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Patrick Wheeler: Bringing Mobile Gaming to China | Casual Connect Video

October 31, 2013 — by Catherine Quinton

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“China is big, we all know this,” Patrick Wheeler tells his audience at Casual Connect Kyiv 2013, “but to deliver games there, you need to be wary of the regulations and choose Chinese partners carefully.”

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Patrick Wheeler, CEO of Smartions, describes his company as a provider of comprehensive game and app adaptation services for the Chinese mobile market, supporting their clients in effectively monetizing games and apps, as well as increasing user acquisition and retention. Their goal is to make China accessible to foreign game developers, so they act as a business enabler through providing services in adapting, publishing and monetizing games in China, as well as a technical enabler with their China SDK and tools. Patrick says, “Bringing great mobile games to China and making the experience as painless as possible is what we are all about.”

Patrick Wheeler, CEO of Smartions
Patrick Wheeler, CEO of Smartions

He explains that his experience while working with Aeria Games in Berlin taught him a great deal about the economics of free-to-play games since monetizing in difficult markets is something Aeria Games excels at. As well, every member of the Smartions team brings an understanding of the B2B market in the West and the B2C market in China. As a result, they are working with more and more great publishers and developers to bring their games to China.

Establishing a Business

Patrick started his career as a developer many years ago, at a job where his focus was on the details, the components of a problem, and finding a solutions to complex code level issues. He found running a business naturally requires a broader focus, looking at the big picture and the road ahead. Finding a balance between these perspectives took a lot of discipline, and being able to see enough of the detail in the day-to-day challenges, while at the same time keeping an eye on all-important business objectives was difficult. He maintains, “You learn that being a perfectionist is a sure way to bury yourself with stress, so sometimes a little compromise is required in order to get things done.”

Founding the Smartions Berlin office in June of this year with his colleague, Rajmund Balogh, is the time Patrick feels has brought him the greatest satisfaction in his career. They had both worked with Smartions China CEO, Fang Liang, and with their combined industry experience, as well as the increasing focus on the mobile gaming market in China, it made sense to use their shared passion for the business to establish a presence in Europe.

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Both Patrick and Rajmund, founders of Smartions Europe, work closely with Smartions China

Regulation

Since the focus for Smartions is mobile gaming in China, their greatest challenge is regulation, especially possible changes in regulation. In China, the only model that works for mobile gaming is free-to-play. As a result, developers are centering their attention on increasingly aggressive free-to-play monetization models, some of which cross the line between free-to-play and pay-to-win. But China already has regulations governing foreign games, virtual money, gaming consoles, and online gambling, as well as legislation requiring anti-fatigue and addiction mechanisms in online games. So the industry in China must police itself with regard to monetization methods in free-to-play games or risk the potential for more government regulation.

“To thrive in China, one typically needs a more robust free-to-play monetization model than in the West. And if a game lacks well thought-out monetization, it can be difficult to retrofit without diluting the gaming experience.”

Whilst Patrick does not see self-regulation as being likely for the industry in China and believes that this may prompt further intervention in the Games market by Chinese regulators, he emphasizes, “To thrive in China, one typically needs a more robust free-to-play monetization model than in the West. And if a game lacks well thought-out monetization, it can be difficult to retrofit without diluting the gaming experience.” Patrick reminds us that although China has a history of issuing broadly worded notices that impose strict regulations affecting various aspects of the gaming industry, he also expects the west, including EU, may also start looking at more controls on free-to-play gaming in the coming years.

He suggests that in China, app stores may play a part in responding to this situation through their approval processes, possibly mitigating the perceived need for more regulation. But it is up to individual developers and publishers to make sure they stay on the right side of the line between robust monetization mechanics and monetization mechanics that verge into grey areas, either legally or ethically. It is especially important to self-regulate when bringing a foreign game to China via one of China’s local publishers.

