Every developer eagerly awaits the release of their mobile game in the hope of reaping the fruits of their hard labor, only to bitterly discover that they now face a new set of challenges. In our latest report, we specifically asked devs about their post-launch challenges. What did we learn?
User retention rates are critical for any app, including mobile games. Even though nurturing existing customers is much cheaper than acquiring new ones, it still remains a big challenge for developers. It is also the number one issue for the majority (54%) of mobile game developers who participated in our survey.
This concern is well-founded. The maturity of the market with dozens of games released every day has made it more difficult to attract new players and retain existing ones. All mobile gaming genres experience a sharp decline in retention rate over time. The average retention rate of mobile games on both Google Play and App Store dropped from 26% on the first release day to only 6% by day 30. The most recent data illustrates a grimmer reality. The day-30 retention rate for mobile games was only 2.4% in the third quarter of 2022, according to Statista.
Considering most industries’ retention rate is between 10 and 20% in the eighth week, the numbers recorded in the mobile game industry are startlingly low.
Microtransactions are one of the most common monetization models in free-to-play games. However, convincing players to spend money on the games can be even more difficult than retaining them for an extended period of time. It is the second biggest challenge named by 43% of our respondents.
Even though consumer spending on gaming apps has been steadily rising since 2019, this growth comes with a hefty price. The average cost of turning a free user to a paying customer increased to $43.88 in 2020, from $35.42 in 2019 and $28.05 in 2018. It is anticipated that this number will keep growing in the coming years. It just goes to show how difficult and costly it is for developers to convince free-to-play users to spend money on the games.
The high cost of user acquisition is yet another challenge that 42% of our respondents are facing. The average cost to acquire a user in 2020 was $1.47, down 66% from the previous year – which was indeed a result of the pandemic, when everyone was told to stay at home and was looking for a distraction.
Unfortunately, this beautiful outlook did not last long. The introduction of App Tracking Transparency (ATT) and Apple’s decision to stop using Identifier for Advertisers (IDFA) – which altered how the mobile app sector could target and track advertising – have increased the cost of user acquisition for the mobile game industry. Despite offering numerous benefits to users, this has added more difficulties for mobile game developers.
The next biggest group of concerns raised in our responders’ replies centers around security, including piracy (39%), cheating (33%) and tampering (20%).
It comes as no surprise that developers see gaming app security as top-of-mind. Poor mobile game protections against cyber criminals result in significant repercussions for both developers and their beloved gamers, with lost monetization and a low retention rate being just two of them. Frustrated players who experience game balance disruptions due to security threats are more likely to leave the game and pick other titles with better security levels. The leaving customer also means no in-game purchases. In addition, they add to reputational damage and lower ratings. And a mobile game with a poor rating and negative reviews is of course less likely to attract new users.
In our report, the impact of each of these difficulties on revenue was another question that developers were urged to think about.
User retention is once again top of the list with 47% of respondents perceiving it as the biggest influence on revenue to at least a moderate or considerable degree. Persuading gamers to make purchases and user acquisition cost were also highly likely to impact directly on the revenue.
In terms of game cybersecurity threats, piracy was significantly associated with revenue loss with 33% saying that it had a moderate or significant impact on their income, followed by 26% for cheating and 14% for tampering.
Follow our blog to learn more about the current needs and pain points experienced by mobile game developers worldwide.
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