1. The Bursting Strategy
In the “bursting strategy,” a company will pay for downloads via a third party service like Tapjoy to effectively earn an organic top ranking in the App Store or Google’s Play. This will then spur real organic growth through the exposure a top ranking yields. According to an App Annie study cited by Lundberg, it took 54,000 downloads a day to reach the top 10 free apps in October. In a good case, every $1 spent in a compressed bursting strategy might return $2 in organic downloads.
2. Android Monetization is problematic
Although Google wallet is signing up more credit cards and growing in popularity, Android monetization is a challenge in Asia, where fragmentation and a plethora of distribution points make targeting users difficult. Lundberg advised focusing on the right devices and OS versions. However, no Android phone has greater than 9% market share, and besides Samsung’s S2 and S3, there is nothing greater than 4%. Lundberg said that the newest Adroid OS, JellyBean, monetizes the best but accounts for less than 1% of the market.
3. In-game monetization best practices
Lundberg quickly ran through some basic in-game monetization strategies: 1) Alerting the user to buy more currency when he has an insufficient amount for an in-app purchase, 2) Simplifying the number of price points with a cap at US $30, 3) Upselling a more powerful tool or ability after an in-game failure or letdown moment and 4) Retaining users by rewarding consecutive day users with free virtual currency.
4. Comparing Asia to the West
Lundberg said per user monetization in the U.S. paled in comparison to East Asian countries like Japan and South Korea. He noted that the in app purchase rate in the U.S. is only 2.5%, compared with 25% in Japan. Japanese players don’t just make a purchase—they make an investment, generating lifetime user value of US $50 compared to just US $2 in the U.S.
Lundberg noted that W3I does not support the Chinese market currently as it is unwilling to touch the fragmented Android app distribution system. TechRice co-founder Kai Lukoff is trying to solve the situation with Innovation Works backed start-up Wandoujia, billed as the iTunes for Android. TechRice’s other co-founder, Sunny Ye, previously addressed the fragmentation problem here.
About Erik Lundberg
Erik Lundberg formerly worked for the gaming company POGO, which was bought by industry giant EA, and is now a general manager at W3i, a San Francisco-based firm that helps mobile app developers maximize revenues. Lundberg had some compelling advice on marketing strategies, the pitfalls of Android in China and best practices for monetization.
Learn more about the 5th Annual China Game Developer’s Conference.
James Hopkins is an American working for Alibaba.com in Hangzhou, China. He previously lived in the tech-heavy district of Nanshan in Shenzhen. The views expressed here are his own and do not represent those of his employer.
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