The democratization of game development is facing its first major challenge across mobile games, as escalating user acquisition costs are making it harder for small game studios to compete with the largest game publishers.
Rising user acquisition costs are significant. User acquisition specialists Fiksu note that year-over-year September CPI rates are up 41% on iOS and 33% on Android.
In a recent talk with investors, EVP of EA Mobile Frank Gibeau said the increased user acquisition costs provide a boost of competitive advantage to a company EA’s size.
“As the cost of install or the cost to acquire continues to rise, we have a bit of an unfair advantage in that our brands naturally attract, and as well, we have a network that is very large in size,” noted Gibeau.
That “unfair advantage” has its benefits, as EA can more easily cross-promote titles and rely on brand recognition from established franchises.
“If we can keep them in our network, that compounds the advantage that we have in organic acquisition,” said Gibeau.
“Last year, we installed over 635 million games,” said Gibeau. “That generates an audience that we can reach out and touch very effectively and communicate with as they increase their engagement in our games.”