Gabe Leydon, CEO of app maker Machine Zone, said during GamesBeat 2012 that the cost of acquiring a user on iOS rose from 50 cents at the start of the year to as high as $7 on some occasions. Statistically, this is actually better than most iOS developers get in acquiring users, pushing the cost of acquiring users above the cost of development for many, and this is a vital problem in the area.
“This mismatch is insane,” said Ben Vu, the founder of SkyVu Entertainment. “You have to pay attention to this, down to the hour or the minute.”
Acquiring users is often done via cross-promoting new games by leveraging the audience for existing games, forming a network of developers willing to trade the eyeballs for their games for the eyeballs of other games. The program Chartboost does this in a formal way.
“You have to pay attention to this, down to the hour or the minute,” Vu said.
On the subject of cost, A.J. Yeakel, a mobile consultant, thinks that there will be a market correction for marketing prices eventually. However, Leydon thinks that rich backers of branded games are willing to lose money to promote their games, and there are large Chinese companies that haven’t entered the market yet.
“The pressure on prices will shoot upward and not slow down until more ad inventory comes online,” Leydon said. “There’s billionaires in the market who want to win. They are willing to spend $7 a download. This is going to be a long, tough fight.”
Rob Weber, the co-founder of app marketing and monetization firm W3i, said it is hard to figure out where the top of the market will be in terms of user acquisition costs. “You can’t predict how the bigger companies will spend,” he said. “But it’s about finding the right volume and the right level of profitability for a game and doing it on a large scale. It’s a huge, full-time job.”
Leydon says that making a great game is key, along with integration of Twitter and Facebook in order to get as much free publicity as possible. Some companies also network puzzle games into more profitable games like RPGs.
In the past, developers have been able to target users with unique device identification numbers (UDID) but Apple has indicated that they are looking to phase that out. One possible way to counter that is with better branding, including physical merchandise and TV shows.
“We are working on the core product and the core brand and making it freakin’ awesome,” Vu said.
If Apple integrates Chomp, an app search entity, it could make it easier to acquire users, but for right now there’s no relief. “That’s just more things to worry about,” Vu said. “I’m pulling my hair out.”
Source: VentureBeat
