Insight-in-Mobile-Games.txt

Introduction
The mobile games industry is a multi-billion dollar industry - mobile gaming is 
big business and is set to continue growing at an alarming rate. Smart phone 
and tablet market penetration is increasing exponentially, with over one billion 
units sold worldwide in 2013 alone. The power of mobile gaming devices is 
increasing just as fast: mobile processing power has developed to the extent 
that smartphones and tablets can produce near console-quality graphics.
At the same time, digital marketplaces have become crowded, and the cost of 
raising your head above the parapet through user acquisition has never been 
higher. The mobile games industry is under increasing pressure to perform, 
targeted at a market with more choice, and lower barriers to entry than ever 
before.
The ability to innovate and to learn from each other’s creative thinking will set 
the successful apart as the mobile sector continues to grow. Three industry 
experts, representing some of the most innovative minds from across the 
industry from investment house Initial Capital and developer/publishers Kabam 
and SGN oer their insights into the mobile games industry in this report. These 
industry leaders, along with a number of their peers, will also be giving their 
insights at Mobile Gaming USA, hosted in San Francisco, 5-6, May 2014.
Kristian Segerstrale
Kristian Segerstrale is an entrepreneur and investor in games, consumer internet 
and technology companies. He was also the CEO and co-founder of Playfish, 
who were acquired by EA for $400 million in 2009. Kristian invests with Initial 
Capital. To find out more visit www.initialcapital.com
1) What is the biggest opportunity in 
mobile gaming today?
I actually don’t think there’s been a time in mobile games where you’ve had an 
almost guaranteed growth over the next five years. You have a set of 
technologies in iOS and Android that are here to stay. You have a set of stores 
that are getting increasingly better at recommending the right content for users. 
You also have a set of marketing technologies in advertising networks and 
acquisition technologies that makes it increasingly better to reach consumers. 
Most importantly you have consumers that are buying more smartphones all the 
time. More than a billion smartphones were bought in 2013 alone.
The markets are getting far more international and consolidated. Previously for a 
western developer and publishers it was extremely dicult to get into markets 
like Japan, China and Korea because of diering technologies and marketplaces 
– diering approaches to everything. Now, although the markets are still unique, 
the technologies – in terms of Android and iOS in particular – are becoming 
these giant equalisers between markets. So if you have a great product, as has 
been amply demonstrated by King, Rovio and Supercell, you can actually create 
global hits.
For all those reasons, I think the next three to five years present an incredible 
opportunity for game developers.
In terms of specific opportunities within that industry growth, which is extremely 
promising, is innovation. We continue to have a massive amount of 
under-served categories in mobile in particular. If you look at genres like Sports 
games, MOBAs (Massively Online Battle Arenas), RPGs (Role Playing Games) – 
they all feel like under-served segments on mobile right now. Also there are 
segments within those genres where you struggle to find quality games. Many 
developers are lured by the success of specific titles and create derivative works 
or games that are heavily influenced by those successful products. The biggest 
opportunity out there is to serve unmet needs and to innovate rather than 
imitate.
2) Discoverability is a huge issue and the 
mobile marketplace is extremely crowded, 
what steps can developers and publishers 
take to get their games into the hands of 
more players?
The product is by far the most important form of marketing, but especially in a 
marketplace with as low friction, with as low barriers to entry, as mobile gaming. 
So the most important thing is to not only create a product that is wonderful 
and great to play – a great experience – but also one that has great character 
and is memorable. Most developers today would still say that the majority of 
their distribution is still word of mouth.
I can’t emphasise enough how important it is to create memorable experiences 
to begin with. It is true that the marketplace is crowded, but the majority of that 
crowd are actually forgettable experiences.
There are also fairly well understood mechanisms to test out what segment and 
type of consumer you product appeals to. Once you have a good sense of who 
your product is for, it is actually fairly straightforward to augment your user 
acquisition eorts with channel marketing that reaches the right communities. I 
think the marketplace is not nearly as sophisticated at doing this as it should be. 
So today it’s entirely possible to quite accurately understand who your 
consumer is and at the same time the ability to target using tools is increasing. 
You can also advertise with much richer content, like video, that can be more 
compelling – I think channels like YouTube are actually quite underused today.
Right now we’re going through this shift of marketing for apps which for the 
past few years has been developed as this quantitative discipline of acquiring 
users through ad networks almost like a trading desk – where one company 
might be willing to sell a user for a price. I think we’ve entered an era where you 
have to be far more sophisticated about building brands and creating a closer, 
more emotional relationship with consumers.
3) Some of the biggest success stories 
have come from new entrants, while some 
traditional publishers have struggled to 
gain traction. Why do you think this is?
From my experience games are really all about talent. The top 1% of talent will 
have by far the best chance of creating the top 0.1% of games that are out there. 
Putting anything less than the best development team on a game will have a 
devastating impact on its ability to have the potential to break out. Part of that is 
the innovation the team is capable of, part of it is the quality of the execution. At 
the end of the day these are crafted experiences and as a consumer you can see 
all of that – whether it’s a game you can clearly see that someone really cares 
about or not.
Part of the challenge with the existing companies is that their focus – where 
they’re placing their very best talent – is where their existing dollars are coming 
from. So if you think about an EA or an Activision, the dilemma is that they’re 
making billions of dollars from existing franchises. It would take an incredibly 
brave company to move their talent from these massive franchises and put them 
onto a new platform. 
The other thing is that the development methodologies that smaller teams 
employ are more suited to mobile. Big companies tend to employ heavy 
approval processes to protect them from big mistakes. That type of process 
doesn't lend itself well to creative risk or creating games in a fast moving 
environment . You need to be able to trust top talent to make gut decisions. 
Companies like Supercell are very vocal about the fact that they don’t have a 
green light process of any kind, and I think that’s something that has hamstrung 
some of the bigger companies when it comes to mobile development.
4) What is the formula for a successful 
free-to-play title?
Games are fundamentally an art, and I don’t know that there’s a formula for art. 
There are approaches that tend to be more successful than others. One that I 
would advocate would be to firstly make something that you love to play 
yourself. Don’t try make something because you think the market is big and 
there are a lot of consumers that want something in that area. Start with what 
you love to play and how you make something that you would love to play. You 
can tell when you play a game whether it has been made by someone that 
genuinely loves it. Obviously it needs to be something that you think the market 
will also love to play, but if you don’t love it, the chances are that nobody else 
will love it also.
You also need to understand who you’re making the game for and profoundly 
respecting the player. There are a lot of games being made right now that either 
simply imitate existing games. There is also still a "San Francisco school" of game 
design out there that advocate "design by the numbers' - create games to get 
people to pay as quickly as possible, as many times as possible, in as many 
dierent ways as possible to maximise the funnel of people paying. I think that’s 
a dangerous route of design. I can see that today the most successful games are 
the ones that respect the players for what they are and creating an engaging 
experience. Design for engagement. Design for fun. Design for the emotional 
attachment to the game. Then build in reasonable monetisation that comes in 
way down the road.
My own gold standard of design of engagement is League of Legends. For the 
first 20 or 30 hours you can’t understand what you would ever pay money for. 
The cool thing about it is that the game is incredibly successful o the back of 
almost trying not to monetise players. They’ve built a phenomenon o the back 
of an incredible game and not worrying too much about monetisation at all. I 
think that’s a great design principle that developers need to work towards as 
consumers get smarter. Are they leaving money on the table? Likely yes - but 
they are building an incredibly successful, long lasting and valuable franchise.
Andrew Sheppard 
Andrew Sheppard is the President of Kabam Studios, a developer and publisher 
of social games. In each of the last two years Kabam revenues have grown by 80 
percent or more and will total more than $325 million in 2013
1) What is the biggest opportunity in 
mobile gaming today?
As consumer demand for gameplay experiences at little to no cost increases, 
more publishers will come to recognize the value of the free-to-play business 
model. In this context the onus is on all publishers (both existing and new) to 
deliver high quality gameplay experiences that players value and ultimately are 
willing to purchase. Thanks to the growing device market and constantly 
improving device capabilities, publishers’ ability to deliver compelling gameplay 
experiences has never been greater.  
2) Discoverability is a huge issue and the 
mobile marketplace is extremely crowded, 
what steps can developers and publishers 
take to get their games into the hands of 
more players?
First, make a great game that is innovative, engaging and fun. This is required to 
unlock tremendous organic opportunity.  Then pull on all the strategic levers of 
traditional marketing and distribution: business development, brand marketing, 
public relations, performance advertising, consumer events, etc. Nail the 
execution on both fronts, than get ready to watch your game soar up the charts!
3) Some of the biggest success stories 
have come from new entrants, while some 
traditional publishers have struggled to 
gain traction. Why do you think this is?
For traditional publishers and developers, it’s been a slow start. This is largely 
because free-to-play mobile game development is an entirely dierent beast 
that draws on both art and science to build mass market global hits. It is fair to 
say the traditional game developers are beginning to figure out this exciting new 
medium of gaming, but that their progress is still rate limited by the best 
practices that made them successful in the first place.
4) What is the formula for a successful 
free-to-play title?
Excellent teams, great product vision and a deep understanding of how to 
balance the art and science of free-to-play game development. Hard work helps 
too.
Chris DeWolfe
Chris DeWolfe is the CEO of SGN (Social Gaming Network), a top cross-platform 
developer and publisher of games on Facebook, iOS, and Android. To date well 
over 300 Million SGN games have been installed on leading mobile and social 
platforms, making SGN one of the largest cross-platform gaming companies in 
the world.
1) What is the biggest opportunity in 
mobile gaming today?
A massive number of people are playing games today, and as a result, the 
market has become much larger than it was several years ago. It will continue to 
get larger as people continue purchasing multiple devices.
The fact that there are now multiple platforms on which to play games expands 
the market even more. Currently there is a big opportunity for developers to 
build their games for all platforms, both social and mobile. The opportunity lies 
in developing games for people to play at work, perhaps on a PC or laptop, and 
for users that are travelling home from work, so they can continue to play the 
same game seamlessly on a mobile device.
Free-to-play in-game purchasing has become frictionless, especially in the iOS 
operating system. Apple has over a billion credit cards on file, so all you have to 
do is type in your password to make a purchase. This makes it very easy to 
purchase and provides a huge potential audience. On top of that, barriers to 
entry have been substantially reduced, so that the cost and time it takes to 
create a great game in the mobile space has decreased as the tools available 
have matured. This has allowed smaller companies to make the biggest mobile 
games.
The other significant opportunity is leveraging the sheer amount of data that 
exists. If done right, you have the ability to look at the fail rates of a user at a 
granular level, almost down to the exact feature of a particular stage that caused 
them to lose. With connected devices you have the ability to refine these 
components so that you can prevent users from becoming frustrated and 
leaving the game, and at the same time, ensure that there are enough 
challenges to keep them playing.
2) Discoverability is a huge issue and the 
mobile marketplace is extremely crowded, 
what steps can developers and publishers 
take to get their games into the hands of 
more players?
It starts with the design of the game. If you have a broad market it is important 
to ensure that your game has a proven mechanic and that the game is fun to 
play. Starting very early with a playable prototype of the game is necessary to 
determine if the game will have fun gameplay mechanics and if it will stand out 
from the crowd. If it does not meet those requirements, then you either have to 
go back to the drawing board or fail quickly and pivot. It is not the best idea to 
spend a year and a half developing a game that is never going to gain traction.
You also want to ensure that there are certain viral elements in the game. From 
our perspective, Facebook remains the social glue in the mobile web and apps 
space. It is helpful to encourage your users to log into Facebook to invite their 
friends into the game, and reward them for doing so. There are many ways to do 
that from the way you set up the game, to notifying users when one of their 
friends joins. For example, in our game Panda Pop, anytime your friend joins, 
you are sent a notification so that you can share progress with each other. We 
encourage users to return to the game and compete on the levels where their 
friends have beaten them.
It is always helpful if you can build a game that is interesting enough from an 
editorial perspective that Apple, Google Play, Amazon and/or Facebook will 
feature it.  This featured placement will get you hundreds of thousands if not 
millions of downloads. From a discoverability perspective, this can be a great 
boon to the launch of your game, but it is not something you can rely on.
For us, we have a very specific focus on our games. We make puzzle games that 
have a deep narrative, great animations and fun gameplay. Most of our entire 
back catalogue appeals to a similar type of demographic. We do that because 
when we get a hit with game A, we can cross-promote games B, C and D to 
those users. From a success perspective, we are looking at the lifetime value of a 
user rather than the lifetime value of a single game.
Some companies will make a game specifically targeted at men, then attempt a 
casino game targeted at women and then a puzzle game targeted to everyone, 
and try to cross-promote all of the games. However, it is unlikely that there is 
interest by that demographic in the new games, so this strategy may not be 
suitable.
With advertising, the picture was quite dierent a year ago. In the early days, 
companies would target across the board and hope that the average lifetime 
value of a user would come out to more than the cost per user to acquire. Now 
– at least for the companies that are doing it right – you have to get much more 
granular with how and where you spend your advertising dollars or you may lose 
a significant amount of money with very little gain.
3) Some of the biggest success stories 
have come from new entrants, while some 
traditional publishers have struggled to 
gain traction. Why do you think this is?
The secret is agility. If you look at companies like Supercell, who make Clash of 
Clans, and King, who of course developed Candy Crush Saga, they do not have 
massive, bloated teams. They quickly make games and quickly iterate.
Mobile games are not software like they were in the past. We are creating a 
game as a service. A game can last an extremely long time rather than a boxed 
product that has a finite lifespan. You can release a game, collect great data, and 
continue to improve the game with regular changes and new content.
There is a new way of thinking when developing games for mobile and social. It 
is the notion of developing a prototype and failing fast – by that I mean using 
data to decide very early on if your prototype is a viable game. At the same time 
the concept now is to build a game as a service – optimizing the revenue and 
user retention for years to come by continuously injecting new content.
It is a very dierent way of thinking compared to the earlier days, where some 
companies set a budget and development time for a game and then began 
work. Every company that has a big hit game, has also had failed games that 
they killed after a month or two. If you spoke with the teams at Supercell or 
Kabam, it is very likely that they have had game ideas that they thought would be 
interesting, but ultimately did not succeed. Games are unique in that way. 
If you take TV for example – it costs possibly a million dollars to create a pilot, 
with the hope that you will get picked up for maybe six episodes and the goal is 
to not get cancelled. With mobile game development, the investment is far 
lower before the point at which you start to get feedback, so you can tell much 
earlier on if a project is not working or how to steer it so that it begins to work 
for you. This kind of thinking is naturally ingrained into newer companies.
4) What is the formula for a successful 
free-to-play title?
As a company we are super focused on one genre of games. We have dabbled 
in other areas, but we settled on this space because – like the issue you brought 
up with discoverability – we start to solve the discoverability issue ourselves 
simply by creating new products that cross-promote very well with each other.
The notion that you create a game with a proven game mechanic is also very 
important. We have a website called mindjolt.com, which has hundreds of very 
simple games that cover almost every game mechanic you can think of. Those 
games are not advanced enough and do not have enough polish to be hits in 
their own right, but what we can do is determine which games people are 
playing and which mechanics people are enjoying. From there we can build a 
prototype with a bigger narrative around that initial idea. If that prototype is a 
success we can move along to formally assign a team to the game and head 
into full development. From that point, we will continually iterate on the game 
through a soft launch and then a full release.
Additionally, we set KPIs and stick to them. For example, for a particular title, we 
might set a day-one retention target of 55%, which is quite a healthy number. 
Our seven-day retention target might be 26%. If those numbers are not where 
we need them to be we will take prescriptive measures – and analyze our data – 
to determine where players are dropping o and what is causing the retention 
to be lower than what we want it to be. This is just one indicator among many 
that we use to measure success and figure out how to make the most 
successful product.
Finally, investing in your team is crucial. To make the best games, you must hire 
the most creative people you can aord. This year we invested heavily in our 
artists, animators, game designers and engineering teams to ensure we have the 
imagination and the talent to make the best products. Unfortunately that is not 
enough, you must also have the analytics infrastructure to back it all up. All of 
these elements are crucial to creating a successful games business.
2014 insight in 
Mobile Games
Introduction
The mobile games industry is a multi-billion dollar industry - mobile gaming is 
big business and is set to continue growing at an alarming rate. Smart phone 
and tablet market penetration is increasing exponentially, with over one billion 
units sold worldwide in 2013 alone. The power of mobile gaming devices is 
increasing just as fast: mobile processing power has developed to the extent 
that smartphones and tablets can produce near console-quality graphics.
At the same time, digital marketplaces have become crowded, and the cost of 
raising your head above the parapet through user acquisition has never been 
higher. The mobile games industry is under increasing pressure to perform, 
targeted at a market with more choice, and lower barriers to entry than ever 
before.
The ability to innovate and to learn from each other’s creative thinking will set 
the successful apart as the mobile sector continues to grow. Three industry 
experts, representing some of the most innovative minds from across the 
industry from investment house Initial Capital and developer/publishers Kabam 
and SGN oer their insights into the mobile games industry in this report. These 
industry leaders, along with a number of their peers, will also be giving their 
insights at Mobile Gaming USA, hosted in San Francisco, 5-6, May 2014.
Kristian Segerstrale
Kristian Segerstrale is an entrepreneur and investor in games, consumer internet 
and technology companies. He was also the CEO and co-founder of Playfish, 
who were acquired by EA for $400 million in 2009. Kristian invests with Initial 
Capital. To find out more visit www.initialcapital.com
1) What is the biggest opportunity in 
mobile gaming today?
I actually don’t think there’s been a time in mobile games where you’ve had an 
almost guaranteed growth over the next five years. You have a set of 
technologies in iOS and Android that are here to stay. You have a set of stores 
that are getting increasingly better at recommending the right content for users. 
You also have a set of marketing technologies in advertising networks and 
acquisition technologies that makes it increasingly better to reach consumers. 
Most importantly you have consumers that are buying more smartphones all the 
time. More than a billion smartphones were bought in 2013 alone.
The markets are getting far more international and consolidated. Previously for a 
western developer and publishers it was extremely dicult to get into markets 
like Japan, China and Korea because of diering technologies and marketplaces 
– diering approaches to everything. Now, although the markets are still unique, 
the technologies – in terms of Android and iOS in particular – are becoming 
these giant equalisers between markets. So if you have a great product, as has 
been amply demonstrated by King, Rovio and Supercell, you can actually create 
global hits.
For all those reasons, I think the next three to five years present an incredible 
opportunity for game developers.
In terms of specific opportunities within that industry growth, which is extremely 
promising, is innovation. We continue to have a massive amount of 
under-served categories in mobile in particular. If you look at genres like Sports 
games, MOBAs (Massively Online Battle Arenas), RPGs (Role Playing Games) – 
they all feel like under-served segments on mobile right now. Also there are 
segments within those genres where you struggle to find quality games. Many 
developers are lured by the success of specific titles and create derivative works 
or games that are heavily influenced by those successful products. The biggest 
opportunity out there is to serve unmet needs and to innovate rather than 
imitate.
2) Discoverability is a huge issue and the 
mobile marketplace is extremely crowded, 
what steps can developers and publishers 
take to get their games into the hands of 
more players?
The product is by far the most important form of marketing, but especially in a 
marketplace with as low friction, with as low barriers to entry, as mobile gaming. 
So the most important thing is to not only create a product that is wonderful 
and great to play – a great experience – but also one that has great character 
and is memorable. Most developers today would still say that the majority of 
their distribution is still word of mouth.
I can’t emphasise enough how important it is to create memorable experiences 
to begin with. It is true that the marketplace is crowded, but the majority of that 
crowd are actually forgettable experiences.
There are also fairly well understood mechanisms to test out what segment and 
type of consumer you product appeals to. Once you have a good sense of who 
your product is for, it is actually fairly straightforward to augment your user 
acquisition eorts with channel marketing that reaches the right communities. I 
think the marketplace is not nearly as sophisticated at doing this as it should be. 
So today it’s entirely possible to quite accurately understand who your 
consumer is and at the same time the ability to target using tools is increasing. 
You can also advertise with much richer content, like video, that can be more 
compelling – I think channels like YouTube are actually quite underused today.
Right now we’re going through this shift of marketing for apps which for the 
past few years has been developed as this quantitative discipline of acquiring 
users through ad networks almost like a trading desk – where one company 
might be willing to sell a user for a price. I think we’ve entered an era where you 
have to be far more sophisticated about building brands and creating a closer, 
more emotional relationship with consumers.
3) Some of the biggest success stories 
have come from new entrants, while some 
traditional publishers have struggled to 
gain traction. Why do you think this is?
From my experience games are really all about talent. The top 1% of talent will 
have by far the best chance of creating the top 0.1% of games that are out there. 
Putting anything less than the best development team on a game will have a 
devastating impact on its ability to have the potential to break out. Part of that is 
the innovation the team is capable of, part of it is the quality of the execution. At 
the end of the day these are crafted experiences and as a consumer you can see 
all of that – whether it’s a game you can clearly see that someone really cares 
about or not.
Part of the challenge with the existing companies is that their focus – where 
they’re placing their very best talent – is where their existing dollars are coming 
from. So if you think about an EA or an Activision, the dilemma is that they’re 
making billions of dollars from existing franchises. It would take an incredibly 
brave company to move their talent from these massive franchises and put them 
onto a new platform. 
The other thing is that the development methodologies that smaller teams 
employ are more suited to mobile. Big companies tend to employ heavy 
approval processes to protect them from big mistakes. That type of process 
doesn't lend itself well to creative risk or creating games in a fast moving 
environment . You need to be able to trust top talent to make gut decisions. 
Companies like Supercell are very vocal about the fact that they don’t have a 
green light process of any kind, and I think that’s something that has hamstrung 
some of the bigger companies when it comes to mobile development.
4) What is the formula for a successful 
free-to-play title?
Games are fundamentally an art, and I don’t know that there’s a formula for art. 
There are approaches that tend to be more successful than others. One that I 
would advocate would be to firstly make something that you love to play 
yourself. Don’t try make something because you think the market is big and 
there are a lot of consumers that want something in that area. Start with what 
you love to play and how you make something that you would love to play. You 
can tell when you play a game whether it has been made by someone that 
genuinely loves it. Obviously it needs to be something that you think the market 
will also love to play, but if you don’t love it, the chances are that nobody else 
will love it also.
You also need to understand who you’re making the game for and profoundly 
respecting the player. There are a lot of games being made right now that either 
simply imitate existing games. There is also still a "San Francisco school" of game 
design out there that advocate "design by the numbers' - create games to get 
people to pay as quickly as possible, as many times as possible, in as many 
dierent ways as possible to maximise the funnel of people paying. I think that’s 
a dangerous route of design. I can see that today the most successful games are 
the ones that respect the players for what they are and creating an engaging 
experience. Design for engagement. Design for fun. Design for the emotional 
attachment to the game. Then build in reasonable monetisation that comes in 
way down the road.
My own gold standard of design of engagement is League of Legends. For the 
first 20 or 30 hours you can’t understand what you would ever pay money for. 
The cool thing about it is that the game is incredibly successful o the back of 
almost trying not to monetise players. They’ve built a phenomenon o the back 
of an incredible game and not worrying too much about monetisation at all. I 
think that’s a great design principle that developers need to work towards as 
consumers get smarter. Are they leaving money on the table? Likely yes - but 
they are building an incredibly successful, long lasting and valuable franchise.
Andrew Sheppard 
Andrew Sheppard is the President of Kabam Studios, a developer and publisher 
of social games. In each of the last two years Kabam revenues have grown by 80 
percent or more and will total more than $325 million in 2013
1) What is the biggest opportunity in 
mobile gaming today?
As consumer demand for gameplay experiences at little to no cost increases, 
more publishers will come to recognize the value of the free-to-play business 
model. In this context the onus is on all publishers (both existing and new) to 
deliver high quality gameplay experiences that players value and ultimately are 
willing to purchase. Thanks to the growing device market and constantly 
improving device capabilities, publishers’ ability to deliver compelling gameplay 
experiences has never been greater.  
2) Discoverability is a huge issue and the 
mobile marketplace is extremely crowded, 
what steps can developers and publishers 
take to get their games into the hands of 
more players?
First, make a great game that is innovative, engaging and fun. This is required to 
unlock tremendous organic opportunity.  Then pull on all the strategic levers of 
traditional marketing and distribution: business development, brand marketing, 
public relations, performance advertising, consumer events, etc. Nail the 
execution on both fronts, than get ready to watch your game soar up the charts!
