"Companies with aspirations to be larger publishers -- Kabam, Kixeye, even Zynga -- are moving aggressively off the Facebook platform to mobile and the open Web. Publishers aren't convinced that the costs of being on Facebook are worth it."- Former EA Mobile head and venture investor Mitch Lasky argues that the high costs of player acquisition on Facebook are driving away some of the biggest publishers and developers from the platform.
| Andrew Grapsas |
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Uhh... mobile user acquisition is more expensive than FB user acquisition, isn't it?
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| Will Hankinson |
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Much more than "half" -- generally speaking, if it costs $1.00 to buy a user (it's more) you need a game that can make more than $1.42 per user to have any chance at profit (not including dev costs).
I put together a quick spreadsheet: https://docs.google.com/spreadsheet/ccc?key=0AsSkS1z3LMmMdE5tMTRlaGJPd1NhYnVfTkFrRlJYV3c Assuming $1 per install, you'd have to be making $5 per user for the revenue to be 50/50. Assuming $2 per install, you'd have to be making $10 per user for the revenue to be 50/50. Also, this doesn't factor in the ads that FB shows alongside your game. Considering they're now also requiring https for all apps, I'd call them decidedly unfriendly to indies. |
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| Nicholas Bellerophon |
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Our experimentation does not entirely support this hypothesis. We've been able to get $0.1 per click on Facebook, which rises slightly to get to an install. But if it's costing you $1, it's your game lead-in that's the problem, not Facebook's ad prices.
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| Michel Desjardins |
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For publishers, to start on Facebook when they are small, and then, when they get bigger to partially move off the platform is a logical growth strategy. When the reach the limit of Facebook player acquisition, they need to leverage the cost down to bring additional profit.
At their stage, the overall capex cost of developing their own platform appears lower than the Facebook costs (revenue% + publicity). They will still have to spend equivalent publicity costs to attract people to their platform, but they will be saving the 30%. And reducing cost by ~30%, that would make shareholders happy. |
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| Nicholas Bellerophon |
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Not $0.01 / click... $0.10 / click. That's ten cents. And those are US customers.
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| Joe McGinn |
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Maybe it would help if they built games with a higher than 2% monetization rate?
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