Mobile Game Marketing In 2015

BY

By Glenn Kiladis
SVP, New Media Solutions & Games Evangelist at Fiksu

Apple recently released its top grossing apps for 2014, and the top three are all, not surprisingly, games. Gaming represents the largest percentage of time spent on mobile devices, and we don’t see that changing anytime soon. However, there are some things we do expect to change in 2015 that will impact mobile marketing strategies for games companies.

Those factors include:

 

  • Increased spend from big brands
  • Focus on audience targeting
  • Retargeting & deep linking
  • Programmatic buying
  • Cross-platform gaming
  • Rise of phablets & advancements in OS

We’ll look at each of these in more detail.

CPI Trends
Fiksu’s Cost Per Install (CPI) Index measures the cost per app install directly attributed to advertising. As you can see in the chart below, for much of the last year, Android games costs have remained consistently higher than iOS games costs – primarily due to significant spending on lower-cost incentivized networks for iOS games, which has a different impact on Android. We expect this trend to continue into 2015.

However, we also expect games CPIs on both platforms to be impacted by some key factors looming for 2015. For starters, as we’ll discuss later, big brands are finally putting more money into mobile. These brands have big budgets, and they’re not as price sensitive as other marketers. This increased pressure from brands is expected to drive up costs for everyone on mobile, including game marketers.

At the same time, however, marketers are increasingly focused on leveraging Programmatic Real-Time Bidding (RTB), which offers access to a large scale of display and video ad inventory with greater efficiency through the use of machine learning optimization. Marketers can focus the optimization technology around in-app monetization events like social shares, subscriptions or in app purchases to find the “traffic that matters”. This “Rise of the Machines” could put downward pressure on overall costs and increase the performance of a mobile marketing dollar.

In either case, the important thing to remember is that CPI is not the most important metric for mobile marketers. As our past research has shown, low CPIs don’t mean anything if those users don’t deliver a positive ROI. Alternatively, high CPIs can result in large returns if they produce high-quality users. More and more, we’re seeing ROI-driven marketing become the norm, and we expect that to continue into 2015.

Pressure from Brands
As mentioned, brands are finally beginning to embrace mobile as a part of their digital strategy. For instance, Taco Bell recently had a big push to promote its new mobile app, and they’re not alone. As this trend continues into 2015, increased mobile spending from brands will gobble up more inventory and increase user acquisition costs for everyone else, including games.

In addition, as traditional and digital first brands begin to strengthen their presence on mobile, this will also increase competitiveness in iOS App Store rank for everyone on mobile, including game marketers.

“As a result of this growing trend, ‘ok’ UA strategies that have worked in the past won’t cut it anymore.”

As a result of this growing trend, “ok” UA strategies that have worked in the past won’t cut it anymore. Brands and games will be competing for the same inventory, and ultimately, something’s going to have to give. Game companies do however, have a head start over brands and could maintain their edge leveraging data, smarter audience buying, retargeting and all the mobile ad-tech tools available.

Audience Targeting
As more robust mobile data becomes available, marketers across the board are increasingly gaining opportunities to reach highly specific audiences at scale. While this strategy has been most intriguing to brand marketers, the capabilities will undoubtedly prove highly beneficial to game marketers as well.

Previously, many mobile game marketers were most interested in acquiring low cost loyal users, with less focus on and visibility into the characteristics of those users. While that may still be the primary goal, now, mobile game marketers will really be able to hone in on the characteristics of the specific audience that monetizes best for them, and go after those highly targeted users.

To make this possible, there will be an increased emphasis on the value of both 1st and 3rd party mobile data. Combined, they create an extremely rich dataset which can allow game marketers to refine their mobile marketing spend. With this capability, game marketers can identify, target and programmatically buy against an audience as specific as males, 18-24, with at least 3 mid-core games downloaded on their device-instead of just trying to display ads where that audience tends to be. While it will cost more initially to reach these highly targeted segments, the users will be more likely to monetize, therefore driving increases in ROI.

Retargeting
“In fact, for one popular social casino game, retargeting was able to more than double the number of purchasers acquired purely through user acquisition strategies.”

2015 is likely to be the year of retargeting, particularly when it comes to gaming. Retargeting was recently characterized as being “where the puck is headed” by Marc Hale, Re-engagement Sales Lead at Twitter. In fact, Hale noted that “The majority of the money being spent on mobile retargeting is coming from the mobile gaming community…gaming companies are ‘mobile first’ and they know the lifetime spend of their customers, and they can see the whole customer sales funnel.”

