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Beating the odds: How Remedy hit 10M downloads and made a $40 in-game purchase work

June 20th, 2012 at 10:50 AM

Beneath Disney, Zynga and Rovio toil dozens of smaller mobile game developers, developing revenue growth strategies without the benefit of massive media coverage. Remedy’s “Death Rally” recently hit 10 million downloads 14 months after its debut, and the company’s executive vice president, Aki Järvilehto, agreed to share his views with us.

  • One day as a top five app can be sweet indeed. Remedy grosses as much as $50,000 a day during periods when “Death Rally” cracks the iPhone/iPad top five charts for all applications. The mobile app market is now so big that a game can become a $1 million grosser without ever hitting top ten. Just clinging onto top 200 position for more than a year can be profitable for an app with development costs below $200,000 and a clever in-app purchase strategy.
  • Speeding up game progression is the biggest money-maker. Interestingly, gaining access to new levels faster has clearly been the most popular in-app purchase for “Death Rally”. The $2 option for speeding up the game by 50% is the biggest in-game revenue generator. Surprisingly, the rather expensive $3.99 option for speeding up progression by 300% is also more popular than new vehicles or weapons.
  • The $40 “God Mode” feature generates nearly as much revenue as the $2 speed-up feature. The consumer who buys the $40 “God Mode” feature is in effect thanking the development team for a constant, year-long stream of new levels, vehicles and features. The consumer must feel fairly impressed by a string of improvements to cough up $40 out of sheer gratitude. That sort of passion requires forging a relationship between the player and the developers. Developing a player-designed level system and fostering a sense of community help.
  • “Freeappaday” is one of the hottest game marketing tools – if you have a seductive in-game purchase options. As the mobile game market shifts towards the freemium model, the strategy of giving games priced at $1 or $2 away for free for a 5-day period is increasingly popular. This approach does require compelling in-game purchases. Every time Remedy runs a free app week, the promotion is broadcast to the 8 million subscribers of the “Freeappaday” service. Aki Järvilehto, Remedy’s EVP, points out that this kind of campaign can only be run about twice a year or it loses its impact. Remedy has racked up more than 2 million new users for “Death Rally” via Freeappaday campaigns — 20% of the entire download base of the game.
  • Remedy refuses to pay for downloads. For some vendors, buying downloads via various ad exchanges can be a good option; Remedy decided early on against it. The danger of paying for downloads is that the resulting users may be less loyal to the game than consumers who became interested in the product organically — even if that happened during a free app campaign. As most mid-list games, “Death Rally” has a wide range of monthly revenue generation: $50,000 to $350,000 during regular months, outside major marketing campaigns.
  • An app developer must be a constant gardener. Remedy crafted a road map of upgrades and improvements ahead of the game launch. 30,000 new apps are now submitted to Apple for evaluation every week. Competition is so tough that a new game has to be polished and possess a certain amount of depth from the day it debuts. But the vendor must also have a clear idea of how to add new features and functionality every couple of months. Game developers are no longer selling a software product — they are selling a service that must evolve over the years, eventually blossoming into something much richer than the initial product.
  • Freemium not always the best option? Remedy has seen a fairly constant 60/40 revenue split between game download revenue and in-game feature sales. The company is not tempted to turn “Death Rally” into a free game because losing the sticker price revenue entirely is not necessarily fully offset by in-game purchases. Pricing a game is still part alchemy, part science.

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