The Future of Web Stores: AI Personalisation & Gamified Sales - Miikka Luotio, Appcharge

[Music] [Music] [Music] so now we we're going to kick off the global Trends with a very pertinent uh issue one of the things uh we talked about how hard it is to get games going mobile games going these days and one of the things that's making a little bit hard potentially is the policies of certain platforms um so um one thing that's fascinating the moment and a different way to to deal deal with your customers and

get different revenues is web stores and Mah is going to talk about that from App charge so round of applause for Mah please all right let me set up my slides here nice to meet you everybody uh great to be here today um happy New Year 2024 so um uh first of all uh start of the year it's been a crazy year um already some interesting news so we'll get to that later I hope you guys have some good questions stored in like I'm ready to answer some some of those for sure uh who am I so um my name is mtio I'm originally from Finland based in Berlin been working in the mobile games industry for two decades now um built about 12 mobile games myself and then weird off into the into the business development domain and and and that's what I'm still doing I've been working at companies like roio pop cap Digital

Chocolate tilting Point recently previously at exola as well on the directed consumer side uh for about three years and just recently joined these awesome Israeli guys um uh cab charts all right so what is apparts so we are an Israeli based company uh focusing on direct to Consumer as a platform for mobile Publishers helping them grow their revenue uh out outside of the app stores what makes us I think unique is the fact that um unlike most Merchant of Records we actually our DNA comes from making games so when I first met the guys I was very I fell in love with the team because they come from the same background I come from which is actually making mobile games and I felt like that was that was that was great and I feel like if if there's uh this particular Trend to be captured um it should be done by people who've actually build games so uh some of our uh teams

background comes from anywhere from moonactive to huge games and much more so really exciting team and we've been active for a couple years now uh we're working with some of the largest mobile Publishers around the world already so things are moving very fast in this space and it's an exciting space to be in all right so let's talk about 2023 so it was really a boom year for the web stores uh most of the Publishers top Crossing Publishers saw um a way into the direct consumer space one way or another some of them buil web stores some of them buil portals many of them saw uh anywhere been around 30% incremental Revenue growth through that and uh I feel like that's that's just the beginning here but um we've seen a lot of the companies um dri being driven into the direct consumer space uh

because of the tightening of the margins for Publishers and this is caused by rising cost in UA which some of some many people are talking about in this conference as well also obviously the inflation so Publishers are looking into ways of um starting to Kickstart restart let's say restart the growth of their games Legacy games older games and even new games and find a way for them to grow without being hampered by the the platforms and and uh the situation economic situation and cost of us and so forth um so here's some important kpis that 2023 unraveled for us um you as you can see um you're looking at roughly and this is kind of based on the data of 2023 30 to 40% incremental Revenue growth on average um what's interesting is conversion to purchase is very promising like overall like this is a very good thing especially for core

games but we've seen definitely if you look at casual games there's still a lot of friction to be resolved and this is really about educating the players and we'll get to that later but you really have to educate your players to understand to trust that they can buy stuff and actually get it outside of the app stores outside of the mobile game as well um and um returning purchases are really loyal and um frion remains no longer an issue when you have ret turning purchases because they've done it once they they've done a firsttime purchase so they want they're they're more likely to do it again so that's encouraging very encouraging results um and most of the first pures will return the purchase which is also very encouraging and even with casual games as you can see you you can really once you get them to get something from the store even if you're dealing with a casual game they will want to go and uh come back and buy some more so it's really the firsttime purchase here that

we can see that with casual games there's there's lot to be resolved and a lot to be improved but very promising results across the board all right so how did Publishers achieve these results and that's a good question most successful Websters nailed really the the pricing of the items um really the the hitting the right price point where players actually get to see the clear value so you send a clear statement to anyone visiting your web store that uh this is where you get the best deal out of this is where you get the best deal so if you manage to nail that um you're halfway there almost because then they understand to do the first purchase and they they can see the value clearly um uh very obviously so free item giveaways remain a very important part actually uh we've seen a few few Publishers do this

