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Berlin Roadshow: Responsible marketing, perils of investment, and oodles of opportunity

roadshow_2015_Berlin

They say a new startup is founded every twenty minutes in Berlin, so by the time our Roadshow left the Game Science Center, there were already a dozen new companies emerging into the world. And no, I’m not just heaping on platitudes. Berlin puts its money where its mouth is by playing host to such game developers as Wooga, GameDuell, and Aeria Games.

I was joined by an awesome panel of experts to discuss some of the emerging trends in the Berlin gaming scene as well as tackle issues like mobile game marketing, f2p games, and mobile game monetization. New comer to our panel, Anders Lykke of Priori Data joined our returning panel of Omar Ramirez (Chartboost), Martin Macmillan (Pollen VC), and Hector Almeida (Fyber).

Blue Oceans

The discussion began optimistically, with some intriguing points from Anders. “The highest concentration of talent exists in the gaming space,” he offered. Partially because of this, the sub 50-200 positions on the App Store top charts are now much more favorable positions. However, “the average time spent in one of these top spots is only two days,” so developers need to move quickly and surround themselves with good resources.

Hector added that the “era of launching without a plan is over” so that even if there is more opportunity, it is critical that developers know how to execute on it. It used to be that you could release a game, achieve fleeting virality, and improvise the marketing and monetization as you go. With so many experts vying for the same spots, this is no longer a responsible strategy.

Taking marketing seriously

The old trope of (wrongly) thinking about marketing last still seems to plague many developers. Omar asserted that developers should spend at least 30% of development time on marketing (including market research). This seems exorbitant until you realize, as Anders pointed out, that this includes devoting part of this time to analytics in order to be set up for success.

With the recent change in algorithms for the top charts to punish burst campaigns even more, solid marketing plans are even more essential. You generate “fewer downloads for the same chart positions”, leading to top charts losing their importance and favoring titles with solid content, mechanics, and UX according to Anders.

In this new paradigm, developers would be wise to focus on free distribution channels, such as direct deal marketplaces, reddit, forums, etc., ruminated Omar Ramirez. From the players derived from such channels, savvy developers must look at retention and subsequently the ARPU for each retention cohort (D1, D2, D7), he continued. Hector added that segmenting monetization based on demographic and location is the next step to fine tune your earnings.

“Money often costs too much.” – Ralph Waldo Emerson

Spending money on User Acquisition campaigns can seem like the easy part when raising money is taken into consideration. Firstly, it is important to arm yourself with a knowledgeable ally (advisor, employee, etc) who has experience in fundraising, suggests Omar. Additionally, it is important to examine stories of fundraising failures closer than successes, because they do a better job of revealing the reality of the challenge.

Once you’re ready to start pitching, incubators are an excellent source for early capital and support, particularly in Germany, noted Anders. In order to strengthen your pitch, he continued, you need to know the market opportunity and come to meetings with data on how you perform relative to similar developers. For instance, how does your D1 retention look like for other games in the same genre?

Martin offered an important caveat which is that when accepting an investment, pay attention to the longer term implications of doing a deal with either a publisher or a venture capitalist. What he is cautioning is that although the dollar amount may be higher for VCs, unless they are really focused on the games sector, it may come with less domain expertise compared to a publisher and an expectation of a huge exit. Conversely, a publisher may have higher demands and less favorable conditions if things sour, compared to VCs

The message of Berlin was simple: the opportunities are expanding but so are the challenges and responsibilities to execute properly. Now, on to Barcelona for our final Roadshow Recap!

Prost!
Nate