Mobile games have generated approximately 85 percent of app market revenue in 2015, representing a total of $34.8 billion across the globe. They are dominating a landscape that is already undergoing massive growth and expansion: in the U.S. alone, 70% of all mobile phone users will play mobile games in 2016.
Mobile Games are Simply Commanding the App Ecosystem:
The average session length of a mobile game is 7.55 minutes, while the average session length of ecommerce and retail apps is 2.85 minutes.
On day 7 after install, the average number of sessions per user is twice as high as every other industry and on top of that, the average user spends $35 on mobile apps over the course of a year, of which $25 is spent on mobile games.
The average American spends between 30 minutes to an hour playing mobile games often, the same game. And remember, this is an average meaning that the number was lowered by the small percentage of Americans who don’t play mobile games in reality, mobile gamers probably spend upwards of an hour a day traipsing through fantasy lands on their phones.
How can we co-opt what mobile gaming is doing to make a different industry app just as successful? In this article, we will examine the three most salient ways in which mobile games have cracked how to make apps: monetization, engagement and retention. Through this study, we will discover how other apps can emulate mobile games to increase their practices and strategies in these areas.
Monetization Best Practices
There are myriad monetization models, and mobile games have tried them all. As you look at what they’re doing correctly in each model, it’s important to ask yourself which one, or combination of ones, will best serve your users. It’s not a one hat fits all kind of equation.
On average, US mobile gamers shelled out $87 of in-app purchases on free-to-play (F2P) games. However, most of this money comes from VIP users: 90% of in-app purchases are made by just 10% of mobile game users. In other words, most F2P player are not paying that much, but a small percentage are paying so much that the average is close to $100 per player.
How do mobile games get their VIP users to spend so much?
They treat them like kings of their own virtual worlds. Mobile games are incredibly adroit at identifying what their VIP customers want, and then offering it as incentives to keep them playing (and paying). Be it VIP events, in-game rewards, swag, or even personal touches, mobile games have figured out how to make customers feel special.
Zynga, for instance, has VIP agents that friend request VIP players and build up a relationship with them not just trying to sell, but being a friend. Gemma Doyle, the head of VIP Operations at Zynga has said that she will message her VIP players on Christmas morning.
It’s not just mobile games that have found loyalty programs to be rewarding, just look at Starbucks Rewards app, a popular and free app that allows users to pay via the app and is now used for 21% of all in-store purchases. Like gaming apps, Starbucks has married their rewards program to other benefits, including the ease of paying in-store, as well as partnerships with Spotify and Lyft. Good loyalty programs don’t just reward the user with more of the app’s product; they reward the user in every facet of their lives.
Ads (And The Option To Remove Them)
Ads are essential to the F2P economy: up to 50% of overall game revenue is generated through ads, according to VentureBeat. However, they can have serious detrimental impacts on retention if not done correctly.
Successful mobile games use sophisticated segmentation to target ad-responsive and purchase-responsive customers. This yields far greater return than just slamming every player with irrelevant, non personalized advertisements.
Both Facebook and Spotify have successfully used advertisements to monetize their apps. Facebook leverages highly personalized ads that have proven to be incredibly successful: they reported that mobile advertising now accounts for 76% of their total ad revenue, or $2.9 billion.
Spotify has seen similarly successful results based on highly personalized targeting: the company reported an almost 400% increase in mobile ad revenue in 2015. However, the company still makes the bulk of its revenue through premium users – customers who pay $10 per month to get rid of the ads.
This system is highly effective in mobile gaming and other apps: users will often pay for an uninterrupted experience, especially if they’re getting high value out of the app’s product (such as being able to listen to almost any music for free).
Elad Natanson, a Forbes contributor, outlined yet another successful way to do in-app advertising: “Video ads often occur during natural pauses in apps, such as between levels in a mobile game. The ads are usually between 15 and 30 seconds long for maximum impact. With the rise of mobile advertising, in-app videos are also used as incentives, introducing the concept of a rewarded video ad format, as opposed to the incentivized installs ad format of the past. Once users watch the short clips to the end, they can claim perks or get free currency or items within the game as incentives. Many brands are also creating specific video ads for native mobile environments such as Facebook and Instagram feeds.”
These incentivized video ads are becoming increasingly popular for mobile games. At this year’s Casual Connect, they were one of the hottest topics, with many speakers positing that they will be the future of app monetization.
