How app monetization is different from what we have learned from the web - Andrei Dementjev - Fortumo

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Many casual and social game developers have moved to mobile, but since the economics of mobile and web are very different not all of these transitions have been successful. While helping companies like Rovio, Digital Chocolate, Badoo and many others find their monetization strategy on mobile, we have distinguished key factors that developers should change in their monetization strategies while moving to mobile. Andrei Demenjev is sharing these key points so you can learn from and avoid the mistakes made by early adopters of the mobile platform.

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How app monetization is different from what we have learned from the web - Andrei Dementjev - Fortumo

  1. 1. Andrei DementjevCOO, Fortumo
  2. 2. Platforms
  3. 3.  New smartphone sales in Q2 2011 Microsoft Others 1% Bada 2% 2% Android RIM 12% 43% iOS 18% Symbian 22% Every second smartphone sold is running Android.
  4. 4.  Smartphones in US (July 2011, comScore mobilens) Microsoft Other Symbian 6% 1% 2% RIM 22% Google 42% Apple 27% iOS and BlackBerry are installed on 49% of US smartphones
  5. 5. 4.90% 4.70%7.70% 82.70%Nearly 83% of app store revenues are made on iOS.
  6. 6.  Glu Mobile: Android Revenues make only 1/10 of iOS revenues Challenge: Why develop for other platforms if iOS is making most of the revenues?
  7. 7.  iOS has the highest level of competition by Distimo
  8. 8.  Rovio Angry Birds:Android revenue = iOS revenue Answer: Every platform can bring you money Keywords: competition, experience, expertise, st rategy
  9. 9. Going Global Challenge: Developers are only aiming at established and rich markets like US and Western Europe
  10. 10.  Android sales in 2011 40% of smartphones are sold in Asia-Pacific
  11. 11.  America: 29% vs Asia 70% vs EMEA 31%
  12. 12.  Answer: You should have a monetization strategy for every region.  Asia Pacific  USA  Western Europe  Middle East  Latin America  Eastern Europe  CIS  Africa
  13. 13. App stores
  14. 14.  Challenge: Developers are ignoring alternative app stores
  15. 15.  Alternative stores:  Regional stores:  Manufacturer stores:  Opera Mobile App  Andronavi (Japan)  HTC Market Store  Samsung Apps  Wandoujia (China)  GetJar  LG smartWorld  Appchina (China)  Appia (Pocketgear)  Shop4Apps (Motorola)  Fasmicro App Store  AndAppStore (Africa)  Handango  OnlyAndroid  HiAPK (China) and many more..  Insyde Market  Amazon App Store  Operator stores:  SlideME  Vodafone Live! ..2 000 000 000  Appoke  OrangeWorld downloads on  O2 Active  YAAM GetJar only
  16. 16. Premium vs Freemium Challenge: Developers rely on premium distribution models.
  17. 17.  Percentage of free apps: Apple App Store Nokia Ovi Store BlackBerry App WorldWindows Phone Marketplace Android Marketplace 0% 10% 20% 30% 40% 50% 60%
  18. 18.  Why Premium is bad?  App stores are full of low quality apps  App purchase is an investment  Cultural differences  Weak and non effective billing solutions  Free competitors  Limited distribution options  Piracy
  19. 19.  Why Freemium is good?  More downloads  Target long tail (just like offers)  People are used with free apps  Ability to adjust to different ability to pay  Better global reach  More distribution options  Lower dependence from app stores  Piracy
  20. 20.  75% of top 100 grossing iOS apps are games 65% of them are freemium Answer: Avoid selling your games and use Freemium models!
  21. 21. Earn money from free games Mobile ads Offers In-game purchases Sponsorships and special deals
  22. 22. Mobile ads$15 billion in 2011.
  23. 23.  Challenge: Mobile ads makes my game slow and ugly. Answer: Do it smart! Whats critical:  Ad coverage  Respect low-end devices  Try different advertisers  Think about UI and design  Place ads on loading screens
  24. 24. Mobile offersA great way to monetize non-paying users.
  25. 25.  Pros:  great for monetizing non paying users  global reach Cons:  be careful with what you offer  you may be promoting competitors  dont overload your game by offers  dont replace payments with offers!
  26. 26. In-app purchases What can be sold?  virtual credits  extra levels  trial version activation  extra features  personalization  banner-free version (weak)
  27. 27.  Consumable goods (virtual credits) 68% of in-app purchases
  28. 28.  Challenge: Developers are using ineffective payment methods
  29. 29.  In-app payment methods:  App store billing (Google checkout) – mostly credit card based, high store margins.  Mobile operator billing (direct billing, premium sms) – good coverage and conversion rates, low revenue shares.  Credit cards (Visa, Mastercard) – bad coverage, high revenue shares, kills conversion rate.  Paypal – works in limited number of the countries  Prepaid cards, kiosks and vouchers – low conversion rates  Direct debit and others...
  30. 30. or Answer Analyze your user base and select the most suitable payment method and additional methods if needed.
  31. 31.  Challenge: Bad user experience during payment flow vs
  32. 32.  In-app payment is impulsive Every new screen kills conversion by 10-15% Customers are not yet familiar with mobile purchases Payment should look secure Answer: Golden rules of in-app payment: the user should reach to the payment with a maximum of 3 clicks.
  33. 33.  Challenge: Developers don’t benefit from ingame promotion. Holidays discounts Achievement based bonuses Limited time offers Exclusive items and gifts
  34. 34.  Answer: Active promotion of ingame purchases increases the revenues by 30%!
  35. 35.  Challenge: Developers ignore small details. • Currency • Localization • Terms and conditions • Operator/billing provider logos (+ 15% conversion) • Helpdesk and customer care • Track user reviews and comments • A/B testing
  36. 36.  Answer: Make your payment flow perfect!
  37. 37.  Challenge: Wrong game balance Game is too difficult => they leave before buying Game is too easy => they don’t need to buy Too few free levels => they are not yet addicted Too many free levels => they had enough Answer: Develop the perfect balance for introducing paid content.
  38. 38.  Challenge: Wrong pricing policy $2 in USA $2 in China Answer: Adjust the prices according to purchasing power.
  39. 39.  Challenge: Lack of offline mode support. According to Localytics, 15% of mobile apps are launched while offline . Answer: Your game should be prepared to work and monetize while offline.
  40. 40. Спасибо!Andrei Dementjevandrei@fortumo.comskype: andrei.dementjev

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