Is the profit multiplier in gaming getting smaller? | Gonçalo Martins from Boombit

[Music] we are now joined by Gonzalo from boom bit games how are you doing today fine very fine thank you very much well we spoke up the last uh London conference as well has much changed in the world of Boom bit games what what is it you folks do for people who aren't aware yes we are in mobile game publisher we publish games all the way from a casual to meid cor uh recently we started as well going into the service business where we are like selling our bi our playables our user acquisition as a service but mostly we are Developer and a publisher of mobile games that's interesting that's that's something new from the last time we talked but we'll come to that in a second in terms of the actual games publishing of it all and also developing you know working with developers we've had this slight wobble in the industry over the last couple of years we were in the middle of it when when we talked last year how are things looking now from the developer side cuz there

reports that we got was that funding was really drying up and it was difficult to get any VC coming in and actually giving you money to develop a game people are laying off lots of their staff members and so forth it still seems to be sort of happening in the background are we seeing an end to this at any point are you seeing this reflected in your clients the people you do business with I think uh I think definitely seeing at the end of it right now especially in the next couple of months next couple of ques I honestly think the the the main difference is the fact that now people are less are more conscious about the cash in cash out dynamics of mobile gaming if you think about four years ago you could invest as much money as you wanted you have like a two years three years Break Even window like that money would come eventually uh because there was a lot of funding right there was a lot of uh of Investments going around so people were willing to wait two three years for that cash to come back uh nowadays that's why I think investment is a bit tougher because people need to

have uh a game that is somehow caching in slightly sooner or at least showing a a very strong promise of that money to to come back it's not just investing on user acquisition and then wait for retention to come to come after so you do have to have slightly stronger products making sure that what you are selling or what you're showing to the VC is it's something strong uh and people are going back on their break even and windows even big big titles they at maybe two years one year you see that they want to to get the money uh in a much shorter amount of time and I think that's the biggest change so they're looking for that return that bit that bit sooner so people need to bear that in mind if they're pitching something ex exactly I think the the multiplier of the the potential on gaming is getting slightly smaller because you know the people know how big a mobile game can be uh so it cannot your given win cannot keep being big bigger and bigger so you

need to to get the money back sooner in my opinion well you mentioned I mean obviously you've been a publisher for quite some time and you mentioned this this motion of of uh using what you've built and then offering it to other people as a service as a tool kind of some almost slightly disconnected from yourselves tell me more about that yeah so we we build the past two four five years we build all these backbone right of publishing right both on user acquisition monetization bi playables everything around even the desk on the SDK side right we build all these things for ourselves to publish a game and to be as successful as possible including LTV prediction and we we build this big machine and then we start looking around and seeing that maybe other Publishers could use a little bit of RBI they are very good at creatives they're very good on the SDK side but they not very good on the bi side or maybe other Publishers are not very good on the playable side and they they have a pretty good user acquisition team but they don't have the assets to really scale their titles and this is where we are seeing that

actually there is that potential of us as a publisher to sell as a service parts of this machine that we've built so far to make sure that at least all of us all these Publishers if we come together and we start using the best of each publisher we can have much bigger chances on on really succeeding getting maybe that break even window on a shorter period And I think that's that's where we we saw that there was an opportunity and this is something that developers can just plug into their games this an xdk thing or API how does it work it definitely depends on what it is so if it's on the bi side we only need access to their MMP data and then they can easily within one two days integration on our side uh have access to RBI and our predictive LTV immediately so it's something that quick then for example on the playable side on the user acquisition side is more of a of a long-term strategy that we of course we need to meet we need to understand the game we need to understand the Dynamics and then our teams will help using our tools uh them

succeed on the playable side on user acquisition side so it's kind of a strategy more more like a strategic partnership I would say it really depends we've seen the changes that are happening with the European Marketplace and this idea that we're trying to move away from just a an app store and Google Play model in the west that we tend to rely on and the idea of alternative app stores popping up all over the place now and even web stores where people are developers are saying just come straight to us just cut out the middleman is that something that affects the way that you approach development and Publishing in future is it a different landscape now yeah I think web stores is definitely a talk for the big big Publishers right for for Publishers that have this insane loyal and big daily active users uh and at the same time where the monetization is fully on the IP side because most most of these Partnerships if you do have a web store for one of your titles then apple is going to hurt you across

