Panel: The Experts' Guide To Direct To Consumer Strategies.

[Music] uh George I'm going to be talking about the experts guide to direct consumer strategies doing okay we've decided in a change to usual conferences instead of getting absolute beginners we've got experts around talk to us about direct consumer strategy so if our experts could come and join us on stage now that would be fantastic and get yourself a panel full of actual experts who are also willing to do some physical labor that's always wonderful to see um so before we get started with the conversation we'll just do a quick round of introductions I'm George Osborne I'm the founder of half space Consulting a strategic Communications Consulting IND company

working within the games industry I'm the founder of video games industry memo the weekly explainer of all things video games and he offer of the forthcoming book power play the inside story of how video games influence the world and what we're going to do is we're going to go from left to right to introduce our panelists and this is left thank you so much uh my name is ham ham H founder and CEO ofam games we're a mobile games publisher uh in the arabic speaking Market in the Middle East and we also enable uh direct consumer payments uh in the uh Middle Eastern Market hey guys I'm a CEO founder of upch charge I've been in the industry for over 10 years um up charge uh we're the only platform direct to Consumer platform that combines uh both uh payments on scale and a deep understanding of monetization

thank you hi everybody I'm David stalzer I'm the president of exola uh for those who don't know ex has been around almost 20 years at this point uh and we specialize in helping companies to monetize so basically we help developers and Publishers to make more money and then on the direct to Consumer side we help them keep more of that money that they make and I'm Taber Voyer I'm the CEO of a thinking ape games uh we've been making games since roughly 2009 we have six games in the market right now hundreds of thousands of users about 80 employees and we're also part of deca games and I'm the head of growth for Deca games as well and we've been doing direct to Consumer payments for the last about two and a half years working with Thea and um yeah now maybe working with app charge too I think we're the pretty girl at the dance and these two are are trying to trying to get us to work with uh work with them and I think uh it's a really exciting time to be

involved in direct a consumer because uh there's so many people entering the market fantastic before we go into the practicalities I want to take a moment to zoom out and ask how did we get here why have we got to this point that direct consumer has become such an important part of the mix for not just mobile games companies but just games companies in general and I'm going to go to tabber first because as he mentioned very much the pretty girl of this corporate dance uh I'd be interested to hear your perspective from the front lines yeah I think um mobile games especially started off in a place where growth for Studios um well it was a lot easier than it is now and there was a lot of organic growth and people were really more interested in scaling up their user base but as the business has matured um servicing your customers has become increasingly important especially with the changes to Performance Marketing over the last two years um you know retaining your customers is really really important and given the um

margins that the platforms charge it's uh very beneficial to be able to not just connect with your customer but also get a much better margin on your purchases interesting so uh strength in uh what tab mentioned here I think there were two pivotal points uh first one uh September 2020 iOS 14 opt in opt out change in privacy so that led to a massive massive erosion and margin I think you guys know uh now it's harder to Target you it's more expensive to Target you Publishers um we saw that Publishers have two choices either consolidation or creative ways to expand margins uh just like Tyber said and one of the main ways are direct to Consumers to its various forms web shops uh side loing Centra and another pivotal point is uh August 13th uh epic games versus apple

uh I think uh it led to a massive chain of events when it comes to regulations uh the the Publishers are more willing to to reach out to Consumers to do the extra effort to to Foster the relationship directly and there obviously uh uh um geograph geographically uh changes both in Europe and US antitrust lawsuits and we can deep dive into it later I think it is fascinating because people often talk about the games industry and they're like how influential are we and it's like well the thing that really cracked open the duopoly was the lack of availability of fortnite that was the thing that customers could understand The Regulators could understand games as this form of mass culture was able to lead to Major change within society which we're now benefiting from as businesses and starting to see here but ham as well I'm interested to see as well what the perspective is on a more Global basis too because I think a lot of the time when we think about about this we're thinking about what was

happening with the app stores in Europe or the us but in terms of the rest of the world and especially in a region like Mena the market maybe was a bit more open in certain places so were there already more direct consumer opportunities within that market than maybe the rest of the world has woken up to I think uh we've been doing uh direct consumers for the longest time since the establishment of the company 2013 and that was just like before it was like really mainstream and the main reason behind that and still until today is um there is no like the arabic speaking market like 250 million people are really really underbanked and unbanked uh so no one has like credit cards uh in in major markets where credit card is the main um uh like a the main medium for you to buy anything from the app store it is just not available