Through our own experience at Fiksu, we’ve seen gaming companies as early adopters of mobile retargeting-and they’ve been seeing success. In fact, for one popular social casino game, retargeting was able to more than double the number of purchasers acquired purely through user acquisition strategies.

Using the latest in deep linking technology, future retargeting ads will feel less like advertisements, as they drive users to a specific location within the game. As mobile game marketers become more familiar with this strategy, many will realize that it should play an ongoing role in their marketing campaigns. There are so many instances where retargeting can be beneficial: from reminding a user to open the app after installing it, to encouraging them to register, to trying to get them to make in-app purchases. Retargeting is definitely where the puck is headed, and it’s travelling fast.

Programmatic Buying
As mobile advertising costs rise, it will continue to become more important to make sure that every penny spent is being done so wisely. Through programmatic buying, which incorporates closed-loop feedback (within milliseconds) into an automated decision-making process, marketers can leverage machine learning to be sure that their dollars are being spent as efficiently as possible.

“While not purely specific to the gaming industry, programmatic buying, and in particular real-time bidding, will be increasingly popular if recent trends are any indication”

While not purely specific to the gaming industry, programmatic buying, and in particular real-time bidding, will be increasingly popular if recent trends are any indication. According to Smaato, global mobile real time bidding (RTB) spend increased 140 percent year-over-year from Q3 2013 to Q3 2014. And that growth isn’t expected to slow. According to eMarketer, RTB (on desktop and mobile) is predicted to grow from $4.16 billion in 2013 to $11.84 billion in 2016, a 185 percent increase.

Cross-platform Gaming
One growing trend that will be unique to gaming is a growing emphasis on a cross-platform experience and marketing strategy. One great example of this is Activision, which recently released an iPad version of its game Skylanders: Trap Team that is identical to the console version.

For Activision, a cross-channel marketing strategy has been key to driving the success of this game in a time when player habits are shifting rapidly. They’ve been among the first to take advantage of the full capabilities of mobile gaming, but they won’t be the last. According to Newzoo, mobile gaming revenue is expected to surpass that of console games next year, as it tops $30 billion in 2015. As this happens, game publishers will need to be able to truly extend their reach across multiple platforms, and have a mobile marketing strategy to compliment that increased emphasis on the mobile gaming experience.

“Despite the potential it seems to offer, Metal has not yet had a major impact on the industry: per Apple, only 12 of the hundreds of thousands of games in the App Store are currently incorporating it”

We expect more of these console-quality gaming experiences to come to iOS thanks to Apple’s iOS 8 feature “Metal.” Metal is a new technology that helps developers create console-like gaming experiences by enabling them to maximize the graphics and computing potential of their iOS app. Despite the potential it seems to offer, Metal has not yet had a major impact on the industry: per Apple, only 12 of the hundreds of thousands of games in the App Store are currently incorporating it. Look for that number to change dramatically over 2015.

The Rise of Phablets & Advancements in Operating Systems
Larger smartphones, aka “phablets”, like the new iPhone, Nexus, and Samsung devices, along with the continued evolution of mobile operating systems like iOS 8, will likely fuel monetization improvements in the coming year. While better gameplay probably isn’t the primary driver behind the size increases and new technologies, anyone who’s played a high-end game on an iPhone 6 Plus or a Samsung Galaxy S5 knows that they really do improve the gaming experience.

The enhanced experiences these devices offer are likely to result in users spending more time, and consequently more money, playing mobile games. With UA costs potentially rising as previously mentioned, these potential monetization improvements could help lessen the blow of the higher UA costs.

What This All Means to You
Now that you know what to expect in the year ahead, how can you take that knowledge to make sure you have the best mobile marketing strategies in place for 2015 The most important thing to be prepared for is fluctuations in costs: don’t depend on costs staying where they are today.

“you should know what these costs mean to you. If you have to pay $2 or even $4 for an install, but that user spends $10 in your game, it’s worth it”

That said, you should know what these costs mean to you. If you have to pay $2 or even $4 for an install, but that user spends $10 in your game, it’s worth it. As we said, the key to remember is that CPI doesn’t tell the whole story and shouldn’t be the only metric you’re using to measure success in your campaigns.

After that, you want to be sure you’re embracing the use of data and maximizing some of the newer mobile ad-tech capabilities that will help you drive increases in revenue, namely audience targeting and retargeting. Generally, you need an established mobile gamer base before getting started (or massive desktop gamer base for cross-screen retargeting), but as long as you have that, you should be trying to drive increased engagement with your game. As mentioned, this could mean reminding users who have downloaded your app to come play, or encouraging users who have registered to make their first in-app purchase.

