Our team recently headed to Casual Connect, one of the gaming industry’s premier summits. Woven throughout discussions at the conference was the topic of mobile gaming. An industry that was nearly non-existent three years ago, mobile gaming has not only changed the gaming industry, it’s fueled new opportunities for marketers and advertisers to reach and connect with consumers through an incredibly immersive channel. According to mobile analytics company Flurry, of the 77 minutes consumers spend using mobile apps on their smartphones every day, 31% of that time (24 minutes) is spent on mobile gaming apps.
The Casual Games Association, organizer of Casual Connect, provides resources and a community for those creating games for the mass market consumer. Their recent report Mobile Gaming 2012: Casual Games Sector Report breaks down how mobile games monetize through methods like in-app purchases, paid downloads, subscriptions, and in-game advertisements. After a brief overview of the smartphone landscape (devices, operating systems and market size), Casual Games organized the report in three sections: “The Players”, “The Payers,” and “Revenue”.
The mobile gaming audience in the United States counts 70 million people, and by 2015 is projected to double to 140 million. Casual Games reports that the average female mobile social gamer is between the ages of 25 and 34 and has an average eCPM (effective cost per thousand impressions) of $12.92. The average male mobile social gamer falls within the same age range, but Casual Games reports a much lower average eCPM of $7.80.
According to the report, between 3.5% and 10% of the free-to-play mobile gaming audience will convert into paying users. In other words, only a subset of users who download a mobile game for free will ultimately pay for in-game purchases or for a game upgrade. This means it’s critical for game developers and publishers to optimize their ad spend from the onset to find and reach monetizing audiences.
Diving deeper into mobile gaming monetization, the report explores various revenue models for mobile games:
- Ad supported
- Microtransactions and virtual goods
- Paid downloads
Between $8 and $15 a month are spent on in-game purchases and downloads. Microtransactions and virtual goods make up 55% of the mobile game revenue model, followed by paid downloads (37%), in-game advertisements (6%), and revenue from other purchases like subscriptions (2%).
Casual Games estimates that by 2013 mobile game revenues will reach $5.54 billion and mobile social specific games will earn $2.77 billion. Geographically, the region that has seen the highest growth in mobile revenue is Asia, followed by North America and Europe. The countries with the highest revenues are Japan and the United States.
Where Facebook Fits
Advertisers must focus on dynamic ways to encourage paid downloads, in-game purchases, and other valuable engagement. Facebook is a prime channel for this, with 230 million people playing games on Facebook in the last month and a reported 543 million people worldwide accessing Facebook from their mobile devices.
Our early results show that Facebook mobile ads for mobile games have been incredibly engaging for users. We have seen clickthrough rates for mobile Sponsored Stories average 12 times higher than clickthrough rates for desktop Sponsored Stories. And when combined with interest targeting, we have seen clickthrough rates on mobile Sponsored Stories cross 2%. We attribute much of this performance success to the ad unit’s inherent social relevancy (for example, a Sponsored Story highlighting that a trusted friend just played a new mobile game) alongside the large screen real-estate these ad units receive in Facebook mobile News Feeds.
The growth of mobile gaming coupled with Facebook’s strong mobile user base and engaging ad units offers a world of opportunities for game developers and publishers looking to acquire users, cross-promote their games, and ultimately monetize their user base.
Have Facebook mobile ads helped drive your mobile game’s growth ad monetization? Let us know in the comments! To learn how Nanigans can help monetize your mobile game, reach out to us today.