and I believe that whenever I talk to people in in Europe and the US they take a credit card for granted it's very accessible very easy apple pay um but when you talk to people in Egypt for example or an an emerging market like Iraq it is a very cash-based economy even if you look at Uber and kareim in the region 70% of all the transactions that happen are still happening in cash where you pay the driver driver in cash and he will keep the rest for you in credit um which is a completely different way to think about it so how all of these consumers will buy things from the App Store so enabling thirdparty uh payments and enabling easy ways for people to go to a supermarket give the guy some cash and then it will charge their account immediately or use like a mobile wallet or a a DCB is a major major and still till today it did

not improve which is still good for us but it's not very easy for people to buy things from digital goods online absolutely and so we're seeing there the kind of factors behind the emergenc is how do you reach consumers across the world effectively how do we navigate past stores that maybe have their interests in mind more than our own how do we actually build and establish a relationship with a community so that the people who are most invested in a game the ones who were able to have the biggest relationship so I think once you start hearing those things starting to develop you start getting towards the benefits of taking such an approach and and David in terms of exola I mean you are willing to extol the virtues of a direct to Consumer approach but what are the big benefits for a business to start thinking how can we just directly reach a customer and start talking to them yeah I think um some of the things that we talked about uh directly related into that so for instance this uh I think the biggest Ben benefit of all is the change

in margin right uh so number one how do you how do you drisk that 30% that you're paying as a tax to the app stores and it's very easy to just say I'll just work with the app stores everything is built for me I can just do it uh but it's becoming harder and harder and harder to eek money out of that type of a relationship second of all and this was brought up on the last panel uh and I think epic and fortnite is a is a great example of this and I was at Epic when when the lawsuits were filed but the idea of community right that is that is your direct to Consumer relationship so what do you do with that Community okay we're so used to I think pushing that Community to the place of where we know that they should go by push them to steam you know push them to the App Stores but why we built this great relationship and and they want to talk to us they want to know more about these games they want to know they want to tell us what they love about these games they want to know how they can get more

for their money and so now we have these destinations where we can bring them to the difficulty is it's a behavioral change right and so what we've been trying to explain to people is we still want you to play on your device but we want you to pay on the web and so we give more value to them in that place where we're trying to move them to and over time hopefully they'll associate value with the web transactions but they always know that they go play somewhere else and once you have that relationship established and you can make that behavioral change I think that there's so much that can be done through the web stores that is not just Commerce right uh now you can you can look at this as and fortnite was a good example of this too why keep pushing all of this data over to the web stores that we should be having a better understanding of why not be able to talk to the customer about other things that they like how do we think about what our next game is and the game beyond that that we want to build or make that's going to Delight

these customers uh if we have a successful piece of Ip how do we talk to the customer in terms of you know would you like to see this be turned into a television show or something linear and then we can push it to you there we can we can spin up a a Cloud app and push you linear content through this this website so all these things that you can do with direct to Consumer it requires behavioral change and I think we're just seeing the tip of the iceberg on that uh but there's so much to be done here and and we're cultivating this relationships why not really leverage them I mean you were nodding a lot there m as well one of the things that really just jumped out to me there as well was about direct consumer actually increases the amount of power the consumer has in the transaction in the process and you do you agree with that as well and why is that important as well in the relationship for games business with players totally agreed to strengthen uh what David just named here so uh economics a 101 middleman and especially if it's a monopoly it's a the biggest burden uh on on the economy so just

cutting the middleman uh selling directly to the consumer you're being able to to give way more value to to your players create a retention loyalty and obviously expand the margins uh taking that to UA and uh just feed the ecosystem you get X on every dollar that you put into into UA once again so that's basically it fantastic and and tab as well I mean I'll be interested to hear hear two things from you is first of all your perspective about what the big benefits have been in terms of your direct to Consumer approach but I'd also be interested to hear about what some of the challenges you've had sure yeah having that approach because it's it's definitely a shift for sure yeah um I might be interested by show of hands how many people here are game developers are like actually working on building games okay cool sweet um so the benefits um you know not just the margin but the way that we like to think about it a little bit is you know we

