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I think if I had to name a villain for the woes of the game industry (beyond the obvious RAM shortage one), I would probably pick performance marketing. This is what drives the economics of the typical F2P game that represent an increasingly large share of industry revenue

As long as the ARPU (average revenue per user) of these new users is less than CPI, you can keep pumping more money into advertising. Now strictly speaking, this is true of any game and not just F2P ones, but the conversion ratios make it much more favorable to F2P games

I remember a time when MZ and SuperCell were spending something like $20M per month on user acquisition. Absurd numbers

Yeah, none of the F2P shops I worked at were as successful as those and most of my time was on the long-tail of a game past its user-acquisition prime, but I was still astounded at the money we were pulling in. Like our game was a kind of crappy flash game, but we were still making bank

For a normal retail game, converting after clicking an ad requires you to pay money up front. F2P games generally only start putting up pay gates once you're already invested in the game and the amount you need to pay to keep progressing at this first "pinch" is usually pretty small