D2C for mobile games: how to save on app store fees WITHIN the rules
Is it possible to make D2C for mobile games work? Safely and legally?
Google Play and the iOS App Store are marvelous things. They enable something we’d struggle to believe possible just a few short years ago: instant global distribution for free. And if your app is ad-supported a complimentary service, or a retail app, it can remain that way: free.
Of course, there are fees for in-app purchases: 30% or less depending on a variety of factors. And that’s even true with the new-found freedom on iOS to use a third-party app store or third-party payment service in Europe, thanks to the Digital Markets Act.
This means 30% of your gross revenue is gone before you even see it. And that has an impact on your profitability as well as your ability to build and ship new functionality.
But for some, there might be another option.
Perhaps a direct to consumer model would still work for you. Legally. Safely. And within Apple’s and Google’s stated guidelines and rules. Recently I chatted with Stash.gg’s head of product, Archie Stonehill, about precisely how that can be done.
D2C for mobile games
Games have often been heavily intermediated by stores, whether a PC platform like Steam or a console platform like Playstation or Xbox. Mobile’s no different, with Google Play or the App Store sitting between you and your end user, player, or customer.
Right now on mobile, of course, that’s a hot topic: should game publishers be able to sideload games or install them directly from a website, and use whatever payment processing platform they wish?
Stash can’t help with sideloading or installing from websites, but they do think they can help in terms of direct sales and retaining more of your gross revenue. Co-founded by Twitch co-founder Justin Kan, former Zynga executive Robin Chan, and Googler Dan Borstelmann, Stash’s mission is to enable developers to become their own platforms.
“We’re trying to be the anti-platform, the direct-to-consumer platform for developers,” says Stonehill.
That’s D2C, and it’s not just about financial transactions. Stash also aims to provide identity services and the expertise to manage consumer experiences effectively. In other words: sort of a customer experience platform for mobile apps and games. Because a big piece of D2C for mobile games is about knowing your customer as something more than an avatar in a game.
Making it kosher and safe
Google and Apple are pretty clear: if you have a mobile-only game, purchases need to happen in-app. But they’ve also acknowledged that there are cross-platform experiences in which people can play the mobile app or a desktop or console version.
The key, then, is to become cross-platform.
And to ensure that at least 1 of the platforms you publish on is fully under your control.
“You are allowed to sell things outside of your store through other channels,” says Stonehill. “Particularly if you’re what’s called a multi-platform service — read a cross-platform game — you have a lot more discretion, which is why a lot of the successes here, like Raid, like some of the Scopely games, have been cross-platform.”
That’s easier said than done for some types of apps or games, of course. It’s one of the reasons why casino games are distributed on browser as well as mobile app … and it’s probably a lot easier to do that with a casino game than a midcore or hardcore mobile game.
But creating a cross-platform experience for your app or game is the key. And then in the EU and now in the U.S., thanks to the recent Epic anti-steering ruling, in your app you can tell your players or users about their purchase options elsewhere.
Of course, external payments have already been happening for years, with Stonehill suggesting that some major game publishers take as much as 30% of their revenue off-store to their own web-based e-commerce experiences. But that can be unsafe: you still need the app stores for distribution, and so following the rules is important.
Where D2C for mobile games needs to win: experience
It’s hard to beat 1-click purchasing via Amazon. It’s just as hard to beat in-app purchase processes that Google and Apple have built.
They’re simple, they’re instant … they’re painless.
So what do you do?
“You have to focus on experience, not convenience,” Stonehill says. “The reason that is so important is you will never build a more convenient distribution channel than Apple or a more convenient payment product than Apple. So you won’t win on convenience.”
That means building a cross-platform experience that is good enough that it is worth players, users, or customers making a special effort to put their app down, open up a web browser, sign in, and engage with whatever it is that you’ve made available there. In addition, you have to make it good enough that even though payments will be harder — especially initially when people have to input a credit card for the first time — they will push through the obstacles.
Not an option for everyone
Of course, D2C for mobile games (or apps) is not an option for everyone. Even though Stash will help, not everyone can build a cross-platform experience that matches Apple’s or Google’s definitions.
If you’re a tiny hyper-casual game, for instance, it’s probably out of your reach.
But if you’re a large publisher and see the 30% you’re giving up as a significant chunk of missing growth, it might be an opportunity. At least until additional legislation passes in the EU and/or the U.S. about what precisely is allowed and what is not.
Because it’s actually more than 30%.
“It’s almost always more than you think because it’s 30% of gross revenue, not net revenue,” Stonehill says. “So what the developers typically think of as revenue is that 70% amount. The ratio isn’t 10 to 3, it’s 7 to 4. So in fact, the amount of money that’s going to Apple and Google is about 40-45% of what you are making as a developer.”
But … and it’s an important but … stay safe. Stay within the Google Play and App Store guidelines.
Much more in the full podcast
- 00:00 Introduction to the Gaming Industry’s Challenges
- 00:43 The Role of Third-Party App Stores
- 01:29 The Impact of the Digital Markets Act
- 02:23 The Three Vectors of Pro-Competitive Pushes
- 04:23 The Importance of Direct Relationships with Players
- 05:11 The Evolution of the Games Industry
- 12:36 The Role of Stash in the Gaming Industry
- 32:26 The Future of the Gaming Industry
- 36:36 Conclusion