3) Some of the biggest success stories 
have come from new entrants, while some 
traditional publishers have struggled to 
gain traction. Why do you think this is?
For traditional publishers and developers, it’s been a slow start. This is largely 
because free-to-play mobile game development is an entirely dierent beast 
that draws on both art and science to build mass market global hits. It is fair to 
say the traditional game developers are beginning to figure out this exciting new 
medium of gaming, but that their progress is still rate limited by the best 
practices that made them successful in the first place.
4) What is the formula for a successful 
free-to-play title?
Excellent teams, great product vision and a deep understanding of how to 
balance the art and science of free-to-play game development. Hard work helps 
too.
Chris DeWolfe
Chris DeWolfe is the CEO of SGN (Social Gaming Network), a top cross-platform 
developer and publisher of games on Facebook, iOS, and Android. To date well 
over 300 Million SGN games have been installed on leading mobile and social 
platforms, making SGN one of the largest cross-platform gaming companies in 
the world.
1) What is the biggest opportunity in 
mobile gaming today?
A massive number of people are playing games today, and as a result, the 
market has become much larger than it was several years ago. It will continue to 
get larger as people continue purchasing multiple devices.
The fact that there are now multiple platforms on which to play games expands 
the market even more. Currently there is a big opportunity for developers to 
build their games for all platforms, both social and mobile. The opportunity lies 
in developing games for people to play at work, perhaps on a PC or laptop, and 
for users that are travelling home from work, so they can continue to play the 
same game seamlessly on a mobile device.
Free-to-play in-game purchasing has become frictionless, especially in the iOS 
operating system. Apple has over a billion credit cards on file, so all you have to 
do is type in your password to make a purchase. This makes it very easy to 
purchase and provides a huge potential audience. On top of that, barriers to 
entry have been substantially reduced, so that the cost and time it takes to 
create a great game in the mobile space has decreased as the tools available 
have matured. This has allowed smaller companies to make the biggest mobile 
games.
The other significant opportunity is leveraging the sheer amount of data that 
exists. If done right, you have the ability to look at the fail rates of a user at a 
granular level, almost down to the exact feature of a particular stage that caused 
them to lose. With connected devices you have the ability to refine these 
components so that you can prevent users from becoming frustrated and 
leaving the game, and at the same time, ensure that there are enough 
challenges to keep them playing.
2) Discoverability is a huge issue and the 
mobile marketplace is extremely crowded, 
what steps can developers and publishers 
take to get their games into the hands of 
more players?
It starts with the design of the game. If you have a broad market it is important 
to ensure that your game has a proven mechanic and that the game is fun to 
play. Starting very early with a playable prototype of the game is necessary to 
determine if the game will have fun gameplay mechanics and if it will stand out 
from the crowd. If it does not meet those requirements, then you either have to 
go back to the drawing board or fail quickly and pivot. It is not the best idea to 
spend a year and a half developing a game that is never going to gain traction.
You also want to ensure that there are certain viral elements in the game. From 
our perspective, Facebook remains the social glue in the mobile web and apps 
space. It is helpful to encourage your users to log into Facebook to invite their 
friends into the game, and reward them for doing so. There are many ways to do 
that from the way you set up the game, to notifying users when one of their 
friends joins. For example, in our game Panda Pop, anytime your friend joins, 
you are sent a notification so that you can share progress with each other. We 
encourage users to return to the game and compete on the levels where their 
friends have beaten them.
It is always helpful if you can build a game that is interesting enough from an 
editorial perspective that Apple, Google Play, Amazon and/or Facebook will 
feature it.  This featured placement will get you hundreds of thousands if not 
millions of downloads. From a discoverability perspective, this can be a great 
boon to the launch of your game, but it is not something you can rely on.
For us, we have a very specific focus on our games. We make puzzle games that 
have a deep narrative, great animations and fun gameplay. Most of our entire 
back catalogue appeals to a similar type of demographic. We do that because 
when we get a hit with game A, we can cross-promote games B, C and D to 
those users. From a success perspective, we are looking at the lifetime value of a 
user rather than the lifetime value of a single game.
Some companies will make a game specifically targeted at men, then attempt a 
casino game targeted at women and then a puzzle game targeted to everyone, 
and try to cross-promote all of the games. However, it is unlikely that there is 
interest by that demographic in the new games, so this strategy may not be 
suitable.
With advertising, the picture was quite dierent a year ago. In the early days, 
companies would target across the board and hope that the average lifetime 
value of a user would come out to more than the cost per user to acquire. Now 
– at least for the companies that are doing it right – you have to get much more 
granular with how and where you spend your advertising dollars or you may lose 
a significant amount of money with very little gain.
3) Some of the biggest success stories 
have come from new entrants, while some 
traditional publishers have struggled to 
gain traction. Why do you think this is?
The secret is agility. If you look at companies like Supercell, who make Clash of 
Clans, and King, who of course developed Candy Crush Saga, they do not have 
massive, bloated teams. They quickly make games and quickly iterate.
Mobile games are not software like they were in the past. We are creating a 
game as a service. A game can last an extremely long time rather than a boxed 
product that has a finite lifespan. You can release a game, collect great data, and 
continue to improve the game with regular changes and new content.
There is a new way of thinking when developing games for mobile and social. It 
is the notion of developing a prototype and failing fast – by that I mean using 
data to decide very early on if your prototype is a viable game. At the same time 
the concept now is to build a game as a service – optimizing the revenue and 
user retention for years to come by continuously injecting new content.
It is a very dierent way of thinking compared to the earlier days, where some 
companies set a budget and development time for a game and then began 
work. Every company that has a big hit game, has also had failed games that 
they killed after a month or two. If you spoke with the teams at Supercell or 
Kabam, it is very likely that they have had game ideas that they thought would be 
interesting, but ultimately did not succeed. Games are unique in that way. 
If you take TV for example – it costs possibly a million dollars to create a pilot, 
with the hope that you will get picked up for maybe six episodes and the goal is 
to not get cancelled. With mobile game development, the investment is far 
lower before the point at which you start to get feedback, so you can tell much 
earlier on if a project is not working or how to steer it so that it begins to work 
for you. This kind of thinking is naturally ingrained into newer companies.
4) What is the formula for a successful 
free-to-play title?
As a company we are super focused on one genre of games. We have dabbled 
in other areas, but we settled on this space because – like the issue you brought 
up with discoverability – we start to solve the discoverability issue ourselves 
simply by creating new products that cross-promote very well with each other.
The notion that you create a game with a proven game mechanic is also very 
important. We have a website called mindjolt.com, which has hundreds of very 
simple games that cover almost every game mechanic you can think of. Those 
games are not advanced enough and do not have enough polish to be hits in 
their own right, but what we can do is determine which games people are 
playing and which mechanics people are enjoying. From there we can build a 
prototype with a bigger narrative around that initial idea. If that prototype is a 
success we can move along to formally assign a team to the game and head 
into full development. From that point, we will continually iterate on the game 
through a soft launch and then a full release.
Additionally, we set KPIs and stick to them. For example, for a particular title, we 
might set a day-one retention target of 55%, which is quite a healthy number. 
Our seven-day retention target might be 26%. If those numbers are not where 
we need them to be we will take prescriptive measures – and analyze our data – 
to determine where players are dropping o and what is causing the retention 
to be lower than what we want it to be. This is just one indicator among many 
that we use to measure success and figure out how to make the most 
successful product.
Finally, investing in your team is crucial. To make the best games, you must hire 
the most creative people you can aord. This year we invested heavily in our 
artists, animators, game designers and engineering teams to ensure we have the 
imagination and the talent to make the best products. Unfortunately that is not 
enough, you must also have the analytics infrastructure to back it all up. All of 
these elements are crucial to creating a successful games business.
Unlocking the Formula to 
Mobile Success
Mobile Gaming USA
May 5-6, 2014 | San Francisco
 
All the contributors to this 
whitepaper will be speaking at 
Mobile Gaming USA. Visit: 
http://www.videogamesintelligen
ce.com/mobile-gaming-usa 
for more details on this landmark 
event.
Introduction
The mobile games industry is a multi-billion dollar industry - mobile gaming is 
big business and is set to continue growing at an alarming rate. Smart phone 
and tablet market penetration is increasing exponentially, with over one billion 
units sold worldwide in 2013 alone. The power of mobile gaming devices is 
increasing just as fast: mobile processing power has developed to the extent 
that smartphones and tablets can produce near console-quality graphics.
At the same time, digital marketplaces have become crowded, and the cost of 
raising your head above the parapet through user acquisition has never been 
higher. The mobile games industry is under increasing pressure to perform, 
targeted at a market with more choice, and lower barriers to entry than ever 
before.
The ability to innovate and to learn from each other’s creative thinking will set 
the successful apart as the mobile sector continues to grow. Three industry 
experts, representing some of the most innovative minds from across the 
industry from investment house Initial Capital and developer/publishers Kabam 
and SGN oer their insights into the mobile games industry in this report. These 
industry leaders, along with a number of their peers, will also be giving their 
insights at Mobile Gaming USA, hosted in San Francisco, 5-6, May 2014.
Kristian Segerstrale
Kristian Segerstrale is an entrepreneur and investor in games, consumer internet 
and technology companies. He was also the CEO and co-founder of Playfish, 
who were acquired by EA for $400 million in 2009. Kristian invests with Initial 
Capital. To find out more visit www.initialcapital.com
1) What is the biggest opportunity in 
mobile gaming today?
I actually don’t think there’s been a time in mobile games where you’ve had an 
almost guaranteed growth over the next five years. You have a set of 
technologies in iOS and Android that are here to stay. You have a set of stores 
that are getting increasingly better at recommending the right content for users. 
You also have a set of marketing technologies in advertising networks and 
acquisition technologies that makes it increasingly better to reach consumers. 
Most importantly you have consumers that are buying more smartphones all the 
time. More than a billion smartphones were bought in 2013 alone.
The markets are getting far more international and consolidated. Previously for a 
western developer and publishers it was extremely dicult to get into markets 
like Japan, China and Korea because of diering technologies and marketplaces 
– diering approaches to everything. Now, although the markets are still unique, 
the technologies – in terms of Android and iOS in particular – are becoming 
these giant equalisers between markets. So if you have a great product, as has 
been amply demonstrated by King, Rovio and Supercell, you can actually create 
global hits.
For all those reasons, I think the next three to five years present an incredible 
opportunity for game developers.
In terms of specific opportunities within that industry growth, which is extremely 
promising, is innovation. We continue to have a massive amount of 
under-served categories in mobile in particular. If you look at genres like Sports 
games, MOBAs (Massively Online Battle Arenas), RPGs (Role Playing Games) – 
they all feel like under-served segments on mobile right now. Also there are 
segments within those genres where you struggle to find quality games. Many 
developers are lured by the success of specific titles and create derivative works 
or games that are heavily influenced by those successful products. The biggest 
opportunity out there is to serve unmet needs and to innovate rather than 
imitate.
2) Discoverability is a huge issue and the 
mobile marketplace is extremely crowded, 
what steps can developers and publishers 
take to get their games into the hands of 
more players?
The product is by far the most important form of marketing, but especially in a 
marketplace with as low friction, with as low barriers to entry, as mobile gaming. 
So the most important thing is to not only create a product that is wonderful 
and great to play – a great experience – but also one that has great character 
and is memorable. Most developers today would still say that the majority of 
their distribution is still word of mouth.
I can’t emphasise enough how important it is to create memorable experiences 
to begin with. It is true that the marketplace is crowded, but the majority of that 
crowd are actually forgettable experiences.
There are also fairly well understood mechanisms to test out what segment and 
type of consumer you product appeals to. Once you have a good sense of who 
your product is for, it is actually fairly straightforward to augment your user 
acquisition eorts with channel marketing that reaches the right communities. I 
think the marketplace is not nearly as sophisticated at doing this as it should be. 
So today it’s entirely possible to quite accurately understand who your 
consumer is and at the same time the ability to target using tools is increasing. 
You can also advertise with much richer content, like video, that can be more 
compelling – I think channels like YouTube are actually quite underused today.
Right now we’re going through this shift of marketing for apps which for the 
past few years has been developed as this quantitative discipline of acquiring 
users through ad networks almost like a trading desk – where one company 
might be willing to sell a user for a price. I think we’ve entered an era where you 
have to be far more sophisticated about building brands and creating a closer, 
more emotional relationship with consumers.
3) Some of the biggest success stories 
have come from new entrants, while some 
traditional publishers have struggled to 
gain traction. Why do you think this is?
From my experience games are really all about talent. The top 1% of talent will 
have by far the best chance of creating the top 0.1% of games that are out there. 
Putting anything less than the best development team on a game will have a 
devastating impact on its ability to have the potential to break out. Part of that is 
the innovation the team is capable of, part of it is the quality of the execution. At 
the end of the day these are crafted experiences and as a consumer you can see 
all of that – whether it’s a game you can clearly see that someone really cares 
about or not.
Part of the challenge with the existing companies is that their focus – where 
they’re placing their very best talent – is where their existing dollars are coming 
from. So if you think about an EA or an Activision, the dilemma is that they’re 
making billions of dollars from existing franchises. It would take an incredibly 
brave company to move their talent from these massive franchises and put them 
onto a new platform. 
The other thing is that the development methodologies that smaller teams 
employ are more suited to mobile. Big companies tend to employ heavy 
approval processes to protect them from big mistakes. That type of process 
doesn't lend itself well to creative risk or creating games in a fast moving 
environment . You need to be able to trust top talent to make gut decisions. 
Companies like Supercell are very vocal about the fact that they don’t have a 
green light process of any kind, and I think that’s something that has hamstrung 
some of the bigger companies when it comes to mobile development.
4) What is the formula for a successful 
free-to-play title?
Games are fundamentally an art, and I don’t know that there’s a formula for art. 
There are approaches that tend to be more successful than others. One that I 
would advocate would be to firstly make something that you love to play 
yourself. Don’t try make something because you think the market is big and 
there are a lot of consumers that want something in that area. Start with what 
you love to play and how you make something that you would love to play. You 
can tell when you play a game whether it has been made by someone that 
genuinely loves it. Obviously it needs to be something that you think the market 
will also love to play, but if you don’t love it, the chances are that nobody else 
will love it also.
You also need to understand who you’re making the game for and profoundly 
respecting the player. There are a lot of games being made right now that either 
simply imitate existing games. There is also still a "San Francisco school" of game 
design out there that advocate "design by the numbers' - create games to get 
people to pay as quickly as possible, as many times as possible, in as many 
dierent ways as possible to maximise the funnel of people paying. I think that’s 
a dangerous route of design. I can see that today the most successful games are 
the ones that respect the players for what they are and creating an engaging 
experience. Design for engagement. Design for fun. Design for the emotional 
attachment to the game. Then build in reasonable monetisation that comes in 
way down the road.
My own gold standard of design of engagement is League of Legends. For the 
first 20 or 30 hours you can’t understand what you would ever pay money for. 
The cool thing about it is that the game is incredibly successful o the back of 
almost trying not to monetise players. They’ve built a phenomenon o the back 
of an incredible game and not worrying too much about monetisation at all. I 
think that’s a great design principle that developers need to work towards as 
consumers get smarter. Are they leaving money on the table? Likely yes - but 
they are building an incredibly successful, long lasting and valuable franchise.
Andrew Sheppard 
Andrew Sheppard is the President of Kabam Studios, a developer and publisher 
of social games. In each of the last two years Kabam revenues have grown by 80 
percent or more and will total more than $325 million in 2013
1) What is the biggest opportunity in 
mobile gaming today?
As consumer demand for gameplay experiences at little to no cost increases, 
more publishers will come to recognize the value of the free-to-play business 
model. In this context the onus is on all publishers (both existing and new) to 
deliver high quality gameplay experiences that players value and ultimately are 
willing to purchase. Thanks to the growing device market and constantly 
improving device capabilities, publishers’ ability to deliver compelling gameplay 
experiences has never been greater.  
2) Discoverability is a huge issue and the 
mobile marketplace is extremely crowded, 
what steps can developers and publishers 
take to get their games into the hands of 
more players?
First, make a great game that is innovative, engaging and fun. This is required to 
unlock tremendous organic opportunity.  Then pull on all the strategic levers of 
traditional marketing and distribution: business development, brand marketing, 
public relations, performance advertising, consumer events, etc. Nail the 
execution on both fronts, than get ready to watch your game soar up the charts!
3) Some of the biggest success stories 
have come from new entrants, while some 
traditional publishers have struggled to 
gain traction. Why do you think this is?
For traditional publishers and developers, it’s been a slow start. This is largely 
because free-to-play mobile game development is an entirely dierent beast 
that draws on both art and science to build mass market global hits. It is fair to 
say the traditional game developers are beginning to figure out this exciting new 
medium of gaming, but that their progress is still rate limited by the best 
practices that made them successful in the first place.
4) What is the formula for a successful 
free-to-play title?
Excellent teams, great product vision and a deep understanding of how to 
balance the art and science of free-to-play game development. Hard work helps 
too.
Chris DeWolfe
Chris DeWolfe is the CEO of SGN (Social Gaming Network), a top cross-platform 
developer and publisher of games on Facebook, iOS, and Android. To date well 
over 300 Million SGN games have been installed on leading mobile and social 
platforms, making SGN one of the largest cross-platform gaming companies in 
the world.
1) What is the biggest opportunity in 
mobile gaming today?
A massive number of people are playing games today, and as a result, the 
market has become much larger than it was several years ago. It will continue to 
get larger as people continue purchasing multiple devices.
The fact that there are now multiple platforms on which to play games expands 
the market even more. Currently there is a big opportunity for developers to 
build their games for all platforms, both social and mobile. The opportunity lies 
in developing games for people to play at work, perhaps on a PC or laptop, and 
for users that are travelling home from work, so they can continue to play the 
same game seamlessly on a mobile device.
Free-to-play in-game purchasing has become frictionless, especially in the iOS 
operating system. Apple has over a billion credit cards on file, so all you have to 
do is type in your password to make a purchase. This makes it very easy to 
purchase and provides a huge potential audience. On top of that, barriers to 
entry have been substantially reduced, so that the cost and time it takes to 
create a great game in the mobile space has decreased as the tools available 
have matured. This has allowed smaller companies to make the biggest mobile 
games.
The other significant opportunity is leveraging the sheer amount of data that 
exists. If done right, you have the ability to look at the fail rates of a user at a 
granular level, almost down to the exact feature of a particular stage that caused 
them to lose. With connected devices you have the ability to refine these 
components so that you can prevent users from becoming frustrated and 
leaving the game, and at the same time, ensure that there are enough 
challenges to keep them playing.
2) Discoverability is a huge issue and the 
mobile marketplace is extremely crowded, 
what steps can developers and publishers 
take to get their games into the hands of 
more players?
It starts with the design of the game. If you have a broad market it is important 
to ensure that your game has a proven mechanic and that the game is fun to 
play. Starting very early with a playable prototype of the game is necessary to 
determine if the game will have fun gameplay mechanics and if it will stand out 
from the crowd. If it does not meet those requirements, then you either have to 
go back to the drawing board or fail quickly and pivot. It is not the best idea to 
spend a year and a half developing a game that is never going to gain traction.
You also want to ensure that there are certain viral elements in the game. From 
our perspective, Facebook remains the social glue in the mobile web and apps 
space. It is helpful to encourage your users to log into Facebook to invite their 
friends into the game, and reward them for doing so. There are many ways to do 
that from the way you set up the game, to notifying users when one of their 
friends joins. For example, in our game Panda Pop, anytime your friend joins, 
you are sent a notification so that you can share progress with each other. We 
encourage users to return to the game and compete on the levels where their 
friends have beaten them.
It is always helpful if you can build a game that is interesting enough from an 
editorial perspective that Apple, Google Play, Amazon and/or Facebook will 
feature it.  This featured placement will get you hundreds of thousands if not 
millions of downloads. From a discoverability perspective, this can be a great 
boon to the launch of your game, but it is not something you can rely on.
For us, we have a very specific focus on our games. We make puzzle games that 
have a deep narrative, great animations and fun gameplay. Most of our entire 
back catalogue appeals to a similar type of demographic. We do that because 
when we get a hit with game A, we can cross-promote games B, C and D to 
those users. From a success perspective, we are looking at the lifetime value of a 
user rather than the lifetime value of a single game.
Some companies will make a game specifically targeted at men, then attempt a 
casino game targeted at women and then a puzzle game targeted to everyone, 
and try to cross-promote all of the games. However, it is unlikely that there is 
interest by that demographic in the new games, so this strategy may not be 
suitable.
With advertising, the picture was quite dierent a year ago. In the early days, 
companies would target across the board and hope that the average lifetime 
value of a user would come out to more than the cost per user to acquire. Now 
– at least for the companies that are doing it right – you have to get much more 
granular with how and where you spend your advertising dollars or you may lose 
a significant amount of money with very little gain.
3) Some of the biggest success stories 
have come from new entrants, while some 
traditional publishers have struggled to 
gain traction. Why do you think this is?
The secret is agility. If you look at companies like Supercell, who make Clash of 
Clans, and King, who of course developed Candy Crush Saga, they do not have 
massive, bloated teams. They quickly make games and quickly iterate.
Mobile games are not software like they were in the past. We are creating a 
game as a service. A game can last an extremely long time rather than a boxed 
product that has a finite lifespan. You can release a game, collect great data, and 
continue to improve the game with regular changes and new content.
There is a new way of thinking when developing games for mobile and social. It 
is the notion of developing a prototype and failing fast – by that I mean using 
data to decide very early on if your prototype is a viable game. At the same time 
the concept now is to build a game as a service – optimizing the revenue and 
user retention for years to come by continuously injecting new content.
It is a very dierent way of thinking compared to the earlier days, where some 
companies set a budget and development time for a game and then began 
work. Every company that has a big hit game, has also had failed games that 
they killed after a month or two. If you spoke with the teams at Supercell or 
Kabam, it is very likely that they have had game ideas that they thought would be 
interesting, but ultimately did not succeed. Games are unique in that way. 
If you take TV for example – it costs possibly a million dollars to create a pilot, 
with the hope that you will get picked up for maybe six episodes and the goal is 
to not get cancelled. With mobile game development, the investment is far 
lower before the point at which you start to get feedback, so you can tell much 
earlier on if a project is not working or how to steer it so that it begins to work 
for you. This kind of thinking is naturally ingrained into newer companies.
4) What is the formula for a successful 
free-to-play title?
As a company we are super focused on one genre of games. We have dabbled 
in other areas, but we settled on this space because – like the issue you brought 
up with discoverability – we start to solve the discoverability issue ourselves 
simply by creating new products that cross-promote very well with each other.
The notion that you create a game with a proven game mechanic is also very 
important. We have a website called mindjolt.com, which has hundreds of very 
simple games that cover almost every game mechanic you can think of. Those 
games are not advanced enough and do not have enough polish to be hits in 
their own right, but what we can do is determine which games people are 
playing and which mechanics people are enjoying. From there we can build a 
prototype with a bigger narrative around that initial idea. If that prototype is a 
success we can move along to formally assign a team to the game and head 
into full development. From that point, we will continually iterate on the game 
through a soft launch and then a full release.
Additionally, we set KPIs and stick to them. For example, for a particular title, we 
might set a day-one retention target of 55%, which is quite a healthy number. 
Our seven-day retention target might be 26%. If those numbers are not where 
we need them to be we will take prescriptive measures – and analyze our data – 
to determine where players are dropping o and what is causing the retention 
to be lower than what we want it to be. This is just one indicator among many 
that we use to measure success and figure out how to make the most 
successful product.
Finally, investing in your team is crucial. To make the best games, you must hire 
the most creative people you can aord. This year we invested heavily in our 
artists, animators, game designers and engineering teams to ensure we have the 
imagination and the talent to make the best products. Unfortunately that is not 
enough, you must also have the analytics infrastructure to back it all up. All of 
these elements are crucial to creating a successful games business.
Unlocking the Formula to 
Mobile Success
Mobile Gaming USA
May 5-6, 2014 | San Francisco
 
All the contributors to this 
whitepaper will be speaking at 
Mobile Gaming USA. Visit: 
http://www.videogamesintelligen
ce.com/mobile-gaming-usa 
for more details on this landmark 
event.