build games that we have relationships with customers for a really long time so some of our games are 10 years old and we have customers that have been you know our customers for a really long time and so let's just say on the really high end you might have a customer that spends $100,000 with your company over the course of 10 years um Apple gets and Google get 30% of that so um they get $30,000 and we get 70 so is that an Apple or Google customer or is it in a thinking ape customer I would like to think that they're my customer and Apple and Google would say well no they're our customers and so that be creates like an a bit of an awkward relationship with um with the platforms where um my customer might not only be playing on let's say an iPhone they might actually be playing on multiple devices and multiple accounts um you know and they might be playing multiple games and so I have a real incentive to protect that relationship because um without my customers I don't have a company and

it's really easy in the past I think we used to be a little naive and arrogant and that we would say like oh you know a customer stopped you know playing your game well we'll just do some UA and find another whale we'll just buy more customers and it'll be fine well you can't really do that anymore and also it was kind of a waste because once you have a customer um you really want them to be you know with you for life you want to build that relationship so you know if you can find a way to communicate with your customers and drive them to make purchases in a way that benefits them as well um and you can use that margin to give them more value then they'll be happier and you'll be happier so some of the things that we're able to do with our web shop is um we've built a VIP program where we have somebody who reaches out to our VIP players and just asks them what they want from the bundles and builds custom bundles for them and we're able to do that because we're able to pass on some of that margin to the to the player and to the customer so even knowing who

those players are you may not have known before correct I mean in our case we do we have like a really good um analytic system and and but not all game developers have that kind of technology so I think we're a little bit different in that we started as a chat company and we have really good technology but um if you you know are a relatively small developer or you don't have that technology then you might not have access to you know all of the purchase history for your customers in a way that um you know is crossplatform for example you know um and so working with you know a partner allows you to get access to some tools that you might not otherwise have yeah absolutely and I think as well in terms of that relationship with the stores you know we we we discussed this a little bit last week before you know we had this session today you know we were reminiscing back to the earlier days of the industry where when the stores arrived they offered something of genuine value to every developer they offered a global reach they could offered an opportunity to get to Market

successfully in a way that simply wasn't possible at the time but that the value of that has declined over time partly because first of all the developer is now doing so much of the lift in terms of actually maintaining and supporting that community that what are the stores doing but I think and going back to you ham is actually this realization that the stores weren't really reaching every part of the world they were notionally available in all of these places but often to very small audiences often not aligned to what those audiences actually needed so in terms of like the direct consumer strategy as a final benefit do you think that one of its most important benefits is unlocking this Market of players in parts of the world that otherwise wouldn't be able to be reached without it of course one of one of the major things in the Middle East is um the concentration of wealth uh is in the hands of a small group of people to start with so also even before iOS 14 and the change reaching this segment of the players was hard now

it is a nightmare um just finding these so just like commenting on like when you find a player you will need to really keep them I I think this is crucial in in today's uh like changing world in the gaming space but I believe that in the Middle East in particular and I'm I'm just like focusing on the Middle East because it's a very interesting Market to just understand and try to figure out the details around it uh just understanding that it is a market of VIPs to start with so in our case when we were doing direct to Consumers we were not thinking about like I want to reduce the 30% margin of apple or I want to do anything I just wanted these players to spend more um because once you have a VIP player you cannot just treat them as any other player they need to be really handheld and uh this moment of conversion from a regular player who

is spending $10 $20 to becoming a spender of $20,000 can happen over a message that you have sent them or like you had like a very nice reply to that person and then he would ask you like okay so if I am buying $10,000 worth of coins will you give me a discount if he was like having this interaction only with the App Store he wouldn't have like that luxury of course there are players who are spending directly on the app store without talking to anyone but we found that we were able to convert players to spend millions of dollars um uh in the App Store uh um like with wire transfers and um and you will need to build a lot of trust now my my mission is to try to reach a bigger audience given like we are offering other alternative payment methods in the Middle East for more and more and providing loyal and providing other stuff it is happening I think that