You also want to be sure you’re buying as much media as possible programmatically, and maximizing the technology, use of audience targeting, reach and low costs available through RTB. Also, as you look to amplify your gamer acquisition or retargeting using Twitter and Facebook, look for companies like Fiksu that apply programmatic buying to social.

And finally, larger smartphones are changing the game, both literally and figuratively. You should be making sure your game is capitalizing on the increased functionality, and that you’re upping your marketing efforts to make sure users are aware of these enhancements.

You should also be on the lookout for other upcoming trends, including a stronger focus on video, as well as App Store chart inflation.

2015 promises to be an excited year for advancements in mobile game marketing. While marketing strategies, costs, and mobile ad inventory could be impacted by pressure from big brands and massive digital first companies, there’s a lot to look forward to on the horizon. I wish all of you a happy, healthy and prosperous 2015. It’s going to be a fun ride.Â

Glen Kiladis is SVP, New Media Solutions & Games Evangelist at Fiksu

Republished from GamesIndustry International. For more, read GamesIndustry International for the latest in game industry news, opinions, interviews, and key information about the global games industry.

Dine Out Like It’s 1989 At The World’s First Pac-Man Restaurant

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Craving a hot, fresh plate of dots? Need a little waka-waka-waka in your life? A new restaurant in suburban Chicago, Illinois will be opening to serve your needs very soon.

A 40,000-square foot Pac-Man-themed restaurant, named Level 257 (taking its moniker from the number following the original Pac-Man arcade game’s infamous Level 256 “kill screen“), is set to open in a space formerly occupied by Sears at Schaumburg, Illinois’ Woodfield Mall in January.

Pac-Man creator/publisher Namco is taking an active role in Level 257′s creation, overseeing its development with plans to use the restaurant to celebrate the beloved ghost slayer’s 35th birthday in May. “Level 257 seeks to explore Pac-Man’s impact upon our society and pop culture, reminding us all of the importance of play in our lives, while facilitating our desire to relive those times when beating the next level was the most important thing in our world,” Namco says on Level 257′s official website.

Level 257 concept drawingLevel 257 concept drawing (photo credit: Chicago Tribune)

Level 257′s official Tumblr reveals plans to integrate the 180-seat restaurant into a bigger entertainment complex. Details include “sixteen boutique retro-styled bowling lanes with smart technology, table tennis, pinball machines and our Lost & Found games parlor”, as well as a “first-of-its-kind Pac-Man shop” and “gallery space” documenting the dot muncher’s legacy.

Level 257 stands as the latest entry in a long series of tie-ins and franchising opportunities for one of classic gaming’s most enduring tentpole characters. Fans hungry for more recent Pac-Man appearances in popular media can also catch him in Disney‘s 2012 paean to arcades Wreck-It Ralph, Nintendo‘s Super Smash Bros. for Wii U and 3DS, and upcoming Adam Sandler movie Pixels.

Vevo Arrives On Xbox One As Its App Viewership Spikes In 2014

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by Sahil Patel

Vevo is now available on the Xbox One.

The new app, which is available for free, utilizes a news feed make it easier for users to access the latest music video premieres and original programming from the music video service.

Users in the US, Canada, and Germany will also have access to Vevo TV, the service’s linear channel that streams content 24 hours a day.

Read more…

This article was originally posted on VideoInk and is reposted on [a]listdaily via a partnership with the news publication, which is the online video industry’s go-to source for breaking news, features, and industry analysis. Follow VideoInk on Twitter @VideoInkNews, or subscribe via thevideoink.com for the latest news and stories, delivered right to your inbox.

Sean ‘Day9’ Plott Talks What Brands Can Learn From Red Bull’s eSports Marketing

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Sean “Day9” Plott has made a living around eSports. The former pro StarCraft: Brood War gamer has built a mini broadcast empire through Day9.tv, including the popular “Day[9] Daily.”  Plott wears many hats. He’s a professional StarCraft II caster at eSports events around the world like DreamHack, BlizzCon and Major League Gaming (MLG), he heads up the After Hours Gaming League (AHGL) and he’s co-founder of game company Artillery, which is working on a new strategy game called Project Atlas.

Plott has been a caster at all of Red Bull eSports events over the past two years.  Since Red Bull doesn’t comment on its own marketing efforts as a rule, Plott fills us in on what the energy drink is doing right in eSports, and explains how his own After Hours Gaming League has grown over the years, in this exclusive interview.

Where do you see Red Bull when it comes to eSports today?

