Massive development costs and declining revenues are forcing the gaming app industry to rethink its business model.
If you own a smartphone, chances are you’ve downloaded at least one mobile gaming app. From classic board games like Chess and Checkers, to first-person shooters like Call of Duty: Strike Team, the gaming app universe spans a wide spectrum. In fact, gaming apps have become so popular that they account for 16% of total gaming revenue worldwide, according to Statista.
Despite the wide range of mobile gaming apps on the market, almost all of them share two things in common: the development is very costly, and most are available to download for free. This trend has led mobile gaming app developers to rely on advertising revenue and in-app purchases to make up for the initial development costs. While this revenue stream has been somewhat successful in the past, industry experts argue that the current business model is unsustainable and will require app developers to formulate new revenue strategies in order to remain competitive.
A Change on the Horizon
The mobile app market, which once experienced unfettered growth, is beginning to slow down. According to an article by David Bolton for Arc, the number of mobile app installs will see single digit growth over the next four years. Citing a detailed report by the International Data Corporation’s "Worldwide Mobile Applications Forecast 2016-2020", Bolton quotes top executives who believe that new revenue strategies are on the horizon for mobile app developers and advertisers.
Lending support to this claim, a recent LinkedIn Pulse article by Bozena Rezab, CEO/Co-founder of Gamee, predicts major changes on the horizon for gaming apps. “The business model is about to change,” Rezab writes. “It seems there is no way back to paid mobile games at this moment, as only a small share of gamers are ready to pay for a game when downloading.” Furthermore, Rezab believes that gaming app advertisers are sacrificing user experience by employing the use of in-app video advertising. Rezab writes, “Users end up with so called rewarded video ads that seem to perform well, however, they create a very annoying experience for gamers…”
So what does the future gaming app model look like? According to Rezab, the future of gaming apps starts with putting the gamer first. Specifically, he advocates for keeping games free but integrating native ads and sponsored content in the apps, similar to how social media networks operate. Rezab explains how this approach fosters user retention: “This means that games are all free, there is nothing pushing gamers to in-app purchases, and there are no super-annoying video ads — the ads are relevant, in a majority of times lead to another gaming experience.”
Planning For The Future
While the gaming app industry is certainly evolving, one aspect of the mobile app world has remained unchanged: development costs. Profitability is an important consideration for mobile gaming app developers; yet many sink substantial dollars in developing a mobile app from scratch, which can cost anywhere from $6,453 to $150,000, according to astegic.
These initial costs have led gaming app entrepreneurs to do-it-yourself app development platforms like AppMakr, which creates highly functional and customizable apps at a fraction of the cost. AppMakr gives users with zero coding experience the ability to produce engaging apps that are available to both Android and iPhone users. But if coding’s your thing, AppMakr has you covered: it offers amateur and professional coders alike an HTML-5 feature that allows for complete customization of your mobile gaming experience.
By employing the help of AppMakr, you won’t just be reducing initial development costs — you’ll also be freeing up time and money to focus on your revenue strategy. So what are you waiting for? Get started with AppMakr today.
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