The future of mobile game monetization

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When we talk about cool ideas of future, monetization isn’t usually the first topic that comes to mind. But it is very important for the survival of mobile game and app developers.

That’s why we had two veterans of the space, Zain Jaffer, CEO of mobile ad tech company Vungle, and Charles Hudson, venture partner at SoftTech VC and managing partner of Precursor Ventures, talk it at our recent GamesBeat Summit 2017 event in Berkeley, Calif.

“Our view is there has to be consolidation,” said Jaffer, in a conversation with Hudson. “The ad industry needs consolidation. As a developer, why would you want to work with hundreds of vendors?”

Above: Zain Jaffer (left), CEO of Vungle, and Charles Hudson, venture partner at SoftTech VC, speak about the future of monetization at GamesBeat Summit 2017.

Image Credit: Michael O’Donnell/VentureBeat

Six years ago, Jaffer made a big bet that video ads would turn into a big platform for advertising and monetizing mobile games. Now the company collects data on more than a billion events a day.

“Data is the key asset, and how you use it determines whether you stay in business or don’t,” Jaffer said.

Lots of ad platforms had the same idea, but only a small number has reached the kind of scale that is necessary to deliver insights and value back to the developers, Jaffer said.

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“The reality for a lot of these companies is that it comes down to scale,” Hudson said. “Until you get to that point, a lot of the vendors kind of look and feel the same.”

Now there are “mobile first” companies — Snap, Spotify, and many others — that are taking mindshare and audiences away from the traditional brands. Making sure that those mobile-first companies monetize early represents a big opportunity for the likes of Vungle.

Hudson is a familiar figure on the game event circuit, as he ran the Social Gaming Summit in the early days of Facebook games. He was also the cofounder and CEO of Bionic Panda Games, an Android-focused mobile games startup based in San Francisco, and VP of business development for Serious Business until the company was acquired by Zynga in February 2010. He invested in 145 companies to date, and his investment in Vungle is the only one in ad tech.

Above: Zain Jaffer (left), CEO of Vungle, and Charles Hudson, venture partner at SoftTech VC.

Image Credit: Michael O’Donnell/VentureBeat

In those earlier years, developers had to spend a lot of money on user acquisition because that was the only way they stood a chance at standing out from a million other developers in the app stores. Unfortunately, app discovery still hasn’t been solved. Getting featured by Apple or Google is still the main strategy for game and app developers, Jaffer said.

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“I understand people feel the way they do about ad tech,” said Jaffer. “I got burned myself in the public markets and I can understand why people are so skittish about the space. But the ad ecosystem is so different and unique. It’s a shame there hasn’t been a multibillion-dollar market cap company yet.”

As for the future, both ad tech companies and developers have to figure out how to thrive in Asia. Jaffer is British and his parent immigrated to the U.S. from Uganda. He found moving into the Asian markets, particularly China, was both exceedingly difficult and important at the same time.

“I realized you can’t just treat China like another market,” Jaffer said.

When Zynga China shut down, Jaffer hired a bunch of the engineers. And it has never stopped investing in that market. Asia is now a third of Vungle’s revenue.

Here’s the video of their talk.

Read GamesBeat Summit Stories Here

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