Plamee Q&A: Is the Mobile Game Industry Fundamentally Flawed?

When an article entitled ?Mobile Games: A Flawed Industry? was published on MobileDevMemo recently, it didn?t break the Internet ? but, in the small world of mobile gamers, it came close.The article was a manifesto of sorts by Israel-based Michael Velkes, current VP of marketing at?Plamee?and former acquisition director at?Jelly Button Games?(the team behind?Pirate King?s astronomical success).

The gist: If indie developers feel like the deck is stacked against them, they?re right. But that doesn?t mean there?s no way to succeed; you just have to be smarter and more creative to win in this saturated marketplace.The article broke MobileDevMemo?s record for unique views on a guest post. Rovio?s Eric Seufert, who runs the site, says he wasn?t surprised: ?It?s a hot topic?a lot of developers are struggling to make money on mobile. VC funding has more or less dried up and even with big marketing budgets, discovery is difficult,? he says. ?I think a lot of developers get frustrated seeing very simple games like Crossy Road blow up seemingly out of nowhere.?Hoping to dig a little deeper, we caught up with Velkes via Skype in Israel. He told us why sophisticated segmentation is the future of mobile games, and why he thinks indie devs need to stop obsessing about CPIs.What compelled you to write the article?It?s something I?ve been thinking about quite often lately, and trying to put down on paper. It slowly became an article. A lot of game devs have been coming to me and saying, ?Hey, look at my numbers, I?ve been doing well,? and they?re talking only about user acquisition. So I was trying to say, ?Hey guys, UA is important, but don?t only think ?If I can buy, I will grow.? Try and think outside the box, and look at other metrics, because the industry?s maturing and you can find solutions and you can grow and be positive in ROI, even if you haven?t raised $1 million.?You outline a number of different ways mobile game developers can win, from retention optimization to platform partnerships. Are these all strategies you?ve tried yourself?Yes, each point came from a different place in my life. Organic growth, for example, was my strategy in my previous company, Jelly Button Games. We managed to break the organic bubble. We optimized to grow in invites. Then we optimized to grow in Facebook connections. Then we saw that if we had invites from our DAU, we knew that we were going to grow, and then we?d buy any type of CPI for any price just for the growth of the organic because we knew that in the end our eCPI would be low.Editor's note: When reached for comment, Jelly Button Games did not verify the above details.?What do you think is the future of ad monetization in mobile games?As the ecosystem matures, I think there?s one thing users actually want to receive, and indie developers should take it into consideration. That?s rewarded videos on progress in the game. Remember that 95 percent of these players don?t pay, they?re just downloading free-to-play games that they want to enjoy. If they understand that they need to watch the video in order to proceed, and that their time is worth my money, then in the end, everybody?s winning.What else are you bullish about in terms of monetization strategies?Optimizing your in-app purchases. Understanding and segmenting your users so you can give the right price to the right person. Or the right package at the right time. It?s about optimizing per country and per segment, and in the future getting deeper into individual users? behavior and history ? then monetizing them with the right message at the right time. So, for example, if a user opens packages but has never paid, give him the lowest price. If a user is a big whale, give him a great package that?s worthwhile.Is that kind of sophistication something you see already becoming the norm?No, I think it?s mobile games 2.0. People are [still] always thinking about CPI, but it?s such a saturated market, you need to think on a much higher level. That?s the reason you see, what, 50 successful companies out of 500,000 developers? They?re the ones that are already doing this. Think about it: What is so different about Candy Crush than other games? It?s the data and segmentation and understanding of the different users from the beginning.A lot of devs found your tip about seeking out new marketplaces especially helpful. Why do you urge developers to think beyond Google and iOS?Everyone talks about iOS and Google all the time, but you won?t always get a feature on Apple or Google. Platforms like Amazon, Vibe and Windows phone, though, are looking for good content like ours. They?ll run after you. They?ll give you features. And when your goal is organic growth, why not add as many free players as you can get, even if it?s 5,000 or 10,000 installs a month? But do it fast, because these platforms will be saturated fast. Just do your research: Connect with people on LinkedIn, and send them a nice message about what you?re looking for and your vision. It can happen. The world is a small place.So would you say it?s time for indie developers to grow up?Well, it?s a saturated market today and you can?t succeed without being professional. You?re competing against a lot of talent. If you want to be an indie developer and you want it to not just be your hobby, you need to react. It?s an innovation era. That?s your added value: the speed at which you can change. With all due respect!