there is something very interesting happening in the region fantastic and I I think we'll also return to that VIP Point as well we tab as well on the community side shortly but I think one of the things that you mentioned there obviously you have to build relationships but one of the key things you actually have to do is build infrastructure because to be able to own that relationship you have to build the mechanisms through which people can purchase through which people can make payments using different methods but also through which you can maintain that Communication channel um so I mean you know in terms of the app charge perspective as well what are the really what are the most important things that a developer in this room needs to be thinking about when it comes to building their direct consumer strategy in terms of the infrastructure Point what are the key things they need to be gathering to be able to do it effectively um I'd like to add on whatam just said so it's not only a VP Market uh there are dep it's a genre dependent right if you're Social Casino you're midcore you're hardcore you have many VIPs and you need to take

good care of them but I think one of the main gospels of director consumer that it forces you to uh adapt new technologies in order to Foster these relationship so if you're casual or you match three you need a ways to automate Communications um with the players without uh a human touch CU it's not like a a 10,000 or $220,000 VIP you just need to reach to to players on high scale it's a part of the infrastructure that we're talking about uh first first and foremost uh the ability to identify the player and to and to dynamically show him the the right stor fund the right offer to the right to the right player uh first and foremost uh Merchant of record that's the the basic on the Gateway in terms of like uh paying the taxes standard regulation uh and coverage across the world uh it's also one of the one of the key um uh infrastructures that you need and uh third that what we like to uh present and one of app charge's Flagship is is monetization tools and again this is

really depends on the kind of the category of the game that you're at uh uh if you're a highly uh LTV driven uh game you'll have certain uh retention and monetization features unlike more casual ones and the lines of communication um clearly uh there are many many many ways to communicate depends if you're looking to a more uh uh White Glove communication with VIPs or it's a casual and you want on scale to uh Mass uh uh Mass messaging on messenger um on WhatsApp on email and you want to be able to send even to the ones that where you do send on mass you want to be able to send it a personalized offer so you need to identify him and you need to have the tools to send personalized offer offers on scale absolutely and and David what's your thoughts about this as well because I mean actually for a lot of businesses in the room they're thinking I really want to be able to do this but is this going to be a lot of work like how can I what can do to make sure that this level

of work is something I can manage or my team can manage as a business so I I'll just I'll start by saying yes to everything that was said here um I think those are all really good points um and I think that it's it's difficult you're blessed I think in your game if you have whales that you can talk to like that to begin with um I think that uh aside from all the plumbing and the tools that we're talking about Merchant of record is one of those really important things uh to your point as well like having more payment methods that people can take is another one of those you want you don't want to lose a player or a transaction because you can't put something in front of that person that that allows them to transact uh so we're at over 800 payment partners for that reason at this point um I think when you find those whales and you have access to those whales having a way to be able to transact with them seamlessly because it's not the normal transaction can be more than a $10,000 transaction and uh

how do you KSA those people and and and know that you can transact with them easier in the future once an initial KSA is done um and then I think one of the other big challenges which we're working to solve right now is as we talk about these direct consumer relationships and the web shop one of the difficulties has been uh figuring out like on your UA how is your spend being attributed to things as you go from store to web shop and things like that um we just implemented uh I think we're the first company to do it too we just implemented a direct integration with apps flyer uh it's it's server to server it allows you to basically get all of that data immediately uh and know exactly where that spend is going how it's being attributed whether there's value in the things that you're spending on you can ab test figure out if uh if you need to change your campaigns and do things otherwise um it's a pretty cool new new feature and it's I think it's one of those things that's missing from this p piece of what we're talking about

if anybody's interested in taking a look at it you can look it up at exola dopro uh back/ appsflyer uh there's a whole bunch of documentation on it absolutely and I think it's really interesting as well about how much this conversation is focusing about how you can at scale do something that we all instinctively understand on a very personal level which is build respect amongst basically the community who really power what your business does and you know T Tab and I were talking about this last week about this is at scale getting to the point of what happens at my local coffee shop which I visit every single day religiously so now I get two stamps on my stamp card instead of one every time I buy a drink because they're like you've bought so much from us and you're so consistently here we're going to reward you it's about kind of returning that personal relationship to that Dynamic within mobile games and and so so tab there I was going to ask about that point around how are you using direct to Consumer strategies to really reinforce that sense of community around your games you know how do you really