Introduction
The mobile games industry is a multi-billion dollar industry - mobile gaming is 
big business and is set to continue growing at an alarming rate. Smart phone 
and tablet market penetration is increasing exponentially, with over one billion 
units sold worldwide in 2013 alone. The power of mobile gaming devices is 
increasing just as fast: mobile processing power has developed to the extent 
that smartphones and tablets can produce near console-quality graphics.
At the same time, digital marketplaces have become crowded, and the cost of 
raising your head above the parapet through user acquisition has never been 
higher. The mobile games industry is under increasing pressure to perform, 
targeted at a market with more choice, and lower barriers to entry than ever 
before.
The ability to innovate and to learn from each other’s creative thinking will set 
the successful apart as the mobile sector continues to grow. Three industry 
experts, representing some of the most innovative minds from across the 
industry from investment house Initial Capital and developer/publishers Kabam 
and SGN oer their insights into the mobile games industry in this report. These 
industry leaders, along with a number of their peers, will also be giving their 
insights at Mobile Gaming USA, hosted in San Francisco, 5-6, May 2014.
Kristian Segerstrale
Kristian Segerstrale is an entrepreneur and investor in games, consumer internet 
and technology companies. He was also the CEO and co-founder of Playfish, 
who were acquired by EA for $400 million in 2009. Kristian invests with Initial 
Capital. To find out more visit www.initialcapital.com
1) What is the biggest opportunity in 
mobile gaming today?
I actually don’t think there’s been a time in mobile games where you’ve had an 
almost guaranteed growth over the next five years. You have a set of 
technologies in iOS and Android that are here to stay. You have a set of stores 
that are getting increasingly better at recommending the right content for users. 
You also have a set of marketing technologies in advertising networks and 
acquisition technologies that makes it increasingly better to reach consumers. 
Most importantly you have consumers that are buying more smartphones all the 
time. More than a billion smartphones were bought in 2013 alone.
The markets are getting far more international and consolidated. Previously for a 
western developer and publishers it was extremely dicult to get into markets 
like Japan, China and Korea because of diering technologies and marketplaces 
– diering approaches to everything. Now, although the markets are still unique, 
the technologies – in terms of Android and iOS in particular – are becoming 
these giant equalisers between markets. So if you have a great product, as has 
been amply demonstrated by King, Rovio and Supercell, you can actually create 
global hits.
For all those reasons, I think the next three to five years present an incredible 
opportunity for game developers.
In terms of specific opportunities within that industry growth, which is extremely 
promising, is innovation. We continue to have a massive amount of 
under-served categories in mobile in particular. If you look at genres like Sports 
games, MOBAs (Massively Online Battle Arenas), RPGs (Role Playing Games) – 
they all feel like under-served segments on mobile right now. Also there are 
segments within those genres where you struggle to find quality games. Many 
developers are lured by the success of specific titles and create derivative works 
or games that are heavily influenced by those successful products. The biggest 
opportunity out there is to serve unmet needs and to innovate rather than 
imitate.
2) Discoverability is a huge issue and the 
mobile marketplace is extremely crowded, 
what steps can developers and publishers 
take to get their games into the hands of 
more players?
The product is by far the most important form of marketing, but especially in a 
marketplace with as low friction, with as low barriers to entry, as mobile gaming. 
So the most important thing is to not only create a product that is wonderful 
and great to play – a great experience – but also one that has great character 
and is memorable. Most developers today would still say that the majority of 
their distribution is still word of mouth.
I can’t emphasise enough how important it is to create memorable experiences 
to begin with. It is true that the marketplace is crowded, but the majority of that 
crowd are actually forgettable experiences.
There are also fairly well understood mechanisms to test out what segment and 
type of consumer you product appeals to. Once you have a good sense of who 
your product is for, it is actually fairly straightforward to augment your user 
acquisition eorts with channel marketing that reaches the right communities. I 
think the marketplace is not nearly as sophisticated at doing this as it should be. 
So today it’s entirely possible to quite accurately understand who your 
consumer is and at the same time the ability to target using tools is increasing. 
You can also advertise with much richer content, like video, that can be more 
compelling – I think channels like YouTube are actually quite underused today.
Right now we’re going through this shift of marketing for apps which for the 
past few years has been developed as this quantitative discipline of acquiring 
users through ad networks almost like a trading desk – where one company 
might be willing to sell a user for a price. I think we’ve entered an era where you 
have to be far more sophisticated about building brands and creating a closer, 
more emotional relationship with consumers.
3) Some of the biggest success stories 
have come from new entrants, while some 
traditional publishers have struggled to 
gain traction. Why do you think this is?
From my experience games are really all about talent. The top 1% of talent will 
have by far the best chance of creating the top 0.1% of games that are out there. 
Putting anything less than the best development team on a game will have a 
devastating impact on its ability to have the potential to break out. Part of that is 
the innovation the team is capable of, part of it is the quality of the execution. At 
the end of the day these are crafted experiences and as a consumer you can see 
all of that – whether it’s a game you can clearly see that someone really cares 
about or not.
Part of the challenge with the existing companies is that their focus – where 
they’re placing their very best talent – is where their existing dollars are coming 
from. So if you think about an EA or an Activision, the dilemma is that they’re 
making billions of dollars from existing franchises. It would take an incredibly 
brave company to move their talent from these massive franchises and put them 
onto a new platform. 
The other thing is that the development methodologies that smaller teams 
employ are more suited to mobile. Big companies tend to employ heavy 
approval processes to protect them from big mistakes. That type of process 
doesn't lend itself well to creative risk or creating games in a fast moving 
environment . You need to be able to trust top talent to make gut decisions. 
Companies like Supercell are very vocal about the fact that they don’t have a 
green light process of any kind, and I think that’s something that has hamstrung 
some of the bigger companies when it comes to mobile development.
4) What is the formula for a successful 
free-to-play title?
Games are fundamentally an art, and I don’t know that there’s a formula for art. 
There are approaches that tend to be more successful than others. One that I 
would advocate would be to firstly make something that you love to play 
yourself. Don’t try make something because you think the market is big and 
there are a lot of consumers that want something in that area. Start with what 
you love to play and how you make something that you would love to play. You 
can tell when you play a game whether it has been made by someone that 
genuinely loves it. Obviously it needs to be something that you think the market 
will also love to play, but if you don’t love it, the chances are that nobody else 
will love it also.
You also need to understand who you’re making the game for and profoundly 
respecting the player. There are a lot of games being made right now that either 
simply imitate existing games. There is also still a "San Francisco school" of game 
design out there that advocate "design by the numbers' - create games to get 
people to pay as quickly as possible, as many times as possible, in as many 
dierent ways as possible to maximise the funnel of people paying. I think that’s 
a dangerous route of design. I can see that today the most successful games are 
the ones that respect the players for what they are and creating an engaging 
experience. Design for engagement. Design for fun. Design for the emotional 
attachment to the game. Then build in reasonable monetisation that comes in 
way down the road.
My own gold standard of design of engagement is League of Legends. For the 
first 20 or 30 hours you can’t understand what you would ever pay money for. 
The cool thing about it is that the game is incredibly successful o the back of 
almost trying not to monetise players. They’ve built a phenomenon o the back 
of an incredible game and not worrying too much about monetisation at all. I 
think that’s a great design principle that developers need to work towards as 
consumers get smarter. Are they leaving money on the table? Likely yes - but 
they are building an incredibly successful, long lasting and valuable franchise.
Andrew Sheppard 
Andrew Sheppard is the President of Kabam Studios, a developer and publisher 
of social games. In each of the last two years Kabam revenues have grown by 80 
percent or more and will total more than $325 million in 2013
1) What is the biggest opportunity in 
mobile gaming today?
As consumer demand for gameplay experiences at little to no cost increases, 
more publishers will come to recognize the value of the free-to-play business 
model. In this context the onus is on all publishers (both existing and new) to 
deliver high quality gameplay experiences that players value and ultimately are 
willing to purchase. Thanks to the growing device market and constantly 
improving device capabilities, publishers’ ability to deliver compelling gameplay 
experiences has never been greater.  
2) Discoverability is a huge issue and the 
mobile marketplace is extremely crowded, 
what steps can developers and publishers 
take to get their games into the hands of 
more players?
First, make a great game that is innovative, engaging and fun. This is required to 
unlock tremendous organic opportunity.  Then pull on all the strategic levers of 
traditional marketing and distribution: business development, brand marketing, 
public relations, performance advertising, consumer events, etc. Nail the 
execution on both fronts, than get ready to watch your game soar up the charts!
3) Some of the biggest success stories 
have come from new entrants, while some 
traditional publishers have struggled to 
gain traction. Why do you think this is?
For traditional publishers and developers, it’s been a slow start. This is largely 
because free-to-play mobile game development is an entirely dierent beast 
that draws on both art and science to build mass market global hits. It is fair to 
say the traditional game developers are beginning to figure out this exciting new 
medium of gaming, but that their progress is still rate limited by the best 
practices that made them successful in the first place.
4) What is the formula for a successful 
free-to-play title?
Excellent teams, great product vision and a deep understanding of how to 
balance the art and science of free-to-play game development. Hard work helps 
too.
Chris DeWolfe
Chris DeWolfe is the CEO of SGN (Social Gaming Network), a top cross-platform 
developer and publisher of games on Facebook, iOS, and Android. To date well 
over 300 Million SGN games have been installed on leading mobile and social 
platforms, making SGN one of the largest cross-platform gaming companies in 
the world.
1) What is the biggest opportunity in 
mobile gaming today?
A massive number of people are playing games today, and as a result, the 
market has become much larger than it was several years ago. It will continue to 
get larger as people continue purchasing multiple devices.
The fact that there are now multiple platforms on which to play games expands 
the market even more. Currently there is a big opportunity for developers to 
build their games for all platforms, both social and mobile. The opportunity lies 
in developing games for people to play at work, perhaps on a PC or laptop, and 
for users that are travelling home from work, so they can continue to play the 
same game seamlessly on a mobile device.
Free-to-play in-game purchasing has become frictionless, especially in the iOS 
operating system. Apple has over a billion credit cards on file, so all you have to 
do is type in your password to make a purchase. This makes it very easy to 
purchase and provides a huge potential audience. On top of that, barriers to 
entry have been substantially reduced, so that the cost and time it takes to 
create a great game in the mobile space has decreased as the tools available 
have matured. This has allowed smaller companies to make the biggest mobile 
games.
The other significant opportunity is leveraging the sheer amount of data that 
exists. If done right, you have the ability to look at the fail rates of a user at a 
granular level, almost down to the exact feature of a particular stage that caused 
them to lose. With connected devices you have the ability to refine these 
components so that you can prevent users from becoming frustrated and 
leaving the game, and at the same time, ensure that there are enough 
challenges to keep them playing.
2) Discoverability is a huge issue and the 
mobile marketplace is extremely crowded, 
what steps can developers and publishers 
take to get their games into the hands of 
more players?
It starts with the design of the game. If you have a broad market it is important 
to ensure that your game has a proven mechanic and that the game is fun to 
play. Starting very early with a playable prototype of the game is necessary to 
determine if the game will have fun gameplay mechanics and if it will stand out 
from the crowd. If it does not meet those requirements, then you either have to 
go back to the drawing board or fail quickly and pivot. It is not the best idea to 
spend a year and a half developing a game that is never going to gain traction.
You also want to ensure that there are certain viral elements in the game. From 
our perspective, Facebook remains the social glue in the mobile web and apps 
space. It is helpful to encourage your users to log into Facebook to invite their 
friends into the game, and reward them for doing so. There are many ways to do 
that from the way you set up the game, to notifying users when one of their 
friends joins. For example, in our game Panda Pop, anytime your friend joins, 
you are sent a notification so that you can share progress with each other. We 
encourage users to return to the game and compete on the levels where their 
friends have beaten them.
It is always helpful if you can build a game that is interesting enough from an 
editorial perspective that Apple, Google Play, Amazon and/or Facebook will 
feature it.  This featured placement will get you hundreds of thousands if not 
millions of downloads. From a discoverability perspective, this can be a great 
boon to the launch of your game, but it is not something you can rely on.
For us, we have a very specific focus on our games. We make puzzle games that 
have a deep narrative, great animations and fun gameplay. Most of our entire 
back catalogue appeals to a similar type of demographic. We do that because 
when we get a hit with game A, we can cross-promote games B, C and D to 
those users. From a success perspective, we are looking at the lifetime value of a 
user rather than the lifetime value of a single game.
Some companies will make a game specifically targeted at men, then attempt a 
casino game targeted at women and then a puzzle game targeted to everyone, 
and try to cross-promote all of the games. However, it is unlikely that there is 
interest by that demographic in the new games, so this strategy may not be 
suitable.
With advertising, the picture was quite dierent a year ago. In the early days, 
companies would target across the board and hope that the average lifetime 
value of a user would come out to more than the cost per user to acquire. Now 
– at least for the companies that are doing it right – you have to get much more 
granular with how and where you spend your advertising dollars or you may lose 
a significant amount of money with very little gain.
3) Some of the biggest success stories 
have come from new entrants, while some 
traditional publishers have struggled to 
gain traction. Why do you think this is?
The secret is agility. If you look at companies like Supercell, who make Clash of 
Clans, and King, who of course developed Candy Crush Saga, they do not have 
massive, bloated teams. They quickly make games and quickly iterate.
Mobile games are not software like they were in the past. We are creating a 
game as a service. A game can last an extremely long time rather than a boxed 
product that has a finite lifespan. You can release a game, collect great data, and 
continue to improve the game with regular changes and new content.
There is a new way of thinking when developing games for mobile and social. It 
is the notion of developing a prototype and failing fast – by that I mean using 
data to decide very early on if your prototype is a viable game. At the same time 
the concept now is to build a game as a service – optimizing the revenue and 
user retention for years to come by continuously injecting new content.
It is a very dierent way of thinking compared to the earlier days, where some 
companies set a budget and development time for a game and then began 
work. Every company that has a big hit game, has also had failed games that 
they killed after a month or two. If you spoke with the teams at Supercell or 
Kabam, it is very likely that they have had game ideas that they thought would be 
interesting, but ultimately did not succeed. Games are unique in that way. 
If you take TV for example – it costs possibly a million dollars to create a pilot, 
with the hope that you will get picked up for maybe six episodes and the goal is 
to not get cancelled. With mobile game development, the investment is far 
lower before the point at which you start to get feedback, so you can tell much 
earlier on if a project is not working or how to steer it so that it begins to work 
for you. This kind of thinking is naturally ingrained into newer companies.
4) What is the formula for a successful 
free-to-play title?
As a company we are super focused on one genre of games. We have dabbled 
in other areas, but we settled on this space because – like the issue you brought 
up with discoverability – we start to solve the discoverability issue ourselves 
simply by creating new products that cross-promote very well with each other.
The notion that you create a game with a proven game mechanic is also very 
important. We have a website called mindjolt.com, which has hundreds of very 
simple games that cover almost every game mechanic you can think of. Those 
games are not advanced enough and do not have enough polish to be hits in 
their own right, but what we can do is determine which games people are 
playing and which mechanics people are enjoying. From there we can build a 
prototype with a bigger narrative around that initial idea. If that prototype is a 
success we can move along to formally assign a team to the game and head 
into full development. From that point, we will continually iterate on the game 
through a soft launch and then a full release.
Additionally, we set KPIs and stick to them. For example, for a particular title, we 
might set a day-one retention target of 55%, which is quite a healthy number. 
Our seven-day retention target might be 26%. If those numbers are not where 
we need them to be we will take prescriptive measures – and analyze our data – 
to determine where players are dropping o and what is causing the retention 
to be lower than what we want it to be. This is just one indicator among many 
that we use to measure success and figure out how to make the most 
successful product.
Finally, investing in your team is crucial. To make the best games, you must hire 
the most creative people you can aord. This year we invested heavily in our 
artists, animators, game designers and engineering teams to ensure we have the 
imagination and the talent to make the best products. Unfortunately that is not 
enough, you must also have the analytics infrastructure to back it all up. All of 
these elements are crucial to creating a successful games business.
Unlocking the Formula to 
Mobile Success
Mobile Gaming USA
May 5-6, 2014 | San Francisco
 
All the contributors to this 
whitepaper will be speaking at 
Mobile Gaming USA. Visit: 
http://www.videogamesintelligen
ce.com/mobile-gaming-usa 
for more details on this landmark 
event.
Introduction
The mobile games industry is a multi-billion dollar industry - mobile gaming is 
big business and is set to continue growing at an alarming rate. Smart phone 
and tablet market penetration is increasing exponentially, with over one billion 
units sold worldwide in 2013 alone. The power of mobile gaming devices is 
increasing just as fast: mobile processing power has developed to the extent 
that smartphones and tablets can produce near console-quality graphics.
At the same time, digital marketplaces have become crowded, and the cost of 
raising your head above the parapet through user acquisition has never been 
higher. The mobile games industry is under increasing pressure to perform, 
targeted at a market with more choice, and lower barriers to entry than ever 
before.
The ability to innovate and to learn from each other’s creative thinking will set 
the successful apart as the mobile sector continues to grow. Three industry 
experts, representing some of the most innovative minds from across the 
industry from investment house Initial Capital and developer/publishers Kabam 
and SGN oer their insights into the mobile games industry in this report. These 
industry leaders, along with a number of their peers, will also be giving their 
insights at Mobile Gaming USA, hosted in San Francisco, 5-6, May 2014.
Kristian Segerstrale
Kristian Segerstrale is an entrepreneur and investor in games, consumer internet 
and technology companies. He was also the CEO and co-founder of Playfish, 
who were acquired by EA for $400 million in 2009. Kristian invests with Initial 
Capital. To find out more visit www.initialcapital.com
1) What is the biggest opportunity in 
mobile gaming today?
I actually don’t think there’s been a time in mobile games where you’ve had an 
almost guaranteed growth over the next five years. You have a set of 
technologies in iOS and Android that are here to stay. You have a set of stores 
that are getting increasingly better at recommending the right content for users. 
You also have a set of marketing technologies in advertising networks and 
acquisition technologies that makes it increasingly better to reach consumers. 
Most importantly you have consumers that are buying more smartphones all the 
time. More than a billion smartphones were bought in 2013 alone.
The markets are getting far more international and consolidated. Previously for a 
western developer and publishers it was extremely dicult to get into markets 
like Japan, China and Korea because of diering technologies and marketplaces 
– diering approaches to everything. Now, although the markets are still unique, 
the technologies – in terms of Android and iOS in particular – are becoming 
these giant equalisers between markets. So if you have a great product, as has 
been amply demonstrated by King, Rovio and Supercell, you can actually create 
global hits.
For all those reasons, I think the next three to five years present an incredible 
opportunity for game developers.
In terms of specific opportunities within that industry growth, which is extremely 
promising, is innovation. We continue to have a massive amount of 
under-served categories in mobile in particular. If you look at genres like Sports 
games, MOBAs (Massively Online Battle Arenas), RPGs (Role Playing Games) – 
they all feel like under-served segments on mobile right now. Also there are 
segments within those genres where you struggle to find quality games. Many 
developers are lured by the success of specific titles and create derivative works 
or games that are heavily influenced by those successful products. The biggest 
opportunity out there is to serve unmet needs and to innovate rather than 
imitate.
2) Discoverability is a huge issue and the 
mobile marketplace is extremely crowded, 
what steps can developers and publishers 
take to get their games into the hands of 
more players?
The product is by far the most important form of marketing, but especially in a 
marketplace with as low friction, with as low barriers to entry, as mobile gaming. 
So the most important thing is to not only create a product that is wonderful 
and great to play – a great experience – but also one that has great character 
and is memorable. Most developers today would still say that the majority of 
their distribution is still word of mouth.
I can’t emphasise enough how important it is to create memorable experiences 
to begin with. It is true that the marketplace is crowded, but the majority of that 
crowd are actually forgettable experiences.
There are also fairly well understood mechanisms to test out what segment and 
type of consumer you product appeals to. Once you have a good sense of who 
your product is for, it is actually fairly straightforward to augment your user 
acquisition eorts with channel marketing that reaches the right communities. I 
think the marketplace is not nearly as sophisticated at doing this as it should be. 
So today it’s entirely possible to quite accurately understand who your 
consumer is and at the same time the ability to target using tools is increasing. 
You can also advertise with much richer content, like video, that can be more 
compelling – I think channels like YouTube are actually quite underused today.
Right now we’re going through this shift of marketing for apps which for the 
past few years has been developed as this quantitative discipline of acquiring 
users through ad networks almost like a trading desk – where one company 
might be willing to sell a user for a price. I think we’ve entered an era where you 
have to be far more sophisticated about building brands and creating a closer, 
more emotional relationship with consumers.
3) Some of the biggest success stories 
have come from new entrants, while some 
traditional publishers have struggled to 
gain traction. Why do you think this is?
From my experience games are really all about talent. The top 1% of talent will 
have by far the best chance of creating the top 0.1% of games that are out there. 
Putting anything less than the best development team on a game will have a 
devastating impact on its ability to have the potential to break out. Part of that is 
the innovation the team is capable of, part of it is the quality of the execution. At 
the end of the day these are crafted experiences and as a consumer you can see 
all of that – whether it’s a game you can clearly see that someone really cares 
about or not.
Part of the challenge with the existing companies is that their focus – where 
they’re placing their very best talent – is where their existing dollars are coming 
from. So if you think about an EA or an Activision, the dilemma is that they’re 
making billions of dollars from existing franchises. It would take an incredibly 
brave company to move their talent from these massive franchises and put them 
onto a new platform. 
The other thing is that the development methodologies that smaller teams 
employ are more suited to mobile. Big companies tend to employ heavy 
approval processes to protect them from big mistakes. That type of process 
doesn't lend itself well to creative risk or creating games in a fast moving 
environment . You need to be able to trust top talent to make gut decisions. 
Companies like Supercell are very vocal about the fact that they don’t have a 
green light process of any kind, and I think that’s something that has hamstrung 
some of the bigger companies when it comes to mobile development.
4) What is the formula for a successful 
free-to-play title?
Games are fundamentally an art, and I don’t know that there’s a formula for art. 
There are approaches that tend to be more successful than others. One that I 
would advocate would be to firstly make something that you love to play 
yourself. Don’t try make something because you think the market is big and 
there are a lot of consumers that want something in that area. Start with what 
you love to play and how you make something that you would love to play. You 
can tell when you play a game whether it has been made by someone that 
genuinely loves it. Obviously it needs to be something that you think the market 
will also love to play, but if you don’t love it, the chances are that nobody else 
will love it also.
You also need to understand who you’re making the game for and profoundly 
respecting the player. There are a lot of games being made right now that either 
simply imitate existing games. There is also still a "San Francisco school" of game 
design out there that advocate "design by the numbers' - create games to get 
people to pay as quickly as possible, as many times as possible, in as many 
dierent ways as possible to maximise the funnel of people paying. I think that’s 
a dangerous route of design. I can see that today the most successful games are 
the ones that respect the players for what they are and creating an engaging 
experience. Design for engagement. Design for fun. Design for the emotional 
attachment to the game. Then build in reasonable monetisation that comes in 
way down the road.
My own gold standard of design of engagement is League of Legends. For the 
first 20 or 30 hours you can’t understand what you would ever pay money for. 
The cool thing about it is that the game is incredibly successful o the back of 
almost trying not to monetise players. They’ve built a phenomenon o the back 
of an incredible game and not worrying too much about monetisation at all. I 
think that’s a great design principle that developers need to work towards as 
consumers get smarter. Are they leaving money on the table? Likely yes - but 
they are building an incredibly successful, long lasting and valuable franchise.
Andrew Sheppard 
Andrew Sheppard is the President of Kabam Studios, a developer and publisher 
of social games. In each of the last two years Kabam revenues have grown by 80 
percent or more and will total more than $325 million in 2013
1) What is the biggest opportunity in 
mobile gaming today?
As consumer demand for gameplay experiences at little to no cost increases, 
more publishers will come to recognize the value of the free-to-play business 
model. In this context the onus is on all publishers (both existing and new) to 
deliver high quality gameplay experiences that players value and ultimately are 
willing to purchase. Thanks to the growing device market and constantly 
improving device capabilities, publishers’ ability to deliver compelling gameplay 
experiences has never been greater.  
2) Discoverability is a huge issue and the 
mobile marketplace is extremely crowded, 
what steps can developers and publishers 
take to get their games into the hands of 
more players?
First, make a great game that is innovative, engaging and fun. This is required to 
unlock tremendous organic opportunity.  Then pull on all the strategic levers of 
traditional marketing and distribution: business development, brand marketing, 
public relations, performance advertising, consumer events, etc. Nail the 
execution on both fronts, than get ready to watch your game soar up the charts!
