User Acquisition Evolution in 2023

The gaming industry has seen many changes over the past few years, with significant changes from Apple making it more difficult for developers to target the right players and maximize revenue. Many teams are completely re-evaluating their user acquisition strategies to ensure that they can maintain a thriving mobile game.

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So, if you aren’t aware already, to say UA in 2023 is challenging would be an understatement.

This becomes evident when we look at the major players in the gaming industry, including Kwalee, and notice that the number of game launches in the market has significantly decreased compared to two years ago.

One pivotal event contributing to this shift was Apple’s deprecation of IDFA, which made it harder to target higher-quality users, resulting in a significant drop in revenue-based metrics (ARPU, ARPDAU, LTV, ROAS).

“In 2023, marketability no longer holds the same value as it did two years ago.”

From my perspective, an interesting point is the value of marketability tests (CPI tests), which have decreased substantially in the past two years.

As a publisher, you used to conduct 400-500+ CPI tests per month on a wide range of games. Essentially, this involved running a few gameplay videos on Meta, spending a few hundred dollars per test, and determining if the CPI was low enough to make launching a game a no-brainer.

In 2023, these tests have largely become obsolete because achieving a low CPI is no longer sufficient. Most developers are now opting to combine this initial stage with a more comprehensive evaluation of retention in a fully developed project, essentially a full MVP. Previously, you may have just done a screen recording of a single scene in Unity to get the materials needed to complete this type of test.

To sum it up, in 2023, marketability no longer holds the same value as it did two years ago. As a developer, you must create an MVP with at least 30-60 minutes of gameplay to test D1/D3 retention alongside the CPI. These tests now come at a considerably higher cost than you might have previously done (20-30X more).

“We’re all aware that UA has become more challenging, but it has also become significantly more expensive and less predictable.”

Diversifying your UA platforms

Let’s delve deeper into the increasing importance of having a broader testing strategy for early-stage games.

We’re all aware that UA has become more challenging, but it has also become significantly more expensive and less predictable. Two years ago, you could achieve quite a bit by sticking with Meta up until the monetization testing stage. At that point, it was crucial to introduce another channel, typically an SDK network like Unity, to assess the differences between the two platform types (IPM/eCPM/eCPI/ROAS).

Before the introduction of SKAN and the deprecation of IDFA, Facebook provided a simpler and more reliable environment. You could comfortably launch a campaign with a few gameplay videos, knowing that a certain percentage of the campaign would yield the desired target CPI, allowing you to move those games forward to retention testing.

Facebook, as a general rule, was also more cost-effective than other channels due to its massive scale. Now, I am seeing a complete 180 on that, with Facebook now becoming more expensive than the SDK networks.

This is why I strongly recommend not only testing SKAN vs non-SKAN campaigns on Facebook but also testing on an SDK network (like Unity) from the very beginning, whereas previously, this was typically done later in the general testing process.

Variety is key

Similarly, TikTok can make or break many game launches. Focusing on short-form content and influencers can be a game-changer if the stars align and you achieve virality. It’s impossible to predict, but a single user-generated content video with the right influencer, or even a video from your marketing team in the right style, can drive hundreds of thousands of users to your game at a minimal (one-off) cost.

“Don’t limit yourself to just Facebook, Google, and/or SDKs because they worked in the past.”

To summarise, diversifying your UA portfolio, much like diversifying your investments, has always been a wise strategy. However, the ease and affordability of Facebook made it the gatekeeper to success for early games.

Now, you need to be more adventurous, testing a more comprehensive range of channels at every stage of the testing process. Don’t limit yourself to just Facebook, Google, and/or SDKs because they worked in the past; be sure to include DSPs and TikTok in the mix, especially in the later stages (soft or hard launch). It may be more expensive, and consequently, you’ll need to be more selective in choosing your games, but in the long run, it will pay off.

Today, the game is more about quality than quantity, more about the qualitative aspects than the quantitative ones, both in the design of the games and how you ascertain if they will be successful or not.

• “In 2023, it’s crucial to acquire not only incremental new users but also those who can enhance your average performance”

The games industry is in constant change, particularly in mobile. Many teams have struggled with user acquisition and capturing the right audience, given some of the more significant changes we have seen, such as Apple’s shifting privacy policies. Knowing how to capture an audience through your marketing and advertising efforts is more critical than ever to grow your game.

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I believe it’s essential to begin this post by acknowledging the difficulty of creative production and expressing my appreciation for the teams working in this critical field. Without winning creatives, we cannot and will not be able to scale our games to the heights they need to reach.

“I’ve witnessed teams spend weeks on iterative testing when, in reality, they were far from their goal and should have revisited the concept stage.”

When I refer to ad creatives, the most popular and widely used ad formats are probably ones you’re already familiar with:

• Video
• End cards
• Playable
• Static display

Each of the above formats plays a vital role in the different environments as part of a diverse strategy.

What’s crucial here is understanding the most effective creative format for each platform where you’re running user acquisition campaigns. Equally important is grasping what success looks like when testing these creatives. I’ve witnessed teams spend weeks on iterative testing when, in reality, they were far from their goal and should have revisited the concept stage.

If I can offer one piece of advice regarding creative production, it’s to strike a balance between testing new concepts and iterations. To achieve ground-breaking double-digit improvements in IPM (Install Per Mille), you’ll need to focus on new concepts or ideas rather than merely iterating on existing creative elements. This is where you can truly “squeeze the lemon” and potentially increase your IPM by another 5 -10%, but the major impacts always stem from the concept itself.