Bringing a Game to China

Patrick describes the process Smartions goes through in bringing a game to China:

“When we look at a game and the market-fit in terms of China, we take a look at all aspects of the game, including monetization. We will evaluate and adapt the monetization model for China and, before making changes to these mechanics, we consider how these changes will impact (positively or negatively) the player experience, and if there may be any “harmonization” issues. In other words, we need to calibrate the monetization model to the market and be responsible in doing so.”

“When we look at a game and the market-fit in terms of China, we take a look at all aspects of the game, including monetization." Game Screen from Magic Beanie
“When we look at a game and the market-fit in terms of China, we take a look at all aspects of the game, including monetization.” Game Screen from Magic Beanie

Evolution of Mobile Gaming

There are now several trends that Patrick sees converging in the industry. The console hardware that will soon be available to gamers will provide more immersive gaming in free-roaming worlds. The consoles themselves, head-mounted displays, and motion controllers are all components of this trend. He is also interested to see how cloud computing will be harnessed to complement the processing capabilities of consoles and smart devices. The increased power of smart devices will allow more sophisticated AAA titles to be targeted toward mobile gamers.

He emphasizes, “The evolution of mobile games and development environments, whether Unity, Marmalade, Game Maker, native etc., means we have to constantly ensure our teams’ skills are sharpened and expanded. We need to maintain both a broad and deep skillset internally. To incorporate this in our planning means a lot of time is dedicated to training and ensuring we do what we can to retain knowledge internally. The basic principle here is simple: we hire great developers who love games and do what we can to make sure that they are happy in their work!”

At Casual Connect Kyiv, Patrick announced that Smartions will be releasing some great mobile titles in China in the coming months. According to Patrick, they have signed Czech publisher Craneballs and will be bringing their highly popular shooter Overkill 2 to China on Android, as well as Magic Beanie, a beautiful 3D endless runner built on Unity made by Byte Rocker’s in Berlin. In addition to the multitude of character customizations within the game, Patrick says, “The launch itself is unique in the fact that it’s a China first launch, and we have been lucky to have been able to work closely with the Byte Rocker’s team to develop some really engaging China focused content and mechanics within Magic Beanie, so we are very excited to be bringing these and other games to China in the coming months.”

Overkill 2 is just one of the games Smartions will be releasing on mobile.
Overkill 2 is just one of the games Smartions will be releasing on mobile.

Also, before the end of the year, they will be making Smartport China SDK available externally. This SDK provides mobile game developers with direct access to popular mobile payment services in China (both carrier and independent) as well as Social Media platforms such as WeChat, Sina Weibo and others. Supported by their China analytics platform, the SmartPort SDK enables developers to monetize their games and build their player community in China. Plugins for Unity and Marmalade will follow close behind. SmartPort is an important component of the solution they are building to open up China to foreign developers.

Video Coverage

Nemanja Posrkaca on Making Games Accessible for Everyone | Casual Connect Video

October 25, 2013 — by Catherine Quinton

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Nemanja Posrkaca explained the strategy and tactics used to double their number of users while doubling the engagement rate from 2 to 4 percent at Casual Connect Kyiv 2013.

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Nemanja Posrkaca is the Community Manager at Nordeus, a leading European game developer, winning, among other awards, recognition as the best European startup of 2011, and declared to be one of the best employer in the region. The company is dedicated to providing a seamless gaming experience to everyone, regardless of the device they are using. The games they make are free and accessible to a wide range of people and their game, Top Eleven, is the most played online sports game in the world.

Nemanja Posrkaca
Nemanja Posrkaca is the Community Manager at Nordeus.

The Monetization Challenge

Posrkaca’s entire career has been with Nordeus. From this vantage point, he assesses one of the top challenges to the games industry as the need to maximize monetization. He points out that many regions of the world are particularly hard to monetize, some because of their culture, and others because they have badly developed payment systems.

He believes this challenge can be met through offering premium currency as an optional feature in the game while still allowing users to play the full game for free, without the need to spend any money unless they want to. At Nordeus, they responded to the monetization challenge by making Top Eleven free-to-play and making sure users would not be locked out of any content.

