Purchasing Advertising and the Negligible Benefit of Offer-Based Acquisitions

That mainly means through advertising.

The best and cheapest way to acquire players is through organic downloads—a good game that generates positive word of mouth and media attention. But in such a saturated market, says Apsalar’s Oiknine, you can’t completely rely on this—even when your game is awesome. “At some point you need to go out there and acquire users.”

At the moment, however, with so much competition in the iOS market, especially from major publishers, the cost per install (CPI) for a game has increased quickly to nosebleed heights. A year ago, says Oiknine, a developer could expect to spend about 30–50 cents in advertising and promotion to acquire a new user. Now CPI has grown to $1.50 per download. Actually, this is a bargain rate, because CPI can cost some developers as much as $5.

An alternative to straight-up advertising is going with an offer service, or what are often called offer walls. In these, gamers are given the opportunity to gain some kind of benefit (usually virtual goods and currency in the iOS game they play) if they install and launch a designated game at least once. (For example, “Download and play Obstreperous Aviaries once and get a free armor upgrade to use in Moebius Sword.”)

“The problem,” Oiknine points out, “is these are the worst downloads you can get.” According to his analytics service, 90 percent of people who opt to download a game will typically launch ...

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