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Going global with local help
Deputy Editor Zoya Street has been trying to make sense of the bewildering array of platforms and services available to mobile game developers. In this post, he looks at four companies helping developers to publish their games internationally.
The relationship between developers and publishers is changing. It changed four years ago, when mobile games self-publishing became an option. As Nicholas explains in How to Publish a Game, this has allowed agile game developers to test ideas in the market without first asking for permission from a big corporation.
Now, just like how games have become services, publishing is emerging as a service too. Developers can outsource user acquisition, monetisation and localisation to companies with the reach and skillset to execute those tasks well. Companies that used to specialise in services such as security, payment processing and ad networks are bringing their userbases to app developers, fulfilling the global distribution roles that were once the specialty of publishers.
NQ Mobile used to focus on security, but they have more recently used their access to an enormous userbase to provide acquisition and monetisation solutions to developers. They’ve even partnered with other large publishers such as Tencent, bringing their superior reach to other platforms.
With a strong foothold in the Chinese market, part of their service is localisation. Not long ago, Chinese publishers were saying that European and American games don’t belong there. ‘We want your skills, not your games,’ said one speaker at the Children’s Media Conference in 2012. Gavin Kim of NQ Mobile says that’s not the case. They are seeing more international success for games. Not only that, but they are finding higher lifetime value from Chinese users than from audiences in the US and the EU.
The stereotype that piracy is rampant in China ‘doesn’t make a lot of sense to me’ says Kim. ‘In every market there is a risk of piracy.’
He’s seeing a convergence between markets, with new design trends rising in America and Europe that come from Chinese and Japanese games. Still, localising a game for the Chinese market is not simply a matter of linguistic translation. Friction curves are steeper in China, for example, and successful Chinese games such as Gods and Dragons were more likely to assume that the user will pay to play in their original form. This had to change when localising for the American market.
I ask if this is because with such a huge number of users in their network, NQ games in China can afford to churn users who don’t pay. Kim acknowledges the role of market size in game design decisions, but said that there is a cultural difference at work as well. ‘American users are accustomed to not paying for things on the internet,’ whereas in China there is not the same precedent set by household internet use; most of China doesn’t have high-speed ADSL lines, with internet uptake primarily coming along more recently with smartphones. That historical difference means a different set of expectations among users.
‘There is also a generational shift’, Kim said. ‘Americans in their forties are much less likely to make payments online than teenagers.’ So it’s not about economics? Kim agreed that since American young people are under more financial pressure than their parents, there doesn’t seem to be a link between income level and monetisation. Digital natives just spend their limited funds differently.
Inmobi countered this with their own data. They see the highest user acquisition costs in the UK, Australia and the US, in part because of a high average lifetime value for users in those territories. It’s also a question of demographics; these are smaller populations, with a high density of smartphone users, making them more valuable to advertisers than China. Demand for English-speaking smartphone users is high, and supply is limited.
Nevertheless, VP of Products Piyush Shah concurred that the Chinese market has to be on every developer’s map. ‘China is a huge monster,’ he said. ‘But it’s a monster that you cannot afford to ignore.’ He listed developments in payment systems, Apple’s clampdown on grey market apps, and the rise of a few dominant players in the fragmented app store ecosystem as major shifts in the past year that have made China a more accessible market.
While it is primarily an ad network, Inmobi also aims to position itself as a localisation service, with teams based in each major territory specialising in helping developers to improve their apps’ acquisition and monetisation in that region. Shah gave the example of incorporating cute characters for the Chinese market, as well as making sure that social and monetisation features integrate with services that work well in that region.
Not only is it becoming easier to launch in different territories, but cross-platform development is becoming more approachable. The fragmentation on Android devices is by no means gone, but Inmobi’s data suggests that Samsung’s Galaxy range has dominated the marketplace, along with Kindle and Nexus devices.
