In this episode of Mobile Growth & Pancakes, Jonathan Fishman is joined by Mariusz Gąsiewski, CEE Mobile Gaming Lead at Google, to discuss some efficient and scalable acquisition and growth strategies in the gaming business.
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“It’s a fast business for people who want to be fast in making things happen and growing that probability of success every next day. It’s more of a marathon than a sprint.”
Mariusz Gąsiewski
Key takeaways:
As the CEE Mobile Gaming Lead at Google, Mariusz is responsible for the mobile gaming ecosystem development in Central and Eastern Europe, evangelizing business aspects of mobile gaming, and advising the biggest mobile gaming customers of Google on how to scale their business with Google products.
Recently, the gaming industry, and particularly mobile gaming, has been experiencing tremendous growth and consolidation. More people play these days than ever before, and the numbers keep growing. Though it’s harder for new developers and games to enter the market, there is enough room for scaling, succeeding, and new business opportunities.
Regarding privacy, Google focuses on creating a private ecosystem. But their approach still allows app developers to advertise effectively and thrive.
To succeed in the gaming business, start with building a professional and highly competent team. Then, decide what to focus on in terms of the business aspects of games, like looking for the right partners and publishers. Lastly, use insights about your users to understand how to improve retention, monetization, and grow your business.
Full transcript:
Jonathan Fishman: Hey everybody. Welcome to another episode of Mobile Growth and Pancakes. I’m your host, Jonathan Fishman. I’m really excited today to have here with me, Mariusz Gasiewski, he’s mobile gaming lead for Central and Eastern Europe at Google. I have a lot of questions and I’m sure it’s going to be a fantastic episode. How are you Mariusz?
Mariusz: Hello. Thank you, really amazing. I’m really actually really great to be here and share some thoughts about the industry with you.
Jonathan: Awesome. Can you tell us a bit about yourself and how you got to where you are today?
Mariusz: Yes. At Google, actually, on one side I work with mobile gaming and apps companies in the region on one side with those ones that have the more ambition to really, scale themselves in the whole world. Then on the other side, I’m trying to help the ecosystem, in the region, by connecting the companies with investors, by sharing more knowledge on the market, or sometimes just engaging more industries to share more knowledge and insight into the industry.
Jonathan: Awesome. I’m sure that you have a ton of perspectives about mobile game businesses in Europe and in general, mostly on the Android side, but I really want to get your perspective on three main things today. The first one is any insights you have on which game genres or countries are on the rise right now. There’s the state of the mobile gaming market these days, even specifically on the Android side, because there’s a lot of data coming in from folk’s, Sensor Tower and App Annie about the fact that mobile game spending is down.
I have my thoughts about this, but I want to touch that point second, your thoughts about where privacy is going to with Android and the privacy sandbox. We will talk about this in a high level because we don’t have a ton of time and third in this new world that we’re headed to, what do you think are the factors to success for a game business and which companies are more likely to succeed than others and why? Let’s start with the state of the market. What do you think about this data that is coming in here and there about the fact that the market is slow for mobile games and how do you see things there?
Mariusz: I think like it has, if we look at the market, the mobile games, it has a few different perspectives and a few different points. The first one if we look at the business, it’s always been the business of high win, high risk. If you are in the market because it’s very scalable, then you actually know you get amazing success, but it’s actually are a lot of companies that actually want to get the success.
The second point is of course, if we look at the data, even based on App Annie, if we compare the first four months of this year versus the first four months of the last year, we see even a little bit of negative growth, which is actually coming from, I think it was minus 8% year over year for based on App Annie, but it’s on one side is coming from the fact that two previous years created pretty nice base because of the COVID because of all moves inside the industry.
Then of course there is the topic related even to the revenue measure. Yes. For example, the other revenue part that is very strong and is actually in many cases, even growing faster than in-app revenue, especially in emerging markets, it’s there are not many ways actually where it, where you can actually measure it. There are not many tools that actually can really look at how it’s really growing.
In this case, in many cases, it’s not really, it’s a little bit overlooked as well. Then of course there is a lot of concentration happening on the market as well because of the growth because of the, one side capital and knowledge that you need to run successful growth activities, create specific entry barrier, which is not easy to go over for entry players.