What we saw before the last two years was treating eSports like traditional advertising.  It was just a numbers thing.  If you got a lot of numbers, maybe you can sell ads on that the same way you would sell on YouTube.  What we’ve seen in the last two years is the publishers themselves getting into the space because it translates in a direct dollar way to the company.  It’s not like paying a few thousands dollars to put a logo or a different brand on the game.  You’re watching the game, and the people who watch it then want to go immediately spend money on the game.  Red Bull is a really interesting in-between, where it’s a company that is taking charge and putting on the events themselves.  This allows them to generate the views and make money off of advertising dollars, but also gives Red Bull an actual product in the form the Red Bull can, which has first class presence at the events.  It’s an interesting model that I think other companies can look at, where instead of just passively handing out a few thousand bucks to put up an overlay; the company is running the event, participating in the scene and really getting involved. And that’s what I think is super cool about Red Bull.

Red Bull has a background in traditional sports.  What do you feel like they have learned from that space and applied to eSports?

The biggest thing that I see is they are immersing themselves in the culture.  It’s increasingly not enough to just have some smart people who are organized trying to do a good job.  You have to get really passionate community members who are sharp and are really hard working to make sure that the event has the right tone to it.  There are a number of things that Red Bull has done this past year that only makes sense if you understand the StarCraft community — like giving pros three lives and having them get knocked out and then having a little 8-bit animation of the player falling over.  That’s something that the gaming community gets and I really credit the guys who are spearheading all of that awesome stuff over at Red Bull.  The guys at the top at Red Bull are super hardcore gamers.  Hogan Carter has been doing gaming events since 2002.  These are people are from this community and that’s a real secret to Red Bull’s success; they are part of the communities that they’re building for.

“You have to get really passionate community members who are sharp and are really hard working to make sure that the event has the right tone to it.”

What role do you see the StarCraft II events that Red Bull held this year play overall in the community?

What Red Bull put on for StarCraft this year was insane.  Those were some of the highlight events of the entire year outside of BlizzCon.  I would not be surprised to continue to see more investment from Red Bull in the space.

How have you seen your After Hours Gaming League grow over the years?

We started Season 1 with eight teams and we’re at 200 this season.  It’s just insane how much it has grown.  The biggest thing that the After Hours Gaming League shows is that all the competition in eSports is at the absolute highest end, but there are still tons of people that love just hanging out playing against each other.  We have teams that have built reputations for not taking the game very seriously when they’re playing, and they’re just trying to do the most wild, out-of-control stuff.  And when they win, their whole teams goes insane and they upload photos of the win.  It’s been a blast to show how many non-pros there are who just love to compete.  It’s becoming almost like a replacement for watching traditional sports.  You actually get to play.  Instead of sitting down for Monday Night Football, you sit down for your Monday Night After Hours Gaming League match or your Sunday Afternoon match and hang out with your friends and have a blast for a few hours.  It’s one of my absolutely favorite things ever.

“Instead of sitting down for Monday Night Football, you sit down for your Monday Night After Hours Gaming League match or your Sunday Afternoon match and hang out with your friends and have a blast for a few hours.  It’s one of my absolutely favorite things ever.”

With real eSports filling stadiums, do you see an opportunity for bigger venues for After Hours Gaming League in the near future?

I think possibly, but what’s interesting is that at the highest level of pro play people want to watch that.  The spectating aspect is a huge component.  There are only like 100, 200 people playing at the top pro level.  The After Hours Gaming League is the opposite.  People are showing that they really want to participate, so I think that we’ll have huge leagues.  Will people want to watch at the end   We’ve had big live events at the end of AHGL, and it’s always most successful when it’s focused on the socialization and the fun.  Where we have the after party for the AHGL is just as important as the event itself because people love to hang out and play.  So spectating wise maybe not.  Participation-wise it just makes me so happy because I grew up doing this stuff and it’s a full time professional job that I’m still doing.  It gives me hope that I’ll be able to play video games forever.

When it comes to the companies involved in AHGL like Intel, Google, Facebook and EA, how do you see them support the players that are representing them in this league?

It’s been great.  You have companies that provide funding for some team members to get shirts for the club and some travel expenses get paid for people who are heavily involved.  I remember when IBM was in the Finals and every single person was there in an IBM shirt showing company spirit.  It’s really nice because that first season was probably the scariest for us because there’s always that fear of will this company be comfortable with them being referenced as a company in the video game   But now that we’re at 200 teams, we have seen more and more and more support.  We want to make sure that each team gets approval from their company, so we have a handbook of ways to do that, things to say to pitch it.  There’s just less and less friction.  It’s really starting to show that eSports and competitive gaming is becoming almost so ingrained that it’s weird not to know about eSports.