where it's it's a way for you to kind of remove the firsttime friction so if you teach them to get a claim a free item from your web store they're halfway there obviously they don't enter payment details but you know they still can see that they get an item from that store so it works and they kind of you can take them to a to a lightweight process just to claim a free item and in some ways you can bundle it up with items that cost something like a firsttime conversion offer where you can actually give away free items as part of the bundle so you incentivize the the friction I think the the first time purchase friction still with all of this uh most Publishers are barely barely tapping into the true potential of the web stores which really can be unlocked by personalization segmentation and uh really making your offers more gamified and by what I mean by that is like mechanics that you know anything from accumulation part loyalty systems all of

these things and I think last year we barely saw people getting into that space we've seen a few companies get into that and the results are even even more encouraging that what what we were looking at before and um most of the web stores in 2023 could be considered as really like um uh MVPs so they were like version one or alpha or beta or whatever uh terminology you want to use but I think in this year we will see much more advanced features across the board from different Publishers so um let's talk about a little bit about the challenges of of um web stores and that's a big question like what what are the main challenges right and there's a lot so first of all as we can all see for the kpis before that I showed you um returning purchasers are loyal and they come back

uh one time or more um this really means that you have to educate your player base and what does mean is that they understand that playing the game happens on the mobile and if they want to get the better deals they pay on the web so mobile is where I uh where I uh play and web is where I pay that's that's really something that you have to understand that you need to educate your player based on that another key challenge um was was the fear that platforms May retaliate uh if you break the guidelines obviously like you know we all Publishers depend on platforms still today and and more or less so how do you inform your players without breaking the guidelines simple rule I mean obviously um even with the news recent news which I think most of you guys being here have probably read about uh on the Apple uh Us app store allowing you know to direct players directly to the web store but I think the rule here

is really like after seeing the 27% uh uh news that followed short after it's just hours after um I think it's clear that you still have to find ways to reach your player Base outside of the game so really building a community that exists not just in the game but outside of the game in a in a trans media format where you can communicate and talk to them um as a community on your own terms is still very important and even if those rules may change the future who knows you still should have a strategy that uh leans on the fact that you're you're doing community building you are driving the communication to your players you know if you're only relying on your game to do that um you need to ask yourself like that's is that future proof right so we may see some advances um in the future especially with the

European Union digital markets act uh coming into place in March 7th um specifically to this obviously there's no there's no hard information on that but I'd assume we'd probably get all of us will be reading about it sometime next month I'm sure um so March isn't that far away right so and I I I don't want to comment on rumors or anything like that but like I would say it's a fast developing space so stay tuned follow the news on this because everybody's in the same bucket nobody has privileged information uh as far as I know so so uh good to follow the news these days another big challenge for many was the the fact that like should I open a standalone web store or create a full portal for multiple games like is it a single destination for multiple games or is a single destination for one game so this has been a big challenge as well and I would say that the upsides of having a

standalone web store is obviously you can get it going faster so if you have a standalone web store for single game um your time to data is optimal so you don't need to put that much effort into getting and learning uh from uh selling outside of the app stores so that's the upside on on having a standalone Web Store um obviously with the portal approach the big thing comes in if you have a big portfolio games you have more branding opportunities but at the same time um you can educate your players to understand for example tie in a publisher ID and make them understand that having a publisher ID gets you some so-called VIP or club benefits of some sort you get free items and that way you can educate your whole player base across multiple games to go into your site or your portal um the other upsite on a portal is obviously you can have features there that that uh go beyond

just selling so you can have anything from news blog to events calendar and much more so let's talk about this year that's that's this is really the interesting part there's going to be a lot of uh developments happening on this sector there's a lot of lot of companies getting into the space and it's almost like a gold gold rush of sorts um and that's exciting I think having having a lot of of companies having competition is really healthy because I hope that drives the industry forward uh into the old paradigms that we grew into uh which other the app stores and I think uh the future uh is going to be very interesting on this side so you really need to do a reality check on your strategy if you're not already planning a web store um you really have to look in the mirror uh this year like uh really uh that should be in your strategy at this point and I think there was like somebody in LinkedIn recently I saw from big company

