BI Intelligence
The mobile gaming app industry is quickly growing. Over the past eight years, developers have flocked to create mobile games as smartphones became a mainstream consumer device. Technological evolutions including faster processors, larger screens, more input points, and better overall graphics capabilities, combined with dropping prices, brought the ability for gaming via smartphone to audiences larger than ever before.
In that growth and through that transition, smartphones as a gaming arena experienced its own evolution. More developers flocked to this medium, and the gaming sections of app stores became saturated. While mobile gaming apps using an up-front paid downloading model, wherein consumers paid a typically nominal fee to download an app, flourished in the early days of mobile gaming, the deluge of apps led to a change in monetization strategy. More apps started using the free-to-play (F2P) model, wherein a consumer can download an app for free, and is then later monetized either via in-app purchases or in-app advertising. Since that transition, most consumers have been conditioned to expect quality mobile gaming apps for little or no cost.
In a new report from BI Intelligence, we examine how the mobile gaming market has been affected by the transition to F2P monetization. We also take a close look at how saturation in the mobile gaming category, combined with the standard F2P model, has led to numerous issues for developers, including spiking marketing costs, the premium on acquiring users who will spend heavily within a game (called whales), and the impact that it's having on mobile gamers who do not spend in-app. The report then identifies innovations in mobile app marketing and engagement that seek to alleviate the issues of F2P and inadequate monetization in the fact of mounting marketing costs.
Here are some key takeaways from the report:
In full, the report:
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