That, of course, it creates another point for impression and the feeling that okay it’s extremely hard, especially for someone who is starting the part. Yes. But still, if you look at the market, so, for example, I just look at the App Annie and it was interesting to see that if I look at the in-app revenue in the US, if I look at top thousand grossing, 30% of that of actual games were older than five years. That shows that it’s harder and harder to enter that market.
But on the other side, you have still a lot of success. A lot of companies that started not a long time ago and they got amazing success. We see that still it’s the time when the casual genres are growing really nicely, casual games, simulation games are doing really well.
Board games are actually getting more and more popular. I think they used to be ad-monetized, but more and more companies are trying to get some in-app from high-value users. Actually, we see that even in those gaming genres, there is a lot of learnings that developers coming from those really casual and light let’s call it genres. They’re removing learnings from your core and meet core games to actually again, increase the monetization.
Of course, if we look at the markets, the last months weren’t really the best for tier one markets. For example, if we look at those four months, US was growing below the average, if we look at the revenue, which is exactly coming from the fact that 2021 and 2020 was extremely successful for US as a market. Then again, there is the specific situation on those markets coming from growth cost and entry barrier. That is actually again, coming to those markets. On the other side, if we look at markets like Turkey, Malaysia, Saudi Arabia, and even markets like Poland and Brazil, they are actually growing much faster than average. Again, they are not always easy markets to enter because of localization because of all those challenges related to that still in those markets, usually pretty high share of the revenues delivered by a pretty small percentage of the users.
You need to find them in the right moment and then adjust the content. But still, again, I think from the perspective of a new developer or someone who hasn’t started a really long time ago, it’s not always the best idea to focus on the biggest share of the pile. Okay. Let’s focus on US or the fastest growing genre, because again, usually, the best parts of the industry are actually the most competitive as well.
Jonathan: Yes, for sure. I think that the concern– I agree with you on a lot of these points, I think that the consolidation that is happening unless you’ve been living under a stone, you’ve seen the news, it’s been happening for a couple of years now, this very, very intense consolidation trend in the mobile game industry. I think that all of this consolidation, basically, it’s a result of the fact that it’s just pretty hard to create a really good mobile game business.
It’s hard to create a good game and there are a lot of risks, as you said, there’s it’s a very high risk, high reward type of venture. A lot of them are turning to acquire existing games and de-risk themselves. It’s really hard to scale a game. There’s a lot of economies of scale there in terms of their user acquisition capabilities, both on the data analytics side. Basically their entire publishing capabilities are already developed. They have a system they can plug in really good games to and grow all of these mega game businesses.
Mariusz: Yes. I think a lot of developers want to be successful, not just in one genre, but a little bit, I would say balance that is a little bit more in the way that okay. I would like to be really present in a few genres. Again, in those cases, it’s usually not easy to create just another game in that different genre. In many cases, it’s exactly, it’s a bit easier to buy the game or even buy the studio then as they grow, be relevant for a few strong and interesting game genres.
Jonathan: Yes. I think on the positive side actually think about success even in Europe and you mentioned Turkey, which is, it’s unbelievable what’s happening in Turkey. I remember, I don’t know, five years ago, it was unheard of, it’s going to be an amazing game industry in Turkey. Now there’s so much great talent and great game studios in Turkey. The Turkish market itself as a game market is growing very fast.
We can see their examples such as Dream Games who created Royal Match. That’s exactly that you have folks that are coming in with a lot of background and expertise in creating a fantastic match three game, I’m addicted to it. I’m at level, I don’t know, 1000 already. They became one of the biggest advertisers in the store coming in head to head with folks like King and other folks that dominate the match three category for a decade or almost. It is possible for a newcomer to do this, but you need to come in with good expertise. That’s encouraging.
Mariusz: Yes. That’s exactly the point. Yes. I think again, there are not many industries where you can leverage that potential so heavily. In the way that if you get the success, that success can be extremely really amazing and always in every market every big success is inspiring new founders and new people who are thinking, “Okay actually maybe I can actually try to do the same or at least kind of similar.” Always such successes are really really good for the market because they’re really inspiring that the talent people in the market and actually they’re showing that that reward even if it’s high risk and high reward, if you see that reward then it’s a little bit easier to imagine yourself on that chair as well.