all all the other titles so it's it needs to be an a decision made on the account level as for all your titles as one entity so I think for medium Publishers where you have a bit of ier a bit of hybrid a bit of idle uh where there's a lot of ads still going around as Revenue web stores are not a solution in my opinion but when you do have like big Publishers one with one or two big titles and it's 100% IP monetized it's definitely going to be a solution sooner rather than later right we know that these big Publishers are thinking about these web stores and some are even going into them at the moment um so for us I think alternative uh stores is a much much more real solution at the moment because you do are you also seen that users are going to this alternative app stores because they have loyalty plan so they can play still the same game that they would get on Apple or

Google but they are getting a reward on top and we are seeing that users are getting loyal to some alternative app stores that at some point is going to start being a niche right you can only reach these users if you start using a certain type of alternative app store and that is something that we are definitely Opening Our Eyes that's interesting are you seeing success at the moment with a particular kind of monetization strategy there was we we went through premium and freeo playay and all the rest of it and a lot of people are talking about about seeing success with a more of a hybrid monetization system like from the developers that you work with or VI yourselves as developers what do you experimenting with what's working at the moment we have everything so we have from the hyper casuals like 98% uh ads we have the the even the hybrids and Idols which could go 30% ads or like 60% ads so we really that's the middle between ibrid right could be ibrid very I focus or ibrid very ads focus and our biggest title is 98% I so we really have

this experience across all the types of of monetization more and more we are seeing that even for hyper casuals we are seeing that the I AP ratio is increasing slightly because in my opinion I think due to privacy now users are getting more and more loyal to any game that they play because if they are on that game it's because they already took extra steps to download the title and it's because they are somehow more committed than before because before you used to see so many ads very well targeted to you so you had a lot of options to jump from game to game nowadays because of privacy you are seeing less and less the what's ideal for you so you tend to be more loyal to your that's interesting so you're saying that that because the data is yielding less information therefore the ads are less targeted the ads aren't as effective at drawing you away from the game you're playing Ergo you develop you spend more time in that game and you get more loyal to it so in fact that in a weird way it's been a positive for

certain games it's been positive on the retention side possibly but still of course what what you are losing from the revenue that is being generated by the by the is not as good right let's imagine that you lose you maybe you lost like due to privacy 40% of your cpms is a big portion but now the users there are in even though they are 4% less valuable they are maybe consuming 5% more IPS because they're going to stick more into the game and they're more they become more committed they becom slightly more addicted and then they maybe want to do a few more iip purchases they not doing in the past so still the the the difference is negative of course because I would prefer to have that 40% increase on ads but at least at 5 10% increase on I is compensating a little bit the the loss on on the monetization side there do you feel that that situation regarding data restriction is only going to get more severe I I I get the feeling that it's going to become more

restricted not less over time is is a gut feeling and then so where does that leave you is it a case of are you already working on strategies of how to deal with the next step where you have even less data to to manage is it about extracting the most from the little that you have I think it's we we are taking advantage of what we have right now using that as okay let let's make sure that from from what we have right now we're taking the most out of it then in the future if if now Google goes into a more aggressive privacy manifest or if if Apple makes makes the the Apple restrictions even more uh intense then we will need to adapt so far we know that Google will sooner or later bring an ATT back but probably only in one year hopefully so there's not a lot that you can adjust right now for then one year when that happens you are in a much better place um so I don't think we are adjusting much there no but who knows

maybe maybe now with Trump in government and all these new you know uh measures from Facebook from Apple to to be less less constrained maybe even privacy will will take a few steps back I don't think so because it was a big big four five years for Apple going on the restriction and privacy Direction but who knows you know anything can happen if you see anything can happen I [Music]