India is clearly the next untapped market for games. I’ve heard a lot of interesting figures lately, but the market is dominated in the mobile space by Android at around 73 percent of the addressable market. I’ve also heard that India is also more accustomed to subscription based games and micro-transactions are something they are getting more comfortable with, so expect micro-transaction models to grow. Other interesting data includes:
The market for Digital Games in India is $853.9 Million in 2015
Mobile is 49 percent of the market, or around $416 Million today
Mobile is growing at a 64 percent growth rate year-over-year
By 2015, the mobile market for games in India is expected to be around $832 Million
There are approximately 185 Million mobile gamers in India in 2015
ARPPU in India for mobile games in October 2015 was $13.07 with a 1.53 percent conversion rate from player to payer
Digital console is 2.7% of the market today
MMO games are 28 percent of the market, with Free-to-Play MMO games comprising 21 percent of the total market
According to the new “Mobile Gaming Social Motivations” study on U.S. mobile gamers:
U.S. mobile gamers are typically playing more than two games per month, and spending an average of $4.58 each per month
Males spend $5.68 per month on average
Women spend $3.49 per month on average
Super Whales, or those that spend over $50 per month on games, spend on average about $108 per month
This group only constitutes 1% of the sample size, but Super Whales contribute nearly 29% to the mobile gaming revenue
Male U.S. mobile gamers spend almost twice as much on games monthly than female mobile gamers
Whales drive the bulk of revenues – 10% of players considered “High Spenders” (spending over $10 per month) make up 66 percent of the revenue from mobile gaming
Those playing 10 hours per week spent over 3X the average spender in primarily strategy, combat, RPG, action and casino games
Mobile gamers who play primarily on iOS devices tend to spend more than their Android counterparts; however, the greatest spending and game downloading comes from mobile gamers who play on both platforms
According to Newzoo, the top 100 countries in the world by game revenue includes:
1.7 billion gamers
$81.5 billion in revenue for 2014 this year
The US is the top country for game revenue in 2014 at $20.5 billion
Japan monetizes the most per person online at $120.20
I ran the numbers differently than they did. You can see the ranks of game revenue by country on the left, but I chose to look at it differently. I divided the revenue by the online population of each country. This gave me the RPPO (Revenue Per Person Online) – since I figure this is a good gauge of technology and that these people are also likely playing on mobile devices. Then I ran the ARPD (Average Revenue Per Day) based on that number divided by 365. It results in some interesting data.
For me, this is most interesting for geographic (soft) launches of mobile games. If we can look at how a game monetizes in specific country or two, we can make a more educated guess about how it might monetize given the propensity to spend per country. Of course it isn’t flawless, but it sure does give an interesting set of benchmarks to measure against. Here’s the full list.
I was looking for some data on Cost Per Install (CPI) for games in Japan and a friend of mine who runs a large studio there sent me this link, a blog post by InMobi that I missed in January. It basically sets out the relative cost of mobile installs worldwide. While it isn’t exclusive to games, we can use it to decipher regional costs. To get started, I went over to one of my favorite CPI sites, MobPartner, to check out their scrolling list of live CPI transactions. If you like to watch CPI bidding, it’s the best place to watch the action. Here are a couple pics to illustrate the CPIs today:
As you can see, Empire: Four Kingdoms is buying a lot of installs and they are ranging in the U.S. between $1.90 and $2.40 and hitting $3.05 in the U.K. I would guess the higher priced acquisition in the U.S. is on a better performing network, or more proven ad channel that provides players that either convert a bit higher, or have a higher Lifetime Value (LTV). You need to balance cost with volume in any acquisition campaign, but that’s probably obvious.
So now let’s dig into the InMobi data. We know that their numbers are not just games, so we need to create a reference point.
The 174 is a number from InMobi on the relative cost per install in the U.K. related to the U.S. Since we know what Goodgame Studios is paying for their users we know the numbers in bold to be true. The InMobi numbers don’t quite match up yet. The difference is 160.5 instead of 174, which is roughly 92.2 percent of the difference. I broke down the numbers with the Relative CPI (R CPI), the Adjusted Relative CPI (AR CPI) and came up with the Actual Game CPI (AG CPI) below. It looks about right to me in terms of acquisition costs. I hope it’s helpful for you too.
In 2012, the cost per install on iOS increased 22% from the beginning to the end of the year (around $2)
The average conversion rate (from a non-spending to a spending user) in October was 4.68%
The average revenue per paying user for mobile in the US is $21.45
CPI is expected to be between $7-$8 this holiday season
All this is to say that acquisition costs are now greater than the LTV (Lifetime Value) of the acquired user. To combat this, mobile game developers should look more deeply at cross-promotional opportunities with other developers of similar titles. Exploring acquisition from a rev share perspective should be more cost effective than buying them in the open market and in our experience, the engagement is higher with users acquired through cross-promotions.
The Finnish Game Industry is growing at a 39.5 percent growth rate because of some amazing game developers (SuperCell, Rovio, Remedy, (Among others)).
Below is an updated presentation on the market in Finland as well as an outline of opportunities in Finland for anyone looking to start an office there. Of particular note (although not in this presentation) is how Ilkka Paananen and the SuperCell team have deliberately chosen to ensure Finland receives the taxes it is due by not setting up operations in Ireland, the Netherlands Antilles and other tax havens, in order to pay what they owe their country. I applaud this approach to industry development and hope it serves as an example to other companies and countries on how a stand-up company deals with success and helps to build both an ecosystem and industry within a country.
My opinion is that with massive profits and mainstream appeal for many of its games, the Finnish game industry is setup in a way to pay for the development of games that can reach the global audience, but also ensure the industry’s ongoing success. It’s morally righteous and reverent to the local university system (as well as previous commercial entities such as Nokia) which have helped build it, and it appreciates the fact that the universities will continue to be a major part of its growth in the future.
In a world that is often short-sighted, Finland is a leader and their approach is a brilliant example in the post-Montreal economic development era.