Jonathan: Yes definitely. Let’s move on to the second point because I want to make sure that we have time to talk about it which is privacy, so much has been happening with privacy and the impact for gay marketers has been huge with iOS 14.5 and everything that happened on the Apple and iOS side which created a lot of mayhem and chaos for some time. It started with iOS 14.5 and deprecating the IDFA without providing a ton of solutions and sending the industry to basically figure it out.
That created a lot of damage in terms of targeting, so a lot of game businesses were used to basically have a channel such as Facebook and others where they can acquire high quality users without worrying too much about targeting because it was based on Facebook and all the other social networks, social graph, and user graph that basically collected a lot of user level data about their in-game behavior from about every game that they ever downloaded or played. They took that away so it became pretty hard to acquire high quality users in the same way and that actually sent a lot of spend and a lot of companies to focus for some time on the Android side.
Then we didn’t hear anything from Google for about a year but when we did the market, and the industry, the community basically received it very well I think because the main message was, we are not going to do something irresponsible that’s going to send also the Android ecosystem into chaos. We know that I’m now talking specifically about mobile games but it’s for any app business. We know that mobile game businesses need a feasible way to grow. They need a way to grow their audience, to grow their user base, and they need to rely on advertising to do that, and we want to maintain that. We do want to create a more private ecosystem and a more private world but we want to do it in a responsible way that allow these businesses to also advertise and thrive.
To do that they need basically two things, they need targeting, they need the ability to measure without compromising user level data. First of all my question is, why do you think and of course everything here that we’re talking about is at a high level. Why do you think Google is taking this approach as opposed to what Apple did because basically they said that it’s going to take about two years until it’s going to be enforced and they’re going to involve the community in it, but it’s a very different approach. It’s like we’re going to protect the advertising ecosystem, and only after we manage to tick that box we’ll protect privacy or something in those lines. What do you think about that?
Mariusz: Yes there are a few points. Yes so in this case as you exactly mentioned like the main idea behind the Google approach is actually to go combine three points. The first one is that okay, as the Google we want to develop those, to really keep this user information private, so really develop the approach that is taking seriously the user’s privacy and their growing expectations. Yes because we know that actually the user’s expectations towards privacy are growing, so that’s why it should be done very, very seriously.
The second point which is extremely important is that the Google really wants to enable both publishers and developers to keep the online content for free. Always there’s, actually the free content was in the Google’s DNA and both the developers and publishers, they literally have the way to still make some business, and because that business will make them giving that access to the content for free because that’s actually what users want. Then of course the third point is the whole project is invitation given to the industry to collaborate on this final solution.
Yes so that’s why it wasn’t the announcement of the final solution. It was announcement about high level approach, and if you go to this privacy sandbox on Android website where you can actually have quite detailed explanation at least on the high level this approach, there is actually the place where a whole industry can add the feedback, share what someone is thinking about that thing, and then the final solution that will probably will take around two years to develop will actually include the feedback to the industry making sure that on one side we have that solution that is actually corresponding to the user’s expectation on privacy.
On the other hand is really looking at the business model of publishers and developers, and the third point is really something that is seen by the industrious fair and working as the standard here. The last point is that a lot of those things that we are discussing and actually sharing for under it were tested already in some way on the web part of Google Properties because some of those solutions were, their life almost two years being more on the website.
Jonathan: Yes and I think I love that. I think that first of all Google has a lot more experience than Apple in working with advertisers. That’s they’re way longer in that business, and I think it shows because it’s basically I’ll just go over real quickly over the proposals in the privacy sandbox so in regard to targeting it’s basically saying we’re going to provide you tools to targeting high quality users. We’re going to do this with something that’s called Topics. It’s basically allowing you to target users based on interest without sacrificing user-level data, without allowing you to basically, yes.
Mariusz: Yes because that what’s important in that approach. The all user data is still staying on the user device. Yes so it’s not really shared with.
Jonathan: Yes it never leaves the device. A lot of it is based on on device computation which is great. Also one of the things that iOS 14.5 broke pretty dramatically was retargeting. Another approach that is called Fledge to allow you to retarget users again without sacrificing that user-level data and maintaining privacy for users, something around measurement the attribution reporting API proposal which is amazing. There’s so much details there on the website if you want to go to privacy sandbox on Android website just Google it which basically is a way more developed version of SK ad network that allows you to actually measure in a pretty good way and in aggregated and privacy first way the performance of your campaigns. Lastly and that’s on actually the user privacy side in a really good way this proposal called the SDK run time.