bring those people to make them feel not just like they're spending lots of money but they're actually actively shaping the thing they love oh man that's a huge question um so I think you know you kind of highlighted that having the infastructure around building those relationships is important and I don't know that um you know companies like exola and app charge are going to help you to necessarily build all of that stuff where they there's obviously a lot of tools that you can leverage but at the end of the day when you are a developer and you um have a small percentage of people that are going to give you money a very very small percentage of of total players ever convert um you have to find strategies to connect with those people no matter what it's the most important thing for you to do as a business even if you're um you know a more casual game finding out who the biggest people in your um economy are is really pivotal so there's a lot of ways to do that whether

you're connecting with them over email um you can get you know inapp um chat tools like we use help shift as as a a customer support tool which gives you the ability to chat with somebody with within the game we have huge Discord communities um we have native chat in our game and we have native group chat and we even had our own you know native chat support um but we still found that Discord was a really powerful place to build community um you know even things like there's some games where I've talked to other developers where they're like we don't have chat but we have these Facebook groups and like all of our players go to Facebook and they talk about the game in these Facebook groups well like put your hand up and say like hi I work at the game company and a lot of times developers are afraid to talk to their customers that way and they're they're afraid to to connect face to face with these people and be like yeah we're the face of this company but in today's like you know world where you have these people who are connected to games for a really long time and they want to be part of that community it's okay to sort of like create like we

create sort of fake personas so you know we have different uh names when we talk to the community but we're in there every day talking to them and and working with them and you can go to people and be like like I said at the start like what do you want to see in this shop what are the things that you've bought like hey we have all your receipts we know what you bought in the past and you bought this item you know two months ago did you like it what did you like about it what did you not like about it and then you can leverage that to build you know new um things to sell people because if you've got the relationship with them directly through an app store you sort of it seems to be that there's this huge black box that's going on as a result of that middleman being present whereas by actually owning a relationship you're able to go straight to your community and hear from like ideally you have the tool to connect with them directly in your app but if you don't have that leverage whatever tools you can to just talk to them yeah and I think absolutely that point and also you know you were really hammering home the point that you were making earlier as well M which was different games are built in different

ways which will lead to different approaches working within different communities so I mean have you seen any examples of direct consumer strategies that you think have been really effective in like different genres and different approaches so you know you mentioned obviously that a match free game might take a different approach to another one have you seen any great case studies out in the wild that really sort of think that's the perfect way of doing it various of course so um I'd like to uh refer to what Tyber said it you need both technology and strategy something we both support an app charge uh our team comes with great experience from uh the monetization world like uh companies like Moon active and Pla and Neo games and fiber uh so we we're here to share the the knowledge the the human capital is the most precious thing we have and we derive our our futures from that and we have several case studies both from either casual or uh soci Casino which is a totally different

strategy and we stitch every game to his own size a suit to his own size and uh relying our on our experience from previous companies or with clients that we have uh uh we're we're offering the best solution and obviously we're iterating alongside with our partners and um we're retention features for a in webshop is one thing and communication with the players is another thing and it's other tools that we're supplying as well everything of course uh supported with data and the ability to manage everything from one place so uh app charge uh reinforces the the the game developer everything is managed from one place you don't need to have double manage on two platforms uh we're the extension of the game and I think this is one of the secrets so you need to understand the internal deliberations of uh every mobile game they um mobile games have uh a limited infite resource and uh uh you need to build a kind of

technology that uh reinforces it and doesn't create extra labor like extra work absolutely and I think it's also about as you're saying exercising that flexibility too to find the right approach the right find the right model because when you are direct consumer you can start really thinking well is a subscription approach going to work best here is it going to be this approach in terms of in G consumer you have that chance to speak directly to people and build what works for them which I think is fantastic but I reckon I've got time for one more question before I'm hopefully going to have an opportunity for someone in the audience to ask something um I think the real question though is is just what what comes next for direct consumer like how can people get potentially ahead of the curve you know obviously there's been a lot of developments in terms of the competition and Regulatory space but we saw uh the Ft report a week ago that the European commission is looking to pause some of its competitive actions against big tech companies while a new Trump Administration comes in so do we see that in the future we're still going to be seeing more room for direct consumer

strategies continuing to evolve where do we think this is going to go next I'm going to go for Hanan I think it it will most definitely evolve and it will open more for more people uh for me I'm seeing an opportunity in New Markets uh that absolutely have no access to uh the App Store especially now with the changes especially in the Middle East more stability in uh will open up opportunity to Banking and the enablement of banking the enablement of people to want to consume content uh in different mediums not only in gaming but anything that is digital allowing people to buy things using alternative payments is crucial looking at like a market like Syria once like once it stabilizes this will be it will take a long time to streamline people buying directly from the App Store and it will be much easier to go through through alternative payments to go there and it's a big

