Running a mobile game business on Apple and Google’s app stores is like working under feudal law, says Lockwood CEO Halli Thor Bjornsson. And he wants it to change.
The boss at the Avakin Life maker says both tech giants must reconsider their store policies to help strike a better balance between running the stores and monetising them through ads and UA – or risk driving smaller and mid-sized game-makers away.
“It’s almost like a feudal set-up, and we need a free market set-up,” he tells us. “The existing platforms, our feudal lords, obviously won’t give it up easily. The problems are so big now that they have this kind of God-like status in this economy, and they choose to just hoard all the cash and not return any of it to the economy again.”
“But by doing that you’re just drying it out – you’re just emptying the lake. If you put it back out there it creates prosperity.”
Bjornsson’s concerns aren’t even with the 30% platform fee, which is under increasing pressure from regulators around the world. Because organic discovery is effectively dead, game companies are having to pay more and more just to reach the right audience, he says.
“There needs to be a balance between paid and organic, and I think there needs to be a balance between running a marketplace and monetising it,” Bjornsson continues.
“In a high street, you pay your rates and your rent and you get footfall, that’s the deal. If the people running the high street put a gate on the end of the street and ask you to pay to let people through to your shop, that’s what we’ve got right now.”
“I want to pay 30% app store fees. I just don’t want to pay 100%…it’s created this unhealthy environment where products that are essentially not profitable are outbidding actual, real businesses for users. And it’s going to end in tears both for the app stores and for these companies.”
Bjornsson says that the app stores will end up harming the mobile ecosystem as a whole if they continue to drive all but the biggest game-makers away.
“Do they want independent developers on their platforms or not? If the answer is yes, then you have to adjust your discovery model and your business model.”
Lockwood says its flagship game, Avakin Life, has 5m players per month, 500k of whom log in daily. With an audience that’s mostly 18-34 year-old women, its fashion-themed virtual world was one of the earliest socially-driven game worlds on mobile.
For these kinds of spaces to thrive, Bjornsson says Apple and Google must loosen their grip. “I think the big opportunities are around the creative economy, and Roblox is showing that,” he says. “All the social platforms are growing. Developers and platforms can share the revenues and the success of that, but there needs to be space for that.”
“Rather than monetise harder, you have to pull back and actually share more now. The developers can’t share any more – if you’re paying 30% to the platforms plus another 30% for the user – and some people are paying more than that – there’s nothing left.”
Unless there’s genuine change soon, Bjornsson believes developers will simply seek out more welcoming platforms, and are starting to do so already.
“There’s a huge economic incentive for people to find a business somewhere else,” he says. “I just don’t see the end game with this model for the platforms. It’ll really only be a marketplace for very big companies and consolidated companies with reduced acquisition costs.”
“They effectively helped create Lockwood and the whole mobile ecosystem so we’re forever indebted to these platforms,” he concludes. “I just don’t want them to kill us. It’s gone in the wrong direction and we have to have a conversation about this. We have to have a place for independent developers on the app stores.”