 

Analyzing Mobile Game Spenders

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Newzoo continues to provide detailed reports on the game market, and its latest data report, “Spotting the Mobile Spenders,” is replete with interesting data on the most important part of the mobile game market — the people who spend money. After all, it does little good if your game attracts millions of players but only a handful actually pay you something, unless you’re making money from advertising or through sales of some other product.

Newzoo starts by outlining the size and shape of the mobile game market, noting that by the end of 2014 1.5 billion people worldwide will have played a game on a smartphone or a tablet. That’s 51 percent of the global online population, an impressive achievement for an entertainment medium once confined to a small number of enthusiasts. Perhaps even more impressive is the fact that almost one third of these gamers (32 percent) have spent money on (or in, via in-app transactions) mobile games, which is 485 million consumers worldwide. The numbers for North America are just as impressive: Some 151 million people have played a mobile game this year, 49 percent of the online population, and 64 million of the (42 percent) have spent money.

That population of spenders averages $4.30 per month (on average, worldwide), which provides a total of some $25 billion in revenue generated by mobile games worldwide in 2014. In North America, the average spending per paying player is higher at a monthly average of $7.68, providing $5.9 billion in revenue this year. One need look no further than these numbers to understand why investment in mobile games continues to be strong. Newzoo interprets these numbers as a positive sign for the future. “It illustrates that global growth is still, for a large part, fuelled by mature markets contrary to some recent reports about a saturated mobile games market,” said Newzoo’s Emma McDonald.

Newzoo’s report is careful to point out that mobile game spending patterns are not that dissimilar from console and PC game spending. “The share of spenders on smartphone and tablet games are steadily growing closer to that of console and PC games,” noted McDonald. “This comes as a surprise to some due to the common misunderstanding that a pay-upfront business model gives a 100 percent player/spender ratio. In the case of console gamers in the US, UK, Germany and France for instance, 67 percent of all Console gamers and 59 percent of all MMO/MOBA gamers spend money on games. For mobile games, this share has increased from 36 percent to 46 percent when comparing 2012 and 2014. Monthly single digit conversion rates of individual games are often misinterpreted as share of mobile gamers that spends money.”

This is a key revelation, showing that the revenue potential from mobile games has yet to be fully realized. That’s not surprising, really considering the relative youth of the mobile game market (really, only the last 7 years as a significant segment) and the newness of the business models being used. While can take a year or more to build a top mobile game these days, it can take years to refine and test new business models — and new business models with variations are still being created. When 95 percent of your audience isn’t making you any money, that should be seen as an opportunity of enormous proportions.

Newzoo’s report showcases an often overlooked competitor in the mobile game market: Amazon. Amazon has its own app store that’s separate from Google’s, and thus it’s sometimes overlooked when people are reviewing the market. Amazon also makes a habit of not announcing its hardware sales, so we have no precise numbers directly from the company as to the number of Kindle Fire tablets that have been sold, or Amazon Fire TV consoles (and now the Fire Stick). “While the world focuses on the battle between iOS and Google Play, the report shows that it is Amazon that reaches the most valuable gamer,” McDonald said. “A closer look at spending behaviour per app store in the US, UK, Germany & France, not only reveals large absolute gamer numbers but, more importantly, shows that gamers using the Amazon Appstore are the most likely to spend money.”

That’s a highly desirable audience to attract, and it’s particularly interesting that Amazon device owners are more likely to spend money, given that Amazon devices are sold at a very low cost compared to leading tablets like the Samsung Galaxy. This is perhaps due to the efficiency at which Amazon uses its control of the platform to market games, which is of course one of the key reasons Amazon has entered the hardware market. The company isn’t making a big profit from tablets, but it’s intent on getting those tablets into as many hands as possible because they are a wonderful shopping platform for everything else Amazon sells.

McDonald notes the “These gamers also have a high share of big spenders, characteristic for tablets such as Amazon’s most popular devices: the Fire Tablets. Combined with its more family-oriented demographics, the opportunity presented by Amazon might be largely underestimated. This suggests that developers should shift marketing resources towards the Amazon Appstore.” If you are already creating an Android version of your game, it seems like an obvious move to add the Amazon app store to your development targets.

Newzoo also profiled the average game spender, which is critical to maximizing the revenue potentital of your mobile game. “The majority of (big) spenders on mobile in the US and Western Europe are male and have kids,” said McDonald. “For men, the share of spenders rises with age, while for women it drops. On average one in five mobile spenders is a man older than 35 and spenders are most likely to have a full-time job and a large income.” That part shouldn’t be surprising, since people with more money are more likely to spend it.

