King recently decided to abandon in-game advertising and considering my position with the NativeX Games Task Force (where we collaborate with mobile game developers to increase the engagement, retention, and monetization) this sparked a few questions and discussions in circles of people around me. Why are they doing this? What’s their motive? Were players leaving? Did they need a better ad experience? These are all good questions, but before addressing them specifically around King let’s look at the two major groups of developers who don’t want or like ads. There might be more groups than this, but in my experience most developers fall into these two buckets.
I’ve encountered several developers who don’t want to break the 4th wall in their game design. They’ve created a story and world where they feel players should immerse themselves, and advertisements would make players aware that this is just a game. I have a hard time believing this in mobile gaming, but I won’t argue that point against developers who feel this way.
There are also developers who believe that the game they are creating will be good enough that players will “want” to spend money in game through in app purchases (IAPs). With those developers, I wish and hope that they’re right! I would hope that a game could achieve 100% conversion rate, 75% or even 30%. Unfortunately, you’ll never have 100% conversion and most developers won’t see more than 10% conversion (in a F2P title) just because one word is associated with their game… free. Some consumers have preconceived notions or assumptions with the word free, and game designers/developers will never be able to change how those people feel about the word free.
Lastly in the purist category, there are some developers who think that advertisement revenue cannibalizes their IAP revenue. This can be true, but only if they slap ads into a game without thinking how to “intelligently” integrate advertisements. I can take any game and completely destroy it with advertisements. I think we all can, but you can also increase your game/company revenues significantly with the addition of advertisements too. That is, if you care for more revenue.
The other kind of developers out there that don’t use ads are those who have enough cash flow or resources and don’t feel the need to include advertising revenue, or any other benefits associated with it. They can “elect” to include ads or not. Most of the time this way of thinking spawns from great success, so it’s really difficult to criticize their decision to remove ads because they’re obviously doing something right being as successful as they are. If you haven’t guessed it yet, King falls under this category.
Many developers think of advertisements as a “necessary evil” in order to make a living out of doing something they love. On the flip-side advertisers believe they are offering a service or product that the consumer values. Which is right? Well that depends on the game/platform and the consumer. Let’s look at Hay Day for example. My wife has been playing for over a year, and is level 60-something at the time of writing this. She has never made an IAP. She will never make an IAP. I asked her why and her response was, “because it’s free.” However, she will watch videos for currency. She actually likes to watch ads for currency. This is a case where a consumer finds value in an advertisement and the developer is benefiting from it as well. Of course on the other end of the spectrum, 20-some year old hardcore gamers who only buy Call of Duty will hate advertisements. (Ok that’s sort of an extreme example, but I think you get the idea.)
You Think I’m Saying King is Making a Mistake?
Not necessarily, but I believe there’s a role for advertisements in most games. I’ve seen the effects first hand from players who won’t spend. However, the data at my fingertips from the NativeX network and from the shift I’ve witnessed in the past few years shows the importance of advertising. However, this is sort of a win-win scenario for King. They’re successful so advertising isn’t as important, they’re getting some press coverage for the announcement and in the eyes of gamers it looks like they’re “doing good.”
Do I think this stance can last? That all depends on their future success. If they stay on top, or keep releasing hits then yes, but if revenues start declining or they’re not meeting expectations then they might reintroduce ads. There’s also always the possibility of reintroducing ads back in games that are “sunsetting” so we could always see them pop back into games that aren’t in the spotlight anymore.