Market supposedly and it will be very much catch driven very similar to what happened in Iraq so if from a technology point of view I'm not uh seeing a lot of changes happening uh next year but for markets I'm seeing a lot of opportunities I think it is a it's going to be a remarkable year for a directed consumer we're going to see major uh technology breakthroughs when it comes to communicating with players starting from uh Dynamic uh game hubs uh to automated social media ways uh to communicate with the player and sending on multiple channels segmented offers to players to lure them in and side loading side loading is going to be very big uh moving players to install through APK and Android and hopefully soon across the world in in iOS uh not through the Apple Store will be

major I think it's going to be one of the of the biggest tectonic shifts in the industry as well I think uh I think that's absolutely correct um you have to remember that we're we're in V1 of all of this it's still very new um and I think what you have now is you have a lot of things that are trying to play Within the rules of the app stores to not run a foul because we're all we're all trying to make sure that our customers are still compliant that their games can stay listed because the app stores are currently still the best means of distribution um but that could change in the future you know web can become a better means of distribution uh you can have direct links once you have enough uh reach to your consumer where you can Sid load or have other efficient means of doing so uh cloud is becoming cheaper and cheaper and better with its latency and how can I spin things up to play directly um you have to remember too like platforms are what they are right now

because it's been the means of the way that things are done but as technology gets better and more efficient the thing that's better for the consumer is always what we're trying to to drive as as Builders of things because we're here to Delight our customers and so in my opinion you always want to be able to have your customer play anytime anywhere in any way they want to so how many different devices can I make this available to uh where the technology of a phone phone or a computer is less important but the fact that I can get a stream of something or a build of the game that's playing anywhere and it just it's familiar to them so how can I do all these things and reach the consumer uh knowing that I have certain rules that I have to play Within knowing that this is what the technology and what everybody is moving towards now but a year from now five years from now I think we're going to see a very different picture of what this looks like and it's going to be driven by what the consumer wants and what we can give them because if we give those if we give them consumer what they want they will throw more money at

us oh man uh so I I have a couple different answers to this question so I think you know over in the short term one of the most interesting things is uh you know these two gentlemen have been quite you know polite to each other but they're viciously competing and there's other people viciously competing with them and so as a developer what's really exciting is just seeing all the different ways that they are trying to leverage their technology to offer value not just to developers but also two consumers and so um for a while you know it was quite slow moving but things are accelerating and there's a lot of uh really interesting technology being developed and that's really exciting as a developer um but the other thing is that you know last year I said email is back baby like it's the year of email and this year is the web is back baby uh I have a seven-year-old daughter and she loves to game and she recently discovered poke games and now that's all she wants to play cuz she can select all the games and she shows me like when I

click here look it shows me more fashion games and when I click here and there's this whole like little recommendation thing and her experience is completely different as a gamer than mine will ever be and there's a new emerging market and this has been a trend for a while is that you know young people who play games now their first gaming device is not a console it's a phone right there I saw a really interesting video where there was a developer talking about how they had a demo at a at a and they had a controller setup and everybody that came up that was young was like trying to use the touchcreen because they didn't know how to use a controller right so like the things are going to be a lot different in the long term that you know like kids growing up today have completely different experiences that are not going to be shaped by web by you know at the Apple ecosystem they're going to play games wherever they can find them and they also don't care about Graphics they just want interesting experiences roblo for example you know shows us that so um you know the market overall I think is going to be one that is is quite fragmented and dynamic whether it's side loing I don't think

it's going to be defined as much by technology as is by generational shift in that media is not really confined to a tablet a computer or a TV it's all just everywhere and on that note uh we are actually out of time so what I'm going to suggest is if you do have a question for the panelists please do grab them after on the way out I'm sure that they'll be happy to spare maybe two minutes not anymore I mean they are experts as we've established so they might be very busy providing their expertise everywhere but in the me time could you please give them a round of applause they've been fantastic thank you George thank you much appreciated