3) Some of the biggest success stories 
have come from new entrants, while some 
traditional publishers have struggled to 
gain traction. Why do you think this is?
For traditional publishers and developers, it’s been a slow start. This is largely 
because free-to-play mobile game development is an entirely dierent beast 
that draws on both art and science to build mass market global hits. It is fair to 
say the traditional game developers are beginning to figure out this exciting new 
medium of gaming, but that their progress is still rate limited by the best 
practices that made them successful in the first place.
4) What is the formula for a successful 
free-to-play title?
Excellent teams, great product vision and a deep understanding of how to 
balance the art and science of free-to-play game development. Hard work helps 
too.
Chris DeWolfe
Chris DeWolfe is the CEO of SGN (Social Gaming Network), a top cross-platform 
developer and publisher of games on Facebook, iOS, and Android. To date well 
over 300 Million SGN games have been installed on leading mobile and social 
platforms, making SGN one of the largest cross-platform gaming companies in 
the world.
1) What is the biggest opportunity in 
mobile gaming today?
A massive number of people are playing games today, and as a result, the 
market has become much larger than it was several years ago. It will continue to 
get larger as people continue purchasing multiple devices.
The fact that there are now multiple platforms on which to play games expands 
the market even more. Currently there is a big opportunity for developers to 
build their games for all platforms, both social and mobile. The opportunity lies 
in developing games for people to play at work, perhaps on a PC or laptop, and 
for users that are travelling home from work, so they can continue to play the 
same game seamlessly on a mobile device.
Free-to-play in-game purchasing has become frictionless, especially in the iOS 
operating system. Apple has over a billion credit cards on file, so all you have to 
do is type in your password to make a purchase. This makes it very easy to 
purchase and provides a huge potential audience. On top of that, barriers to 
entry have been substantially reduced, so that the cost and time it takes to 
create a great game in the mobile space has decreased as the tools available 
have matured. This has allowed smaller companies to make the biggest mobile 
games.
The other significant opportunity is leveraging the sheer amount of data that 
exists. If done right, you have the ability to look at the fail rates of a user at a 
granular level, almost down to the exact feature of a particular stage that caused 
them to lose. With connected devices you have the ability to refine these 
components so that you can prevent users from becoming frustrated and 
leaving the game, and at the same time, ensure that there are enough 
challenges to keep them playing.
2) Discoverability is a huge issue and the 
mobile marketplace is extremely crowded, 
what steps can developers and publishers 
take to get their games into the hands of 
more players?
It starts with the design of the game. If you have a broad market it is important 
to ensure that your game has a proven mechanic and that the game is fun to 
play. Starting very early with a playable prototype of the game is necessary to 
determine if the game will have fun gameplay mechanics and if it will stand out 
from the crowd. If it does not meet those requirements, then you either have to 
go back to the drawing board or fail quickly and pivot. It is not the best idea to 
spend a year and a half developing a game that is never going to gain traction.
You also want to ensure that there are certain viral elements in the game. From 
our perspective, Facebook remains the social glue in the mobile web and apps 
space. It is helpful to encourage your users to log into Facebook to invite their 
friends into the game, and reward them for doing so. There are many ways to do 
that from the way you set up the game, to notifying users when one of their 
friends joins. For example, in our game Panda Pop, anytime your friend joins, 
you are sent a notification so that you can share progress with each other. We 
encourage users to return to the game and compete on the levels where their 
friends have beaten them.
It is always helpful if you can build a game that is interesting enough from an 
editorial perspective that Apple, Google Play, Amazon and/or Facebook will 
feature it.  This featured placement will get you hundreds of thousands if not 
millions of downloads. From a discoverability perspective, this can be a great 
boon to the launch of your game, but it is not something you can rely on.
For us, we have a very specific focus on our games. We make puzzle games that 
have a deep narrative, great animations and fun gameplay. Most of our entire 
back catalogue appeals to a similar type of demographic. We do that because 
when we get a hit with game A, we can cross-promote games B, C and D to 
those users. From a success perspective, we are looking at the lifetime value of a 
user rather than the lifetime value of a single game.
Some companies will make a game specifically targeted at men, then attempt a 
casino game targeted at women and then a puzzle game targeted to everyone, 
and try to cross-promote all of the games. However, it is unlikely that there is 
interest by that demographic in the new games, so this strategy may not be 
suitable.
With advertising, the picture was quite dierent a year ago. In the early days, 
companies would target across the board and hope that the average lifetime 
value of a user would come out to more than the cost per user to acquire. Now 
– at least for the companies that are doing it right – you have to get much more 
granular with how and where you spend your advertising dollars or you may lose 
a significant amount of money with very little gain.
3) Some of the biggest success stories 
have come from new entrants, while some 
traditional publishers have struggled to 
gain traction. Why do you think this is?
The secret is agility. If you look at companies like Supercell, who make Clash of 
Clans, and King, who of course developed Candy Crush Saga, they do not have 
massive, bloated teams. They quickly make games and quickly iterate.
Mobile games are not software like they were in the past. We are creating a 
game as a service. A game can last an extremely long time rather than a boxed 
product that has a finite lifespan. You can release a game, collect great data, and 
continue to improve the game with regular changes and new content.
There is a new way of thinking when developing games for mobile and social. It 
is the notion of developing a prototype and failing fast – by that I mean using 
data to decide very early on if your prototype is a viable game. At the same time 
the concept now is to build a game as a service – optimizing the revenue and 
user retention for years to come by continuously injecting new content.
It is a very dierent way of thinking compared to the earlier days, where some 
companies set a budget and development time for a game and then began 
work. Every company that has a big hit game, has also had failed games that 
they killed after a month or two. If you spoke with the teams at Supercell or 
Kabam, it is very likely that they have had game ideas that they thought would be 
interesting, but ultimately did not succeed. Games are unique in that way. 
If you take TV for example – it costs possibly a million dollars to create a pilot, 
with the hope that you will get picked up for maybe six episodes and the goal is 
to not get cancelled. With mobile game development, the investment is far 
lower before the point at which you start to get feedback, so you can tell much 
earlier on if a project is not working or how to steer it so that it begins to work 
for you. This kind of thinking is naturally ingrained into newer companies.
4) What is the formula for a successful 
free-to-play title?
As a company we are super focused on one genre of games. We have dabbled 
in other areas, but we settled on this space because – like the issue you brought 
up with discoverability – we start to solve the discoverability issue ourselves 
simply by creating new products that cross-promote very well with each other.
The notion that you create a game with a proven game mechanic is also very 
important. We have a website called mindjolt.com, which has hundreds of very 
simple games that cover almost every game mechanic you can think of. Those 
games are not advanced enough and do not have enough polish to be hits in 
their own right, but what we can do is determine which games people are 
playing and which mechanics people are enjoying. From there we can build a 
prototype with a bigger narrative around that initial idea. If that prototype is a 
success we can move along to formally assign a team to the game and head 
into full development. From that point, we will continually iterate on the game 
through a soft launch and then a full release.
Additionally, we set KPIs and stick to them. For example, for a particular title, we 
might set a day-one retention target of 55%, which is quite a healthy number. 
Our seven-day retention target might be 26%. If those numbers are not where 
we need them to be we will take prescriptive measures – and analyze our data – 
to determine where players are dropping o and what is causing the retention 
to be lower than what we want it to be. This is just one indicator among many 
that we use to measure success and figure out how to make the most 
successful product.
Finally, investing in your team is crucial. To make the best games, you must hire 
the most creative people you can aord. This year we invested heavily in our 
artists, animators, game designers and engineering teams to ensure we have the 
imagination and the talent to make the best products. Unfortunately that is not 
enough, you must also have the analytics infrastructure to back it all up. All of 
these elements are crucial to creating a successful games business.
Unlocking the Formula to 
Mobile Success
Mobile Gaming USA
May 5-6, 2014 | San Francisco
 
All the contributors to this 
whitepaper will be speaking at 
Mobile Gaming USA. Visit: 
http://www.videogamesintelligen
ce.com/mobile-gaming-usa 
for more details on this landmark 
event.
Introduction
The mobile games industry is a multi-billion dollar industry - mobile gaming is 
big business and is set to continue growing at an alarming rate. Smart phone 
and tablet market penetration is increasing exponentially, with over one billion 
units sold worldwide in 2013 alone. The power of mobile gaming devices is 
increasing just as fast: mobile processing power has developed to the extent 
that smartphones and tablets can produce near console-quality graphics.
At the same time, digital marketplaces have become crowded, and the cost of 
raising your head above the parapet through user acquisition has never been 
higher. The mobile games industry is under increasing pressure to perform, 
targeted at a market with more choice, and lower barriers to entry than ever 
before.
The ability to innovate and to learn from each other’s creative thinking will set 
the successful apart as the mobile sector continues to grow. Three industry 
experts, representing some of the most innovative minds from across the 
industry from investment house Initial Capital and developer/publishers Kabam 
and SGN oer their insights into the mobile games industry in this report. These 
industry leaders, along with a number of their peers, will also be giving their 
insights at Mobile Gaming USA, hosted in San Francisco, 5-6, May 2014.
Kristian Segerstrale
Kristian Segerstrale is an entrepreneur and investor in games, consumer internet 
and technology companies. He was also the CEO and co-founder of Playfish, 
who were acquired by EA for $400 million in 2009. Kristian invests with Initial 
Capital. To find out more visit www.initialcapital.com
1) What is the biggest opportunity in 
mobile gaming today?
I actually don’t think there’s been a time in mobile games where you’ve had an 
almost guaranteed growth over the next five years. You have a set of 
technologies in iOS and Android that are here to stay. You have a set of stores 
that are getting increasingly better at recommending the right content for users. 
You also have a set of marketing technologies in advertising networks and 
acquisition technologies that makes it increasingly better to reach consumers. 
Most importantly you have consumers that are buying more smartphones all the 
time. More than a billion smartphones were bought in 2013 alone.
The markets are getting far more international and consolidated. Previously for a 
western developer and publishers it was extremely dicult to get into markets 
like Japan, China and Korea because of diering technologies and marketplaces 
– diering approaches to everything. Now, although the markets are still unique, 
the technologies – in terms of Android and iOS in particular – are becoming 
these giant equalisers between markets. So if you have a great product, as has 
been amply demonstrated by King, Rovio and Supercell, you can actually create 
global hits.
For all those reasons, I think the next three to five years present an incredible 
opportunity for game developers.
In terms of specific opportunities within that industry growth, which is extremely 
promising, is innovation. We continue to have a massive amount of 
under-served categories in mobile in particular. If you look at genres like Sports 
games, MOBAs (Massively Online Battle Arenas), RPGs (Role Playing Games) – 
they all feel like under-served segments on mobile right now. Also there are 
segments within those genres where you struggle to find quality games. Many 
developers are lured by the success of specific titles and create derivative works 
or games that are heavily influenced by those successful products. The biggest 
opportunity out there is to serve unmet needs and to innovate rather than 
imitate.
2) Discoverability is a huge issue and the 
mobile marketplace is extremely crowded, 
what steps can developers and publishers 
take to get their games into the hands of 
more players?
The product is by far the most important form of marketing, but especially in a 
marketplace with as low friction, with as low barriers to entry, as mobile gaming. 
So the most important thing is to not only create a product that is wonderful 
and great to play – a great experience – but also one that has great character 
and is memorable. Most developers today would still say that the majority of 
their distribution is still word of mouth.
I can’t emphasise enough how important it is to create memorable experiences 
to begin with. It is true that the marketplace is crowded, but the majority of that 
crowd are actually forgettable experiences.
There are also fairly well understood mechanisms to test out what segment and 
type of consumer you product appeals to. Once you have a good sense of who 
your product is for, it is actually fairly straightforward to augment your user 
acquisition eorts with channel marketing that reaches the right communities. I 
think the marketplace is not nearly as sophisticated at doing this as it should be. 
So today it’s entirely possible to quite accurately understand who your 
consumer is and at the same time the ability to target using tools is increasing. 
You can also advertise with much richer content, like video, that can be more 
compelling – I think channels like YouTube are actually quite underused today.
Right now we’re going through this shift of marketing for apps which for the 
past few years has been developed as this quantitative discipline of acquiring 
users through ad networks almost like a trading desk – where one company 
might be willing to sell a user for a price. I think we’ve entered an era where you 
have to be far more sophisticated about building brands and creating a closer, 
more emotional relationship with consumers.
3) Some of the biggest success stories 
have come from new entrants, while some 
traditional publishers have struggled to 
gain traction. Why do you think this is?
From my experience games are really all about talent. The top 1% of talent will 
have by far the best chance of creating the top 0.1% of games that are out there. 
Putting anything less than the best development team on a game will have a 
devastating impact on its ability to have the potential to break out. Part of that is 
the innovation the team is capable of, part of it is the quality of the execution. At 
the end of the day these are crafted experiences and as a consumer you can see 
all of that – whether it’s a game you can clearly see that someone really cares 
about or not.
Part of the challenge with the existing companies is that their focus – where 
they’re placing their very best talent – is where their existing dollars are coming 
from. So if you think about an EA or an Activision, the dilemma is that they’re 
making billions of dollars from existing franchises. It would take an incredibly 
brave company to move their talent from these massive franchises and put them 
onto a new platform. 
The other thing is that the development methodologies that smaller teams 
employ are more suited to mobile. Big companies tend to employ heavy 
approval processes to protect them from big mistakes. That type of process 
doesn't lend itself well to creative risk or creating games in a fast moving 
environment . You need to be able to trust top talent to make gut decisions. 
Companies like Supercell are very vocal about the fact that they don’t have a 
green light process of any kind, and I think that’s something that has hamstrung 
some of the bigger companies when it comes to mobile development.
4) What is the formula for a successful 
free-to-play title?
Games are fundamentally an art, and I don’t know that there’s a formula for art. 
There are approaches that tend to be more successful than others. One that I 
would advocate would be to firstly make something that you love to play 
yourself. Don’t try make something because you think the market is big and 
there are a lot of consumers that want something in that area. Start with what 
you love to play and how you make something that you would love to play. You 
can tell when you play a game whether it has been made by someone that 
genuinely loves it. Obviously it needs to be something that you think the market 
will also love to play, but if you don’t love it, the chances are that nobody else 
will love it also.
You also need to understand who you’re making the game for and profoundly 
respecting the player. There are a lot of games being made right now that either 
simply imitate existing games. There is also still a "San Francisco school" of game 
design out there that advocate "design by the numbers' - create games to get 
people to pay as quickly as possible, as many times as possible, in as many 
dierent ways as possible to maximise the funnel of people paying. I think that’s 
a dangerous route of design. I can see that today the most successful games are 
the ones that respect the players for what they are and creating an engaging 
experience. Design for engagement. Design for fun. Design for the emotional 
attachment to the game. Then build in reasonable monetisation that comes in 
way down the road.
My own gold standard of design of engagement is League of Legends. For the 
first 20 or 30 hours you can’t understand what you would ever pay money for. 
The cool thing about it is that the game is incredibly successful o the back of 
almost trying not to monetise players. They’ve built a phenomenon o the back 
of an incredible game and not worrying too much about monetisation at all. I 
think that’s a great design principle that developers need to work towards as 
consumers get smarter. Are they leaving money on the table? Likely yes - but 
they are building an incredibly successful, long lasting and valuable franchise.
Andrew Sheppard 
Andrew Sheppard is the President of Kabam Studios, a developer and publisher 
of social games. In each of the last two years Kabam revenues have grown by 80 
percent or more and will total more than $325 million in 2013
1) What is the biggest opportunity in 
mobile gaming today?
As consumer demand for gameplay experiences at little to no cost increases, 
more publishers will come to recognize the value of the free-to-play business 
model. In this context the onus is on all publishers (both existing and new) to 
deliver high quality gameplay experiences that players value and ultimately are 
willing to purchase. Thanks to the growing device market and constantly 
improving device capabilities, publishers’ ability to deliver compelling gameplay 
experiences has never been greater.  
2) Discoverability is a huge issue and the 
mobile marketplace is extremely crowded, 
what steps can developers and publishers 
take to get their games into the hands of 
more players?
First, make a great game that is innovative, engaging and fun. This is required to 
unlock tremendous organic opportunity.  Then pull on all the strategic levers of 
traditional marketing and distribution: business development, brand marketing, 
public relations, performance advertising, consumer events, etc. Nail the 
execution on both fronts, than get ready to watch your game soar up the charts!
3) Some of the biggest success stories 
have come from new entrants, while some 
traditional publishers have struggled to 
gain traction. Why do you think this is?
For traditional publishers and developers, it’s been a slow start. This is largely 
because free-to-play mobile game development is an entirely dierent beast 
that draws on both art and science to build mass market global hits. It is fair to 
say the traditional game developers are beginning to figure out this exciting new 
medium of gaming, but that their progress is still rate limited by the best 
practices that made them successful in the first place.
4) What is the formula for a successful 
free-to-play title?
Excellent teams, great product vision and a deep understanding of how to 
balance the art and science of free-to-play game development. Hard work helps 
too.
Chris DeWolfe
Chris DeWolfe is the CEO of SGN (Social Gaming Network), a top cross-platform 
developer and publisher of games on Facebook, iOS, and Android. To date well 
over 300 Million SGN games have been installed on leading mobile and social 
platforms, making SGN one of the largest cross-platform gaming companies in 
the world.
1) What is the biggest opportunity in 
mobile gaming today?
A massive number of people are playing games today, and as a result, the 
market has become much larger than it was several years ago. It will continue to 
get larger as people continue purchasing multiple devices.
The fact that there are now multiple platforms on which to play games expands 
the market even more. Currently there is a big opportunity for developers to 
build their games for all platforms, both social and mobile. The opportunity lies 
in developing games for people to play at work, perhaps on a PC or laptop, and 
for users that are travelling home from work, so they can continue to play the 
same game seamlessly on a mobile device.
Free-to-play in-game purchasing has become frictionless, especially in the iOS 
operating system. Apple has over a billion credit cards on file, so all you have to 
do is type in your password to make a purchase. This makes it very easy to 
purchase and provides a huge potential audience. On top of that, barriers to 
entry have been substantially reduced, so that the cost and time it takes to 
create a great game in the mobile space has decreased as the tools available 
have matured. This has allowed smaller companies to make the biggest mobile 
games.
The other significant opportunity is leveraging the sheer amount of data that 
exists. If done right, you have the ability to look at the fail rates of a user at a 
granular level, almost down to the exact feature of a particular stage that caused 
them to lose. With connected devices you have the ability to refine these 
components so that you can prevent users from becoming frustrated and 
leaving the game, and at the same time, ensure that there are enough 
challenges to keep them playing.
2) Discoverability is a huge issue and the 
mobile marketplace is extremely crowded, 
what steps can developers and publishers 
take to get their games into the hands of 
more players?
It starts with the design of the game. If you have a broad market it is important 
to ensure that your game has a proven mechanic and that the game is fun to 
play. Starting very early with a playable prototype of the game is necessary to 
determine if the game will have fun gameplay mechanics and if it will stand out 
from the crowd. If it does not meet those requirements, then you either have to 
go back to the drawing board or fail quickly and pivot. It is not the best idea to 
spend a year and a half developing a game that is never going to gain traction.
You also want to ensure that there are certain viral elements in the game. From 
our perspective, Facebook remains the social glue in the mobile web and apps 
space. It is helpful to encourage your users to log into Facebook to invite their 
friends into the game, and reward them for doing so. There are many ways to do 
that from the way you set up the game, to notifying users when one of their 
friends joins. For example, in our game Panda Pop, anytime your friend joins, 
you are sent a notification so that you can share progress with each other. We 
encourage users to return to the game and compete on the levels where their 
friends have beaten them.
It is always helpful if you can build a game that is interesting enough from an 
editorial perspective that Apple, Google Play, Amazon and/or Facebook will 
feature it.  This featured placement will get you hundreds of thousands if not 
millions of downloads. From a discoverability perspective, this can be a great 
boon to the launch of your game, but it is not something you can rely on.
For us, we have a very specific focus on our games. We make puzzle games that 
have a deep narrative, great animations and fun gameplay. Most of our entire 
back catalogue appeals to a similar type of demographic. We do that because 
when we get a hit with game A, we can cross-promote games B, C and D to 
those users. From a success perspective, we are looking at the lifetime value of a 
user rather than the lifetime value of a single game.
Some companies will make a game specifically targeted at men, then attempt a 
casino game targeted at women and then a puzzle game targeted to everyone, 
and try to cross-promote all of the games. However, it is unlikely that there is 
interest by that demographic in the new games, so this strategy may not be 
suitable.
With advertising, the picture was quite dierent a year ago. In the early days, 
companies would target across the board and hope that the average lifetime 
value of a user would come out to more than the cost per user to acquire. Now 
– at least for the companies that are doing it right – you have to get much more 
granular with how and where you spend your advertising dollars or you may lose 
a significant amount of money with very little gain.
3) Some of the biggest success stories 
have come from new entrants, while some 
traditional publishers have struggled to 
gain traction. Why do you think this is?
The secret is agility. If you look at companies like Supercell, who make Clash of 
Clans, and King, who of course developed Candy Crush Saga, they do not have 
massive, bloated teams. They quickly make games and quickly iterate.
Mobile games are not software like they were in the past. We are creating a 
game as a service. A game can last an extremely long time rather than a boxed 
product that has a finite lifespan. You can release a game, collect great data, and 
continue to improve the game with regular changes and new content.
There is a new way of thinking when developing games for mobile and social. It 
is the notion of developing a prototype and failing fast – by that I mean using 
data to decide very early on if your prototype is a viable game. At the same time 
the concept now is to build a game as a service – optimizing the revenue and 
user retention for years to come by continuously injecting new content.
It is a very dierent way of thinking compared to the earlier days, where some 
companies set a budget and development time for a game and then began 
work. Every company that has a big hit game, has also had failed games that 
they killed after a month or two. If you spoke with the teams at Supercell or 
Kabam, it is very likely that they have had game ideas that they thought would be 
interesting, but ultimately did not succeed. Games are unique in that way. 
If you take TV for example – it costs possibly a million dollars to create a pilot, 
with the hope that you will get picked up for maybe six episodes and the goal is 
to not get cancelled. With mobile game development, the investment is far 
lower before the point at which you start to get feedback, so you can tell much 
earlier on if a project is not working or how to steer it so that it begins to work 
for you. This kind of thinking is naturally ingrained into newer companies.
4) What is the formula for a successful 
free-to-play title?
As a company we are super focused on one genre of games. We have dabbled 
in other areas, but we settled on this space because – like the issue you brought 
up with discoverability – we start to solve the discoverability issue ourselves 
simply by creating new products that cross-promote very well with each other.
The notion that you create a game with a proven game mechanic is also very 
important. We have a website called mindjolt.com, which has hundreds of very 
simple games that cover almost every game mechanic you can think of. Those 
games are not advanced enough and do not have enough polish to be hits in 
their own right, but what we can do is determine which games people are 
playing and which mechanics people are enjoying. From there we can build a 
prototype with a bigger narrative around that initial idea. If that prototype is a 
success we can move along to formally assign a team to the game and head 
into full development. From that point, we will continually iterate on the game 
through a soft launch and then a full release.
Additionally, we set KPIs and stick to them. For example, for a particular title, we 
might set a day-one retention target of 55%, which is quite a healthy number. 
Our seven-day retention target might be 26%. If those numbers are not where 
we need them to be we will take prescriptive measures – and analyze our data – 
to determine where players are dropping o and what is causing the retention 
to be lower than what we want it to be. This is just one indicator among many 
that we use to measure success and figure out how to make the most 
successful product.
Finally, investing in your team is crucial. To make the best games, you must hire 
the most creative people you can aord. This year we invested heavily in our 
artists, animators, game designers and engineering teams to ensure we have the 
imagination and the talent to make the best products. Unfortunately that is not 
enough, you must also have the analytics infrastructure to back it all up. All of 
these elements are crucial to creating a successful games business.
Unlocking the Formula to 
Mobile Success
Mobile Gaming USA
May 5-6, 2014 | San Francisco
 
All the contributors to this 
whitepaper will be speaking at 
Mobile Gaming USA. Visit: 
http://www.videogamesintelligen
ce.com/mobile-gaming-usa 
for more details on this landmark 
event.
