iOS users spend 75% more than android users.

The_Gamesalad_Guru

Been a while since I started a thread so I had an observation I've been watching for a while on the forum and thought I'd start a discussion. I have, over the past few months, notice many people only publishing their games to android. It's very old news that iOS users spend way more money on apps and games than android users. I read an article just two days ago about the metrics from App Annie on last years statistics, which is I guess what put this together in my mind. Not only does iOS produce more revenue but the gap between android is growing not shrinking as one would expect even a marginal decline as android has more app downloads.

When looking to sell anything your target audience needs to have DISPOSABLE income. Selling to people with extra money is always easier than convincing someone on a limited budget to buy you product, especially when that product is not a necessity.

When I started making games, nearly all were pay to play. As the trends switched to ads, most independent developers saw their revenue decline, as ads are a terrible way to make money unless you have a huge audience. I think Apple's two recent decisions are an indicator of a change coming in monetizing app/games.

1. Apple decision to allow ad blocking software.
2. Apple decision to dump iAds.

I myself have never liked ads. With these new indicators I've rethought my strategy. We have a couple new games coming out this year and so we are switching back to pay to play. I am also going to use our free apps to push our new games and vice versa. I am also considering bundling. X numbers of apps all for one reduced price.

Okay let's discuss.

Chunkypixels

Im not sure where your getting your data from or how accurate it is, as everything I'm reading is saying that Android has finally overtaken iOS revenue. However its still true that iOS users pay on average more than Android users... but theres just a much larger number of Android devices out there.

Agree with the sentiments regarding Ads and Freemium games though... hate them, and prefer paid apps. Ive been mulling over whether to just remove all ads from my games... I was reluctant to try them in the first place... and I think it just adds extra hassle to the development and design of games. To be honest, Ive been considering whether to just get out of mobile in general, and get back to doing console and PC work, as the whole mobile games industry has turned on its head, and doesn't make much sense to me anymore.

Ive recently landed a decent 3 month contract doing art for a Nintendo 3DS game, which triggered me looking into self publishing games on the 3DS and Wii U using Unity... and it seems a much better investment of time and money, compared to the lottery of mobile. The Nintendo user base doesn't expect things for free, and its a much more stable eco-system.... so is something Im exploring and costing up.

I still have around 25 unfinished/near complete iOS/Android games in GameSalad though, so still need to get a load of those finished and out of the door... but yup, Ive come to the conclusion that they'll either be completely free or paid apps, with no adverts. I want to concentrate my efforts on making better games, not on how to make the advertising work.

Edit: Regarding Apples decision with iAds... I don't think its anything to do with Apple predicting the end of Advertising for games and apps. Its more a case of them accepting that they tried to muscle in on a market, and failed. They tried to move in on the advertising industry, and pitched iAds as some revolutionary new system, that they charged a high premium for... when in reality it was just a banner ad system. It gained traction for a short while, as it was new, and everything Apple did at the time was seen to be untouchable. But the service never evolved, and never proved to be revolutionary, so quickly faltered and lost interest from the major advertisers that were originally involved. It just doesn't make money for Apple anymore..so they're killing it.

A possible side effect of that is that they're probably going to try and discourage or outright stop other ad systems on their apps... as why let other companies make money from ads in apps on their store, and Apple not get their cut... thus possibly driving the App Store back in the direction of a paid app economy... which is a good side effect if you ask me

But yup..its not Apple showing insight... its Apple realising they failed at something, so trying to force change so that they don't lose out, or other companies gain from their failure.

unbeatenpixel

@Chunkypixels said:
Im not sure where your getting your data from or how accurate it is, as everything I'm reading is saying that Android has finally overtaken iOS revenue.

http://www.dailymail.co.uk/sciencetech/article-3410945/Android-owners-cheapskates-Google-s-Android-100-downloads-Apple-s-iOS-App-Store-generated-75-revenue.html?ITO=applenews

Not true, still ios revenue is bigger than android.