The report showed the influence of children on mobile game spending. “More than a third of mobile spenders play together with their children regularly and spend a large share of their game budget on their kids,” McDonald said. “Mobile spenders do a lot more shopping, are more active on Twitter and Google+ and have a distinct preference for certain mobile service providers. In-depth profiling of spenders illustrates that this is a valuable target audience also outside of their game spending behaviour.” That’s excellent news for game developers seeking to bring advertisers into their revenue mix.

The Newzoo report provides some interesting details to help flesh out a picture of the mobile gaming market. This next year looks to be another solid year of growth, change and opportunity in the mobile game market, and it’s important to keep up with the latest information about the market to make the most of what lies ahead.

This Week’s [a]list Jobs – December 17

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[a]listdaily is your source for the hottest job openings for senior management and marketing in games, entertainment and social media. Check here every Wednesday for the latest openings.

Procrastination is the bane of productivity. Here’s the easiest way to get back on track.

Here are this week’s [a]list jobs:

For last week’s [a]list jobs, click here. Have a position you’d like to place with us Email us at pr@ayzenberg.com.

Five Console Gaming Trends To Watch In 2015

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Console gaming has entered a new generation of devices, the eighth according to NPD. We enter 2015 with more than a year’s availability for the PlayStation 4 and the Xbox One, and the Wii U has been out for more than two years. So far, the launch of a new generation of consoles has seen a complete shuffling of roles. For the last generation, Nintendo was the clear leader with the Wii, with over 100 million consoles sold; the Xbox 360 and the PS3 ended up in roughly a tie after the Xbox 360’s early lead (83.7 million Xbox 360 consoles, 80 million PS3 consoles). This time, Sony is clearly leading with 13.5 million PlayStation 4 consoles sold, with Microsoft in second place at 10.5 million Xbox Ones and the Wii U trailing with 7.6 million consoles sold.

Still, NPD noted in its most recent report that the Xbox One and PS4 together are well ahead of the last generation of consoles at the same point in their lifecycle. What’s lagging behind is retail sales of the software, and while digital sales are helping, there’s still a nagging deficit. One good indivator of what’s going on this year is to note that for the third straight year in a row, the latest Call of Duty title has sold fewer units than the previous year — and yet it’s still the best-selling console title of the year.

So it’s with this landscape in mind that console game publishers and industry observers are looking at 2015 to see what the new year will bring. The [a]listdaily offers some insight into the important trends in the console game business for 2015, and what you can expect to see. Many decisions will have to be made in the new year, and these are the important trends to keep in mind as you help shape the game industry’s future.

More Downloadable Content Than Ever Before
When the last generation of consoles became the first to expect an Internet connection, the concept of downloadable content for console games really began to take off. It seemed like a natural idea: Add a few maps, or some levels, or some other form of content to an existing game as a simple download for a low price. Best of all, the cost of goods was gone, and no pesky retail discount need get in the way of reaping maximum profits. So a few games began to get the occasional piece of downloadable content or DLC.

Now the situation has changed. It’s a rare game, at least for Sony and Microsoft platforms, that doesn’t have DLC of some kind. Most major titles ship with additional DLC available, either as a free exclusive for a retailer, or even some additional content you can buy right away. DLC is planned for years advance, and you can expect new content to drop at least quarterly, perhaps bimonthly – and monthly in some cases.

We’ll see this trend accelerate as publishers look to extract more money from fans without raising the retail price of the basic game. Expect more different types of DLC, and a variety of price points. We’re now seeing “season passes” being sold to the DLC for the next year, and there will probably be more experimentation with pricing, content, and marketing to find the optimum mix.

This will have an effect on hard drive space, though. While 500 GB may have seemed like a lot, it’s quickly going to fill up. Microsoft has already introduced a 1 TB Xbox One, and we can expect to see other models of consoles appear with higher storage. Add-on drives may get a major push by console makers in order to make more DLC sales possible.

More Price Erosion
GameStop president Tony Bartel was right to warn that bundling games with consoles may negatively impact customer’s willingness to pay full retail for games. But that’s not the only factor at play. PlayStation Plus gave away over $1300 worth of games last year for a $50 subscription, and Xbox Live Gold gave away over $500 worth of games. More and more terrific indie games are appearing on consoles with price points in the $10 to $20 range. All of this has the effect of making gamers wary of paying $60 for a new game – why spend top dollar when there are plenty of fun alternatives for far less, or even for free

That’s not the only source for price erosion in console gaming. Many top PC online games are free with terrific quality, like League of Legends. Free-to-play games already have a beachhead on consoles (like Warframe) and we’ll see more of those appear. The vast and growing array of mobile games are amost all free-to-play, and they have the added advantage of being portable as well. All of this makes it harder to justify the $60 price point for new console games, forcing them to be higher quality with better marketing or risk lower sales.