Introduction
The mobile games industry is a multi-billion dollar industry - mobile gaming is 
big business and is set to continue growing at an alarming rate. Smart phone 
and tablet market penetration is increasing exponentially, with over one billion 
units sold worldwide in 2013 alone. The power of mobile gaming devices is 
increasing just as fast: mobile processing power has developed to the extent 
that smartphones and tablets can produce near console-quality graphics.
At the same time, digital marketplaces have become crowded, and the cost of 
raising your head above the parapet through user acquisition has never been 
higher. The mobile games industry is under increasing pressure to perform, 
targeted at a market with more choice, and lower barriers to entry than ever 
before.
The ability to innovate and to learn from each other’s creative thinking will set 
the successful apart as the mobile sector continues to grow. Three industry 
experts, representing some of the most innovative minds from across the 
industry from investment house Initial Capital and developer/publishers Kabam 
and SGN oer their insights into the mobile games industry in this report. These 
industry leaders, along with a number of their peers, will also be giving their 
insights at Mobile Gaming USA, hosted in San Francisco, 5-6, May 2014.
Kristian Segerstrale
Kristian Segerstrale is an entrepreneur and investor in games, consumer internet 
and technology companies. He was also the CEO and co-founder of Playfish, 
who were acquired by EA for $400 million in 2009. Kristian invests with Initial 
Capital. To find out more visit www.initialcapital.com
1) What is the biggest opportunity in 
mobile gaming today?
I actually don’t think there’s been a time in mobile games where you’ve had an 
almost guaranteed growth over the next five years. You have a set of 
technologies in iOS and Android that are here to stay. You have a set of stores 
that are getting increasingly better at recommending the right content for users. 
You also have a set of marketing technologies in advertising networks and 
acquisition technologies that makes it increasingly better to reach consumers. 
Most importantly you have consumers that are buying more smartphones all the 
time. More than a billion smartphones were bought in 2013 alone.
The markets are getting far more international and consolidated. Previously for a 
western developer and publishers it was extremely dicult to get into markets 
like Japan, China and Korea because of diering technologies and marketplaces 
– diering approaches to everything. Now, although the markets are still unique, 
the technologies – in terms of Android and iOS in particular – are becoming 
these giant equalisers between markets. So if you have a great product, as has 
been amply demonstrated by King, Rovio and Supercell, you can actually create 
global hits.
For all those reasons, I think the next three to five years present an incredible 
opportunity for game developers.
In terms of specific opportunities within that industry growth, which is extremely 
promising, is innovation. We continue to have a massive amount of 
under-served categories in mobile in particular. If you look at genres like Sports 
games, MOBAs (Massively Online Battle Arenas), RPGs (Role Playing Games) – 
they all feel like under-served segments on mobile right now. Also there are 
segments within those genres where you struggle to find quality games. Many 
developers are lured by the success of specific titles and create derivative works 
or games that are heavily influenced by those successful products. The biggest 
opportunity out there is to serve unmet needs and to innovate rather than 
imitate.
2) Discoverability is a huge issue and the 
mobile marketplace is extremely crowded, 
what steps can developers and publishers 
take to get their games into the hands of 
more players?
The product is by far the most important form of marketing, but especially in a 
marketplace with as low friction, with as low barriers to entry, as mobile gaming. 
So the most important thing is to not only create a product that is wonderful 
and great to play – a great experience – but also one that has great character 
and is memorable. Most developers today would still say that the majority of 
their distribution is still word of mouth.
I can’t emphasise enough how important it is to create memorable experiences 
to begin with. It is true that the marketplace is crowded, but the majority of that 
crowd are actually forgettable experiences.
There are also fairly well understood mechanisms to test out what segment and 
type of consumer you product appeals to. Once you have a good sense of who 
your product is for, it is actually fairly straightforward to augment your user 
acquisition eorts with channel marketing that reaches the right communities. I 
think the marketplace is not nearly as sophisticated at doing this as it should be. 
So today it’s entirely possible to quite accurately understand who your 
consumer is and at the same time the ability to target using tools is increasing. 
You can also advertise with much richer content, like video, that can be more 
compelling – I think channels like YouTube are actually quite underused today.
Right now we’re going through this shift of marketing for apps which for the 
past few years has been developed as this quantitative discipline of acquiring 
users through ad networks almost like a trading desk – where one company 
might be willing to sell a user for a price. I think we’ve entered an era where you 
have to be far more sophisticated about building brands and creating a closer, 
more emotional relationship with consumers.
3) Some of the biggest success stories 
have come from new entrants, while some 
traditional publishers have struggled to 
gain traction. Why do you think this is?
From my experience games are really all about talent. The top 1% of talent will 
have by far the best chance of creating the top 0.1% of games that are out there. 
Putting anything less than the best development team on a game will have a 
devastating impact on its ability to have the potential to break out. Part of that is 
the innovation the team is capable of, part of it is the quality of the execution. At 
the end of the day these are crafted experiences and as a consumer you can see 
all of that – whether it’s a game you can clearly see that someone really cares 
about or not.
Part of the challenge with the existing companies is that their focus – where 
they’re placing their very best talent – is where their existing dollars are coming 
from. So if you think about an EA or an Activision, the dilemma is that they’re 
making billions of dollars from existing franchises. It would take an incredibly 
brave company to move their talent from these massive franchises and put them 
onto a new platform. 
The other thing is that the development methodologies that smaller teams 
employ are more suited to mobile. Big companies tend to employ heavy 
approval processes to protect them from big mistakes. That type of process 
doesn't lend itself well to creative risk or creating games in a fast moving 
environment . You need to be able to trust top talent to make gut decisions. 
Companies like Supercell are very vocal about the fact that they don’t have a 
green light process of any kind, and I think that’s something that has hamstrung 
some of the bigger companies when it comes to mobile development.
4) What is the formula for a successful 
free-to-play title?
Games are fundamentally an art, and I don’t know that there’s a formula for art. 
There are approaches that tend to be more successful than others. One that I 
would advocate would be to firstly make something that you love to play 
yourself. Don’t try make something because you think the market is big and 
there are a lot of consumers that want something in that area. Start with what 
you love to play and how you make something that you would love to play. You 
can tell when you play a game whether it has been made by someone that 
genuinely loves it. Obviously it needs to be something that you think the market 
will also love to play, but if you don’t love it, the chances are that nobody else 
will love it also.
You also need to understand who you’re making the game for and profoundly 
respecting the player. There are a lot of games being made right now that either 
simply imitate existing games. There is also still a "San Francisco school" of game 
design out there that advocate "design by the numbers' - create games to get 
people to pay as quickly as possible, as many times as possible, in as many 
dierent ways as possible to maximise the funnel of people paying. I think that’s 
a dangerous route of design. I can see that today the most successful games are 
the ones that respect the players for what they are and creating an engaging 
experience. Design for engagement. Design for fun. Design for the emotional 
attachment to the game. Then build in reasonable monetisation that comes in 
way down the road.
My own gold standard of design of engagement is League of Legends. For the 
first 20 or 30 hours you can’t understand what you would ever pay money for. 
The cool thing about it is that the game is incredibly successful o the back of 
almost trying not to monetise players. They’ve built a phenomenon o the back 
of an incredible game and not worrying too much about monetisation at all. I 
think that’s a great design principle that developers need to work towards as 
consumers get smarter. Are they leaving money on the table? Likely yes - but 
they are building an incredibly successful, long lasting and valuable franchise.
Andrew Sheppard 
Andrew Sheppard is the President of Kabam Studios, a developer and publisher 
of social games. In each of the last two years Kabam revenues have grown by 80 
percent or more and will total more than $325 million in 2013
1) What is the biggest opportunity in 
mobile gaming today?
As consumer demand for gameplay experiences at little to no cost increases, 
more publishers will come to recognize the value of the free-to-play business 
model. In this context the onus is on all publishers (both existing and new) to 
deliver high quality gameplay experiences that players value and ultimately are 
willing to purchase. Thanks to the growing device market and constantly 
improving device capabilities, publishers’ ability to deliver compelling gameplay 
experiences has never been greater.  
2) Discoverability is a huge issue and the 
mobile marketplace is extremely crowded, 
what steps can developers and publishers 
take to get their games into the hands of 
more players?
First, make a great game that is innovative, engaging and fun. This is required to 
unlock tremendous organic opportunity.  Then pull on all the strategic levers of 
traditional marketing and distribution: business development, brand marketing, 
public relations, performance advertising, consumer events, etc. Nail the 
execution on both fronts, than get ready to watch your game soar up the charts!
3) Some of the biggest success stories 
have come from new entrants, while some 
traditional publishers have struggled to 
gain traction. Why do you think this is?
For traditional publishers and developers, it’s been a slow start. This is largely 
because free-to-play mobile game development is an entirely dierent beast 
that draws on both art and science to build mass market global hits. It is fair to 
say the traditional game developers are beginning to figure out this exciting new 
medium of gaming, but that their progress is still rate limited by the best 
practices that made them successful in the first place.
4) What is the formula for a successful 
free-to-play title?
Excellent teams, great product vision and a deep understanding of how to 
balance the art and science of free-to-play game development. Hard work helps 
too.
Chris DeWolfe
Chris DeWolfe is the CEO of SGN (Social Gaming Network), a top cross-platform 
developer and publisher of games on Facebook, iOS, and Android. To date well 
over 300 Million SGN games have been installed on leading mobile and social 
platforms, making SGN one of the largest cross-platform gaming companies in 
the world.
1) What is the biggest opportunity in 
mobile gaming today?
A massive number of people are playing games today, and as a result, the 
market has become much larger than it was several years ago. It will continue to 
get larger as people continue purchasing multiple devices.
The fact that there are now multiple platforms on which to play games expands 
the market even more. Currently there is a big opportunity for developers to 
build their games for all platforms, both social and mobile. The opportunity lies 
in developing games for people to play at work, perhaps on a PC or laptop, and 
for users that are travelling home from work, so they can continue to play the 
same game seamlessly on a mobile device.
Free-to-play in-game purchasing has become frictionless, especially in the iOS 
operating system. Apple has over a billion credit cards on file, so all you have to 
do is type in your password to make a purchase. This makes it very easy to 
purchase and provides a huge potential audience. On top of that, barriers to 
entry have been substantially reduced, so that the cost and time it takes to 
create a great game in the mobile space has decreased as the tools available 
have matured. This has allowed smaller companies to make the biggest mobile 
games.
The other significant opportunity is leveraging the sheer amount of data that 
exists. If done right, you have the ability to look at the fail rates of a user at a 
granular level, almost down to the exact feature of a particular stage that caused 
them to lose. With connected devices you have the ability to refine these 
components so that you can prevent users from becoming frustrated and 
leaving the game, and at the same time, ensure that there are enough 
challenges to keep them playing.
2) Discoverability is a huge issue and the 
mobile marketplace is extremely crowded, 
what steps can developers and publishers 
take to get their games into the hands of 
more players?
It starts with the design of the game. If you have a broad market it is important 
to ensure that your game has a proven mechanic and that the game is fun to 
play. Starting very early with a playable prototype of the game is necessary to 
determine if the game will have fun gameplay mechanics and if it will stand out 
from the crowd. If it does not meet those requirements, then you either have to 
go back to the drawing board or fail quickly and pivot. It is not the best idea to 
spend a year and a half developing a game that is never going to gain traction.
You also want to ensure that there are certain viral elements in the game. From 
our perspective, Facebook remains the social glue in the mobile web and apps 
space. It is helpful to encourage your users to log into Facebook to invite their 
friends into the game, and reward them for doing so. There are many ways to do 
that from the way you set up the game, to notifying users when one of their 
friends joins. For example, in our game Panda Pop, anytime your friend joins, 
you are sent a notification so that you can share progress with each other. We 
encourage users to return to the game and compete on the levels where their 
friends have beaten them.
It is always helpful if you can build a game that is interesting enough from an 
editorial perspective that Apple, Google Play, Amazon and/or Facebook will 
feature it.  This featured placement will get you hundreds of thousands if not 
millions of downloads. From a discoverability perspective, this can be a great 
boon to the launch of your game, but it is not something you can rely on.
For us, we have a very specific focus on our games. We make puzzle games that 
have a deep narrative, great animations and fun gameplay. Most of our entire 
back catalogue appeals to a similar type of demographic. We do that because 
when we get a hit with game A, we can cross-promote games B, C and D to 
those users. From a success perspective, we are looking at the lifetime value of a 
user rather than the lifetime value of a single game.
Some companies will make a game specifically targeted at men, then attempt a 
casino game targeted at women and then a puzzle game targeted to everyone, 
and try to cross-promote all of the games. However, it is unlikely that there is 
interest by that demographic in the new games, so this strategy may not be 
suitable.
With advertising, the picture was quite dierent a year ago. In the early days, 
companies would target across the board and hope that the average lifetime 
value of a user would come out to more than the cost per user to acquire. Now 
– at least for the companies that are doing it right – you have to get much more 
granular with how and where you spend your advertising dollars or you may lose 
a significant amount of money with very little gain.
3) Some of the biggest success stories 
have come from new entrants, while some 
traditional publishers have struggled to 
gain traction. Why do you think this is?
The secret is agility. If you look at companies like Supercell, who make Clash of 
Clans, and King, who of course developed Candy Crush Saga, they do not have 
massive, bloated teams. They quickly make games and quickly iterate.
Mobile games are not software like they were in the past. We are creating a 
game as a service. A game can last an extremely long time rather than a boxed 
product that has a finite lifespan. You can release a game, collect great data, and 
continue to improve the game with regular changes and new content.
There is a new way of thinking when developing games for mobile and social. It 
is the notion of developing a prototype and failing fast – by that I mean using 
data to decide very early on if your prototype is a viable game. At the same time 
the concept now is to build a game as a service – optimizing the revenue and 
user retention for years to come by continuously injecting new content.
It is a very dierent way of thinking compared to the earlier days, where some 
companies set a budget and development time for a game and then began 
work. Every company that has a big hit game, has also had failed games that 
they killed after a month or two. If you spoke with the teams at Supercell or 
Kabam, it is very likely that they have had game ideas that they thought would be 
interesting, but ultimately did not succeed. Games are unique in that way. 
If you take TV for example – it costs possibly a million dollars to create a pilot, 
with the hope that you will get picked up for maybe six episodes and the goal is 
to not get cancelled. With mobile game development, the investment is far 
lower before the point at which you start to get feedback, so you can tell much 
earlier on if a project is not working or how to steer it so that it begins to work 
for you. This kind of thinking is naturally ingrained into newer companies.
4) What is the formula for a successful 
free-to-play title?
As a company we are super focused on one genre of games. We have dabbled 
in other areas, but we settled on this space because – like the issue you brought 
up with discoverability – we start to solve the discoverability issue ourselves 
simply by creating new products that cross-promote very well with each other.
The notion that you create a game with a proven game mechanic is also very 
important. We have a website called mindjolt.com, which has hundreds of very 
simple games that cover almost every game mechanic you can think of. Those 
games are not advanced enough and do not have enough polish to be hits in 
their own right, but what we can do is determine which games people are 
playing and which mechanics people are enjoying. From there we can build a 
prototype with a bigger narrative around that initial idea. If that prototype is a 
success we can move along to formally assign a team to the game and head 
into full development. From that point, we will continually iterate on the game 
through a soft launch and then a full release.
Additionally, we set KPIs and stick to them. For example, for a particular title, we 
might set a day-one retention target of 55%, which is quite a healthy number. 
Our seven-day retention target might be 26%. If those numbers are not where 
we need them to be we will take prescriptive measures – and analyze our data – 
to determine where players are dropping o and what is causing the retention 
to be lower than what we want it to be. This is just one indicator among many 
that we use to measure success and figure out how to make the most 
successful product.
Finally, investing in your team is crucial. To make the best games, you must hire 
the most creative people you can aord. This year we invested heavily in our 
artists, animators, game designers and engineering teams to ensure we have the 
imagination and the talent to make the best products. Unfortunately that is not 
enough, you must also have the analytics infrastructure to back it all up. All of 
these elements are crucial to creating a successful games business.
Unlocking the Formula to 
Mobile Success
Mobile Gaming USA
May 5-6, 2014 | San Francisco
 
All the contributors to this 
whitepaper will be speaking at 
Mobile Gaming USA. Visit: 
http://www.videogamesintelligen
ce.com/mobile-gaming-usa 
for more details on this landmark 
event.
Introduction
The mobile games industry is a multi-billion dollar industry - mobile gaming is 
big business and is set to continue growing at an alarming rate. Smart phone 
and tablet market penetration is increasing exponentially, with over one billion 
units sold worldwide in 2013 alone. The power of mobile gaming devices is 
increasing just as fast: mobile processing power has developed to the extent 
that smartphones and tablets can produce near console-quality graphics.
At the same time, digital marketplaces have become crowded, and the cost of 
raising your head above the parapet through user acquisition has never been 
higher. The mobile games industry is under increasing pressure to perform, 
targeted at a market with more choice, and lower barriers to entry than ever 
before.
The ability to innovate and to learn from each other’s creative thinking will set 
the successful apart as the mobile sector continues to grow. Three industry 
experts, representing some of the most innovative minds from across the 
industry from investment house Initial Capital and developer/publishers Kabam 
and SGN oer their insights into the mobile games industry in this report. These 
industry leaders, along with a number of their peers, will also be giving their 
insights at Mobile Gaming USA, hosted in San Francisco, 5-6, May 2014.
Kristian Segerstrale
Kristian Segerstrale is an entrepreneur and investor in games, consumer internet 
and technology companies. He was also the CEO and co-founder of Playfish, 
who were acquired by EA for $400 million in 2009. Kristian invests with Initial 
Capital. To find out more visit www.initialcapital.com
1) What is the biggest opportunity in 
mobile gaming today?
I actually don’t think there’s been a time in mobile games where you’ve had an 
almost guaranteed growth over the next five years. You have a set of 
technologies in iOS and Android that are here to stay. You have a set of stores 
that are getting increasingly better at recommending the right content for users. 
You also have a set of marketing technologies in advertising networks and 
acquisition technologies that makes it increasingly better to reach consumers. 
Most importantly you have consumers that are buying more smartphones all the 
time. More than a billion smartphones were bought in 2013 alone.
The markets are getting far more international and consolidated. Previously for a 
western developer and publishers it was extremely dicult to get into markets 
like Japan, China and Korea because of diering technologies and marketplaces 
– diering approaches to everything. Now, although the markets are still unique, 
the technologies – in terms of Android and iOS in particular – are becoming 
these giant equalisers between markets. So if you have a great product, as has 
been amply demonstrated by King, Rovio and Supercell, you can actually create 
global hits.
For all those reasons, I think the next three to five years present an incredible 
opportunity for game developers.
In terms of specific opportunities within that industry growth, which is extremely 
promising, is innovation. We continue to have a massive amount of 
under-served categories in mobile in particular. If you look at genres like Sports 
games, MOBAs (Massively Online Battle Arenas), RPGs (Role Playing Games) – 
they all feel like under-served segments on mobile right now. Also there are 
segments within those genres where you struggle to find quality games. Many 
developers are lured by the success of specific titles and create derivative works 
or games that are heavily influenced by those successful products. The biggest 
opportunity out there is to serve unmet needs and to innovate rather than 
imitate.
2) Discoverability is a huge issue and the 
mobile marketplace is extremely crowded, 
what steps can developers and publishers 
take to get their games into the hands of 
more players?
The product is by far the most important form of marketing, but especially in a 
marketplace with as low friction, with as low barriers to entry, as mobile gaming. 
So the most important thing is to not only create a product that is wonderful 
and great to play – a great experience – but also one that has great character 
and is memorable. Most developers today would still say that the majority of 
their distribution is still word of mouth.
I can’t emphasise enough how important it is to create memorable experiences 
to begin with. It is true that the marketplace is crowded, but the majority of that 
crowd are actually forgettable experiences.
There are also fairly well understood mechanisms to test out what segment and 
type of consumer you product appeals to. Once you have a good sense of who 
your product is for, it is actually fairly straightforward to augment your user 
acquisition eorts with channel marketing that reaches the right communities. I 
think the marketplace is not nearly as sophisticated at doing this as it should be. 
So today it’s entirely possible to quite accurately understand who your 
consumer is and at the same time the ability to target using tools is increasing. 
You can also advertise with much richer content, like video, that can be more 
compelling – I think channels like YouTube are actually quite underused today.
Right now we’re going through this shift of marketing for apps which for the 
past few years has been developed as this quantitative discipline of acquiring 
users through ad networks almost like a trading desk – where one company 
might be willing to sell a user for a price. I think we’ve entered an era where you 
have to be far more sophisticated about building brands and creating a closer, 
more emotional relationship with consumers.
3) Some of the biggest success stories 
have come from new entrants, while some 
traditional publishers have struggled to 
gain traction. Why do you think this is?
From my experience games are really all about talent. The top 1% of talent will 
have by far the best chance of creating the top 0.1% of games that are out there. 
Putting anything less than the best development team on a game will have a 
devastating impact on its ability to have the potential to break out. Part of that is 
the innovation the team is capable of, part of it is the quality of the execution. At 
the end of the day these are crafted experiences and as a consumer you can see 
all of that – whether it’s a game you can clearly see that someone really cares 
about or not.
Part of the challenge with the existing companies is that their focus – where 
they’re placing their very best talent – is where their existing dollars are coming 
from. So if you think about an EA or an Activision, the dilemma is that they’re 
making billions of dollars from existing franchises. It would take an incredibly 
brave company to move their talent from these massive franchises and put them 
onto a new platform. 
The other thing is that the development methodologies that smaller teams 
employ are more suited to mobile. Big companies tend to employ heavy 
approval processes to protect them from big mistakes. That type of process 
doesn't lend itself well to creative risk or creating games in a fast moving 
environment . You need to be able to trust top talent to make gut decisions. 
Companies like Supercell are very vocal about the fact that they don’t have a 
green light process of any kind, and I think that’s something that has hamstrung 
some of the bigger companies when it comes to mobile development.
4) What is the formula for a successful 
free-to-play title?
Games are fundamentally an art, and I don’t know that there’s a formula for art. 
There are approaches that tend to be more successful than others. One that I 
would advocate would be to firstly make something that you love to play 
yourself. Don’t try make something because you think the market is big and 
there are a lot of consumers that want something in that area. Start with what 
you love to play and how you make something that you would love to play. You 
can tell when you play a game whether it has been made by someone that 
genuinely loves it. Obviously it needs to be something that you think the market 
will also love to play, but if you don’t love it, the chances are that nobody else 
will love it also.
You also need to understand who you’re making the game for and profoundly 
respecting the player. There are a lot of games being made right now that either 
simply imitate existing games. There is also still a "San Francisco school" of game 
design out there that advocate "design by the numbers' - create games to get 
people to pay as quickly as possible, as many times as possible, in as many 
dierent ways as possible to maximise the funnel of people paying. I think that’s 
a dangerous route of design. I can see that today the most successful games are 
the ones that respect the players for what they are and creating an engaging 
experience. Design for engagement. Design for fun. Design for the emotional 
attachment to the game. Then build in reasonable monetisation that comes in 
way down the road.
My own gold standard of design of engagement is League of Legends. For the 
first 20 or 30 hours you can’t understand what you would ever pay money for. 
The cool thing about it is that the game is incredibly successful o the back of 
almost trying not to monetise players. They’ve built a phenomenon o the back 
of an incredible game and not worrying too much about monetisation at all. I 
think that’s a great design principle that developers need to work towards as 
consumers get smarter. Are they leaving money on the table? Likely yes - but 
they are building an incredibly successful, long lasting and valuable franchise.
Andrew Sheppard 
Andrew Sheppard is the President of Kabam Studios, a developer and publisher 
of social games. In each of the last two years Kabam revenues have grown by 80 
percent or more and will total more than $325 million in 2013
1) What is the biggest opportunity in 
mobile gaming today?
As consumer demand for gameplay experiences at little to no cost increases, 
more publishers will come to recognize the value of the free-to-play business 
model. In this context the onus is on all publishers (both existing and new) to 
deliver high quality gameplay experiences that players value and ultimately are 
willing to purchase. Thanks to the growing device market and constantly 
improving device capabilities, publishers’ ability to deliver compelling gameplay 
experiences has never been greater.  
2) Discoverability is a huge issue and the 
mobile marketplace is extremely crowded, 
what steps can developers and publishers 
take to get their games into the hands of 
more players?