Five most important points to consider when working with traditional creatives for user acquisition:

1. Clearly define the creative production process, allocating the necessary resources to create a diverse pool of creatives in all the mentioned formats.
2. Utilise automation and AI to maximize the output of your team. This isn’t just a smart move; it’s imperative in today’s fast-paced environment. Whether using templates to generate iterations of a winning concept, expediting the design of new characters using AI, or quickly uploading content to platforms through an API, it doesn’t matter, but the principle is key.
3. Build relationships with UA platforms and partners, allowing their teams to internally promote or push creatives through the tools and resources they have at their disposal – a detail some companies tend to overlook and something that I know first-hand can make or break a launch.
4. Diversify, diversify, diversify. This applies across the board, but key areas include concepts and ideas, ad formats, ad length, the environments in which you run them, cultural relevance, and continuous iteration of all design aspects of the winning concept.
5. Creative is a data-driven game. If you test an idea that you believe would work and doesn’t, it’s crucial to move on and not look back.

Explore and experiment

In full transparency, this next topic is probably the one I know the least about and the one I’m eager to learn more about. I implore each of you to conduct your own research into these formats and explore new ways to enhance your UA performance.

We have already discussed the norm, highlighting the ad formats that you have tried and tested numerous times. These will continue to be the focus of your UA efforts in the current environment. However, this year has also clearly marked the importance of exploration and experimentation. It’s emphasizing the need to focus on acquiring the best quality users rather than the cheapest ones. Scale remains crucial in our industry, and traditional formats will continue to dominate for the foreseeable future.

“In 2023, it’s crucial to acquire not only incremental new users but also those who can enhance your average performance by being more valuable.”

However, by incorporating some of the options below, you can boost your averages and overall performance:

• Apple Search Ads.
• Biggest growing channel of 2023, a must. Check out Luna from Unity.
• UGC and Influencer.
• Some developers have posted the right UGC video and generated hundreds of thousands of users for a small one-off cost, you need to have this in your strategy. Check out Bambassadors or Babblestock: Bespoke & Stock UGC Videos.
• In-game or intrinsic ads.
• This is my favorite among the bunch because it’s clean, seamless, and non-disruptive while enhancing the gaming experience. You could argue it’s more on the “monetization” side, but I believe it’s worth mentioning here. Anzu.io is the market leader, in my opinion, and if you haven’t already, it’s worth getting in touch with them.
• Audio ads.
• It’s a simple concept, and its success is easily understood. Users can continue their gaming experience without disruption, unlike interstitial ads that break the flow. It’s also a way to tap into those lucrative brand opportunities. Check out Odeeo and Audiomob to see how the best in the market execute this.
• OfferWall / CPE (Cost Per Engagement)
• An old but reliable strategy. Those of us who have been in this space long enough will remember that before rewarded videos became popular, OfferWalls were the primary drivers of mobile traffic. The challenge was the quality of users – many would install the game to earn rewards and never return, resulting in poor retention and ARPU numbers. This changed with the ability to target more engaging metrics, such as reaching level 20, for example. Tapjoy (Acquired by ironSource) (through the ironSource acquisition) is the market leader, but you should also explore Mistplay and Tyr Rewards.

“UA is challenging, much harder than the days of old when small studios could solo-launch games without the need for substantial resources.”

In summary, it’s inherent to gaming to be inquisitive and test new approaches. In 2023, it’s crucial to acquire not only incremental new users but also those who can enhance your average performance by being more valuable, replacing the whales you’ve lost the ability to target using previous methods.

The challenge of UA

I’ll undoubtedly be talking about the topic of UA for decades to come. Throughout this series, I’ve tried to focus on what I believe are some of the key aspects of UA in the current landscape.

To wrap it up, I would like to bring it home and focus on why I think working with a publisher right now is more valuable than ever.

UA is challenging, much harder than the days of old when small studios could solo-launch games without the need for substantial resources. What I see now is quite apparent: studios are realising how difficult things have become. Even though they’ve had success in the past, they’re struggling to replicate it, so they’ve decided to double down on game development.

Again, this is good for publishers in general, but it doesn’t take away from the fact that it’s also very tough for us. The difference is that we’re able to have a huge team of experts who can specialize in various disciplines. In a small company or start-up, it’s much more valuable to be a jack of all trades. Additionally, a publisher has access to far more data, both holistically and granularly, due to the sheer number of tests they conduct each month. This is a valuable but expensive way to work and find success.

“Stay educated, remain vigilant, and carefully consider your options when looking at any game launch.”

Then there are the team, tools, third-party technology, and money. I’ll use Kwalee as an example. Our publishing and marketing team totals nearly 100 people specializing in a vast amount of fields. We have a team developing in-house tools to make our own studios’ lives easier, which we also share with our partner studios. There’s all the third-party tech we pay for, which is not easily viable for small studios. And, of course, there’s the money, arguably the most important factor depending on the studio’s current cash flow. Having someone take on the financial risk, either by funding the UA or covering the studio’s running costs up to the launch, can alleviate immediate pressure so you can focus on making the best game you can.

I want to be clear: I’m not telling all of you to work with a publisher, and I’m not telling all of you to work with Kwalee directly. What I am telling you is to stay educated, remain vigilant, and carefully consider your options when looking at any game launch. It’s perfectly fine to try to self-publish, just as it’s perfectly fine to talk to a publisher and see what they can do for you. Ultimately, all of us want the same thing: to create and launch the most fun games for the world’s players (the Kwalee mission statement).

I’ll continue to share my experience for the betterment of all in our industry. As I always say, ‘A rising tide lifts all boats.’