More Mobile Influence On Console Games
Now that mobile games have become the industry’s largest sector, it’s not hard to understand why this fact will influence console games. This influence has already been happening. For instance, mobile games have to get you playing quickly and engage you rapidly, otherwise you’re onto the next game with a quick tap. This is influencing console games to get you up and playing faster – those lengthy 15 or 20 minute intro videos and hour-long tutorial levels are looking pretty slow and dated. Expect console games to strive harder to get players into the action as quickly as possible.

We’re also going to see more mobile companion apps that link into console games, at least on the PlayStation 4 and Xbox One. Other than sheer graphics horsepower, that’s a key differentiating feature of the new consoles that designers have yet to fully explore. Expect that some sort of mobile companion app will become standard for any major console game release, and possibly stand-alone games that connect with the console games in some way.

More Digital Sales
It’s not just DLC that publishers will be pushing in their quest for more revenue and profits. Full digital game downloads are now not only possible, they are being marketed with increasing frequency for the newest consoles. Publishers are already reporting digital full game sales at anywhere from 10 percent to 20 percent of the retail sales, and we can expect that number to rise. This will tie in with other trends, as the temptation to discount becomes stronger (why not There’s no cost of goods, and what matters is overall revenue, right ) and continues the atmosphere of price erosion and the pressure to add more storage space.

The Continuing AAA Struggle
All of these trends continue to put pressure on the top AAA console games to perform. Budgets are rising, and the time it takes to create these games is still two to three years despite the increasing power of the tools available. That’s partly because publishers feel the need to put ever more content into these games, and expand the range of what players can do in the games, in order to make sure each game is going to be a hit.

Thus investment in each AAA title climbs, and so does the risk. When you extend the trend lines, the end result isn’t pretty. At some point something has to give. What seems logical is that, like blockbuster movies, some brands will be able to carry a huge investment of time and money and make it back with a high level of assurance. Smaller brands, and new IP, will get even riskier if they are expected to have the same sort of budget. Publishers may start looking at smaller size projects, sold only digitally for $20 to $30, than can be created with far lower investment. Then, if it succeeds, produce more content. If it fails, shrug and move on to the next title.

The console market hay not get any larger than the last generation, but publishers are certainly looking to make it at least as profitable as the last generation. When we get the results in from this holiday quarter, we will have some idea of how well publishers are succeeding in reaching that goal.

CREATIVE: Get Behind The Wheel Of Honda’s Civic Type R With Xbox One

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Honda has teamed up with Microsoft Advertising to create a lap trial around the world famous Nürburgring through Microsoft’s Xbox One as a track in the game Forza Motorsport 5. The whole thing is to promote the Civic Type R, which Honda recently showcased in a beautiful campaign on their YouTube page.

Users record and share their fastest times using Xbox Upload. The whole competition runs until the end of the month where 10 winners will be chosen and featured in the next video.

 

Trends In Chinese Game Market Revealed

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The Chinese gaming market has certainly seen a huge increase over the past year, between the announcement of console launches for both PlayStation 4 and Xbox One, the growth in the mobile gaming market and the potential to expand the market even further. That said, there’s still some things that can be learned from the six trends that have emerged from the market, according to Tech In Asia. We’ve broken them down in brief below, including both positives and negatives.

There was a growth in mobile gaming, but not profits

Although it slowed down a bit leading into the second half of the year, the country’s mobile market did show an increasing growth rate, and should expand even further with the introduction of new companies, products and services next year.

That said, the market still has room in terms of trying to increase its revenue. According to the report, a number of China’s most popular mobile games actually saw lower profits (92 percent), and PC games continue to make a higher revenue, despite the smaller audience. That’s not to say the market is in trouble by any means, but some developers may need to find a way to turn around their misfortunes.

Console releases have come, but didn’t make too big an impact

The Xbox One has officially launched in China, and the PlayStation 4 isn’t too far behind, ready to arrive in early next year.