It’s a really good way to enforce all the bad practices from players doing fingerprinting and things that aren’t allowed, so Google has a really good proposal for that. It’s called the SDK run time basically making sure that all the SDKs that perform that this practice of fingerprinting are operating in their own runtime environment so they can’t access device parameters without receiving permission from the app itself that they’re installed within. These are really good proposals that they think would make life very different for game marketers in Android once they’re actually deployed we need to see the final version of these proposals of course but it’s not going to be the same in my view as what game marketers experienced when iOS 14.5 came out.
Mariusz: Yes I feel like the initial response from the industry I think is really good, and even at this point there are a lot of details on this privacy sandbox on Android website, and of course all that content approach will be developed but still there is quite a lot of time on that, but actually on that side I really encourage everyone who haven’t visited that website yet really to visit it and start to go deeper into the topic and even thinking how to actually understand it better and actually how to even grow my approach towards first party data as well.
Of course on one side there is a lot of stuff you can do around understanding your data on the higher level thinking about third party approach, but on the other side you can of course grow your approach towards understanding your users based on the data they were giving, based on looking at your relationship that you have with them and what actually data they can share just with you because you have that relationship, and then what you can know about those user more than the other players.
Jonathan: That’s gold right there, and there’s so much you can do with learning from that first party data but that’s gold. Lastly before we move to my third point just want to talk a bit about the entire legal environment that is changing. We won’t go into the nuts and bolts of the legal proposals and everything but for those of you who don’t know, Europe is making a tone of progress in actually proposing, and it seems like they’re adopting some of these laws or pieces of regulation such as the Digital Markets Act, and there’s a few other proposals.
It even gets the attention of US officials. I even heard Obama in a video talking about the fact that the US is behind and they need to start having these conversations but basically all these what’s common or like the common thread that goes through all of these pieces of regulation is to open up marketplaces to stop very monopolistic behaviors I would say. On one hand that basically it means that there’s a gatekeeper in for some markets and it’s one company and they can do whatever they want.
Apple is a bit more centralized in that approach and basically it has two sides to it. I know that you can’t comment like specifically for about Google’s view and all of that but basically there’s two sides of it. One of them is around payment systems and allowing different payment systems. That’s one side of it. You don’t have to go through Apple or Google on the payment side, Google is testing. It’s been published with Spotify, they’re running a pilot of allowing third party payment systems, which is great. The more interesting side is that, although, on the Android side, you can sideload apps for a lot of time. That has created a thriving market in places like China, on Apple devices you can, so one of these proposals is to actually allow for sideloading on iOS devices.
The question that going, I know that you can’t comment on some of these things, but I just really want to try to imagine the future here and to ask you, do you imagine that in Western markets, in Europe, the US, all of that, we’re going to see an environment that is more similar to China, where when you as a game business approach distribution, you have dozens and dozens of options, dozens of marketplaces, dozens of app stores. The market there is very fragmented. Do you think we’re going to see the same thing in Western markets?
Mariusz: Of course, it’s quite complex topic. Because on one side, Google is always fulfilling any low regulations that exist in any market. Yes. Also, whatever law exists, whatever kind of law will be created in the European Union, Google will fulfill the obligations coming from that. On the other side, if you look at those stores, it’s kind of even bigger topic, because for example, right now in there, there is a lot of discussion around Web3, around crypto. Not just like you’re paying with US, sorry, paying just with currency, in many other ways. That access to the games and apps is not just the topic, where those apps and games will be, but how you will be paying for them and how you will be engaging with the content.
If you’re asking me, if I can imagine, of course, everything is possible and a lot of again will depend on those regulations. A lot of it will depend on how those Web3 communities will grow or how they actually will develop because in that approach, of course, that mission of the store will be a bit different, I would say, but even actually in China, there is quite many stores but still, there are some that in general are more popular among higher share of the users. Also, of course, you can imagine that in general, that competition that is getting harder and of course, depending on this regulation, depending on the user’s favors, the feature can be way different. Even today, you have some third party stores existing in the world.
Hard for me to comment what will be the future of Apple Store or Play Store because at the end of the users will kind of vote with their money and with their fingers. Going to the specific point when they see the value and then downloading games and apps from the plex. Of course, at this point, Play is doing everything it can to deliver the best user experience, the best, the most secure environment for the users.
