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Monetisation in different markets

By on April 17, 2014
Flickr CC by Nicholas Raymond

This is an extract from a white paper by inMobi. Download the full white paper here

The first decision in a monetization strategy starts with understanding which types of games are popular in which regions. For example, Chinese and Korean gamers are far more likely to prefer RPG/adventure games while Americans prefer puzzle games. Developers must then consider how their demographic discovers games.

Americans, Chinese, and Koreans all prefer to download free apps, but how they discover apps differs widely. Developers must also consider how their desired demographic views and makes in-app purchases. Attitudes towards mobile purchases and the reasons users make these purchases are very different, and developers should create purchase experiences that appeal to the specific region they’re marketing. Developers should then utilize in-app advertising to increase revenue and monetize from players who are resistant to paying for downloads or making in-app purchases.

App Download Intent and Discovery

Let’s take a look at how each region downloads and discovers apps.

Chinese gamers play the most number of games per month. Through our study, we also discovered that Chinese gamers also have the highest download intent, expecting to download 7.5 games in the next 30 days – that’s more than 20% higher than American and Korean download intent.

Gamers of all three countries exhibit similar paid app download behaviors. About 56% of gamers play all free apps.
However, Chinese gamers are 31% more likely than American gamers to play mostly free applications, whereas American gamers are 36% more likely than Chinese gamers to play a healthy mix of both paid and free apps.

App Discovery

App discovery mechanisms vary by country. In the United States, browsing app stores and following word of mouth recommendations are the two most popular methods of app discovery. Although there are a few emerging app stores, such as Amazon and Window’s Phone stores, Apple’s iOS App Store and Google’s Play Store dominate the United States download market.

One-third of American survey respondents discover game applications via mobile advertisements or other mobile applications and sites, and one-quarter of American respondents discover games through social media. American gamers are not likely to discover apps by perusing online websites and ads or by reading magazines and newspapers.

China suffers from a very fragmented app distribution ecosystem. Although there are several sites that allow for the pirating of iOS games, similar to the U.S., China’s iOS store is still the primary store to download iOS apps in China. Our gaming study shows that two-thirds of Chinese iOS gamers discover apps by browsing the app stores. However, unlike the U.S., where Google Play monopolizes Android game downloads, China has an incredibly fragmented Android game distribution, with more than 500 competing app stores. According to our study, only one-third of Chinese Android gamers discover apps through app stores, and instead rely just as heavily on mobile apps and websites for reviews and recommendations.

Game distribution is more fragmented in Korea than in the U.S., but less so than in China. Android games reign supreme in Korea – Samsung and LG dominate the smartphone market, making iOS relatively obsolete. In fact, Korea generates the most revenue in the Google Play Store, second only to Japan12. Despite this, Google Play does not have a monopoly on the Korean Android app market. Smartphone companies, such as Samsung and local carriers like SK Telecom, also create and curate their own app stores.

More interestingly, many Koreans discover games through Kakao’s game platform. Kakao began as a mobile chat application that allowed users to make free calls or send free messages to other users. The chat application accrued more than 100 million users, and the company leveraged its application’s massive social network to create a mobile gaming platform. Using Kakao’s platform, players are able to invite their friends to download games, play games with their friends, and make in-app purchases, among other capabilities. Kakao’s business model has proven so successful that as of this publication, 9 of the top 10 grossing games on both Google Play and Apple Appstore games in Korea are games made for the Kakao platform9.

Following in Kakao’s footsteps, China’s Tencent is building a similar game platform model using its messaging application WeChat.

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