You probably had a game you liked playing years ago and wanted to download it again. You check your favourite app store and the game’s not listed or if it is, when you start it up it’s in a perpetual loading screen. Or you get a notice that the “game’s servers were shut down”. You google for the game online and discover that the game was shutdown because it failed. Why do mobile games fail, you ask yourself? Can’t a developer just keep it online and that’s it?
Your answer up front:
Mobile games are considered a failure by developers and publishers when they do not reach the financial goals set by the developers.
For a hobby developer a mobile game can be considered a failure when it fails to attract any players.
For an indie game developer a mobile game fails when it cannot sustain the development of the game or future games.
For a big game developer or publisher a mobile game fails when it can damage the brand, the developers name or when the cost of running the game is lower than then the revenue of the game. A mobile game can also be considered to have failed when the goals set for the game’s release are not meet, even though financially the game is sustainable as it is.
To understand why mobile games fail we first need to look at what counts as a success from a developer or game publisher’s perspective. We’ll start by looking at what success means through various lenses and then move onto examples of failure and explaining why most mobile games fail.
How do you measure mobile game success – with theoretical examples?
To start things off – success is measured by various metrics that the developer or publisher is targeting. This can take the form of revenue or profit from the game’s sale.
- For a hobby developer – success could mean the game becomes popular and has a lot of players. His game design or game idea is validated this way and he’s happy he gets some fame and renown. This could also mean a game developers builds a fan base or gets a job offer from his favourite company.
- For a indie game developer who treats it as a business – success could mean that the game makes enough revenue and earns enough money to keep the game developer in business to make another game while being able to keep the current game online.
- For a big game developer or publisher – success means that a game earns enough money at an enough rate to cover the cost of developing other games as well as allowing the game’s IP (intellectual Property) to branch in other mediums (like toys, movies, music).
If we look at hobby devs and indie devs – the monetary aspect could be the primary designator of success. For big studios? It’s one of the important aspects but not always the most defining one. Let’s look at it from the perspective of a pseudo big studio. Let’s call this supposed studio Electrical Artistry.
Electrical Artistry – Success goals for a big game developer – a theoretical situation
Electrical Artistry is an established and well known mobile game developers. They have 10 games on the market, in 6 different IP categories. 4 of those games have tie in movies while two of them have successful merchandising campaigns (you can buy toys, t-shirts, board games etc).
They are bound to release a sequel to one of the games already on the market and bring it to smartphones. Let’s call it Wyvern Age – Mobile Edition.
The original game, Wyvern Age did really well. People loved the story, the characters and everything related to the game.
Wyvern Age Mobile Edition is set in the same IP, but diverges from the base game. It’s set in the same world, but it’s a auto battle figurine collecting game.
When setting up to develop the game, Electrical Artistry had the following goals:
- To leverage the existing Wyvern Age PC/Console fan base but to get them to spend more money on the game through the use of in-app purchases of digital collectibles.
- To bring mobile players into the world of Wyvern Age and convert them into fans and get them to maybe purchase existing or future PC/Console releases.
- To build upon the existing game and open up merchandising avenues (Figurines and Collectables). They want to see what the most purchased and used in-game figures are and to release physical ones.
The total budget to develop the game was $10M and was developed in 6 months and re-used a lot of assets from the original game to cut costs.
Wyvern Age – Mobile Edition launches on both iPhone and Android at the same time. The press covers the game and everyone has high hopes for it. After 3 months on the market they have the following data:
- The game’s been downloaded more than 10 000 000 times in 3 months and has 150 000 daily active users at any point.
- Players reviews sits at a 3.5 star rating on both stores, most of them complaining about the character gacha system.
- The average revenue from a player (ARPU) sits at about $1.4, with most players purchasing only one or two in-app purchases (gacha unlocks) for new characters.
- The game’s retention is sitting at about 45% Day 1 and 9% Day 7.
From this data alone Electrical Artistry knows that: The game made it’s development money back, having scored a 4 million profit in 3 months but not many players stay in the game after 1 week of playing. Their on-going costs to keep the game servers running is at about $300k per month (infrastructure + people) and another $250k / month for the game’s Live Operation (making new content, maps, bringing in new characters). in total, their monthly profit of operating the game sits at $650K. However…
- Players are not interested in purchasing character unlocks and those that do (usually wales in their eyes) represent a far to little slice of the total amount of the game’s players. These means they can’t get enough good data for making the physical figures. Aka they don’t know which characters would sell the most as actual toys.
- Their entire strategy of releasing new content in the way of digital figures and collectibles isn’t actually working out and they need to introduce new mechanics or game modes in order to better monetise the game.
- Designing new mechanics and game mods would eat into the game’s monthly profit by having to sustain an entire development team to design and implement it.
- They noticed a good amount of new sales for the PC and Console original release and their data suggest that a decent percentage of the new purchases comes from people who played the game on mobile.