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At Nordeus, they responded to the monetization challenge by making Top Eleven free-to-play and making sure users would not be locked out of any content.

The success of their plan is shown through the moment Posrkaca describes as the proudest of his career. It occurred when a post on the Top Eleven Fan Page received more than 140,000 comments. He says, “It was the most exposure we had ever had on social networks.”

The Social Aspect of the Games Industry

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Working hard at Nordeus

Posrkaca realizes the importance of these social networks. He claims the biggest challenge of his career has been developing a quality strategy of creating a social media team at Nordeus. He also sees social mobile gaming as one of the most important directions the games industry will take in the next several years and recognizes the need to focus on moving the gameplay of social games to a new, higher level.

When not involved with his work, Posrkaca is immersed in watching, playing and reading about football. He enjoys listening to electronic music, saying, “It just makes me feel good.”

Video Coverage

Andrew Paradise: Skillz Payz the Billz | Casual Connect Video

August 21, 2013 — by Catherine Quinton

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“I think there are a couple of things that are very interesting that are happening in skill gaming in the next 12 months,” said Andrew Paradise during Casual Connect USA. “When I think about the space broadly, I’m thinking there is going to be a lot of awareness happening over the next 12 months around skill gaming as a third kind of monetization, particularly available to mobile developers.”

Andrew Paradise is CEO and Founder of Skillz, the first cash tournament SDK. Skillz is able to enhance monetization tools that already exist in most mobile games, while also offering new revenue to game developers.

Andrew Paradise
Andrew Paradise

Andrew attributes his success in building companies to the friendships he’s made along the way. A self-professed lifelong gamer, Andrew learned to program at age seven by hacking a video game with a hex editor, then later wrote his first game in Pascal. These days, Andrew’s recreational activities include testing new and up-and-coming game titles and blaring 1990s rap and hip-hop.

Breaking the 80/20 Rule

“I was discouraged to think that 80 percent of mobile gaming revenue went to the top 20 developers,” Andrew explains. “While not new news, it didn’t sit right with me.” He decided to explore new monetization methods that support more options for success, and a healthier economic ecosystem for game development. That thought process led to Skillz, a company offering an innovative monetization method intended to allow developers to become profitable without sacrificing gameplay. This monetization method provides cash competitions in the form of tournaments, increasing gameplay intensity as players compete to win real money playing their favorite mobile titles. The system drives revenue directly to the developers with a cut of the tournament entry fees. Skillz even increases existing ad revenue and IAP by increasing engagement and fun of existing game features.

“I am determined to improve profitability in the developer community so studios of all sizes can flourish,” Paradise says.

Boosting Monetization AND Engagement at the Same Time

As is an avid gamer himself, Andrew wanted to be sure the platform they created would enhance the gameplay rather than inhibiting or interrupting it. “Skillz offers the only monetization technique that also improves both player retention and engagement. It’s been amazing to see how our platform has driven real results for our developer partners. We recently released a case study demonstrating how our cash competitions are boosting revenue and increasing engagement and retention for Gnarly Games, creators of Gnarbike Trials. We boosted their ARPPU by over $5 and 7-day retention by 27 percent,” Paradise claims.

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Skillz is able to enhance the monetization tools already existing in most mobile games, while also offering new direct revenue to game developers.

Download the case study here.

Great People Make Great Products

The biggest challenge for Andrew and Skillz is building the right team. He believes the first few hires for a new company are extremely important. “They are the ones who help create the company culture, so it is vital to choose them wisely,” he advises. Also important is a keen connection to your audience: “Know your customer!” he continues. “If you don’t play our games, you can’t work here. We want to build a system people love. If we don’t love it enough to play it, why should anyone else?”

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The system drives revenue directly to the developers with a cut of the tournament entry fees.