Even a lot of changes that are actually tested on the Play like lower value payments. Also that someone can pay something for very small amount of money, not just for $2 or $3. The topics that are very important for example, for emerging markets. The test that you mentioned with Spotify. Or what is the best way for the users to get information about new type of content on the story? I would say a lot of things are actually being tested right now. We can say for sure that probably that reality in a few years will be way different than today.
Jonathan: Yes, for sure, and for game marketers and people in the business of games, in mobile games, I just think focusing on the principles of marketing and understanding who your– Yes. Go ahead.
Mariusz: I think even the topic that is that’s in some way, I would say not exactly connected to that, but I think strongly correlated, which is plus platform approach, for example. I think that more and more actually companies are actually not saying that actually, we want to develop the games that will actually work on any other platform, not just on one. Then actually on the Google side, we see that interest as well. That’s why even again, those stories in the future for sure will be looking totally differently than now.
Jonathan: Yes, it’s exactly the point I was saying. Is that as a marketer, you need to focus on the principles of marketing to grow your game business. You need to understand who your users are, where your good user segments, what differentiates them, how you can acquire them, where they spend time, how you can find them, how you can scale your game basically.
The future, I truly believe it’s going to be more open and the way that folks would discover new content and new games and where they’re going to play it is going to be very, I don’t want to say fragmented, but there’s going to be a lot of options. What you just mentioned with just cross-platform, we can see the same thing because another test that is happening. I think it’s in beta is Google play games on PC. There’s a beta that allows folks to play mobile or games that were designed for mobile.
It’s like the word mobile here, it doesn’t make a lot of sense. To play, for example, Candy Crush on a PC by installing a Google play store on your PC. You can basically- and then what it means to be a marketer of a mobile game? You have users coming in from PC that maybe they don’t even have the app on mobile, but the more exciting thing is, some of their sessions are happening on mobile. Some of their sessioning are happening on the PC when they’re taking a break from work or so on. I think that’s a really exciting future, but if you focus on the principles of marketing and growing your game business, it would always hold true no matter where you distribute your games.
Mariusz: Exactly. I would say the same things will matter as now. We are trying to understand the needs of your user and then how actually you can really deliver that specific promise that made them actually come to you and then actually know that whoever is the best in that, whoever actually is choosing the right game and the right bottle because of course, the whole gaming is not just about going to all battles but choosing that one that you know that you can win. That’s why actually we were talking even about those genres, about those countries. It’s not always about doing the game for everyone, but focusing on the specific audience that is on one side, big enough for your business to survive, but on the other side, not necessarily the most competitive and taken for example, by the biggest ones.
Jonathan: For sure. We have a few minutes left. I do want to ask you on the third point, which is factor of success and which companies do you think are more likely to succeed as a game business in this environment in the next few years and which are less likely. Can you give us a few points about that?
Mariusz: I think of course it’s again, it’s broad topic, but something that we see really well and that’s actually why there is even this hiring market became so competitive, is that because this business is so scalable and strong knowledge and dedication gives so high leverage, it really starts from the strong team. Whoever has the strong team, that will have way, way higher chance of success, which means that in the gaming business, it makes sense to hire really one good person instead of three that are average.
Then we see it actually outcome in terms of the business results. That’s actually how I think especially new players and new teams should really start. How actually can we really create, not really big, but small team that can survive for longer, but the people who really know what they’re doing and are really dedicated to do it. I think that’s a really important point. Then the second one is you need to decide, I would say very early in your journey, what is your approach towards business aspects of gaming? Do you want to just create the games and then focus on that?
Then for these business parts, look for the right partner, look for the right publisher, maybe look for the right freelancer that will do it for you, or you want to develop full gaming company, which means that all those topics that create really high entry budget, like analytics, creation of BI, creation of CRM, although sometimes wide sophisticated topics need to do it from as early as possible. If you want to really go in that direction.
Of course, it can be starting from doing nice BI based on the Firebase and data sent to the big query or no similar solutions, but again, there is high win and high reward, but there is actually this challenge related that to the fact that you are really actually going to the battle which really is strong components actually are present in the market for many years already.
