Image Credit: flickker photos
Just imagine if you were a product manager who worked in the world of creating a product development definition for mobile phone video games. You would always be looking for that next big hit: the next Candy Crush Soda Saga or Clash Of Clans. However, here’s an interesting question for you: who is your real customer? Sure, maybe your game would get downloaded 10 million times, but who would really be willing to pay you money for it?
What A Whale Looks Like
If you take a look at the statistics that surround the mobile phone video game market, you’ll quickly discover that they are pretty grim. First off, forget about creating a game that you think that you can get people to buy. Studies have shown that in the upcoming year, only 1/3 of all mobile phone users will purchase an app of any kind to use on their mobile phone (let alone a game).If it were not for whales, working in this market almost looks like something that you wouldn’t want to put on your product manager resume.
In the world of mobile games, a whale is the type of customer you really, really want. This customer is willing to spend at least US$100 / month playing mobile games. How important are these customers? Well it turns out that they generate 2/3 of all revenue that is generated by people who play such games. This has increased from about 50% just a year ago.
The market for in-game purchases is very large and is growing. It is forecasted that this year people will spend US$23.4B making in-game purchases worldwide. In the U.S. alone, people will be spending $1.82B. The reason that whales are such a big deal to product managers who are responsible for mobile games is because less than 3% of all mobile game users will ever make a purchase. Most buyers will end up spending between $5 – $25 per month. The highly desirable whale customer ranks in the top 10% of mobile game spenders.
How To Go Whale Hunting
If we can all agree that whales are what mobile game product managers really want to get their hands on, then the next question is how? The first thing that you are going to have to get comfortable with is giving your game away for free. You will be competing with the 750 other games that get added to an app store every day. It turns out that the 10 highest grossing games bring in 43% of the total mobile game market revenue.
Product managers know that their mobile game has to present their customer with two critical things. The first is great engagement – it has to be fun to play. The second is great retention – they have to want to come back and play some more.
The good news for product managers is that customers are getting use to paying for things using their mobile phones. No matter if it is music, movie tickets, etc., we are all getting accustomed to using our phones to make purchases. This can go a long way in getting players who are engrossed in our game to decide to make a purchase in order to enhance their gameplay experience.
In the beginning, many mobile game product managers made addition revenue by including in-game ads. However, as the value of in-game purchases has grown this is changing. Showing a customer an in-game ad while they are busy playing your game can be disruptive and make take away from their sense of enjoyment. You don’t want to do this because then they may not come back. Product managers are scaling back their use of these types of ads.
What All Of This Means For You
Product managers who are looking for a high-risk, high-reward market to compete in should take a look at the product manager job description for jobs in the world of mobile games. In this market, most customers never make a purchase. However, because the market is so large, when even a small number of customers do make purchases, it can create a very large market.
In order to enter this market, product managers need to be willing to give their mobile game away for free. The game has to be fun to play and has to make the customer want to come back and play more. The product manager needs to be careful and not present the customer with too many in-game ads that can take away from the game playing experience.
The market for mobile games and their associated in-game purchases is so large that product managers can’t afford to pass it up. However, they need to be very careful and understand what it takes to succeed in this crowded market. The secret to success is to create a great game and then go about marketing it in the right way!
– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™
Question For You: What aspects of a video game do you think will convince players to make an in-game purchase?
Click here to get automatic updates when
The Accidental Product Manager Blog is updated.
P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!
What We’ll Be Talking About Next Time
So we all know that product manager always have to be prepared to deal with the situation that both they and their product find themselves in, but what should you be doing if you parachute into a situation that you didn’t create? That was the situation that I found myself in recently when I agreed to take a look at a firm that had been doing quite well, but which had recently fallen on some hard times. Could I use my product manager skills to help them turn things around? Could I find out what product development definition they were using?