Matomy specializes in delivering performance based results to the mobile app industry and provides app publishers and developers a multichannel gateway to global distribution. Yossi Tarablus is the Marketing Manager of Matomy Media Group. Before Matomy, Yossi worked in Content and Creative for Keshet TV. He was also the Marketing Manager at Atera Networks. Yossi talks about what the Super Bowl mobile game adverts mean for the maturing mobile industry.
The First Mobile Super Bowl – The Year of Mobile Game Ads
Last Sunday, more than 100 million people worldwide watched a battle between the top-two franchises in the game today. I’m not talking about the on-the-field Super Bowl game between the New England Patriots and the Seattle Seahawks. I’m referring to the battle for the No. 1 position on the “Top Grossing” chart of the app stores.
Clash of the Titans
This week marked a historic milestone in the mobile game industry. Three mobile game ads for made their TV debut during Super Bowl XLIX. Two of the games that advertised during the Super Bowl are the top-grossing apps in the industry today: Clash of Clans by Supercell and Game of War: Fire Age by Machine Zone. The third game advertised was uCool’s Heroes Charge, a card battle game that was featured for 15 seconds. The game isn’t in the top-20 app store ranking.
A 30-second Super Bowl ad reportedly cost $4.5 million per 30 seconds of ad time this year. When you add up the numbers it means that Supercell, Machine Zone and uCool spent together about $16 million in advertising time to promote Game of War, Clash of Clans and Heroes Charge, respectively, during this year’s Super Bowl. But that’s not all. Liam Neeson and Kate Upton, who starred in the ads, certainly wouldn’t work for free. The estimated cost of producing these ads is an additional $3 million – $5 million per ad, making it a big financial investment in a single 30-second TV spot. These are huge budgets for a young industry, or is it?
Welcome to the App Bowl
For people in the mobile ad industry, it wasn’t a big surprise that these two mobile titans would go head-to-head during the biggest marketing event of the year. Clash of Clans was the top-grossing mobile game of 2014, according to Superdata. The company estimated recently that the annual revenue from the popular mobile game reached $1.8 billion. Game of War: Fire Age is currently in the No. 2 spot on the top-grossing iOS chart in the US (right after Clash of Clans). In November, Machine Zone launched a $40 million campaign forGame of War: Fire Age starring Kate Upton, who also takes part in the actual game as an avatar.
A Mature Industry
Clash of Clans and Game of War: Fire Age are the top players in the growing mobile games industry. The total revenue from this industry in 2014 topped the $4 billion mark in the US alone — 35% of all revenue emanating from digital games in 2014. In December 2014, revenue from mobile games revenue grew 17% compared to the same month the year before. However, despite the growth in mobile game revenue, the mobile gaming industry is growing at a slower pace. In 2014, overall app usage grew by 76% year-over-year, according to Flurry, but game sessions grew by only 30% compared to 60% the year before. This is a sign that the industry is maturing and slowly becoming saturated.
CPI vs. ARPU — The Real Battle
The mobile games industry is dealing with a growing pain as app stores are becoming more and more crowded with new apps and games every week. CPI costs are rising faster than the growth in ARPU, meaning that game publishers are investing more in getting users that will generate less. If this current trend continues, the small players will suffer. The strong companies will only get stronger and smaller players will be either acquired or go bust. The days of getting a US user for $1 or $2 are long-gone. Supercell and Machine Zone today offer between $6 and $7 for a new US mobile user. That is three times more than it was three years ago. Another sign of maturity for the mobile game industry is an increase in barriers to entry. Small developers need to start thinking in budgets of hundreds of thousands of dollars, maybe even millions of dollars, if they want to play in the big leagues and reach new players via paid acquisition. Companies that cannot afford these budgets will have to be more creative in finding new ways to reach gamers.
Mobile is Here to Stay
Three ads for free-to-play mobile games during the most expensive marketing event of the year mean one thing: Mobile gaming is here to stay. If we consider a Super Bowl TV ad as a young industry’s rite of passage, we can definitely say that in 2015 the mobile gaming industry is not a child anymore.
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Posted: February 16, 2015