was just saying that and I I don't want to quote anybody here but yeah um you should even plan to launch a web store with new games I think because it's really actually easier to educate a new player base than an old player base so also think about that that could be an interesting way to to Benchmark your new title and have your players really learn the direct to Consumer from the very beginning and understand it's part of the game not something that's added on top of it um and then obviously segmentation and personalization that's really couldn't emphasize that more because that can impact positively at least 10% on Boost on your direct consumer sales personalization will really actually reduce the firsttime friction because if you go there and you see exactly what you want to buy right away off the bat that makes a massive difference and this is something we didn't see a lot last year and um that's

something that our team at appart has been working especially on a lot especially this side because we believe this is the real uh this is the real way to uh take it to the next level this trend of web Stores um you should also find a merchant record partner who can offer really segmentation and personalization out of the box because and can plug into your existing segmentation setup that's really important uh because you want to start building up and uh trying to develop that to be extended outside of the we outside of the uh main mobile game um the gamification mechanics in the web stores will evolve uh we will see many features like accumulation bars um daily offers Advanced loyalty systems that are actually fun so like what I would say that like this year I'm definitely looking forward seeing some fun to use fun to buy uh web stores and I think

that's that's that's the key here it should be an extension of the fun that you're having in the game right like you should you should have as much fun buying stuff than playing the game like if you can get close to that fun um then you're on to something and I think that's yet to be seen like uh we and there's a lot of things we will see this year uh especially on that side um the the impact of the eud dma of course uh as I mentioned before uh right now it's just rumors but you know there's been rumors about the App Store being split and all kinds of stuff we'll just have to wait and see what happens right and then react B react accordingly Al together Publishers Merchant of Records providers like app charts or uh and other companies one thing that I believe um this year perhaps the biggest Revolution we will see is obviously everybody knows a AI the power of AI but imagine like

imagine a situation where your players can talk directly uh to the store right in their favorite messaging app like whether it's WhatsApp telegram messenger you name it but imagine if they can have a open dialogue with your store almost like a coned system an extension of it so you can reach not just your VIP players and have your player ConEd team talking to your VIP players but really uh improve the the fiction fiction uh challenge which is really if you're able to get your whole player base to have a dialogue with the store and buy things directly from there that kind of already removes the the whole need to have a storefront and really go deep into segmentation and personalization and I think using AI here is where we will see some of the biggest advances um and I think one of the one

of the key exciting parts of this is because it's an interaction So when you buy things you're more likely to purchase things when you have an interaction so if you can huggle with the AI if you can ask it for what's the daily offer today um even getting friends pulled into getting group group uh benefits uh discounts uh that you can refer a friend and hooking that up like there's endless possibilities that that kind of creates so web stores I think is a stop Gap to something greater and this this is what we will see this year happening more and more and I think we're just in the beginning of it really okay so that was uh my Talking part I'm happy to take questions if there's time I think I think you have a question you can have at least one question there must be some bloody H sorry problem me it's a lot of you there yeah it's a question for for web stores amongst the the thousands gathered here

here we go one here can we get a mic up to where's my there we go fantastic thank you thanks maker uh I just wanted uh to hear a little bit your thoughts as a game maker as well on the d2c experience so beyond just payments what else do you think uh we might see or could be an opportunity as a game developer to build a relationship with uh our players uh through uh app charge through web stores yeah that that's a good question so besides purchases right yeah so besides purchases obviously you know free free item giveaway is like an easy thing like it's sounds like very simple but it's actually quite deep so imagine being able to have interactive um interactive parts of that so that you have an influencer who's giving away x amount of free items um but if you claim certain items you can kind of have a more dynamic situation that could also be a social mechanic so

I think social mechanics are very powerful and I I think that's what I was referring earlier to the whole AI part as well like if you're able to do messaging and you're able to refer friends to pull in friends to get a group benefit or get um a unique item even that's unique completely unique and you have to achieve that almost as an accumulation bar of sorts so it's a quest for your you and your friends who playing together so I think there's a lot of lot to do with the Innovation on the social side of it directed consumer awesome I'm sure we have many questions you can you can grab M after but thank you much Round of Applause please for for M fantastic thank you thanks while while you're applauding my my son who's 13 and not easily impressed is going to be ABS I I just wanted to show him what I do can can you look enthusiastic behind me while I do a selfie that good go it's it's 2024 [Music] yeah