The Rise of Real Money Gaming

Andrew believes that over the next three-to-five-years, real-money gaming will see a surge in growth, both in skill-based and chance-based games. Skillz currently focuses on skill-based gaming markets, allowing players to bet on games where skill determines the outcome. But Andrew also follows the advancement of online gambling. Nevada, Delaware and New Jersey currently allow online gambling in games of chance such as slots or roulette. He expects legislation will continue to soften, with widespread adoption of online gambling in the US in approximately five years.

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The Mobile Ad is Dead, Long Live the Mobile Ad

April 17, 2013 — by Mariia Lototska

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A guest post from NativeX on how native advertising is becoming the clear front-runner for mobile games, with 225% higher click-through rates and 142% higher effective cost per thousand impressions.

Mobile gaming is one of the fastest growing and most rapidly changing parts of the entertainment industry. In just a couple years, we’ve seen it evolve from a wild-west market chock full of indie developers figuring out the best way to utilize a touch screen, to a place where developers of all shapes and sizes create AAA-quality games with strong lifetime values. Through all of these changes, there has been one constant: people are constantly searching for the best way to turn a buck in mobile games. Whether it’s premium games, lite games with ads, or freemium, monetization is arguably the biggest driving factor in mobile games, and native advertising is one of the best ways for game developers to make money off their titles without taking away from the user experience.

So, what exactly is a native ad? The term has been thrown around a lot in the advertising and public relations markets as the next big iteration of paid content. It could mean anything from a sponsored post to a branded advertisement. In mobile games, the native ad takes on a slightly different form. With mobile games, developers and advertisers are paired to games and products that share similar themes and are going after the same audience. Companies such as NativeX (formely W3i) help developers to create branded interstitials where the ad can be displayed.

For example, let’s say there is a developer whose game has an audience of mostly older women. They may want to advertise a children’s game in their native interstitial. Mom sees a game her kids might like without being taken away from the game experience, the developer makes money off the ad, and the advertiser gets targeted ad views from people that are much more likely to check out their game. It’s a triple-win situation.

Based on early data, NativeX found that click through rates on native ads are 225 percent higher than on traditional ads. Additionally, effective cost per thousand impressions (eCPM rates) are, on average, 142 percent higher on native ads than on traditional ads. This data was found by comparing publishers who used native ad interstitials against publishers who ran non-native interstitials from February 2013 to March 2013. Each publisher used the same relevant advertisement. Click through rates on non-native ads were .06 percent on average, with an average 3.46 percent on native ads. For eCPMS, non-native ads had rates of about $4.98, where native ads had average rates of $12.04.

In layman’s terms, this means that a gamer is almost three times as likely to click on an advertisement if they see it as a native ad than a regular banner ad. Having an eCPM that’s 142 percent higher in native ads means that total earnings gained from the ads will be significantly higher. Using native ads means more money for developers and a better experience for the user.

As developers continue to innovate new ways to monetize their games, it’s a safe bet that native advertising will continue to rise in popularity on mobile. In the relatively short time NativeX has been working on native ads, they’ve shown incredibly promising results as a new source of revenue for developers of all sizes. The time of native advertising is at hand, so consider well what ads to include in your mobile games when the time comes.

NativeX (formerly W3i) has worked with developers to help them build strong user bases and figure out the best ways to create revenue without affecting the gameplay experience. The company rebranded on March 20 to reflect this. For the last few months, we’ve worked with developers and advertisers to create better native ad experiences. So far, we’re seeing some very promising results.

Video Coverage

Playphone’s Anders Evju on being the Captain of the Carrier

November 8, 2012 — by Brian Anthony Thornton

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Anders Evju, EVP of Business Development and Strategic Partnerships for PlayPhone, has manned a leadership position in the wireless industry for many years. He recently sat down with Gamesauce for a discussion on his origins and inspirations, the rise of the smartphone, and the impact of PlayPhone in a volatile industry.