First, make a great game that is innovative, engaging and fun. This is required to 
unlock tremendous organic opportunity.  Then pull on all the strategic levers of 
traditional marketing and distribution: business development, brand marketing, 
public relations, performance advertising, consumer events, etc. Nail the 
execution on both fronts, than get ready to watch your game soar up the charts!
3) Some of the biggest success stories 
have come from new entrants, while some 
traditional publishers have struggled to 
gain traction. Why do you think this is?
For traditional publishers and developers, it’s been a slow start. This is largely 
because free-to-play mobile game development is an entirely dierent beast 
that draws on both art and science to build mass market global hits. It is fair to 
say the traditional game developers are beginning to figure out this exciting new 
medium of gaming, but that their progress is still rate limited by the best 
practices that made them successful in the first place.
4) What is the formula for a successful 
free-to-play title?
Excellent teams, great product vision and a deep understanding of how to 
balance the art and science of free-to-play game development. Hard work helps 
too.
Chris DeWolfe
Chris DeWolfe is the CEO of SGN (Social Gaming Network), a top cross-platform 
developer and publisher of games on Facebook, iOS, and Android. To date well 
over 300 Million SGN games have been installed on leading mobile and social 
platforms, making SGN one of the largest cross-platform gaming companies in 
the world.
1) What is the biggest opportunity in 
mobile gaming today?
A massive number of people are playing games today, and as a result, the 
market has become much larger than it was several years ago. It will continue to 
get larger as people continue purchasing multiple devices.
The fact that there are now multiple platforms on which to play games expands 
the market even more. Currently there is a big opportunity for developers to 
build their games for all platforms, both social and mobile. The opportunity lies 
in developing games for people to play at work, perhaps on a PC or laptop, and 
for users that are travelling home from work, so they can continue to play the 
same game seamlessly on a mobile device.
Free-to-play in-game purchasing has become frictionless, especially in the iOS 
operating system. Apple has over a billion credit cards on file, so all you have to 
do is type in your password to make a purchase. This makes it very easy to 
purchase and provides a huge potential audience. On top of that, barriers to 
entry have been substantially reduced, so that the cost and time it takes to 
create a great game in the mobile space has decreased as the tools available 
have matured. This has allowed smaller companies to make the biggest mobile 
games.
The other significant opportunity is leveraging the sheer amount of data that 
exists. If done right, you have the ability to look at the fail rates of a user at a 
granular level, almost down to the exact feature of a particular stage that caused 
them to lose. With connected devices you have the ability to refine these 
components so that you can prevent users from becoming frustrated and 
leaving the game, and at the same time, ensure that there are enough 
challenges to keep them playing.
2) Discoverability is a huge issue and the 
mobile marketplace is extremely crowded, 
what steps can developers and publishers 
take to get their games into the hands of 
more players?
It starts with the design of the game. If you have a broad market it is important 
to ensure that your game has a proven mechanic and that the game is fun to 
play. Starting very early with a playable prototype of the game is necessary to 
determine if the game will have fun gameplay mechanics and if it will stand out 
from the crowd. If it does not meet those requirements, then you either have to 
go back to the drawing board or fail quickly and pivot. It is not the best idea to 
spend a year and a half developing a game that is never going to gain traction.
You also want to ensure that there are certain viral elements in the game. From 
our perspective, Facebook remains the social glue in the mobile web and apps 
space. It is helpful to encourage your users to log into Facebook to invite their 
friends into the game, and reward them for doing so. There are many ways to do 
that from the way you set up the game, to notifying users when one of their 
friends joins. For example, in our game Panda Pop, anytime your friend joins, 
you are sent a notification so that you can share progress with each other. We 
encourage users to return to the game and compete on the levels where their 
friends have beaten them.
It is always helpful if you can build a game that is interesting enough from an 
editorial perspective that Apple, Google Play, Amazon and/or Facebook will 
feature it.  This featured placement will get you hundreds of thousands if not 
millions of downloads. From a discoverability perspective, this can be a great 
boon to the launch of your game, but it is not something you can rely on.
For us, we have a very specific focus on our games. We make puzzle games that 
have a deep narrative, great animations and fun gameplay. Most of our entire 
back catalogue appeals to a similar type of demographic. We do that because 
when we get a hit with game A, we can cross-promote games B, C and D to 
those users. From a success perspective, we are looking at the lifetime value of a 
user rather than the lifetime value of a single game.
Some companies will make a game specifically targeted at men, then attempt a 
casino game targeted at women and then a puzzle game targeted to everyone, 
and try to cross-promote all of the games. However, it is unlikely that there is 
interest by that demographic in the new games, so this strategy may not be 
suitable.
With advertising, the picture was quite dierent a year ago. In the early days, 
companies would target across the board and hope that the average lifetime 
value of a user would come out to more than the cost per user to acquire. Now 
– at least for the companies that are doing it right – you have to get much more 
granular with how and where you spend your advertising dollars or you may lose 
a significant amount of money with very little gain.
3) Some of the biggest success stories 
have come from new entrants, while some 
traditional publishers have struggled to 
gain traction. Why do you think this is?
The secret is agility. If you look at companies like Supercell, who make Clash of 
Clans, and King, who of course developed Candy Crush Saga, they do not have 
massive, bloated teams. They quickly make games and quickly iterate.
Mobile games are not software like they were in the past. We are creating a 
game as a service. A game can last an extremely long time rather than a boxed 
product that has a finite lifespan. You can release a game, collect great data, and 
continue to improve the game with regular changes and new content.
There is a new way of thinking when developing games for mobile and social. It 
is the notion of developing a prototype and failing fast – by that I mean using 
data to decide very early on if your prototype is a viable game. At the same time 
the concept now is to build a game as a service – optimizing the revenue and 
user retention for years to come by continuously injecting new content.
It is a very dierent way of thinking compared to the earlier days, where some 
companies set a budget and development time for a game and then began 
work. Every company that has a big hit game, has also had failed games that 
they killed after a month or two. If you spoke with the teams at Supercell or 
Kabam, it is very likely that they have had game ideas that they thought would be 
interesting, but ultimately did not succeed. Games are unique in that way. 
If you take TV for example – it costs possibly a million dollars to create a pilot, 
with the hope that you will get picked up for maybe six episodes and the goal is 
to not get cancelled. With mobile game development, the investment is far 
lower before the point at which you start to get feedback, so you can tell much 
earlier on if a project is not working or how to steer it so that it begins to work 
for you. This kind of thinking is naturally ingrained into newer companies.
4) What is the formula for a successful 
free-to-play title?
As a company we are super focused on one genre of games. We have dabbled 
in other areas, but we settled on this space because – like the issue you brought 
up with discoverability – we start to solve the discoverability issue ourselves 
simply by creating new products that cross-promote very well with each other.
The notion that you create a game with a proven game mechanic is also very 
important. We have a website called mindjolt.com, which has hundreds of very 
simple games that cover almost every game mechanic you can think of. Those 
games are not advanced enough and do not have enough polish to be hits in 
their own right, but what we can do is determine which games people are 
playing and which mechanics people are enjoying. From there we can build a 
prototype with a bigger narrative around that initial idea. If that prototype is a 
success we can move along to formally assign a team to the game and head 
into full development. From that point, we will continually iterate on the game 
through a soft launch and then a full release.
Additionally, we set KPIs and stick to them. For example, for a particular title, we 
might set a day-one retention target of 55%, which is quite a healthy number. 
Our seven-day retention target might be 26%. If those numbers are not where 
we need them to be we will take prescriptive measures – and analyze our data – 
to determine where players are dropping o and what is causing the retention 
to be lower than what we want it to be. This is just one indicator among many 
that we use to measure success and figure out how to make the most 
successful product.
Finally, investing in your team is crucial. To make the best games, you must hire 
the most creative people you can aord. This year we invested heavily in our 
artists, animators, game designers and engineering teams to ensure we have the 
imagination and the talent to make the best products. Unfortunately that is not 
enough, you must also have the analytics infrastructure to back it all up. All of 
these elements are crucial to creating a successful games business.
Unlocking the Formula to 
Mobile Success
Mobile Gaming USA
May 5-6, 2014 | San Francisco
 
All the contributors to this 
whitepaper will be speaking at 
Mobile Gaming USA. Visit: 
http://www.videogamesintelligen
ce.com/mobile-gaming-usa 
for more details on this landmark 
event.
Introduction
The mobile games industry is a multi-billion dollar industry - mobile gaming is 
big business and is set to continue growing at an alarming rate. Smart phone 
and tablet market penetration is increasing exponentially, with over one billion 
units sold worldwide in 2013 alone. The power of mobile gaming devices is 
increasing just as fast: mobile processing power has developed to the extent 
that smartphones and tablets can produce near console-quality graphics.
At the same time, digital marketplaces have become crowded, and the cost of 
raising your head above the parapet through user acquisition has never been 
higher. The mobile games industry is under increasing pressure to perform, 
targeted at a market with more choice, and lower barriers to entry than ever 
before.
The ability to innovate and to learn from each other’s creative thinking will set 
the successful apart as the mobile sector continues to grow. Three industry 
experts, representing some of the most innovative minds from across the 
industry from investment house Initial Capital and developer/publishers Kabam 
and SGN oer their insights into the mobile games industry in this report. These 
industry leaders, along with a number of their peers, will also be giving their 
insights at Mobile Gaming USA, hosted in San Francisco, 5-6, May 2014.
Kristian Segerstrale
Kristian Segerstrale is an entrepreneur and investor in games, consumer internet 
and technology companies. He was also the CEO and co-founder of Playfish, 
who were acquired by EA for $400 million in 2009. Kristian invests with Initial 
Capital. To find out more visit www.initialcapital.com
1) What is the biggest opportunity in 
mobile gaming today?
I actually don’t think there’s been a time in mobile games where you’ve had an 
almost guaranteed growth over the next five years. You have a set of 
technologies in iOS and Android that are here to stay. You have a set of stores 
that are getting increasingly better at recommending the right content for users. 
You also have a set of marketing technologies in advertising networks and 
acquisition technologies that makes it increasingly better to reach consumers. 
Most importantly you have consumers that are buying more smartphones all the 
time. More than a billion smartphones were bought in 2013 alone.
The markets are getting far more international and consolidated. Previously for a 
western developer and publishers it was extremely dicult to get into markets 
like Japan, China and Korea because of diering technologies and marketplaces 
– diering approaches to everything. Now, although the markets are still unique, 
the technologies – in terms of Android and iOS in particular – are becoming 
these giant equalisers between markets. So if you have a great product, as has 
been amply demonstrated by King, Rovio and Supercell, you can actually create 
global hits.
For all those reasons, I think the next three to five years present an incredible 
opportunity for game developers.
In terms of specific opportunities within that industry growth, which is extremely 
promising, is innovation. We continue to have a massive amount of 
under-served categories in mobile in particular. If you look at genres like Sports 
games, MOBAs (Massively Online Battle Arenas), RPGs (Role Playing Games) – 
they all feel like under-served segments on mobile right now. Also there are 
segments within those genres where you struggle to find quality games. Many 
developers are lured by the success of specific titles and create derivative works 
or games that are heavily influenced by those successful products. The biggest 
opportunity out there is to serve unmet needs and to innovate rather than 
imitate.
2) Discoverability is a huge issue and the 
mobile marketplace is extremely crowded, 
what steps can developers and publishers 
take to get their games into the hands of 
more players?
The product is by far the most important form of marketing, but especially in a 
marketplace with as low friction, with as low barriers to entry, as mobile gaming. 
So the most important thing is to not only create a product that is wonderful 
and great to play – a great experience – but also one that has great character 
and is memorable. Most developers today would still say that the majority of 
their distribution is still word of mouth.
I can’t emphasise enough how important it is to create memorable experiences 
to begin with. It is true that the marketplace is crowded, but the majority of that 
crowd are actually forgettable experiences.
There are also fairly well understood mechanisms to test out what segment and 
type of consumer you product appeals to. Once you have a good sense of who 
your product is for, it is actually fairly straightforward to augment your user 
acquisition eorts with channel marketing that reaches the right communities. I 
think the marketplace is not nearly as sophisticated at doing this as it should be. 
So today it’s entirely possible to quite accurately understand who your 
consumer is and at the same time the ability to target using tools is increasing. 
You can also advertise with much richer content, like video, that can be more 
compelling – I think channels like YouTube are actually quite underused today.
Right now we’re going through this shift of marketing for apps which for the 
past few years has been developed as this quantitative discipline of acquiring 
users through ad networks almost like a trading desk – where one company 
might be willing to sell a user for a price. I think we’ve entered an era where you 
have to be far more sophisticated about building brands and creating a closer, 
more emotional relationship with consumers.
3) Some of the biggest success stories 
have come from new entrants, while some 
traditional publishers have struggled to 
gain traction. Why do you think this is?
From my experience games are really all about talent. The top 1% of talent will 
have by far the best chance of creating the top 0.1% of games that are out there. 
Putting anything less than the best development team on a game will have a 
devastating impact on its ability to have the potential to break out. Part of that is 
the innovation the team is capable of, part of it is the quality of the execution. At 
the end of the day these are crafted experiences and as a consumer you can see 
all of that – whether it’s a game you can clearly see that someone really cares 
about or not.
Part of the challenge with the existing companies is that their focus – where 
they’re placing their very best talent – is where their existing dollars are coming 
from. So if you think about an EA or an Activision, the dilemma is that they’re 
making billions of dollars from existing franchises. It would take an incredibly 
brave company to move their talent from these massive franchises and put them 
onto a new platform. 
The other thing is that the development methodologies that smaller teams 
employ are more suited to mobile. Big companies tend to employ heavy 
approval processes to protect them from big mistakes. That type of process 
doesn't lend itself well to creative risk or creating games in a fast moving 
environment . You need to be able to trust top talent to make gut decisions. 
Companies like Supercell are very vocal about the fact that they don’t have a 
green light process of any kind, and I think that’s something that has hamstrung 
some of the bigger companies when it comes to mobile development.
4) What is the formula for a successful 
free-to-play title?
Games are fundamentally an art, and I don’t know that there’s a formula for art. 
There are approaches that tend to be more successful than others. One that I 
would advocate would be to firstly make something that you love to play 
yourself. Don’t try make something because you think the market is big and 
there are a lot of consumers that want something in that area. Start with what 
you love to play and how you make something that you would love to play. You 
can tell when you play a game whether it has been made by someone that 
genuinely loves it. Obviously it needs to be something that you think the market 
will also love to play, but if you don’t love it, the chances are that nobody else 
will love it also.
You also need to understand who you’re making the game for and profoundly 
respecting the player. There are a lot of games being made right now that either 
simply imitate existing games. There is also still a "San Francisco school" of game 
design out there that advocate "design by the numbers' - create games to get 
people to pay as quickly as possible, as many times as possible, in as many 
dierent ways as possible to maximise the funnel of people paying. I think that’s 
a dangerous route of design. I can see that today the most successful games are 
the ones that respect the players for what they are and creating an engaging 
experience. Design for engagement. Design for fun. Design for the emotional 
attachment to the game. Then build in reasonable monetisation that comes in 
way down the road.
My own gold standard of design of engagement is League of Legends. For the 
first 20 or 30 hours you can’t understand what you would ever pay money for. 
The cool thing about it is that the game is incredibly successful o the back of 
almost trying not to monetise players. They’ve built a phenomenon o the back 
of an incredible game and not worrying too much about monetisation at all. I 
think that’s a great design principle that developers need to work towards as 
consumers get smarter. Are they leaving money on the table? Likely yes - but 
they are building an incredibly successful, long lasting and valuable franchise.
Andrew Sheppard 
Andrew Sheppard is the President of Kabam Studios, a developer and publisher 
of social games. In each of the last two years Kabam revenues have grown by 80 
percent or more and will total more than $325 million in 2013
1) What is the biggest opportunity in 
mobile gaming today?
As consumer demand for gameplay experiences at little to no cost increases, 
more publishers will come to recognize the value of the free-to-play business 
model. In this context the onus is on all publishers (both existing and new) to 
deliver high quality gameplay experiences that players value and ultimately are 
willing to purchase. Thanks to the growing device market and constantly 
improving device capabilities, publishers’ ability to deliver compelling gameplay 
experiences has never been greater.  
2) Discoverability is a huge issue and the 
mobile marketplace is extremely crowded, 
what steps can developers and publishers 
take to get their games into the hands of 
more players?
First, make a great game that is innovative, engaging and fun. This is required to 
unlock tremendous organic opportunity.  Then pull on all the strategic levers of 
traditional marketing and distribution: business development, brand marketing, 
public relations, performance advertising, consumer events, etc. Nail the 
execution on both fronts, than get ready to watch your game soar up the charts!
3) Some of the biggest success stories 
have come from new entrants, while some 
traditional publishers have struggled to 
gain traction. Why do you think this is?
For traditional publishers and developers, it’s been a slow start. This is largely 
because free-to-play mobile game development is an entirely dierent beast 
that draws on both art and science to build mass market global hits. It is fair to 
say the traditional game developers are beginning to figure out this exciting new 
medium of gaming, but that their progress is still rate limited by the best 
practices that made them successful in the first place.
4) What is the formula for a successful 
free-to-play title?
Excellent teams, great product vision and a deep understanding of how to 
balance the art and science of free-to-play game development. Hard work helps 
too.
Chris DeWolfe
Chris DeWolfe is the CEO of SGN (Social Gaming Network), a top cross-platform 
developer and publisher of games on Facebook, iOS, and Android. To date well 
over 300 Million SGN games have been installed on leading mobile and social 
platforms, making SGN one of the largest cross-platform gaming companies in 
the world.
1) What is the biggest opportunity in 
mobile gaming today?
A massive number of people are playing games today, and as a result, the 
market has become much larger than it was several years ago. It will continue to 
get larger as people continue purchasing multiple devices.
The fact that there are now multiple platforms on which to play games expands 
the market even more. Currently there is a big opportunity for developers to 
build their games for all platforms, both social and mobile. The opportunity lies 
in developing games for people to play at work, perhaps on a PC or laptop, and 
for users that are travelling home from work, so they can continue to play the 
same game seamlessly on a mobile device.
Free-to-play in-game purchasing has become frictionless, especially in the iOS 
operating system. Apple has over a billion credit cards on file, so all you have to 
do is type in your password to make a purchase. This makes it very easy to 
purchase and provides a huge potential audience. On top of that, barriers to 
entry have been substantially reduced, so that the cost and time it takes to 
create a great game in the mobile space has decreased as the tools available 
have matured. This has allowed smaller companies to make the biggest mobile 
games.
The other significant opportunity is leveraging the sheer amount of data that 
exists. If done right, you have the ability to look at the fail rates of a user at a 
granular level, almost down to the exact feature of a particular stage that caused 
them to lose. With connected devices you have the ability to refine these 
components so that you can prevent users from becoming frustrated and 
leaving the game, and at the same time, ensure that there are enough 
challenges to keep them playing.
2) Discoverability is a huge issue and the 
mobile marketplace is extremely crowded, 
what steps can developers and publishers 
take to get their games into the hands of 
more players?
It starts with the design of the game. If you have a broad market it is important 
to ensure that your game has a proven mechanic and that the game is fun to 
play. Starting very early with a playable prototype of the game is necessary to 
determine if the game will have fun gameplay mechanics and if it will stand out 
from the crowd. If it does not meet those requirements, then you either have to 
go back to the drawing board or fail quickly and pivot. It is not the best idea to 
spend a year and a half developing a game that is never going to gain traction.
You also want to ensure that there are certain viral elements in the game. From 
our perspective, Facebook remains the social glue in the mobile web and apps 
space. It is helpful to encourage your users to log into Facebook to invite their 
friends into the game, and reward them for doing so. There are many ways to do 
that from the way you set up the game, to notifying users when one of their 
friends joins. For example, in our game Panda Pop, anytime your friend joins, 
you are sent a notification so that you can share progress with each other. We 
encourage users to return to the game and compete on the levels where their 
friends have beaten them.
It is always helpful if you can build a game that is interesting enough from an 
editorial perspective that Apple, Google Play, Amazon and/or Facebook will 
feature it.  This featured placement will get you hundreds of thousands if not 
millions of downloads. From a discoverability perspective, this can be a great 
boon to the launch of your game, but it is not something you can rely on.
For us, we have a very specific focus on our games. We make puzzle games that 
have a deep narrative, great animations and fun gameplay. Most of our entire 
back catalogue appeals to a similar type of demographic. We do that because 
when we get a hit with game A, we can cross-promote games B, C and D to 
those users. From a success perspective, we are looking at the lifetime value of a 
user rather than the lifetime value of a single game.
Some companies will make a game specifically targeted at men, then attempt a 
casino game targeted at women and then a puzzle game targeted to everyone, 
and try to cross-promote all of the games. However, it is unlikely that there is 
interest by that demographic in the new games, so this strategy may not be 
suitable.
With advertising, the picture was quite dierent a year ago. In the early days, 
companies would target across the board and hope that the average lifetime 
value of a user would come out to more than the cost per user to acquire. Now 
– at least for the companies that are doing it right – you have to get much more 
granular with how and where you spend your advertising dollars or you may lose 
a significant amount of money with very little gain.
3) Some of the biggest success stories 
have come from new entrants, while some 
traditional publishers have struggled to 
gain traction. Why do you think this is?
The secret is agility. If you look at companies like Supercell, who make Clash of 
Clans, and King, who of course developed Candy Crush Saga, they do not have 
massive, bloated teams. They quickly make games and quickly iterate.
Mobile games are not software like they were in the past. We are creating a 
game as a service. A game can last an extremely long time rather than a boxed 
product that has a finite lifespan. You can release a game, collect great data, and 
continue to improve the game with regular changes and new content.
There is a new way of thinking when developing games for mobile and social. It 
is the notion of developing a prototype and failing fast – by that I mean using 
data to decide very early on if your prototype is a viable game. At the same time 
the concept now is to build a game as a service – optimizing the revenue and 
user retention for years to come by continuously injecting new content.
It is a very dierent way of thinking compared to the earlier days, where some 
companies set a budget and development time for a game and then began 
work. Every company that has a big hit game, has also had failed games that 
they killed after a month or two. If you spoke with the teams at Supercell or 
Kabam, it is very likely that they have had game ideas that they thought would be 
interesting, but ultimately did not succeed. Games are unique in that way. 
If you take TV for example – it costs possibly a million dollars to create a pilot, 
with the hope that you will get picked up for maybe six episodes and the goal is 
to not get cancelled. With mobile game development, the investment is far 
lower before the point at which you start to get feedback, so you can tell much 
earlier on if a project is not working or how to steer it so that it begins to work 
for you. This kind of thinking is naturally ingrained into newer companies.
4) What is the formula for a successful 
free-to-play title?
As a company we are super focused on one genre of games. We have dabbled 
in other areas, but we settled on this space because – like the issue you brought 
up with discoverability – we start to solve the discoverability issue ourselves 
simply by creating new products that cross-promote very well with each other.
The notion that you create a game with a proven game mechanic is also very 
important. We have a website called mindjolt.com, which has hundreds of very 
simple games that cover almost every game mechanic you can think of. Those 
games are not advanced enough and do not have enough polish to be hits in 
their own right, but what we can do is determine which games people are 
playing and which mechanics people are enjoying. From there we can build a 
prototype with a bigger narrative around that initial idea. If that prototype is a 
success we can move along to formally assign a team to the game and head 
into full development. From that point, we will continually iterate on the game 
through a soft launch and then a full release.
Additionally, we set KPIs and stick to them. For example, for a particular title, we 
might set a day-one retention target of 55%, which is quite a healthy number. 
Our seven-day retention target might be 26%. If those numbers are not where 
we need them to be we will take prescriptive measures – and analyze our data – 
to determine where players are dropping o and what is causing the retention 
to be lower than what we want it to be. This is just one indicator among many 
that we use to measure success and figure out how to make the most 
successful product.
Finally, investing in your team is crucial. To make the best games, you must hire 
the most creative people you can aord. This year we invested heavily in our 
artists, animators, game designers and engineering teams to ensure we have the 
imagination and the talent to make the best products. Unfortunately that is not 
enough, you must also have the analytics infrastructure to back it all up. All of 
these elements are crucial to creating a successful games business.
Unlocking the Formula to 
Mobile Success
Mobile Gaming USA
May 5-6, 2014 | San Francisco
 
All the contributors to this 
whitepaper will be speaking at 
Mobile Gaming USA. Visit: 
http://www.videogamesintelligen
ce.com/mobile-gaming-usa 
for more details on this landmark 
event.
