How the mobile development industry has changed in the last five years and where it is headed in the next five

It’s 2016, and looking back over the last five years, it’s amazing how much the mobile landscape has changed, particularly for app developers.  It’s hard to imagine that it was only just 2009 when Apple started allowing in-app purchases, and by this year, mobile game revenues alone totaled over $30 Billion!  This massive growth has fueled increased competition and market saturation, with over 1.5 million apps on the App Store and the equivalent on Android/Google Play.  While the story of the last five years in mobile has been one of explosive growth, the next five will represent a combination of growth and maturation. 

For mobile developers, particularly game developers, increased cost per installs and other customer acquisition costs are making it more difficult to compete as old techniques like incentivized installs and app keyword optimization no longer yield results.  Winning in this more competitive market will require laser-like focus, integrated product/market strategy, and greater levels of customer intimacy and engagement.  I’d like to highlight some trends that will shape the industry going forward and outline what game developers can do to succeed.

Rise of Distribution Platforms

One trend that has the potential to change this situation is the rise of other distribution platforms.

Customer Intimacy

These new platforms can change the way apps get discovered, but developers cannot succeed if they don’t provide a valuable user experience.  This means more focus and specialization, and greater customer intimacy.  Focus means developing apps for specific market segments, whether defined by type of game, or type of user.  One such segment that could represent a major opportunity is “silver” or mature gamers.  Over the next 20 years we will witness the “graying” of the first generation to be raised on video games, and developers would be wise to create games tailored to their needs, which are to remain social, connected and engaged in life.

Long-term Engagement + Retention

In general, there is an ongoing shift from new user acquisition to retention of higher quality users, ones who are more engaged with the product and are more likely to spend money using it.  Long-term engagement is becoming a more important metric than number of downloads, and advertising platforms and analytics tools are now focusing on how to measure engagement to help developers better target and retain quality users.

Quality over Quantity

Another trend that relates to retention over acquisition is extending/updating successful apps rather than releasing new ones.  This is particularly important for game developers, as updating new levels/settings/challenges to keep loyal users engaged can be done more rapidly for mobile games than in the typical PC or Console game cycle, where new versions of hits are released once a year.

So: new forms of distribution, better analytics and smarter ad platforms, product/market specialization, and an emphasis of quality users over quantity.  These can be guiding principles for game designers going forward, and can inform the fundamental choices developers make when creating games.  By understanding more precisely in the beginning who your users are, how you plan on reaching them, how you plan on measuring their engagement, and how you will enable the game to keep them playing, you will be equipped to thrive in the challenging mobile landscape as it continues to mature over the next several years.