BigDave

yeah my apps performed around 30% better on iOS in-app wise as well as the ads.
Its a much more valuable target audience since iOS is bought by people that spend money rather than going for the cheap options. (not discriminating Android tough I know they have equal models and maybe even more hardware power)

I do not think the paid model comes back to the mobile market, retro-indies try and apple is trying (featuring more paid apps) and will continue to try, but I don't see it coming.

Its too late the new generation is so different on how they spend money now. I would rather suggest to make good free2 play games with in-apps that excite the players rather than make them feel like they really need that to continue playing.

Except your candy crush and make hearts/insert coin based game - slot machine.
I guess that works too..

Armelline

@Chunkypixels said:
Im not sure where your getting your data from or how accurate it is, as everything I'm reading is saying that Android has finally overtaken iOS revenue. However its still true that iOS users pay on average more than Android users... but theres just a much larger number of Android devices out there.

Afraid the stats agree with @Lost_Oasis_Games. Another source:

http://appleinsider.com/articles/16/01/20/apple-increases-ios-app-store-revenue-lead-now-earns-75-more-than-androids-google-play-

Throw in the comparatively massive piracy on Android, and it's a much less appealing prospect:

http://venturebeat.com/2015/01/05/monument-valley-developer-only-5-of-android-installs-were-paid-for/

And Apple isn't ditching iAd per se, just reducing their role in it.

imjustmike

The reason so many opt for free+ads is because it's a much, much easier thing to convince a user to download a free game than to get them to pay. If you're a big name developer, a publisher that can pay for ads or are REALLY good at art / game design, then it's easier to get people to pay for your game.

But there are thousands of games out there - why will people pay for yours when they can get loads for free. To a lot of developers, making a little bit of money from ads seems to make more sense than hoping that people will buy your game and don't.

Hopscotch

A quick search on AppAnnie or Flurry reports will also confirm @Lost_Oasis_Games 's statement. Heck, even Kindle does better than Android for me.

@Chunkypixels, you call it "A possible side effect". I don't think Apple makes decisions like this without considering every outcome and ramification. I also think that the two points @Lost_Oasis_Games brings are a passive aggressive strategy from Apple to turn the tide back to paid apps.

A third point to corroborate this, just look at the ever increasing number of paid apps which Apple features on the Appstore. Currently 59%. Added to this, some of the remaining free apps rely on IAPs only.

The_Gamesalad_Guru

Yes, you guys quoted to of the articles I recently read. My mistake for not adding them as links. I had this in my head and started the thread and had to be out the door. @Hopscotch I totally agree, Apple sees the ads as a trend that needs changing. @bigdave I agree with you that the trend is IAP but not every game type works in that model. To me very traditional type of genres are getting neglected. I read an article a couple weeks back about how pathetic most if not all mobile platformer games are. The consensus was, that genre was ripe for someone to figure out how to do it well. @Chunkypixels I agree with you on console games, which is why my youngest, a computer science game design major is doing all his development for his portfolio as PC games. Both my sons are big PC gamers and have been on The steam community for years now.

@bigdave I do disagree about ads not dying thought. Products streams need revenue. Ads do not deliver even close. What will happen is developers will move into the paying markets and leave mobile. This would be what I'd call killing the parasite by killing the host. If people won't pay for games they will kill the market and the field and options of titles will narrow. It takes time for this effect to happen but it's like a train, once you get it going, it's a fairly quick descent.

Also: my comment as to Android and Apple was this. Since porting in gamesalad is really easy in the scheme of things, why would you neglect a lucrative market completely? That was my point.

BigDave

@Lost_Oasis_Games
i see. But I still think its too late but lets see maybe not. We raised a generation with free2play.
For me apples approach vs what they co-created is like trying to extinguish a forest fire with a bucket of water, even tough they have a big bucket.

maybe they can pull it through maybe not - maybe android follows up and also start featuring paid more again. Amazon tough just launched its own Advertising service which enables to monetise cross platform even too apple.

About your point about neglecting a market i did not make any statement related to it and I totally agree there.

Apple Users are more valuable but why not also make Android/Amazon versions. It paid a big part of my rent the couple years.