Snake Charming

Evju’s long and winding journey towards the videogame industry began in 1990’s Norway, where he found himself addicted to playing Snake on his Nokia phone while working at NetCom GSM, a local wireless carrier. “I knew that Java was coming to phones and that there would be a big opportunity for mobile games in the future. The potential for games and entertainment distributed through mobile devices was very appealing to me, and I sought out opportunities to take my experience and passion in this direction based on what was, at the time, a very big bet,” Evju said. And this bet paid off, as opportunity after opportunity emerged. With over 20 years in the wireless industry, Evju has gained much insight on what it takes to succeed in an industry that is constantly in flux. “Having a passion for the business always helps,” Evju admits, “and my ability to take what I learned about mobile platforms and how consumers utilize their devices for entertainment purposes has served me well throughout my career. My background in sales and marketing combined with my financial experience has been particularly helpful in building PlayPhone and the PlayPhone Social Gaming Network (PSGN) into a major player in mobile social gaming.”

Slots LIVE! is one of the games available on the PlayPhone Social Gaming Network.

Inspiration from the East

“We strongly believe that carriers are becoming the third true ecosystem.”

Japan has had a love affair with the mobile industry for a great many years now, and Evju is determined to mirror that success for western markets. “We view PlayPhone as the Western alternative to the success that mobile social gaming is seeing in Japan,” says Evju,“PlayPhone is driving the industry in ways that bring carriers back into the fold as a viable option for distribution versus traditional app stores. We strongly believe that carriers are becoming the third true ecosystem.” The PlayPhone Social Gaming Network (PSGN) was created with these goals in mind – as a complete publishing solution and platform for game developers seeking to acquire users and build communities of mobile players through a fully integrated network – and as an alternative to the game-by-game solution offered by competitors. Evju claims that the PSGN is the only cross-platform network for mobile games that is optimized for engagement and monetization.

Evju admits that the competition in this sector has been intense, to say the least, and that carriers been “sluggish” to transition their feature phone content distribution business to smartphones. That said, they are now waking up to the realization that they can’t allow themselves to be left behind. “Our carrier partners are moving very quickly and decisively with both on-deck and off-deck channels,” says Evju, “and PlayPhone’s direct-carrier billing integration allows us to make the user experience much better than any other channel. We believe the carrier billing solutions are on-par or better than Apple at this point.”

There have, however, been hurdles to overcome. Developers are not excited about having to integrate to multiple SDKs, and carrier integration is another step to add to the process. As an answer to this, PlayPhone has developed an easy to integrate SDK that a developer can use for all channels, including Apple, Google and Amazon.

“By working with carriers, developers reduce their overall risk because they can get their game featured within a few hundred served apps and really stand out from the crowd.”

The fact that the carriers own the home screens of all Android phones distributed on their plans (which allows them to significantly influence content distribution for a major part of the market) also helps immensely. “By working with carriers, developers reduce their overall risk because they can get their game featured within a few hundred served apps and really stand out from the crowd,” Evju says.

Keep Calm and Carry On

“We have to be able to offer them both a large, engaged audience to market to, and cutting-edge tools that allow them to self-publish and control every step of the integration process.”

The main question on the minds of Evju and company is the same question that developers worldwide have been losing sleep over – “What is the most effective way to monetize a game?” Evju has this to say on the matter: “If we consider the PSGN to be a true democratization for game developers big and small, we have to be able to offer them both a large, engaged audience to market to, and cutting-edge tools that allow them to self-publish and control every step of the integration process. After all, we are talking about developers and their own IP – PlayPhone isn’t looking to control their content.”

Before the rise of the smartphone, carriers were extremely successful at selling and distributing digital entertainment to users on feature phones. According to Evju, those heady days are gone, but not forgotten: “Carriers saw big revenues offering content for feature phones and now they want that revenue stream back, so they are re-staking their claim by migrating their content distribution model to the smartphone business. It may be a slow progression, but carriers will find success in the smartphone arena in the end. They can’t afford not to.”

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