We are in an era of rapid technological change, and the gaming industry is not exempt from this transformative shift. A few years ago, the success of a gaming company was gauged by the sheer number of games it produced and the number of downloads or sales these games generated. However, the narrative has significantly shifted. Today, success is measured not by quantity but by the quality of gaming experiences.
I had the opportunity to chat with Peggy Anne Salz, chief analyst and founder of MobileGroove, a top 50 ranked destination providing analysis, custom research, and strategic content marketing to the global mobile industry. We discussed this paradigm shift, its effect on game developers and players, and how gaming companies can thrive by focusing on quality over quantity.
You would think that having a good game was the prerequisite to achieving success in the mobile gaming space. But the advance of ad-supported monetization models and the rise of free-to-play paved the way for many publishers, particularly in the casual and hypercasual genres, to focus on quantity before quality. Companies could churn out games and turn a profit even if players themselves churned within weeks, not months, Peggy explains.
“Success was a numbers game, and publishers could afford a ‘pray-and-spray’ approach to UA because the object was to fill the funnel, not fix a leaky bucket,” she explains. “The outcome was a flood of mediocre titles that only existed to keep players engaged for as little as 14 days. No matter if players got bored or abandoned the game altogether, the model of buying users on the cheap and monetizing them to the max meant studios made their money.”
In today’s privacy-first landscape, that model is “broken,” Peggy says. The lack of user-level data forces companies to focus back on the basics. “So now, it's really about the quality of games in the gaming industry.”
It’s a dynamic that literally forces studios to up their game. Because the lack of user-level data makes it harder to target players with games and ads they are likely to appreciate, the pressure is on companies to capture player attention (and market share) with winning concepts.Today's gamers seek captivating narratives, impressive graphics, immersive gameplay, and unique experiences. It can take more effort to develop and market games, but users who love their games stay engaged for longer periods. “Whether that attention and interaction translate into more in-app purchases or more opportunities to show an ad, studios generate revenues.”
For game developers, this shift means investing more time, effort, and resources into each game they create. They must pay more attention to details, storytelling, character development, game mechanics, and visuals. “Now, more companies across more genres, including hypercasual, are looking at how we develop a narrative. How do we develop a story?” Peggy observes.
Moreover, developers must be prepared to update and refine their games post-release based on player feedback and to ensure continued engagement. This is where investing in LiveOps to keep games content fresh and audiences engaged can pay dividends, Peggy says.
So, how can gaming companies successfully adapt? Here are a few tips:
Producing high-quality games requires a skilled team, a cross-functional approach and a tech stack that supports a lifecycle marketing strategy that moves in lockstep with where players are in the journey.
From onboarding to win-backs, effective campaigns are powered by cutting-edge technology, but they demand creativity. Invest in hiring the right mix of talent -- from game designers to developers, and from marketers to CRM specialists -- and ensure they have access to the data and insights that will allow them to deliver a gaming experience sure to keep players coming back for more.
It’s also critical to try new tools and techniques. “With the advance of generative AI, companies will be able to do more with less, and that will impact gaming companies at every level,” Peggy says. “It's mind-boggling if we think that Coke has just released the first-ever commercial made entirely by AI - and someday soon, we’ll see AI take on more of what it takes to make and market a game.” At one level, AI lowers the barriers to entry, allowing small teams, even individuals, to create a good game, Peggy adds. “But when everyone gets on the AI bandwagon there will be an even greater demand for human talent to create gaming experiences that stand out from the crowd.”
Players are the best judges of game quality. Make it easy for players to provide feedback and take their criticisms and suggestions to heart. Use this feedback to continually improve your games.
You need to continually refine your game to stay relevant in a changing market. This means introducing features, events and campaigns to keep players loyal. And it means monitoring data to get it right. Data may be constrained, but it’s the only guide gaming companies have. “Companies are going to have to be more innovative about their approach to data, and that means spending more effort to develop models to interpret this data and make it actionable,” Peggy notes.
Rather than aiming to release new games constantly, focus on keeping players engaged with your existing games. “You're always looking at your most valuable users and you're trying to figure out ways to get more of them,” Peggy points out. “That hasn't changed. All that has changed is the metrics you look at. Retention wasn’t part of that picture; now it’s front and center.”
Yes, tracking your Cost Per Install (CPI) is still essential because making games has to make money. But the primary focus should always be on ensuring that Lifetime Value (LTV) exceeds the cost to acquire users in the first place. And since it costs more to acquire a new user than to keep an existing user, it follows that high retention remains the key to profitability.
Recent data from a GameHouse study, as reported on PGgamer.biz, predicts women will soon make up roughly 46% of the global gaming market. "This demographic is still untapped and underserved - it still has a lot of mileage,” Peggy underscores. Moreover, this is precisely the player segment that appreciates a good narrative and storytelling, which means the hard work to deliver a captivating game will be rewarded. "Covid has given rise to a whole new group of gamers who were never previously engaged in gaming. They didn’t even think of themselves as gamers, but their numbers and enthusiasm for gaming make them an attractive market segment to serve.” The stereotype of the young male mid-core to hard-core gamer has given way to new segments and lucrative opportunities.” The real question for you,is this - do you want to invest to gain a foothold in a competitive niche catering to the gamer stereotype, or do you want to push the boundaries to reach for a broader opportunity such as young women and newbie gamers?”
Regardless of the path chosen, each presents its unique hurdles. But the end game remains the same - to foster long-term player engagement.
The gaming industry's shift from quantity to quality represents a more consumer-centric approach that seeks to deliver superior value and satisfaction to players.
For game developers, this shift presents both challenges and opportunities. It raises the bar for what constitutes a successful game. They must now invest more time, effort, and resources in each game, ensuring it meets the highest quality standards. They also need to continuously update and refine their games based on player feedback and changing preferences. Finally, they must use that data to deliver players what they want -- even predict what is sure to resonate.
On the flip side, it gives game developers the opportunity to push the boundaries of creativity and innovation. They have the chance to create games that are popular and profitable, and truly leave a mark on the gaming landscape. Even better if they draw on data to build deeper, more meaningful relationships with their player base, leading to loyal customers and more predictable revenue streams.