No Christmas Truce in the Game of Phones

Winter has come, and the Game of Phones rages on.Winter is finally upon us, and game publishers on every platform are preparing for one of the most important periods of the year. On mobile, during Christmas more than ever, the power struggle between Apple and Google rages on.No better time to pay a visit to the ghosts of Christmas past, present and future: we’ll take a retrospective look at the story so far, provide a few Christmassy facts to keep in mind and, of course, try to make some predictions of what lies ahead.

apple vs google

The story so far: where do we stand?

The world may not have ended in 2013, but the mobile landscape definitely trembled.The smartphone market is still growing fast, though it is being increasingly driven by the growth of the different app ecosystems. A growing market means room for change, something Google and Apple are very much aware of – but whose elbows lie on the armrests?The best metric for keeping the score is the market share. Wait, no – the install base.The truth is, it’s a pretty tricky question – one that this article sums up admirably. In short, while the market share represents the amount of products shipped over a given period of time, the install base is the number of products actually being used by consumers – and is often a lot harder to estimate. It’s important to understand the differences and links between the two, and avoid pitfalls in unfounded conclusions.Over the whole year, Apple has been losing ground to Google in terms of market share. Or perhaps in this case, the term “mass market share” would be more appropriate. Because while Cupertino has held on to its share of the “elite” slice of the market, every developing country in the world has been adopting the more customizable and affordable Android at a fast rate. In Q3 2013, Google’s share of the market had increased by 6.1%, partly at the expense of Apple’s, which dropped by 1.6%.And in terms of install base, it is no different – once again, Android’s success in emerging countries has put it way ahead of iOS. In November, Google’s mobile operating system was already installed on more than 70% of the world’s smartphones.In the particular case of the mobile war, there is of course another factor to take into account: the two “app ecosystems”, and the revenue they generate for their parent companies.While Apple’s focus on established, developed markets has caused them to lose ground in emerging markets, it may have also contributed to the continued thriving of their app ecosystem. In terms of monetization, Apple is still way ahead of their competitors.However, it cannot be denied that Google is catching up: in July, Google’s apps were generating five times less revenue than Apple’s, even though they were getting 75% of the world’s app downloads. In October, they were already at half of Apple’s revenue, although their share of the downloads did not increase much. Why? BRIC again – as emerging countries develop, they buy more apps – and they get their apps from the Play Store.When it comes to user acquisition for mobile games, iOS is still definitely the most attractive platform. A look at our infographic shows that the discrepancies in CPIs still do not reflect the wide gaps in monetization between the two platforms. Android apps still monetize half as well as their iOS counterparts – but command CPIs of more than half of what an iOS publisher would expect to pay.

No Christmas truce

In this important period for game publishers everywhere, here are two “Christmassy” facts to keep in mind:

Which brings us neatly to our predictions for the coming year: the dawn of a new era of user acquisition.

A shift towards quality

Next year, quality will definitely trump quantity for both platforms.

Both platform companies will keep on striving to improve discoverability in their ecosystems. Apple’s recent acquisition of Topsy, for example, is proof of a desire to use social data trends to that end, and careful observers have noticed the introduction of an auto-correct function in the App Store – yet another step towards better navigation.

Better discoverability means that the rankings taken on their own will also lose relevance – as they become more focused on quality, and less on the quantity of downloads an app generates.Google as well has taken a big step toward quality when, this year, the Play Store’s policies were updated in order to ban apps that use push notifications for advertising purposes, and expressly prohibit any exploitation of the Store’s ranking system.All this in turn means that it will no longer be worthwhile for publishers to buy users to boost their positions. What should matter primarily is the quality – not the quantity – of the traffic they buy. And whether or not that traffic generates a positive return on their investment.The era of buying burst campaigns to shoot your app to the top of the charts is slowly but surely coming to an end, as the business finds itself inexorably shifting towards ROI-positive campaigns.And regardless of which platform prevails next year, there’s no doubt that this shift to quality is good news for everyone:

  • For the users, who will finally have access to the apps they really want, and who will receive suggestions tailored to their specific needs.
  • For the app publishers, who will once again be able to focus on creating quality apps – and not on acquiring heaps of anonymous users to boost their rankings.

Happy holidays!

outlook for 2014