Ad-funded mobile games: a bad idea
Posted at 19:53 on 11th June 2008 - permalink

I should forewarn you that this post is going to contain marketing speak, and stuff that is probably only of interest to people who follow the business side of mobile games. I’ll get back to talking about less deathly dull subjects in the next update.

On mobile games industry news sites (like Pocket Gamer and Mobile Entertainment), I’ve seen a steady trickle of positive news stories about a company called Greystripe. Greystripe’s business model is to license mobile games from publishers and ‘wrap’ them with dynamically updated advertising. Users can then download the games for free from Greystripe’s GameJump website (and elsewhere), and are shown some full-screen ads each time they enter or exit the game.

On the face of it, this sounds like a system that’s beneficial for all parties: customers get free games, publishers get a steady revenue stream, and advertisers get good data on how many people are seeing their ads. Certainly, the magic words “mobile advertising” (currently as effective for hooking venture capitalists as “mobile search”, “mobile video” and “free birdseed” have been in the recent past) have ensured that GreyStripe’s coffers have been generously filled by investors.

However, there are significant issues with such a model of which mobile games publishers should be wary. (Please note that I’m referring to ad-funded games in general here rather than singling out Greystripe specifically. There are other companies trying similar models which may also be affected these problems.)

The most obvious concern from a marketing perspective is that offering a game for free risks making consumers view that product and the entire class of products it belongs to as having no intrinsic value. If I can download your flagship game for free, why would I ever pay for another game from your catalogue?

The second, and potentially much more serious issue, is that a free service is likely to make no provision for customer support. Mobile games, by the nature of the technology they’re working with, present more potential pitfalls for the customer than simply buying a game from a shop for a PC or console. The vendor has to deal with explaining to the customer how the process of downloading and installing a game works (as the vast majority of customers won’t ever have attempted to download a game before) as well as ensuring that the process is completed successfully.

Even for paid services the level of customer support provided can be spotty, but for free games, the customer is effectively left to try to figure out how to obtain the game by themselves. Using the Greystripe example, the process of obtaining the game is made more complicated by the fact that the user must register on their website (providing a valid email address – likely to put off a lot of visitors before they begin), and then retrieve the game manually by visiting a WAP site and entering a numeric code. By way of comparison, most paid services simply involve texting a keyword to a five-digit short number and getting sent a download link via SMS in return.

At each step more customers will give up on the process through confusion, frustration or apathy. This sloughing off of a high percentage of dissatisfied customers who never even get their game is known in marketing circles as “churn” and it’s the polar opposite of what publishers should be aiming to achieve – instead of working to gain customer satisfaction that engenders repeat purchases and good word of mouth, they’re gambling on trying to reach a few people at the expense of pissing off loads more.

Of course none of this is helped by the fact that people seeing the words “free” and “ad-supported” will expect to be bombarded with email and SMS spam, irrespective of whether this is actually the case.

It’s telling that none of the big three mobile games publishers (EA, Gameloft and Glu) have licensed their games for inclusion on Greystripe’s service, and it’s a safe bet that they never will. Surprisingly they’ve managed to tempt some other (smaller but still quite high profile) publishers on board who offer a few decent titles, but the vast majority of the games on offer are ancient low-quality cack, the mobile equivalents of the shovelware that clutters supermarket ‘bargain’ racks (home to gems like Lady Cruncher and Ninjabread Man).

It’s also interesting (but entirely unscientific) to note that when I downloaded a game from Greystripe’s service to research this article, it contained generic house ads, which led to a list of links to gambling and porn sites. I do have to wonder whether their bullish claims for the service are reflected by real world performance.

In spite of all this negativity, I do think that there could be some circumstances where the ad-funded model would be appropriate and would make commercial sense (for instance for distributing game demos and promotional items), but I suspect that gamers will continue to be better served by paying to support games that offer a level of quality and diversity that couldn’t be sustainably delivered through ad-funding or other unproven models. Paying four or five quid to effortlessly, reliably get a quality game is a better deal than jumping through hoops to get games like this.

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