Does that mean that developers can ignore HTC and LG? ‘The question is, if it’s not that hard to port to all Android devices, why not do it?’ Shah responded, pointing out that with Gingerbread, cross-device compatibility is becoming easier. As a user of a low-end Android smartphone, I was sceptical; games often run on my device, but they are not as stable as they would be on a Galaxy. Surely developers are still having to prioritise which devices they optimise for? ‘Making sure that your app runs without bugs on different devices is labour-intensive’, Shah conceded.
Shah also warned that fragmentation remains an issue when it comes to different Android OSes built for international markets. Baidu in China has their own flavour of Android, which doesn’t benefit from the cross-device capabilities of Gingerbread. It’s these kinds of complications that platform service providers such as Inmobi want to help developers to iron out.
Gaming represents 90% of revenue for Infobip, a company that used to specialise in SMS payments and has branched out into localisation support and other publishing services. For them, localisation is not just about language or even design elements; they are particularly keen on helping developers to meet the regulatory requirements in different territories by publishing their games through offices run by locals.
They are the first non-Japanese company to offer mobile payments to foreign companies in Japan, normally ‘a closed market’ according to VP of Mobile Payments Paolo Rizzardini. Japanese operators do not ordinarily allow carrier billing for foreign companies, because of consumer-friendly regulations designed to ensure that customers always have a point of contact and support within the country.
‘We are using local regulations in a way that serves marketing,’ Rizzardini explained. ‘Local regulations say that we must have a web portal where we state clearly what people can pay for using our services. We use that to show people all the things that they can purchase using our payment system. It’s like a shop.’
Other territories bring different challenges. Vietnam is one of the places where store-bought scratch cards have become popular as an accessible and reliable payment method. By setting them up with the scratchcard system, Infobip has been able to improve revenues tenfold for games published in that country. ‘The goal is to provide in every country the best user experience based on regulations and the habits of the local users. A consumer in Vietnam is different from a consumer in the US. So we have local people managing the a local presence in 27 countries.’
Premium SMS is still one of Infobip’s major strengths; they fulfill SMS payments directly in 160 countries. This gives them an edge in countries like India which have low smartphone penetration, since SMS payments continue to work in the same way that they did 10+ years ago.
With all their competitors touting their access to China, I asked Rizzardini how Infobip is performing in that area. ‘The Chinese market is the hardest one that we face,’ he admitted. ‘We don’t have a local entity in China and there’s not a lot that you can do there if you don’t have that. But we are helping Chinese companies to monetise their games outside of China.’
Despite increased confidence about publishing European and American games in China, regulatory and legal issues are still serious roadblocks, said Rizzardini. ‘There are a lot of issues with intellectual property. The operators out there will ask for the source code when you want to distribute a game.’ The answer, he says, is to have local partners who can schmooze their way out of trouble. ‘You need to have a Chinese company director who can build trust with operators.’
Not all of the international publishing service providers grew out of more specific, targeted services. Playhaven grounds its service in the acquisition, retention (they call it engagement) monetisation model (see our ARM series) to give its clients assistance with the major challenges associated with publishing a game internationally.
On the retention side, one of the features they have been making a lot of noise about recently is push notifications (other services such as Infobip also provide push). They advise developers big and small to learn to do direct messaging such as push skilfully. ‘Look at Amazon for lessons’ said COO Andy Yang. Messaging should be targeted to users based on their behaviour, being mindful of who is close to paying and needs something like a discount or a flash sale to help them get over the hump.
For Yang, customer relationship management is at the core of a successful apps business. ‘There is too much focus on acquisition’, he said, pointing out that better funded companies will always be able to outspend smaller startups. ‘If you have a high ARPU, you can afford to spend on acquisition,’ so the focus there is on learning how to increase engagement and spending. Aside from social integration, Yang said that developers have to find opportunities to be generous to users. ‘Serendipitous moments do work’, such as surprising them with free gifts at just the right time.
He compared apps’ relationships with customers to restaurants. ‘Good food is not enough to ensure a good experience,’ he said, ‘you want meaningful relationships where you’re not tricking the players.’ Playhaven aims to build a platform that allows developers to nurture those relationships.