struggle to attract and retain sufficient user numbers.
Future Innovations and Market Survival Strategies
As the gaming industry grapples with slow growth rates and market consolidation, the focus is shifting to how smaller companies can survive amidst larger competitors. Discussions highlighted that while big firms dominate with substantial budgets, innovative smaller developers continue to leverage their understanding of player needs to create successful games. Additionally, adapting to market demands and utilizing live ops models will be crucial for sustained success. Companies may need to rethink their traditional approaches to development and marketing to maintain relevance, especially in a landscape increasingly dominated by major players.