While this does introduce the potential of a new audience, most gamers “don’t care about consoles,” according to the report. This is mainly due to restrictive software (based on Chinese government censors) as well as troublesome region locking, preventing the importing of more popular titles like Grand Theft Auto V. So far, only 100,000 Xbox Ones have been pre-ordered, and the numbers aren’t showing any increase that price point, despite a recent drop of $80. It appears the PC continues to dominate on this front.

eSports growth is here, but without a winning streak

eSports continue to bloom in China, as both viewership and attendance for events were on the rise. In addition, teams are starting to show dominance in certain games, such as winning the Dota 2 International championship in Seattle earlier this year.

However, there is still progress to be made when it comes to winning other games. Chinese tournament players still can’t win at its most popular game League of Legends. As a result, some teams have gone as far as trying to woo better Korean players to their squads, in an effort to try and turn things around.

Streaming picks up, but only for a select few

Game streaming definitely picked up this year, and eCommerce with it, as a number of professional players managed to rake in the cash based on their consistent game sessions. For instance, recently retired League of Legends player Misaya actually managed to make $1.5 million per year based on both his streaming and tie-in shops.

That said, it’s a service that doesn’t quite benefit everyone, but rather those who are savvy in the streaming game and know how to market themselves properly. This could possibly change with 2015, especially with Twitch teaming up with streamers to offer their own specialty shops, but for now, it appears to be restricted to a lucky few.

Virtual Reality taking off, but when is it releasing

Virtual reality made a huge impact this year with the introduction of such gear as Samsung’s VR headset, Oculus’ Rift headset and Sony’s forthcoming Project Morpheus. In addition, a company called ANTVR, among others, are looking to get into the virtual reality game in China as well.

However, there’s a catch – none of them have been released yet. With only a few prototypes available and a handful of impressive tech demos, it hasn’t caught fire like many people thought it would. This, again, could change next year with some mainstream releases, but, for now, it seems more like a “hardcore” interest than a general market.

PC Games are on the rise, but still not quite best-sellers

Finally, with the market pre-determined based upon “freemium” releases or Blizzard titles to make a profit, many titles managed to break the mold this year with their own set-ups. Guild Wars 2 is a shining example of this, using pay-up-front-based monetization, and it managed to sell half a million pre-orders before its release. In addition, Square Enix’s Final Fantasy XIV made a dent as well, even though it’s based on a subscription service.

That said, China’s mainstream PC hits remained that way, with League of Legends, CrossFire and Dungeon Fighter continuing to dominate in the market, all based on a free-to-play system. This is mainly due to the marketing savvy of Tencent, although their content certainly attracted a huge audience as well.

Could this change in 2015 Perhaps, depending on PC content. For now, though, it’s still business as usual.

Microsoft May Stream Xbox Games

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With streaming video games becoming more common these days, especially with OnLive’s services and Sony’s PlayStation Now up and running on consoles, it’s pretty likely we’re going to see more companies jumping on board. And who’s up next? Perhaps Microsoft.

ZDNet has reported that Microsoft is hard at work on a new cloud-based streaming service called “Arcadia,” which would enable users to stream both video games and applications through a number of devices. The system would be based upon the company’s own Azure infrastructure, and is being worked on by a technological team within the company’s Operating Systems Group. The Arcadia codename may refer a United Earth Government colony in the Halo game, which perhaps hints at how this technology might be used.

This would replace the previously announced “Rio” technology, which the company hinted at during a meeting earlier this year. At that time, the company was about to get a demonstration of its Xbox 360 game Halo 4 up and running smoothly on a Windows device, while interacting with an Xbox 360 controller with very little problem.

With the service, Microsoft could effectively introduce the opportunity to provide backwards compatibility with the Xbox One console, similar to what Sony is doing now with its Gaikai-based PlayStation Now technology on the PlayStation 4. However, according to ZDNet, it’s capable of more than that.

Along with games, Arcadia could also make use of applications as well, enabling Windows and Windows Phone consumers to run Android apps and games without needing to download them physically to their devices. This would bring Android compatibility to Windows mobile devices, but it’s not known whether this will move forward even if it’s technically possible.

Microsoft hinted at a full-fledged cloud-based service long ago with a recent job posting in its Microsoft Careers section {link no longer active}, indicating that it was looking for a senior software engineer savvy in “non-MS platform (Android, iOS) experience.” No word yet on if a hire was made, but it appears that Microsoft is making progress. This raises the interesting possibility that game (or app) streaming could occur on iOS or Android devices as well as on Xbox consoles and Windows mobile devices and PCs. This appears to be more of a strategic business decision that Microsoft has to make, rather than one constrained by technology.

More information is likely to come next year sometime – perhaps even at E3, when Microsoft might surprise its growing Xbox One consumer audience with the announcement of the service, aimed primarily at games. We’ll see what the future holds over the next few months…