Is Gree really spending money on user acquisition like there’s no tomorrow? (interview)

GamesBeat: The worry is that spending is going higher than revenue coming in for the industry at large. Is there any truth to that? What strategy does any given developer adopt to deal with that?

Masuda: We’re here investing in this market because we’re getting revenue out of it. The more revenue you can get, the more investment you’ll be able to do. Especially in the mobile landscape, where we know this is the future. As long as we’re investing a dollar and two dollars come out, we’ll keep investing.

We’re one of the few companies and studios that have multiple titles on top of the gross charts. One of our biggest strengths is not our ability to ship our games, but our ability to keep up with the live ops. We provide a reason for our users to come back to the games day by day. Crime City has been out there for a year now, and it’s still doing very well on the grossing charts.

My advice to developers is that the live ops are where you have to turn your attention. The studio’s revenues see an increment whenever we run a special event. We need to make sure we’re running that on a weekly basis. That helps the marketing teams continue to invest in the space for the same title. Just to give you an idea, there’s no single day of the month when we’re not running campaigns for our existing titles, and that’s because we’re making revenue at the same time. Spending time on live ops and providing a reason for users to come back to games, that’s going to give you the dollars to invest in the market.

GamesBeat: The tradition in the industry is that app marketing gets more expensive as we get closer to December. Is that the established pattern now? When does that start, really?

Masuda: We’re hearing that it starts around the Thanksgiving holidays now, late in November. We’re seeing a trend toward the end of every quarter, too — so March, June, and September as well. That’s typically when demand increases at a faster rate than supply, which creates more competition when it comes to CPC and CPI.

GamesBeat: Did you see TinyCo’s announcement, when they were talking about embedding some ads for TinyCo games in the context of developers’ games? They’d share any revenue that came from that user over the long term, but they didn’t pay for that up front. It’s a different approach.

Masuda: It’s very interesting as a solution. It might create another source of revenues for smaller developers. But it’s also risky for some, as well. You’re completely dependent on TinyCo’s ability for that single app to make revenues. Whereas if it’s CPI for CPI, publishers no longer have to worry about whether this game is going to do well or not. You’re going to get the money on the day you generate the install.

We do have a similar kiosk program. We just don’t do a revenue share around it. There are pros and cons for developers in that one. One of the cons is that you’re keeping your fingers crossed, hoping the game’s going to monetize, and if the game isn’t going to monetize, then you’re not going to be able to get a business return out of it.

GamesBeat: What is your current approach on user acquisition?

Masuda: Challenging ourselves to come up with more case studies. What we can do outside of mobile is something we’re very excited about. We’re also excited about Facebook Mobile, as well. We’ve been testing with some of the recent launches, and they’re driving both quality and volume. We’re interested in how Facebook is going to change the landscape of mobile.

We’re moving into a plan where our user acquisitions are ROI-based. So if you see us bidding very strong, that means we’re making money on that. When we launched in March, there was another reason in play beyond just ROI. When we came into the U.S., one of the challenges I faced was that there’s a lot of new companies being formed. Some of these companies didn’t even have websites. I wanted to reach out to them because they could be strong partners for us, but I didn’t have any means of connection.

Even though we weren’t ready, we made a splash by promoting Zombie Jombie and Alien Family very strongly in the marketplace. We don’t do that anymore, but at the time it served a purpose. Now, I’m getting contacted on a weekly basis by newly formed ad networks and companies that offer great ideas on user acquisition. Rather [than] having to bang on their doors myself, they’re banging on our door and saying, “Why don’t you sign up for our programs?”

Right now, we’re going over to ROI, but when we came into the U.S., there was that other business reason. It helped us get our names out in the space.

GamesBeat: I don’t know if this was a factor, too, in how much you have spent on user acquisition, but I guess you had to catch up to larger rivals that had gotten there first.

Masuda: Yeah, yeah. I don’t know why people don’t really talk about the nonpaid side of it, too. Like I said, if you can gain users organically, you can bid higher. I’d like the industry to think more about things, like how to take advantage of App Store search. We should keep on improving that day by day.