Overall I just feel a big excitement on your side since you seem to have a big resistance vs ads / in-apps. (they work great together in my opnion)
And I want to say Ads have their place, banners are not intrusive and can trigger the in-app to remove them if you really don't want them. Interstitials can be used carefully between every xth level change. (rewarded videos ..)

But I also see a lot of games that are featured being totally shallow because of their monetisation/ad scheme.

Man I think I just wanna say "don't hate them too much, they have their place"
but right now they are to strong, agreed.

I gonna play heroes of the storm now.
(without ads, free2play with in-apps..i never bough anything yet)

BigDave

@Lost_Oasis_Games
http://www.pocketgamer.biz/comment-and-opinion/62338/premium-mobile-games/?utm_content=buffer06cfb&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

oha

Hopscotch

No @BigDave, not "oha".

Using the Top Grossing list, means you are not comparing apples to apples. I think most indies are realistic enough not to try and compete or compare themselves with a Rovio, King or Supercell. Realistic enough to know that they are not building a game that has a potential retention time of a year or more, where IAPs really bear fruit.

The points made in the article are true, but from the perspective of a team with 50+ developers and a marketing budget of 10 mil+.

Only at the end does the article relativise the situation.

For a large game company, the strategy is clear: develop only F2P games.
For a small indie, there might still be a niche for premium.

The_Gamesalad_Guru

@Hopscotch said:
No @BigDave, not "oha".

Using the Top Grossing list, means you are not comparing apples to apples. I think most indies are realistic enough not to try and compete or compare themselves with a Rovio, King or Supercell. Realistic enough to know that they are not building a game that has a potential retention time of a year or more, where IAPs really bear fruit.

The points made in the article are true, but from the perspective of a team with 50+ developers and a marketing budget of 10 mil+.

Only at the end does the article relativise the situation.

For a large game company, the strategy is clear: develop only F2P games.
For a small indie, there might still be a niche for premium.

This is my point exactly. Which if you read carefully my post above I gave the outcome for small mobile developers like us and that is death by a thousand pinpricks. There just won't be many indi titles on mobile. This is why places like gamesalad have high turnover. Most people are excited untill they realize how much hard work it is to earn peanuts. They come thinking they have the best idea and that energizes them enough to spend months building a game and then they release and soon the reality sets in and then off into the night. Most of the regulars here make money doing client work more than from their games, that's why they keep going. Eventually the bloom comes off the rose, like the gold rush and then bang overnight ghost town. Same tune different song, this isn't the first industry to face this before. Premium may never come back but with that neither will small developers.

PhilipCC

@Lost_Oasis_Games , @Chunkypixels , @BigDave, @Hopscotch , @Armelline and @onelasttime

I think indie developers who put ads in their games are just giving away their users to the big studios.

I have observed that most common type of ads that you will see in freemium games are ads for games from the big studios.

The type of ads I mostly find in free games from the big studios are ads for that studio's other games.

If you download a freemium game from an indie developer you will be plied with ads for free games from the big studios that are well produced, market researched and of such quality that few indie developers could ever match. Do you think your users are tempted? You bet they are!

The big studios must find it hilarious that the indies that put adds in their games are providing them with a massive advertising channel of a countless number of potential users looking free quality games.

If you ran a restaurant would you put the name of your business on the door and sell the window space, the wall space and roof space for advertising from your competitors? NFW!

BigDave

@PhilipCC
i see your point but thats how the market works right now
A big studio is willing to pay up 1.6 to 5 Dollar for a single user, a user which would have been worth 0.05 to 0.30 Dollar in my game to me.

So it sounds like a good deal to me.

Else you would need a huge live time value game with in-apps around min. $2 to $10 selling atleast 1 in-app per user to compete with that monetisation model. And a normal in-app conversion is somewhere around 1% even the big studios have maybe values around 1-3%. But they go on mass with huge budgets and hunt the whales with even bigger in-apps $70 which no one will pay in our little indie games unless your fully server covered and have content for half a year. Which we don't have.

Reality is your indie game can't compete with them you are not their competition your their partner.