Introduction
The mobile games industry is a multi-billion dollar industry - mobile gaming is 
big business and is set to continue growing at an alarming rate. Smart phone 
and tablet market penetration is increasing exponentially, with over one billion 
units sold worldwide in 2013 alone. The power of mobile gaming devices is 
increasing just as fast: mobile processing power has developed to the extent 
that smartphones and tablets can produce near console-quality graphics.
At the same time, digital marketplaces have become crowded, and the cost of 
raising your head above the parapet through user acquisition has never been 
higher. The mobile games industry is under increasing pressure to perform, 
targeted at a market with more choice, and lower barriers to entry than ever 
before.
The ability to innovate and to learn from each other’s creative thinking will set 
the successful apart as the mobile sector continues to grow. Three industry 
experts, representing some of the most innovative minds from across the 
industry from investment house Initial Capital and developer/publishers Kabam 
and SGN oer their insights into the mobile games industry in this report. These 
industry leaders, along with a number of their peers, will also be giving their 
insights at Mobile Gaming USA, hosted in San Francisco, 5-6, May 2014.
Kristian Segerstrale
Kristian Segerstrale is an entrepreneur and investor in games, consumer internet 
and technology companies. He was also the CEO and co-founder of Playfish, 
who were acquired by EA for $400 million in 2009. Kristian invests with Initial 
Capital. To find out more visit www.initialcapital.com
1) What is the biggest opportunity in 
mobile gaming today?
I actually don’t think there’s been a time in mobile games where you’ve had an 
almost guaranteed growth over the next five years. You have a set of 
technologies in iOS and Android that are here to stay. You have a set of stores 
that are getting increasingly better at recommending the right content for users. 
You also have a set of marketing technologies in advertising networks and 
acquisition technologies that makes it increasingly better to reach consumers. 
Most importantly you have consumers that are buying more smartphones all the 
time. More than a billion smartphones were bought in 2013 alone.
The markets are getting far more international and consolidated. Previously for a 
western developer and publishers it was extremely dicult to get into markets 
like Japan, China and Korea because of diering technologies and marketplaces 
– diering approaches to everything. Now, although the markets are still unique, 
the technologies – in terms of Android and iOS in particular – are becoming 
these giant equalisers between markets. So if you have a great product, as has 
been amply demonstrated by King, Rovio and Supercell, you can actually create 
global hits.
For all those reasons, I think the next three to five years present an incredible 
opportunity for game developers.
In terms of specific opportunities within that industry growth, which is extremely 
promising, is innovation. We continue to have a massive amount of 
under-served categories in mobile in particular. If you look at genres like Sports 
games, MOBAs (Massively Online Battle Arenas), RPGs (Role Playing Games) – 
they all feel like under-served segments on mobile right now. Also there are 
segments within those genres where you struggle to find quality games. Many 
developers are lured by the success of specific titles and create derivative works 
or games that are heavily influenced by those successful products. The biggest 
opportunity out there is to serve unmet needs and to innovate rather than 
imitate.
2) Discoverability is a huge issue and the 
mobile marketplace is extremely crowded, 
what steps can developers and publishers 
take to get their games into the hands of 
more players?
The product is by far the most important form of marketing, but especially in a 
marketplace with as low friction, with as low barriers to entry, as mobile gaming. 
So the most important thing is to not only create a product that is wonderful 
and great to play – a great experience – but also one that has great character 
and is memorable. Most developers today would still say that the majority of 
their distribution is still word of mouth.
I can’t emphasise enough how important it is to create memorable experiences 
to begin with. It is true that the marketplace is crowded, but the majority of that 
crowd are actually forgettable experiences.
There are also fairly well understood mechanisms to test out what segment and 
type of consumer you product appeals to. Once you have a good sense of who 
your product is for, it is actually fairly straightforward to augment your user 
acquisition eorts with channel marketing that reaches the right communities. I 
think the marketplace is not nearly as sophisticated at doing this as it should be. 
So today it’s entirely possible to quite accurately understand who your 
consumer is and at the same time the ability to target using tools is increasing. 
You can also advertise with much richer content, like video, that can be more 
compelling – I think channels like YouTube are actually quite underused today.
Right now we’re going through this shift of marketing for apps which for the 
past few years has been developed as this quantitative discipline of acquiring 
users through ad networks almost like a trading desk – where one company 
might be willing to sell a user for a price. I think we’ve entered an era where you 
have to be far more sophisticated about building brands and creating a closer, 
more emotional relationship with consumers.
3) Some of the biggest success stories 
have come from new entrants, while some 
traditional publishers have struggled to 
gain traction. Why do you think this is?
From my experience games are really all about talent. The top 1% of talent will 
have by far the best chance of creating the top 0.1% of games that are out there. 
Putting anything less than the best development team on a game will have a 
devastating impact on its ability to have the potential to break out. Part of that is 
the innovation the team is capable of, part of it is the quality of the execution. At 
the end of the day these are crafted experiences and as a consumer you can see 
all of that – whether it’s a game you can clearly see that someone really cares 
about or not.
Part of the challenge with the existing companies is that their focus – where 
they’re placing their very best talent – is where their existing dollars are coming 
from. So if you think about an EA or an Activision, the dilemma is that they’re 
making billions of dollars from existing franchises. It would take an incredibly 
brave company to move their talent from these massive franchises and put them 
onto a new platform. 
The other thing is that the development methodologies that smaller teams 
employ are more suited to mobile. Big companies tend to employ heavy 
approval processes to protect them from big mistakes. That type of process 
doesn't lend itself well to creative risk or creating games in a fast moving 
environment . You need to be able to trust top talent to make gut decisions. 
Companies like Supercell are very vocal about the fact that they don’t have a 
green light process of any kind, and I think that’s something that has hamstrung 
some of the bigger companies when it comes to mobile development.
4) What is the formula for a successful 
free-to-play title?
Games are fundamentally an art, and I don’t know that there’s a formula for art. 
There are approaches that tend to be more successful than others. One that I 
would advocate would be to firstly make something that you love to play 
yourself. Don’t try make something because you think the market is big and 
there are a lot of consumers that want something in that area. Start with what 
you love to play and how you make something that you would love to play. You 
can tell when you play a game whether it has been made by someone that 
genuinely loves it. Obviously it needs to be something that you think the market 
will also love to play, but if you don’t love it, the chances are that nobody else 
will love it also.
You also need to understand who you’re making the game for and profoundly 
respecting the player. There are a lot of games being made right now that either 
simply imitate existing games. There is also still a "San Francisco school" of game 
design out there that advocate "design by the numbers' - create games to get 
people to pay as quickly as possible, as many times as possible, in as many 
dierent ways as possible to maximise the funnel of people paying. I think that’s 
a dangerous route of design. I can see that today the most successful games are 
the ones that respect the players for what they are and creating an engaging 
experience. Design for engagement. Design for fun. Design for the emotional 
attachment to the game. Then build in reasonable monetisation that comes in 
way down the road.
My own gold standard of design of engagement is League of Legends. For the 
first 20 or 30 hours you can’t understand what you would ever pay money for. 
The cool thing about it is that the game is incredibly successful o the back of 
almost trying not to monetise players. They’ve built a phenomenon o the back 
of an incredible game and not worrying too much about monetisation at all. I 
think that’s a great design principle that developers need to work towards as 
consumers get smarter. Are they leaving money on the table? Likely yes - but 
they are building an incredibly successful, long lasting and valuable franchise.
Andrew Sheppard 
Andrew Sheppard is the President of Kabam Studios, a developer and publisher 
of social games. In each of the last two years Kabam revenues have grown by 80 
percent or more and will total more than $325 million in 2013
1) What is the biggest opportunity in 
mobile gaming today?
As consumer demand for gameplay experiences at little to no cost increases, 
more publishers will come to recognize the value of the free-to-play business 
model. In this context the onus is on all publishers (both existing and new) to 
deliver high quality gameplay experiences that players value and ultimately are 
willing to purchase. Thanks to the growing device market and constantly 
improving device capabilities, publishers’ ability to deliver compelling gameplay 
experiences has never been greater.  
2) Discoverability is a huge issue and the 
mobile marketplace is extremely crowded, 
what steps can developers and publishers 
take to get their games into the hands of 
more players?
First, make a great game that is innovative, engaging and fun. This is required to 
unlock tremendous organic opportunity.  Then pull on all the strategic levers of 
traditional marketing and distribution: business development, brand marketing, 
public relations, performance advertising, consumer events, etc. Nail the 
execution on both fronts, than get ready to watch your game soar up the charts!
3) Some of the biggest success stories 
have come from new entrants, while some 
traditional publishers have struggled to 
gain traction. Why do you think this is?
For traditional publishers and developers, it’s been a slow start. This is largely 
because free-to-play mobile game development is an entirely dierent beast 
that draws on both art and science to build mass market global hits. It is fair to 
say the traditional game developers are beginning to figure out this exciting new 
medium of gaming, but that their progress is still rate limited by the best 
practices that made them successful in the first place.
4) What is the formula for a successful 
free-to-play title?
Excellent teams, great product vision and a deep understanding of how to 
balance the art and science of free-to-play game development. Hard work helps 
too.
Chris DeWolfe
Chris DeWolfe is the CEO of SGN (Social Gaming Network), a top cross-platform 
developer and publisher of games on Facebook, iOS, and Android. To date well 
over 300 Million SGN games have been installed on leading mobile and social 
platforms, making SGN one of the largest cross-platform gaming companies in 
the world.
1) What is the biggest opportunity in 
mobile gaming today?
A massive number of people are playing games today, and as a result, the 
market has become much larger than it was several years ago. It will continue to 
get larger as people continue purchasing multiple devices.
The fact that there are now multiple platforms on which to play games expands 
the market even more. Currently there is a big opportunity for developers to 
build their games for all platforms, both social and mobile. The opportunity lies 
in developing games for people to play at work, perhaps on a PC or laptop, and 
for users that are travelling home from work, so they can continue to play the 
same game seamlessly on a mobile device.
Free-to-play in-game purchasing has become frictionless, especially in the iOS 
operating system. Apple has over a billion credit cards on file, so all you have to 
do is type in your password to make a purchase. This makes it very easy to 
purchase and provides a huge potential audience. On top of that, barriers to 
entry have been substantially reduced, so that the cost and time it takes to 
create a great game in the mobile space has decreased as the tools available 
have matured. This has allowed smaller companies to make the biggest mobile 
games.
The other significant opportunity is leveraging the sheer amount of data that 
exists. If done right, you have the ability to look at the fail rates of a user at a 
granular level, almost down to the exact feature of a particular stage that caused 
them to lose. With connected devices you have the ability to refine these 
components so that you can prevent users from becoming frustrated and 
leaving the game, and at the same time, ensure that there are enough 
challenges to keep them playing.
2) Discoverability is a huge issue and the 
mobile marketplace is extremely crowded, 
what steps can developers and publishers 
take to get their games into the hands of 
more players?
It starts with the design of the game. If you have a broad market it is important 
to ensure that your game has a proven mechanic and that the game is fun to 
play. Starting very early with a playable prototype of the game is necessary to 
determine if the game will have fun gameplay mechanics and if it will stand out 
from the crowd. If it does not meet those requirements, then you either have to 
go back to the drawing board or fail quickly and pivot. It is not the best idea to 
spend a year and a half developing a game that is never going to gain traction.
You also want to ensure that there are certain viral elements in the game. From 
our perspective, Facebook remains the social glue in the mobile web and apps 
space. It is helpful to encourage your users to log into Facebook to invite their 
friends into the game, and reward them for doing so. There are many ways to do 
that from the way you set up the game, to notifying users when one of their 
friends joins. For example, in our game Panda Pop, anytime your friend joins, 
you are sent a notification so that you can share progress with each other. We 
encourage users to return to the game and compete on the levels where their 
friends have beaten them.
It is always helpful if you can build a game that is interesting enough from an 
editorial perspective that Apple, Google Play, Amazon and/or Facebook will 
feature it.  This featured placement will get you hundreds of thousands if not 
millions of downloads. From a discoverability perspective, this can be a great 
boon to the launch of your game, but it is not something you can rely on.
For us, we have a very specific focus on our games. We make puzzle games that 
have a deep narrative, great animations and fun gameplay. Most of our entire 
back catalogue appeals to a similar type of demographic. We do that because 
when we get a hit with game A, we can cross-promote games B, C and D to 
those users. From a success perspective, we are looking at the lifetime value of a 
user rather than the lifetime value of a single game.
Some companies will make a game specifically targeted at men, then attempt a 
casino game targeted at women and then a puzzle game targeted to everyone, 
and try to cross-promote all of the games. However, it is unlikely that there is 
interest by that demographic in the new games, so this strategy may not be 
suitable.
With advertising, the picture was quite dierent a year ago. In the early days, 
companies would target across the board and hope that the average lifetime 
value of a user would come out to more than the cost per user to acquire. Now 
– at least for the companies that are doing it right – you have to get much more 
granular with how and where you spend your advertising dollars or you may lose 
a significant amount of money with very little gain.
3) Some of the biggest success stories 
have come from new entrants, while some 
traditional publishers have struggled to 
gain traction. Why do you think this is?
The secret is agility. If you look at companies like Supercell, who make Clash of 
Clans, and King, who of course developed Candy Crush Saga, they do not have 
massive, bloated teams. They quickly make games and quickly iterate.
Mobile games are not software like they were in the past. We are creating a 
game as a service. A game can last an extremely long time rather than a boxed 
product that has a finite lifespan. You can release a game, collect great data, and 
continue to improve the game with regular changes and new content.
There is a new way of thinking when developing games for mobile and social. It 
is the notion of developing a prototype and failing fast – by that I mean using 
data to decide very early on if your prototype is a viable game. At the same time 
the concept now is to build a game as a service – optimizing the revenue and 
user retention for years to come by continuously injecting new content.
It is a very dierent way of thinking compared to the earlier days, where some 
companies set a budget and development time for a game and then began 
work. Every company that has a big hit game, has also had failed games that 
they killed after a month or two. If you spoke with the teams at Supercell or 
Kabam, it is very likely that they have had game ideas that they thought would be 
interesting, but ultimately did not succeed. Games are unique in that way. 
If you take TV for example – it costs possibly a million dollars to create a pilot, 
with the hope that you will get picked up for maybe six episodes and the goal is 
to not get cancelled. With mobile game development, the investment is far 
lower before the point at which you start to get feedback, so you can tell much 
earlier on if a project is not working or how to steer it so that it begins to work 
for you. This kind of thinking is naturally ingrained into newer companies.
4) What is the formula for a successful 
free-to-play title?
As a company we are super focused on one genre of games. We have dabbled 
in other areas, but we settled on this space because – like the issue you brought 
up with discoverability – we start to solve the discoverability issue ourselves 
simply by creating new products that cross-promote very well with each other.
The notion that you create a game with a proven game mechanic is also very 
important. We have a website called mindjolt.com, which has hundreds of very 
simple games that cover almost every game mechanic you can think of. Those 
games are not advanced enough and do not have enough polish to be hits in 
their own right, but what we can do is determine which games people are 
playing and which mechanics people are enjoying. From there we can build a 
prototype with a bigger narrative around that initial idea. If that prototype is a 
success we can move along to formally assign a team to the game and head 
into full development. From that point, we will continually iterate on the game 
through a soft launch and then a full release.
Additionally, we set KPIs and stick to them. For example, for a particular title, we 
might set a day-one retention target of 55%, which is quite a healthy number. 
Our seven-day retention target might be 26%. If those numbers are not where 
we need them to be we will take prescriptive measures – and analyze our data – 
to determine where players are dropping o and what is causing the retention 
to be lower than what we want it to be. This is just one indicator among many 
that we use to measure success and figure out how to make the most 
successful product.
Finally, investing in your team is crucial. To make the best games, you must hire 
the most creative people you can aord. This year we invested heavily in our 
artists, animators, game designers and engineering teams to ensure we have the 
imagination and the talent to make the best products. Unfortunately that is not 
enough, you must also have the analytics infrastructure to back it all up. All of 
these elements are crucial to creating a successful games business.
Unlocking the Formula to 
Mobile Success
Mobile Gaming USA
May 5-6, 2014 | San Francisco
 
All the contributors to this 
whitepaper will be speaking at 
Mobile Gaming USA. Visit: 
http://www.videogamesintelligen
ce.com/mobile-gaming-usa 
for more details on this landmark 
event.
Introduction
The mobile games industry is a multi-billion dollar industry - mobile gaming is 
big business and is set to continue growing at an alarming rate. Smart phone 
and tablet market penetration is increasing exponentially, with over one billion 
units sold worldwide in 2013 alone. The power of mobile gaming devices is 
increasing just as fast: mobile processing power has developed to the extent 
that smartphones and tablets can produce near console-quality graphics.
At the same time, digital marketplaces have become crowded, and the cost of 
raising your head above the parapet through user acquisition has never been 
higher. The mobile games industry is under increasing pressure to perform, 
targeted at a market with more choice, and lower barriers to entry than ever 
before.
The ability to innovate and to learn from each other’s creative thinking will set 
the successful apart as the mobile sector continues to grow. Three industry 
experts, representing some of the most innovative minds from across the 
industry from investment house Initial Capital and developer/publishers Kabam 
and SGN oer their insights into the mobile games industry in this report. These 
industry leaders, along with a number of their peers, will also be giving their 
insights at Mobile Gaming USA, hosted in San Francisco, 5-6, May 2014.
Kristian Segerstrale
Kristian Segerstrale is an entrepreneur and investor in games, consumer internet 
and technology companies. He was also the CEO and co-founder of Playfish, 
who were acquired by EA for $400 million in 2009. Kristian invests with Initial 
Capital. To find out more visit www.initialcapital.com
1) What is the biggest opportunity in 
mobile gaming today?
I actually don’t think there’s been a time in mobile games where you’ve had an 
almost guaranteed growth over the next five years. You have a set of 
technologies in iOS and Android that are here to stay. You have a set of stores 
that are getting increasingly better at recommending the right content for users. 
You also have a set of marketing technologies in advertising networks and 
acquisition technologies that makes it increasingly better to reach consumers. 
Most importantly you have consumers that are buying more smartphones all the 
time. More than a billion smartphones were bought in 2013 alone.
The markets are getting far more international and consolidated. Previously for a 
western developer and publishers it was extremely dicult to get into markets 
like Japan, China and Korea because of diering technologies and marketplaces 
– diering approaches to everything. Now, although the markets are still unique, 
the technologies – in terms of Android and iOS in particular – are becoming 
these giant equalisers between markets. So if you have a great product, as has 
been amply demonstrated by King, Rovio and Supercell, you can actually create 
global hits.
For all those reasons, I think the next three to five years present an incredible 
opportunity for game developers.
In terms of specific opportunities within that industry growth, which is extremely 
promising, is innovation. We continue to have a massive amount of 
under-served categories in mobile in particular. If you look at genres like Sports 
games, MOBAs (Massively Online Battle Arenas), RPGs (Role Playing Games) – 
they all feel like under-served segments on mobile right now. Also there are 
segments within those genres where you struggle to find quality games. Many 
developers are lured by the success of specific titles and create derivative works 
or games that are heavily influenced by those successful products. The biggest 
opportunity out there is to serve unmet needs and to innovate rather than 
imitate.
2) Discoverability is a huge issue and the 
mobile marketplace is extremely crowded, 
what steps can developers and publishers 
take to get their games into the hands of 
more players?
The product is by far the most important form of marketing, but especially in a 
marketplace with as low friction, with as low barriers to entry, as mobile gaming. 
So the most important thing is to not only create a product that is wonderful 
and great to play – a great experience – but also one that has great character 
and is memorable. Most developers today would still say that the majority of 
their distribution is still word of mouth.
I can’t emphasise enough how important it is to create memorable experiences 
to begin with. It is true that the marketplace is crowded, but the majority of that 
crowd are actually forgettable experiences.
There are also fairly well understood mechanisms to test out what segment and 
type of consumer you product appeals to. Once you have a good sense of who 
your product is for, it is actually fairly straightforward to augment your user 
acquisition eorts with channel marketing that reaches the right communities. I 
think the marketplace is not nearly as sophisticated at doing this as it should be. 
So today it’s entirely possible to quite accurately understand who your 
consumer is and at the same time the ability to target using tools is increasing. 
You can also advertise with much richer content, like video, that can be more 
compelling – I think channels like YouTube are actually quite underused today.
Right now we’re going through this shift of marketing for apps which for the 
past few years has been developed as this quantitative discipline of acquiring 
users through ad networks almost like a trading desk – where one company 
might be willing to sell a user for a price. I think we’ve entered an era where you 
have to be far more sophisticated about building brands and creating a closer, 
more emotional relationship with consumers.
3) Some of the biggest success stories 
have come from new entrants, while some 
traditional publishers have struggled to 
gain traction. Why do you think this is?
From my experience games are really all about talent. The top 1% of talent will 
have by far the best chance of creating the top 0.1% of games that are out there. 
Putting anything less than the best development team on a game will have a 
devastating impact on its ability to have the potential to break out. Part of that is 
the innovation the team is capable of, part of it is the quality of the execution. At 
the end of the day these are crafted experiences and as a consumer you can see 
all of that – whether it’s a game you can clearly see that someone really cares 
about or not.
Part of the challenge with the existing companies is that their focus – where 
they’re placing their very best talent – is where their existing dollars are coming 
from. So if you think about an EA or an Activision, the dilemma is that they’re 
making billions of dollars from existing franchises. It would take an incredibly 
brave company to move their talent from these massive franchises and put them 
onto a new platform. 
The other thing is that the development methodologies that smaller teams 
employ are more suited to mobile. Big companies tend to employ heavy 
approval processes to protect them from big mistakes. That type of process 
doesn't lend itself well to creative risk or creating games in a fast moving 
environment . You need to be able to trust top talent to make gut decisions. 
Companies like Supercell are very vocal about the fact that they don’t have a 
green light process of any kind, and I think that’s something that has hamstrung 
some of the bigger companies when it comes to mobile development.
4) What is the formula for a successful 
free-to-play title?
Games are fundamentally an art, and I don’t know that there’s a formula for art. 
There are approaches that tend to be more successful than others. One that I 
would advocate would be to firstly make something that you love to play 
yourself. Don’t try make something because you think the market is big and 
there are a lot of consumers that want something in that area. Start with what 
you love to play and how you make something that you would love to play. You 
can tell when you play a game whether it has been made by someone that 
genuinely loves it. Obviously it needs to be something that you think the market 
will also love to play, but if you don’t love it, the chances are that nobody else 
will love it also.
You also need to understand who you’re making the game for and profoundly 
respecting the player. There are a lot of games being made right now that either 
simply imitate existing games. There is also still a "San Francisco school" of game 
design out there that advocate "design by the numbers' - create games to get 
people to pay as quickly as possible, as many times as possible, in as many 
dierent ways as possible to maximise the funnel of people paying. I think that’s 
a dangerous route of design. I can see that today the most successful games are 
the ones that respect the players for what they are and creating an engaging 
experience. Design for engagement. Design for fun. Design for the emotional 
attachment to the game. Then build in reasonable monetisation that comes in 
way down the road.
My own gold standard of design of engagement is League of Legends. For the 
first 20 or 30 hours you can’t understand what you would ever pay money for. 
The cool thing about it is that the game is incredibly successful o the back of 
almost trying not to monetise players. They’ve built a phenomenon o the back 
of an incredible game and not worrying too much about monetisation at all. I 
think that’s a great design principle that developers need to work towards as 
consumers get smarter. Are they leaving money on the table? Likely yes - but 
they are building an incredibly successful, long lasting and valuable franchise.
Andrew Sheppard 
Andrew Sheppard is the President of Kabam Studios, a developer and publisher 
of social games. In each of the last two years Kabam revenues have grown by 80 
percent or more and will total more than $325 million in 2013
1) What is the biggest opportunity in 
mobile gaming today?
As consumer demand for gameplay experiences at little to no cost increases, 
more publishers will come to recognize the value of the free-to-play business 
model. In this context the onus is on all publishers (both existing and new) to 
deliver high quality gameplay experiences that players value and ultimately are 
willing to purchase. Thanks to the growing device market and constantly 
improving device capabilities, publishers’ ability to deliver compelling gameplay 
experiences has never been greater.  
2) Discoverability is a huge issue and the 
mobile marketplace is extremely crowded, 
what steps can developers and publishers 
take to get their games into the hands of 
more players?