Then the third point is really, you need to use those insights about users as good as possible. Starting from the point that we mentioned, choosing the right market, choosing the right genre, you really understand. Then how actually you can grow understanding of those users, how actually I can really improve retention, how I can really improve the monetization and then combine those points, I can improve monetization.
Then once I’m there, then it’s a way easier even to think about doing growth and developing the really successful business. Actually, it’s fast business, which means is the business for the people who want to be fast and really want to be fast in doing the things happen and sort of making it happen. I would say growing that probability of success every next day, it’s kind of rather marathon than sprint at the end of the day.
Jonathan: For sure. I really like your point about the fact that somebody is building a game or a team that’s building a game really needs to make that decision early on, because it’s two different things to create a good game or a great game is just a completely different rodeo than building the publishing technology that you need to compete with the large, I don’t know, it’s like players that are worth tens of billions of dollars in the market that are investing a lot into publishing technology and having these capabilities to distribute and scale these games.
Scaling the game is just a different rodeo. These days it’s extremely complex, like to build that side of the business. That’s a decision that needs to be done early on, but luckily folks have a lot of options. They have a lot of options they can start with.
As you mentioned, Firebase these entry points exist basically across the stack of the publishing technology. At some point of course, publishing like finding a publishing partner is an option. There’s a lot of options, but it’s so crucial to make that decision. Because a lot of teams that I saw that tried to actually build these, the technology and that publishing stack too early on, it took away so much of their focus that they actually hurt their own game which is the important thing.
Mariusz: Exactly. Then that’s even this COVID that you showed that in many ways working in the games, you can actually work from anywhere. Literally, you don’t need to be in the office. You don’t need to be in the specific country. That’s really, I think big advantage that you can choose to grow your business even hiring the people from other markets, hiring the people from very distant places. On the other side that actually grows this competitive bar as well.
Again, you need to think about how much you are actually averse to the risk, because again, in this case, it’s a lot of those activities depend on how far you want to go risking specific activity because let’s see, even if we look at some budgets, like 100 K, it can be a lot to develop the game, but not necessarily it will be a lot to grow the game to strong success.
Again, at the end of the day, it’s like whoever makes it thinking from the beginning, looking at the right time horizon and thinking about topics like cash flow, what is my team, what they want to create, do they want to be really successful? Then they understand that actually it comes with higher risk or maybe they just want to be part of pretty small, but still successful gaming company. The company that rather will not be repeating the success of Dream Games as the example. That’s I think is the really the important point for those business decisions.
Jonathan: Awesome. Thank you. That has been a fantastic conversation. We are running out of time. I’m going to skip a few of the regular question that we ask guests and I’ll move straight to the meat, or should they say the pancake and ask you what is your favorite flavor of pancake? It doesn’t have to be a pancake by the way. You can, something that is similar to a pancake also works.
Mariusz: Actually, I love vanilla, I would say. I really like vanilla ice cream vanilla pancakes, actually I would say probably I would fall for that one.
Jonathan: Awesome. That’s good. Lastly, where can people find you if they, we talked about so many things and I’m sure that folks have questions or want to work with Google and so on. Where can folks reach out to?
Mariusz: Sure. At first, I really encourage you to visit the website www.gamecam.io. Actually, if you are like growing your mobile gaming business, you will find a lot of really good sessions there. Recordings done with the really successful founders and successful gaming companies. That’s really, I think one good source and then really encourage you to catch up with me on the LinkedIn. You can- happy to connect with the people. Please reach out to me, happy to exchange the experience and knowledge. Just go to the LinkedIn Mariusz Gasiewski and happy to connect with you.
Jonathan: Great. I will include those links in the episode description. You can find them there. That’s it. I think it was a fantastic conversation. I enjoyed it a lot. I could continue for another hour or so, but we do have to finish and I will just want to thank you. It’s been a pleasure. We’ll speak soon.
Mariusz: Thank you for invitation.
Jonathan: Awesome.
Mariusz: Have a good day.
Jonathan: Thank you very much bye bye.
Esther: That was Mobile Growth and Pancakes, to find out more about Storemaven and how we can improve app store performance, visit storemaven.com and then make sure to search for Mobile Growth and Pancakes in Apple podcasts, Spotify and Google podcasts or anywhere else podcasts are found and click subscribe so you don’t miss any feature episodes. On behalf of the team here at Storemaven, thanks for listening.
