Can't Code? No Business Plan? GameSalad and PlayHaven Partner to Hack Game Monetization

By Michael Carney , written on June 22, 2012

From The News Desk

Life’s tough for mobile game developers. Even after clearing the hurdle of building a compelling game, attracting users is a bitch. Keeping them is even worse. Accomplish each of these minor miracles and a developer still might not make any money.

LTV maximizing company PlayHaven and drag-and-drop game creation platform GameSalad know a thing or two about simplifying the life of developers.  The companies announced a partnership today, which arguably offers the quickest and most direct path available to creating and monetizing mobile games.

PlayHaven offers game developers advertising and analytics tools to improve monetization and engagement. Results suggest that this is more than just an empty promise, with its games generating up to eight times higher eCPMS, or rates from advertisers, than those using competing mobile services. A few extra pennies here or there is nice. Eight times more pennies is some serious lift.

As we’ve covered previously, GameSalad offers a visual programming interface that makes it possible to build games without writing a line of code, instead using only pictures and flowcharts to describe the action. The company has 350,000 developers worldwide who have created 60,000 original iOS, Android, and HTML5 game titles. These include 15 percent of all new game releases in the US iOS App Store in 2011, a No. 1 iOS game and more than 60 Top-100 Games.

The timing of the partnership coincides with an industry shifting toward free-to-play games. “We’ve seen our developers gain significantly larger audiences when they choose to make their games available for free, when compared to charging upfront to download,” says GameSalad CEO Steve Felter. “The challenge in our industry is to find ways for developers to maximize the value of free-to-play games, and PlayHaven provides a simple and effective way for our developers to do just that.”

The companies have been quietly testing the integration for nearly six months and are now ready to offer it more widely. They’ve elected to begin with only the advertising component of PlayHaven’s product offering, with optimization tools to follow shortly.

PlayHaven’s ad-units are “dynamic overlays," or customizable HTML5 pop-ups, that offer user calls to action and can execute underlying code. One of the biggest benefits of this type of deployment is that developers can easily make changes without having to wait for Apple to approve an update.

Like the rest of GameSalad’s features, developers can now drag-and-drop ad units during the development process, choosing where and how they appear. The two CEOs say they are unaware of any other available solution in the market that offers this functionality.

“Lots of people say ‘It’s just a few lines of code. It only takes 15 minutes (to integrate our ad-units),’” says PlayHaven CEO Andy Yang. “But in reality it ends up taking weeks to do right.” With PlayHaven plus GameSalad, it’s literally as simple as dragging a visual element across a screen. The integration with GameSalad also allows developers the simplicity of a single point of payment for all development and advertising tools.

Using the forthcoming PlayHaven optimization tools, GameSalad developers will soon be able to segment their customers by purchase behavior, region, device, and level of engagement.  Some users, “minnows,” never purchase anything in-game and can only be monetized with ads. Others, “dolphins,” buy frequently, but in small doses. “Whales,” or those customers who exhibit enormous purchase volumes, often comprise less than two percent of users but can generate up to 90 percent of revenue. PlayHaven provides real-time actionable metrics that drive monetization decisions.

It's advertising solution began as iOS adver solution, with the company adding Android in just the last month. As a result, the ad-tools are only available for Apple’s platform within GameSalad at this time. Additional platforms will follow in the coming months.

One of the biggest announcements to come out of GameSalad to date was its partnership with Chinese Web giant Tencent. By localizing its interface into simplified Chinese, the company removed the very real barrier to game development of needing to speak English. (The majority of coding around the world happens in English.) PlayHaven is in the late stages of completing the same process, with its CEO saying that a Chinese version of its toolset will be deployed within GameSalad in the next two to three weeks.

GameSalad has raised a total of $7.1 million from VCs Greycroft Partners, DFJ Mercury, DFJ Frontier, and ff Venture Capital, as well as Angels Paige Craig, Mark Suster, Tom McInerney, Paul Bricault, and Josh Resnick. PlayHaven raised $1 million in 2010 from Tandem Entrepreneurs and BV Capital, in what is its single reported financing round.

“We’ve been working on this together on a limited basis since January,” says Felter. “People think of AdMob as the gold standard, but we’ve seen PlayHaven produce far better results. I actually started out concerned that it wouldn’t scale, but they’ve filled 100% of our inventory thus far and the CPMs haven’t fallen.”

These tools may not be ideal for every game developer. Certainly, some within the top one percentile will demand extreme functionality not offered by this plug-and-play solution. But for the majority of the market, which is looking for efficiency and efficacy, there are few better combinations that offer such straightforward product development and a clear path to monetization.