Gree is one of the biggest mobile video game companies around. Its Tokyo-headquartered business has locations all over the world, focusing on developing and publishing free-to-play games like the million-dollar-a-month Knights & Dragons, and maintaining a massive mobile game network. Sho Masuda's job at Gree is to think about how to bring more players into the fold. The user acquisition VP passes on the knowledge he's gathered from his own work, in this Gamasutra Q&A.

What's your overarching strategy or philosophy when it comes to user acquisition?

We see user acquisition as a science -- a way to build an audience and a brand. Our philosophy is to understand the value of an acquisition and spend methodically to get the return on investment that we are trying to achieve. We're now at a point where we are comfortable predicting the expected lifetime value of one install over a certain period of time, simply by looking at key performance indicators and trends within the first couple of days of a campaign. What our strategy comes down is to making sure that the return outweighs its costs, and that we are contributing to our business's overall growth, so that we can continue to produce and market high-quality games that we all enjoy. In terms of spending [on user acquisition] specifically, we feel we can spend aggressively as long as we are getting a higher value on each investment, but will cap it at a lower spend if we're not seeing the value we want. Knowing what, where, and when to buy and cap our spending comes from the experience we've gained up until now, and really analyzing and understanding the data we've collected to see what works and what doesn't. Our strategy, however, would not be successful without our ad partners and their dedication towards making each campaign work effectively. We've been able to see success because of their support and always aim to drive growth for both our respective businesses.

What trends do you see in user acquisition that game developers need to know about?

There are definitely more players in the space now, compared to a couple years or even months ago. The number of apps crowding the marketplace and fighting for attention have been growing at an astonishing speed. Today, there are over 850,000 apps on the iOS App Store alone -- which is almost triple what it was in June 2010. What is interesting though, is that the number of apps that launch per day (data source: Flurry blog) on both iOS and Android devices has actually not changed over the years, remaining at 7-8 per day. Secondly, the app market has definitely proven to have a steady business model, where even smaller developers are able to run their own independent businesses. Apple recently announced that it paid out a total of $9 billion to its developers, but what is most important to note is its speed -- with a payout of more than $1 billion per quarter, and this continues to accelerate. Both these components urge the need for a robust users acquisition strategy and I personally think user acquisition costs will continue to rise in the near future, until we see a slowdown in the rate of new app launches.

What would you say are the biggest user acquisition challenges for game developers today?

I have seen two challenges. Firstly, getting access to the information required to make smart acquisition decisions has always been tricky. This information includes things like predicting the expected lifetime value of one install/user over a period of time, knowing who to partner with for your acquisition, or understanding what price point to bid at in order to get a favorable return. A second challenge that I've seen is a developer's ability to make up-front investments for a long-term benefit. Not all companies may have the financial capability or support to make large-scale investments, so depending on your scale or size, some of these longer-term benefits may not be feasible.

What's the average amount of money that a company pays to acquire a user?

The amount of money developers spend will vary by platform, device, budget, and the product that you are marketing. There is not one answer, but from industry experience, I would imagine it can vary from 10 cents up to 8 dollars.

How has non-paid user acquisition evolved in the past year?

Companies have become a lot more sophisticated around non-paid user acquisition due to an increase in communication around the topic (Google disclosed how search for Google Play works, for the first time). This is definitely an area we are heavily focused on. I would say non-paid user acquisition has two components in order for it to be successful. Firstly, being strategic about every decision - from choosing the game title, icon, screenshot, app store description, and keywords to the categories you select - each of these have to be thoroughly thought-out and tested. My experience shows that each of these are equally important factors in driving non-paid user acquisition can make a significant impact in App Store visibility. Secondly, I think it's important to make sure make sure both your non-paid and paid user acquisition practices are closely tied together. I definitely think it's important to keep a healthy non-paid to paid user acquisition ratio. In order to do so, it is important to know how paid acquisition impacts non-paid efforts, and where you start to see diminishing returns so that we can make alternate decisions such as, delaying paid acquisition for another time that makes more sense, etc.

What's the best method or channel of acquisition for niche games?

I have always believed in running smaller-scale campaigns with over a dozen vendors and ad network partners -- try them out, analyze them, and find the best match this way.

Do you consider Twitter as a viable channel for user acquisition?

Yes, I absolutely do. Twitter has a lot of inventory available on mobile platforms (both iOS/Android) and has an extensive network around the world which is attractive to any user acquisition strategy. They also have a sophisticated targeting method based on keywords (people's Tweets) and behavior (based on who the person follows) in addition to traditional device, region, and gender targeting. Lastly, the Twitter team is comprised of incredibly smart, industry-savvy people, which ultimately leads to higher-quality knowledge sharing.

How has the rise of Facebook mobile installs affected user acquisition?

Facebook has absolutely changed the mobile network landscape. We have made significant investments in Facebook and we will continue to do so. Everyone has their own recipe for targeting, but Facebook has definitely proven to be a leader in this area. Their ability to successfully target users based on demographic and interests, provides developers and advertisers the ability to narrow-down and focus on certain audience groups that will most likely be engaged with our games. This saves developers a lot of effort, research, and money. What is even more powerful is the amount of volume Facebook is able to provide across the world.

In your experience, which user acquisition method results in the highest percentage of long-term users?

Generally, non-paid users have a longer retention rate. However, we make sure we leverage quality with some of the paid users through real-time campaign optimization and investing in networks and publishers that have a higher likelihood of getting us a higher quality user base.