The key to monetization through ads is twofold: make the ads highly personalized and target only customers who are ad and purchase responsive, and, if your app experience would be vastly improved without ads (as with mobile games and Spotify), offer the option to upgrade to premium to get rid of them.
In this monetization model the app and its basic features are free, but certain features are “gated” and users must pay to access them. Angry Birds is probably the most successful game example of this: features like being able to juice up your bird and access to certain levels are only available with an upgrade.
Many news apps have implemented a similar version of this called “paywalls”, in which users can view a certain amount of content, but must subscribe to view anything past that. These models are highly effective in encouraging loyal users to pay, but can serve as detriments to less involved users.
A good way to make the model monetizable for both, is to incorporate some amount of native advertising into the free version, and offer less advertising as one of the incentives to subscribe. For non-content apps, freemium models can often do without the mixed model-users are usually willing to pay a small amount to unlock a single feature. The key is to offer options for large and small feature upgrades, to get even your smaller-time users to pay.
This is by far the simplest model: you have your users pay upfront to download your app. Many mobile games do not employ this model for a very simple reason: users don’t want to pay for a game that they haven’t tried out.
For this reason, it’s mostly either very established games, or ones with a long beta version that has been highly anticipated that employ it. Perhaps the unpopularity of paid apps is why mobile games have become so incredibly effective at getting users to pay once they are already inside the app.
For non-gaming apps, choosing to make users pay upfront requires that you offer an incredibly compelling value proposition upfront. This should include screenshots, testimonials, and a very clear, simple statement of why users need your app. This model works best for products that offer value propositions such as massive time saving or convenience apps that will have a tangible impact on the life of their users, outside of their phones.
Engagement Best Practices
Although the mobile device is certainly personal (“It was once said that a person’s eyes are the windows to their soul. That was before people had cell phones.”), it is also a communication tool. Your app should reflect this.
Mobile games use two primary tools for engagement: multi-player and in-app chat. These two strategies get players involved in the community of the game, and also get them to actively talk about and interact with fellow evangelists. Once a dialogue has begun, the player is continually brought back into the game as they receive a challenge, message, or comment from a fellow player. Specific ways to establish these communities are to establish micro communities, reward users, and use two way push notification.
Establish Micro Communities
Mobile games have done a truly superior job at creating microcommunities within their games. For instance, we at Helpshift have a “Helpshift Clan”, in Clash of Clans for which players must request access. This mix of exclusivity within communities drives engagement players compete to join groups, as well as to beat other groups (in tournaments).
You can establish communities based on shared interests, shared IRL communities (like our Helpshift clan), or a shared dedication to the app (in many games you must earn entry into a “clan” or similar community). By creating micro communities within the larger community of your app, you enable your users to become true evangelists, and encourage them to seek out your app as a means of finding other evangelists
Reward User Engagement
User Engagement Games like Boom Beach and Clash of Clans have the highest retention on day seven since install (at 39% for both games), due to the interactive nature of the games: all of Supercell’s games have a social element to them – be it “Clan Chat”, the ability to request cards from other users (as in Clash Royale), or the recently released “tournaments” feature.
To join groups (or “clans”) in these games, players must often reach a certain threshold (of points, gold, etc) and then request to join a community. Allow your users to help each other give each other makeup tips, home coffee brewing ideas, photos of products, etc and then reward them for it. In games, players advance from interacting with others. Emulate this strategy through rewarding users for being part of groups, inviting their friends to your app, and using your app together.
Use Two Way Push Notifications
Gemma Doyle of Zynga is a huge proponent of what she terms “two way push”. In this system, users are brought into the app via a push notification, but instead of being brought into the game, they are routed to a conversation or page related to their context. Say you have a product update: traditionally, you would send emails to your customers announcing and explaining the new feature. The email probably gets deleted, and the user is not informed as to how to use the new feature.
With two way push notifications, though, you send a push saying “check out the new ways that you can earn coins in level 42” and then direct the customer from the push into the in-app FAQ page about the new feature. In the FAQ page, the user can see photos and videos on the new feature (important, since users increasingly rely on video), and then directly engage with it since they are already in the app.
It is a more direct journey and an easier way to communicate with customers. You can also solicit feedback (“You’ve been playing for 30 days, we’d love to get your feedback!”) and send users into support (“You’ve been on level 41 for 5 days want some tips?”)