Electrical Artistry managed to achieve 1 of the 3 goals that they set for this game. While the game is seeing a monthly profit from the game, it would not be sustainable to make new content that players don’t really purchase. Designing new game modes and content would be to costly, eat into the monthly profits and lower them while also not being sure that would increase revenue and retention.
They also toy with the idea of increasing revenue by adding advertisements into the game however this can hurt their brand, the game’s Intellectual Property AND their only goal that succeeded – converting mobile players into purchasing and becoming fans of the PC/Console game. Players would also be afraid that their other games or mobile ip’s would soon get in-game advertisements.
If we just look at the hard data – $4M profit in 3 months, hundreds of thousands of daily active players and more sales of the base game we would deem Wyvern Age mobile to be a huge success. But for the make believe publisher – the game is a failure. Their only option is to not produce the physical figures and toys (not enough data for what to produce) and keep the game servers open until the player base dies down (since producing new content for the game wouldn’t be financially reasonable).
After 6 more months the servers go offline.
Amazing Indie Games Studio – Success goals for a indie game developer – a theoretical situation
Let’s look at the previous example from a (theoretical) indie game developer, Amazing Indie Games Studio or AIGS. Same game, similar situation. They have Wyvern Age as a PC/Console release with modicum success and a small, but loyal fan base. They aim to reuse some of the in-game assets and release a mobile tie-in version of their game. AIGS also knows that idle games, figurine collectibles and auto battles are in-trend and working. So they have the following goals:
- To leverage the existing Wyvern Age PC/Console fan base but to get them to spend more money on the game through the use of in-app purchases of digital collectibles.
- To bring mobile players into the world of Wyvern Age and convert them into fans and get them to maybe purchase existing or future PC/Console releases.
- To use the profits from the mobile version in order to fund the development of their next game.
Total budget for this game was $300K dollars and was development over the course of 6 months by a small, core team of 5 developers.
Wyvern Age – Mobile Edition launches on both iPhone and Android at the same time. They receive small press coverage so they drop about $100K and spends it on user acquisition. After 3 months on the market they have the following data:
- The game’s been downloaded more than 100 000 times in 3 months and has 15 000 daily active users at any point.
- Players reviews sits at a 4 star rating on both stores.
- The average revenue from a player (ARPU) sits at about $1.4, with most players purchasing only one or two in-app purchases (gacha unlocks) for new characters.
- The game’s retention is sitting at about 45% Day 1 and 9% Day 7.
Same game, same situation as with the big publisher, just a lot less downloads and daily active users. Having the data above, we know that the developer earn $140 000 revenue over the course of 3, putting him at a negative net profit of $260 000 ($300K to develop the game + $100K in marketing – $140K revenue).
The situation seems grim for the indie game studio compared to the big publisher right? Not quite. As the game seems to bring in about $50K / month in revenue with about $33k cost of doing user acquisition to continue on the same path. Leaving about $17K for a monthly budget to sustain the game. If we remove server costs for the game ($3000 / month, 100x times less than with the big publisher if we use linear scaling) they are left with $14K.
AIGS can now keep 1 programmer and 1 artist assigned to the project to develop new content for the game and improve it, from the team of original 5 needed.
As opposed to the big publisher, AIGS can also enable ads in the game to increase revenue. They won’t suffer such a huge impact on their brand and this can increasing their revenue. After 6 more months, the game turns a profit and can now fund the development of their next game, with live ops cost of just two full time developers.
Conclusion on measuring a game’s success:
The takeaway from these two theoretical examples is that success is measured differently, at different scales. What seems to be a successful game can be an unsustainable failure for a developer and what seems to be a huge failure can be an actual sustainable success for another.
Why do mobile games fail?
Mobile games are considered a failure by developers and publishers when they do not reach the financial goals set by the developers.
For a hobby developer a mobile game can be considered a failure when it fails to attract any players.
For n indie game developer a mobile game fails when it cannot sustain the development of the game or future games.
For a big game developer or publisher a mobile game fails when it can damage the brand, the developers name or when the cost of running the game is lower than then the revenue of the game. A mobile game can also be considered to have failed when the goals set for the game’s release are not meet, even though financially the game is sustainable as it is.
Where To Next?
You’ve reached the end of this article and hopefully you have a better idea of why mobile games fail. I write extensively about the mobile gaming industry, their tactics and how greed influences a game’s design. I believe that you might be interested in more articles on game monetisation. So if you want to stick around, you can check out “How Do Free Mobile Games Make money“, “Why Do Mobile Games Have Fake Ads” and “Why Do Mobile Games Have In-App Purchases“.
There’s also a monster post (about 4000 words) that answers the question: “How Hard Is It To Make A Mobile Game“. It goes in depth with actual examples on how Experience, Resources and Financials affect the difficulty of developing and releasing new mobile games!
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