First, make a great game that is innovative, engaging and fun. This is required to 
unlock tremendous organic opportunity.  Then pull on all the strategic levers of 
traditional marketing and distribution: business development, brand marketing, 
public relations, performance advertising, consumer events, etc. Nail the 
execution on both fronts, than get ready to watch your game soar up the charts!
3) Some of the biggest success stories 
have come from new entrants, while some 
traditional publishers have struggled to 
gain traction. Why do you think this is?
For traditional publishers and developers, it’s been a slow start. This is largely 
because free-to-play mobile game development is an entirely dierent beast 
that draws on both art and science to build mass market global hits. It is fair to 
say the traditional game developers are beginning to figure out this exciting new 
medium of gaming, but that their progress is still rate limited by the best 
practices that made them successful in the first place.
4) What is the formula for a successful 
free-to-play title?
Excellent teams, great product vision and a deep understanding of how to 
balance the art and science of free-to-play game development. Hard work helps 
too.
Chris DeWolfe
Chris DeWolfe is the CEO of SGN (Social Gaming Network), a top cross-platform 
developer and publisher of games on Facebook, iOS, and Android. To date well 
over 300 Million SGN games have been installed on leading mobile and social 
platforms, making SGN one of the largest cross-platform gaming companies in 
the world.
1) What is the biggest opportunity in 
mobile gaming today?
A massive number of people are playing games today, and as a result, the 
market has become much larger than it was several years ago. It will continue to 
get larger as people continue purchasing multiple devices.
The fact that there are now multiple platforms on which to play games expands 
the market even more. Currently there is a big opportunity for developers to 
build their games for all platforms, both social and mobile. The opportunity lies 
in developing games for people to play at work, perhaps on a PC or laptop, and 
for users that are travelling home from work, so they can continue to play the 
same game seamlessly on a mobile device.
Free-to-play in-game purchasing has become frictionless, especially in the iOS 
operating system. Apple has over a billion credit cards on file, so all you have to 
do is type in your password to make a purchase. This makes it very easy to 
purchase and provides a huge potential audience. On top of that, barriers to 
entry have been substantially reduced, so that the cost and time it takes to 
create a great game in the mobile space has decreased as the tools available 
have matured. This has allowed smaller companies to make the biggest mobile 
games.
The other significant opportunity is leveraging the sheer amount of data that 
exists. If done right, you have the ability to look at the fail rates of a user at a 
granular level, almost down to the exact feature of a particular stage that caused 
them to lose. With connected devices you have the ability to refine these 
components so that you can prevent users from becoming frustrated and 
leaving the game, and at the same time, ensure that there are enough 
challenges to keep them playing.
2) Discoverability is a huge issue and the 
mobile marketplace is extremely crowded, 
what steps can developers and publishers 
take to get their games into the hands of 
more players?
It starts with the design of the game. If you have a broad market it is important 
to ensure that your game has a proven mechanic and that the game is fun to 
play. Starting very early with a playable prototype of the game is necessary to 
determine if the game will have fun gameplay mechanics and if it will stand out 
from the crowd. If it does not meet those requirements, then you either have to 
go back to the drawing board or fail quickly and pivot. It is not the best idea to 
spend a year and a half developing a game that is never going to gain traction.
You also want to ensure that there are certain viral elements in the game. From 
our perspective, Facebook remains the social glue in the mobile web and apps 
space. It is helpful to encourage your users to log into Facebook to invite their 
friends into the game, and reward them for doing so. There are many ways to do 
that from the way you set up the game, to notifying users when one of their 
friends joins. For example, in our game Panda Pop, anytime your friend joins, 
you are sent a notification so that you can share progress with each other. We 
encourage users to return to the game and compete on the levels where their 
friends have beaten them.
It is always helpful if you can build a game that is interesting enough from an 
editorial perspective that Apple, Google Play, Amazon and/or Facebook will 
feature it.  This featured placement will get you hundreds of thousands if not 
millions of downloads. From a discoverability perspective, this can be a great 
boon to the launch of your game, but it is not something you can rely on.
For us, we have a very specific focus on our games. We make puzzle games that 
have a deep narrative, great animations and fun gameplay. Most of our entire 
back catalogue appeals to a similar type of demographic. We do that because 
when we get a hit with game A, we can cross-promote games B, C and D to 
those users. From a success perspective, we are looking at the lifetime value of a 
user rather than the lifetime value of a single game.
Some companies will make a game specifically targeted at men, then attempt a 
casino game targeted at women and then a puzzle game targeted to everyone, 
and try to cross-promote all of the games. However, it is unlikely that there is 
interest by that demographic in the new games, so this strategy may not be 
suitable.
With advertising, the picture was quite dierent a year ago. In the early days, 
companies would target across the board and hope that the average lifetime 
value of a user would come out to more than the cost per user to acquire. Now 
– at least for the companies that are doing it right – you have to get much more 
granular with how and where you spend your advertising dollars or you may lose 
a significant amount of money with very little gain.
3) Some of the biggest success stories 
have come from new entrants, while some 
traditional publishers have struggled to 
gain traction. Why do you think this is?
The secret is agility. If you look at companies like Supercell, who make Clash of 
Clans, and King, who of course developed Candy Crush Saga, they do not have 
massive, bloated teams. They quickly make games and quickly iterate.
Mobile games are not software like they were in the past. We are creating a 
game as a service. A game can last an extremely long time rather than a boxed 
product that has a finite lifespan. You can release a game, collect great data, and 
continue to improve the game with regular changes and new content.
There is a new way of thinking when developing games for mobile and social. It 
is the notion of developing a prototype and failing fast – by that I mean using 
data to decide very early on if your prototype is a viable game. At the same time 
the concept now is to build a game as a service – optimizing the revenue and 
user retention for years to come by continuously injecting new content.
It is a very dierent way of thinking compared to the earlier days, where some 
companies set a budget and development time for a game and then began 
work. Every company that has a big hit game, has also had failed games that 
they killed after a month or two. If you spoke with the teams at Supercell or 
Kabam, it is very likely that they have had game ideas that they thought would be 
interesting, but ultimately did not succeed. Games are unique in that way. 
If you take TV for example – it costs possibly a million dollars to create a pilot, 
with the hope that you will get picked up for maybe six episodes and the goal is 
to not get cancelled. With mobile game development, the investment is far 
lower before the point at which you start to get feedback, so you can tell much 
earlier on if a project is not working or how to steer it so that it begins to work 
for you. This kind of thinking is naturally ingrained into newer companies.
4) What is the formula for a successful 
free-to-play title?
As a company we are super focused on one genre of games. We have dabbled 
in other areas, but we settled on this space because – like the issue you brought 
up with discoverability – we start to solve the discoverability issue ourselves 
simply by creating new products that cross-promote very well with each other.
The notion that you create a game with a proven game mechanic is also very 
important. We have a website called mindjolt.com, which has hundreds of very 
simple games that cover almost every game mechanic you can think of. Those 
games are not advanced enough and do not have enough polish to be hits in 
their own right, but what we can do is determine which games people are 
playing and which mechanics people are enjoying. From there we can build a 
prototype with a bigger narrative around that initial idea. If that prototype is a 
success we can move along to formally assign a team to the game and head 
into full development. From that point, we will continually iterate on the game 
through a soft launch and then a full release.
Additionally, we set KPIs and stick to them. For example, for a particular title, we 
might set a day-one retention target of 55%, which is quite a healthy number. 
Our seven-day retention target might be 26%. If those numbers are not where 
we need them to be we will take prescriptive measures – and analyze our data – 
to determine where players are dropping o and what is causing the retention 
to be lower than what we want it to be. This is just one indicator among many 
that we use to measure success and figure out how to make the most 
successful product.
Finally, investing in your team is crucial. To make the best games, you must hire 
the most creative people you can aord. This year we invested heavily in our 
artists, animators, game designers and engineering teams to ensure we have the 
imagination and the talent to make the best products. Unfortunately that is not 
enough, you must also have the analytics infrastructure to back it all up. All of 
these elements are crucial to creating a successful games business.
Unlocking the Formula to 
Mobile Success
Mobile Gaming USA
May 5-6, 2014 | San Francisco
 
All the contributors to this 
whitepaper will be speaking at 
Mobile Gaming USA. Visit: 
http://www.videogamesintelligen
ce.com/mobile-gaming-usa 
for more details on this landmark 
event.
Introduction
The mobile games industry is a multi-billion dollar industry - mobile gaming is 
big business and is set to continue growing at an alarming rate. Smart phone 
and tablet market penetration is increasing exponentially, with over one billion 
units sold worldwide in 2013 alone. The power of mobile gaming devices is 
increasing just as fast: mobile processing power has developed to the extent 
that smartphones and tablets can produce near console-quality graphics.
At the same time, digital marketplaces have become crowded, and the cost of 
raising your head above the parapet through user acquisition has never been 
higher. The mobile games industry is under increasing pressure to perform, 
targeted at a market with more choice, and lower barriers to entry than ever 
before.
The ability to innovate and to learn from each other’s creative thinking will set 
the successful apart as the mobile sector continues to grow. Three industry 
experts, representing some of the most innovative minds from across the 
industry from investment house Initial Capital and developer/publishers Kabam 
and SGN oer their insights into the mobile games industry in this report. These 
industry leaders, along with a number of their peers, will also be giving their 
insights at Mobile Gaming USA, hosted in San Francisco, 5-6, May 2014.
Kristian Segerstrale
Kristian Segerstrale is an entrepreneur and investor in games, consumer internet 
and technology companies. He was also the CEO and co-founder of Playfish, 
who were acquired by EA for $400 million in 2009. Kristian invests with Initial 
Capital. To find out more visit www.initialcapital.com
1) What is the biggest opportunity in 
mobile gaming today?
I actually don’t think there’s been a time in mobile games where you’ve had an 
almost guaranteed growth over the next five years. You have a set of 
technologies in iOS and Android that are here to stay. You have a set of stores 
that are getting increasingly better at recommending the right content for users. 
You also have a set of marketing technologies in advertising networks and 
acquisition technologies that makes it increasingly better to reach consumers. 
Most importantly you have consumers that are buying more smartphones all the 
time. More than a billion smartphones were bought in 2013 alone.
The markets are getting far more international and consolidated. Previously for a 
western developer and publishers it was extremely dicult to get into markets 
like Japan, China and Korea because of diering technologies and marketplaces 
– diering approaches to everything. Now, although the markets are still unique, 
the technologies – in terms of Android and iOS in particular – are becoming 
these giant equalisers between markets. So if you have a great product, as has 
been amply demonstrated by King, Rovio and Supercell, you can actually create 
global hits.
For all those reasons, I think the next three to five years present an incredible 
opportunity for game developers.
In terms of specific opportunities within that industry growth, which is extremely 
promising, is innovation. We continue to have a massive amount of 
under-served categories in mobile in particular. If you look at genres like Sports 
games, MOBAs (Massively Online Battle Arenas), RPGs (Role Playing Games) – 
they all feel like under-served segments on mobile right now. Also there are 
segments within those genres where you struggle to find quality games. Many 
developers are lured by the success of specific titles and create derivative works 
or games that are heavily influenced by those successful products. The biggest 
opportunity out there is to serve unmet needs and to innovate rather than 
imitate.
2) Discoverability is a huge issue and the 
mobile marketplace is extremely crowded, 
what steps can developers and publishers 
take to get their games into the hands of 
more players?
The product is by far the most important form of marketing, but especially in a 
marketplace with as low friction, with as low barriers to entry, as mobile gaming. 
So the most important thing is to not only create a product that is wonderful 
and great to play – a great experience – but also one that has great character 
and is memorable. Most developers today would still say that the majority of 
their distribution is still word of mouth.
I can’t emphasise enough how important it is to create memorable experiences 
to begin with. It is true that the marketplace is crowded, but the majority of that 
crowd are actually forgettable experiences.
There are also fairly well understood mechanisms to test out what segment and 
type of consumer you product appeals to. Once you have a good sense of who 
your product is for, it is actually fairly straightforward to augment your user 
acquisition eorts with channel marketing that reaches the right communities. I 
think the marketplace is not nearly as sophisticated at doing this as it should be. 
So today it’s entirely possible to quite accurately understand who your 
consumer is and at the same time the ability to target using tools is increasing. 
You can also advertise with much richer content, like video, that can be more 
compelling – I think channels like YouTube are actually quite underused today.
Right now we’re going through this shift of marketing for apps which for the 
past few years has been developed as this quantitative discipline of acquiring 
users through ad networks almost like a trading desk – where one company 
might be willing to sell a user for a price. I think we’ve entered an era where you 
have to be far more sophisticated about building brands and creating a closer, 
more emotional relationship with consumers.
3) Some of the biggest success stories 
have come from new entrants, while some 
traditional publishers have struggled to 
gain traction. Why do you think this is?
From my experience games are really all about talent. The top 1% of talent will 
have by far the best chance of creating the top 0.1% of games that are out there. 
Putting anything less than the best development team on a game will have a 
devastating impact on its ability to have the potential to break out. Part of that is 
the innovation the team is capable of, part of it is the quality of the execution. At 
the end of the day these are crafted experiences and as a consumer you can see 
all of that – whether it’s a game you can clearly see that someone really cares 
about or not.
Part of the challenge with the existing companies is that their focus – where 
they’re placing their very best talent – is where their existing dollars are coming 
from. So if you think about an EA or an Activision, the dilemma is that they’re 
making billions of dollars from existing franchises. It would take an incredibly 
brave company to move their talent from these massive franchises and put them 
onto a new platform. 
The other thing is that the development methodologies that smaller teams 
employ are more suited to mobile. Big companies tend to employ heavy 
approval processes to protect them from big mistakes. That type of process 
doesn't lend itself well to creative risk or creating games in a fast moving 
environment . You need to be able to trust top talent to make gut decisions. 
Companies like Supercell are very vocal about the fact that they don’t have a 
green light process of any kind, and I think that’s something that has hamstrung 
some of the bigger companies when it comes to mobile development.
4) What is the formula for a successful 
free-to-play title?
Games are fundamentally an art, and I don’t know that there’s a formula for art. 
There are approaches that tend to be more successful than others. One that I 
would advocate would be to firstly make something that you love to play 
yourself. Don’t try make something because you think the market is big and 
there are a lot of consumers that want something in that area. Start with what 
you love to play and how you make something that you would love to play. You 
can tell when you play a game whether it has been made by someone that 
genuinely loves it. Obviously it needs to be something that you think the market 
will also love to play, but if you don’t love it, the chances are that nobody else 
will love it also.
You also need to understand who you’re making the game for and profoundly 
respecting the player. There are a lot of games being made right now that either 
simply imitate existing games. There is also still a "San Francisco school" of game 
design out there that advocate "design by the numbers' - create games to get 
people to pay as quickly as possible, as many times as possible, in as many 
dierent ways as possible to maximise the funnel of people paying. I think that’s 
a dangerous route of design. I can see that today the most successful games are 
the ones that respect the players for what they are and creating an engaging 
experience. Design for engagement. Design for fun. Design for the emotional 
attachment to the game. Then build in reasonable monetisation that comes in 
way down the road.
My own gold standard of design of engagement is League of Legends. For the 
first 20 or 30 hours you can’t understand what you would ever pay money for. 
The cool thing about it is that the game is incredibly successful o the back of 
almost trying not to monetise players. They’ve built a phenomenon o the back 
of an incredible game and not worrying too much about monetisation at all. I 
think that’s a great design principle that developers need to work towards as 
consumers get smarter. Are they leaving money on the table? Likely yes - but 
they are building an incredibly successful, long lasting and valuable franchise.
Andrew Sheppard 
Andrew Sheppard is the President of Kabam Studios, a developer and publisher 
of social games. In each of the last two years Kabam revenues have grown by 80 
percent or more and will total more than $325 million in 2013
1) What is the biggest opportunity in 
mobile gaming today?
As consumer demand for gameplay experiences at little to no cost increases, 
more publishers will come to recognize the value of the free-to-play business 
model. In this context the onus is on all publishers (both existing and new) to 
deliver high quality gameplay experiences that players value and ultimately are 
willing to purchase. Thanks to the growing device market and constantly 
improving device capabilities, publishers’ ability to deliver compelling gameplay 
experiences has never been greater.  
2) Discoverability is a huge issue and the 
mobile marketplace is extremely crowded, 
what steps can developers and publishers 
take to get their games into the hands of 
more players?
First, make a great game that is innovative, engaging and fun. This is required to 
unlock tremendous organic opportunity.  Then pull on all the strategic levers of 
traditional marketing and distribution: business development, brand marketing, 
public relations, performance advertising, consumer events, etc. Nail the 
execution on both fronts, than get ready to watch your game soar up the charts!
3) Some of the biggest success stories 
have come from new entrants, while some 
traditional publishers have struggled to 
gain traction. Why do you think this is?
For traditional publishers and developers, it’s been a slow start. This is largely 
because free-to-play mobile game development is an entirely dierent beast 
that draws on both art and science to build mass market global hits. It is fair to 
say the traditional game developers are beginning to figure out this exciting new 
medium of gaming, but that their progress is still rate limited by the best 
practices that made them successful in the first place.
4) What is the formula for a successful 
free-to-play title?
Excellent teams, great product vision and a deep understanding of how to 
balance the art and science of free-to-play game development. Hard work helps 
too.
Chris DeWolfe
Chris DeWolfe is the CEO of SGN (Social Gaming Network), a top cross-platform 
developer and publisher of games on Facebook, iOS, and Android. To date well 
over 300 Million SGN games have been installed on leading mobile and social 
platforms, making SGN one of the largest cross-platform gaming companies in 
the world.
1) What is the biggest opportunity in 
mobile gaming today?
A massive number of people are playing games today, and as a result, the 
market has become much larger than it was several years ago. It will continue to 
get larger as people continue purchasing multiple devices.
The fact that there are now multiple platforms on which to play games expands 
the market even more. Currently there is a big opportunity for developers to 
build their games for all platforms, both social and mobile. The opportunity lies 
in developing games for people to play at work, perhaps on a PC or laptop, and 
for users that are travelling home from work, so they can continue to play the 
same game seamlessly on a mobile device.
Free-to-play in-game purchasing has become frictionless, especially in the iOS 
operating system. Apple has over a billion credit cards on file, so all you have to 
do is type in your password to make a purchase. This makes it very easy to 
purchase and provides a huge potential audience. On top of that, barriers to 
entry have been substantially reduced, so that the cost and time it takes to 
create a great game in the mobile space has decreased as the tools available 
have matured. This has allowed smaller companies to make the biggest mobile 
games.
The other significant opportunity is leveraging the sheer amount of data that 
exists. If done right, you have the ability to look at the fail rates of a user at a 
granular level, almost down to the exact feature of a particular stage that caused 
them to lose. With connected devices you have the ability to refine these 
components so that you can prevent users from becoming frustrated and 
leaving the game, and at the same time, ensure that there are enough 
challenges to keep them playing.
2) Discoverability is a huge issue and the 
mobile marketplace is extremely crowded, 
what steps can developers and publishers 
take to get their games into the hands of 
more players?
It starts with the design of the game. If you have a broad market it is important 
to ensure that your game has a proven mechanic and that the game is fun to 
play. Starting very early with a playable prototype of the game is necessary to 
determine if the game will have fun gameplay mechanics and if it will stand out 
from the crowd. If it does not meet those requirements, then you either have to 
go back to the drawing board or fail quickly and pivot. It is not the best idea to 
spend a year and a half developing a game that is never going to gain traction.
You also want to ensure that there are certain viral elements in the game. From 
our perspective, Facebook remains the social glue in the mobile web and apps 
space. It is helpful to encourage your users to log into Facebook to invite their 
friends into the game, and reward them for doing so. There are many ways to do 
that from the way you set up the game, to notifying users when one of their 
friends joins. For example, in our game Panda Pop, anytime your friend joins, 
you are sent a notification so that you can share progress with each other. We 
encourage users to return to the game and compete on the levels where their 
friends have beaten them.
It is always helpful if you can build a game that is interesting enough from an 
editorial perspective that Apple, Google Play, Amazon and/or Facebook will 
feature it.  This featured placement will get you hundreds of thousands if not 
millions of downloads. From a discoverability perspective, this can be a great 
boon to the launch of your game, but it is not something you can rely on.
For us, we have a very specific focus on our games. We make puzzle games that 
have a deep narrative, great animations and fun gameplay. Most of our entire 
back catalogue appeals to a similar type of demographic. We do that because 
when we get a hit with game A, we can cross-promote games B, C and D to 
those users. From a success perspective, we are looking at the lifetime value of a 
user rather than the lifetime value of a single game.
Some companies will make a game specifically targeted at men, then attempt a 
casino game targeted at women and then a puzzle game targeted to everyone, 
and try to cross-promote all of the games. However, it is unlikely that there is 
interest by that demographic in the new games, so this strategy may not be 
suitable.
With advertising, the picture was quite dierent a year ago. In the early days, 
companies would target across the board and hope that the average lifetime 
value of a user would come out to more than the cost per user to acquire. Now 
– at least for the companies that are doing it right – you have to get much more 
granular with how and where you spend your advertising dollars or you may lose 
a significant amount of money with very little gain.
3) Some of the biggest success stories 
have come from new entrants, while some 
traditional publishers have struggled to 
gain traction. Why do you think this is?
The secret is agility. If you look at companies like Supercell, who make Clash of 
Clans, and King, who of course developed Candy Crush Saga, they do not have 
massive, bloated teams. They quickly make games and quickly iterate.
Mobile games are not software like they were in the past. We are creating a 
game as a service. A game can last an extremely long time rather than a boxed 
product that has a finite lifespan. You can release a game, collect great data, and 
continue to improve the game with regular changes and new content.
There is a new way of thinking when developing games for mobile and social. It 
is the notion of developing a prototype and failing fast – by that I mean using 
data to decide very early on if your prototype is a viable game. At the same time 
the concept now is to build a game as a service – optimizing the revenue and 
user retention for years to come by continuously injecting new content.
It is a very dierent way of thinking compared to the earlier days, where some 
companies set a budget and development time for a game and then began 
work. Every company that has a big hit game, has also had failed games that 
they killed after a month or two. If you spoke with the teams at Supercell or 
Kabam, it is very likely that they have had game ideas that they thought would be 
interesting, but ultimately did not succeed. Games are unique in that way. 
If you take TV for example – it costs possibly a million dollars to create a pilot, 
with the hope that you will get picked up for maybe six episodes and the goal is 
to not get cancelled. With mobile game development, the investment is far 
lower before the point at which you start to get feedback, so you can tell much 
earlier on if a project is not working or how to steer it so that it begins to work 
for you. This kind of thinking is naturally ingrained into newer companies.
4) What is the formula for a successful 
free-to-play title?
As a company we are super focused on one genre of games. We have dabbled 
in other areas, but we settled on this space because – like the issue you brought 
up with discoverability – we start to solve the discoverability issue ourselves 
simply by creating new products that cross-promote very well with each other.
The notion that you create a game with a proven game mechanic is also very 
important. We have a website called mindjolt.com, which has hundreds of very 
simple games that cover almost every game mechanic you can think of. Those 
games are not advanced enough and do not have enough polish to be hits in 
their own right, but what we can do is determine which games people are 
playing and which mechanics people are enjoying. From there we can build a 
prototype with a bigger narrative around that initial idea. If that prototype is a 
success we can move along to formally assign a team to the game and head 
into full development. From that point, we will continually iterate on the game 
through a soft launch and then a full release.
Additionally, we set KPIs and stick to them. For example, for a particular title, we 
might set a day-one retention target of 55%, which is quite a healthy number. 
Our seven-day retention target might be 26%. If those numbers are not where 
we need them to be we will take prescriptive measures – and analyze our data – 
to determine where players are dropping o and what is causing the retention 
to be lower than what we want it to be. This is just one indicator among many 
that we use to measure success and figure out how to make the most 
successful product.
Finally, investing in your team is crucial. To make the best games, you must hire 
the most creative people you can aord. This year we invested heavily in our 
artists, animators, game designers and engineering teams to ensure we have the 
imagination and the talent to make the best products. Unfortunately that is not 
enough, you must also have the analytics infrastructure to back it all up. All of 
these elements are crucial to creating a successful games business.
Unlocking the Formula to 
Mobile Success
Mobile Gaming USA
May 5-6, 2014 | San Francisco
 
All the contributors to this 
whitepaper will be speaking at 
Mobile Gaming USA. Visit: 
http://www.videogamesintelligen
ce.com/mobile-gaming-usa 
for more details on this landmark 
event.