These types of push notifications are particularly valuable to companies with ad-based business models, like most news apps. Rather than selling a product or products, they are selling the app itself, the time that a user devotes to the app.
This means that bringing users into the app to do something is highly valuable. Players generally play about three times a day an impressive statistic, considering that users spend 80% of their time in just 5 apps.
Apps in other categories must take note, and begin to engage users not just with the app, but with each other. As Supercell has shown, it’s not just about creating an addictive game; it’s about creating a community.
Retention Best Practices
As we mentioned above, Supercell’s popular games Boom Beach and Clash of Clans excel not only in engagement, but in retention. This is a key part of forming a successful game, as there is high churn in the first 7 days after install across the industry.
Mobile gaming retention ranges from 20% – 40% one day after install, and drops to 5%-15% 30 days after install. More than half of mobile gamers never open the app again after install. That said, the sharpest drop off is that first day: about 3/4 of active users from day 10 are still playing on day 30.
Furthermore, these users are highly active: even on day 7 after install, the average number of sessions per user is twice as high as every other industry except social. While retention remains a battle to be won, mobile games are certainly ahead of every other app.
There are several key ways that they’re keeping their players, many of which we have already covered (each of these best practice categories is not a silo they all interact and play off of each other to inform what is in the end a good, highly rated app).
- Superior Customer Service
- VIP Programs
- Community Building
- Ridiculously Easy Onboarding
- Continual Product Improvements
We covered the first two in the engagement section already, so we’ll focus on customer service, onboarding, and product iterations.
In mobile gaming, emotional intensity is high, so gamers need answers to their questions extremely rapidly. Furthermore, gamers are likely to take to social as an outlet for their ire when things go wrong, which negatively impacts the app’s image. Because of this, mobile games have established effective onboarding, incredibly detailed and rapid customer service, and product iterations based on feedback. Supercell, for instance, has incredibly detailed, searchable FAQs, as well as an in-app chat feature. It’s no coincidence that their customers do not have to leave the app to get help, and that their games have some of the highest retention rates in the industry (disclaimer: they use Helpshift).
Similar to customer service, having a fast, easy, simple onboarding experience is crucial to getting users to come back. Getting a user to understand both your value proposition and how to gain this value, in under one minute is hard.
It’s the perpetual tech paradox: you want a complex product that is simple to use. The apps with the best retention strategies onboard their users rapidly, offer proactive customer service, and have fast, easy to access help centers. Retention isn’t just about offering value; it’s about ensuring that your customer has a seamless, successful experience.
Mobile games are also highly effective at garnering user feedback and incorporating it into their product most mobile games release beta versions to a test audience (of VIP users), in order to make a game that fulfills customer needs.
Establish clear systems through which your users may leave feedback and suggest changes (you don’t want them doing it in the App Store), and establish clear systems to demonstrate to your users that their feedback actually results in change. Microsoft Outlook, for instance, will ask their customers for their top product iteration requests, and then make the results of the survey public so that customers know why one change is prioritized over another.
The true secret to mobile gaming’s success is that they realize they are offering a fantasy world, a life wholly outside of anything really experienced, and that to make this successful, they must make being in the app a good experience. Game developers don’t just see themselves as building an app, they see themselves as building an escape. And for an escape to be a true sanctuary, processes to getting there must be seamless, and the rewards for staying there must be high.
Where other industry apps should truly learn from gaming companies is in the core vision of what an app is: it is an experience. The best apps are ones who make that experience meld seamlessly with the customer’s life; the worst are the ones that cause frustration upon opening them. Mobile games understand this: they have built apps that allow users to effortlessly step in and out of their phones, apps that are not only painless, but are pleasurable. It’s time for all apps to give their customers this experience.
Helpshift bridges the disconnect between conventional customer service channels — like email and phone support — and a growing consumer base that heavily relies on mobile devices and has a strong preference for messaging as the primary mode of communication. Through Helpshift’s AI-powered support platform, companies can resolve issues more efficiently, boosting customer satisfaction in the process. Companies such as Xfinity Home, Microsoft, Virgin Media, Zynga, Viacom, and hundreds of other leading brands use the Helpshift platform to provide messaging-first customer support.
Helpshift is installed on two billion devices worldwide and serves more than 130 million active consumers monthly. To learn more about Helpshift, visit helpshift.com and follow @helpshift on Twitter.