Mobile game publishers are at a crossroads. With increasing regulatory scrutiny on app stores and changing policies, game studios face a choice: wait for more policy shifts or embrace a flexible direct-to-consumer (DTC) strategy now. The answer from industry leaders is clear—act today.
App Store Changes: Uncertainty Ahead
Recent regulatory actions have already made waves. The EU’s Digital Markets Act, for instance, pressured Apple to allow external payment links in the region, offering new revenue opportunities for developers.
Yet, the future remains uncertain. Ongoing battles, like the high-profile Epic vs. Apple and Google cases, keep the landscape shifting. In-game promotion of external web stores remains problematic; many publishers operate in ‘gray’ areas, finding workarounds while being careful not to irk the gatekeepers in fear of penalties.
But relying on regulators to deliver a perfect solution is risky at best to games businesses.
While some developers wait for clarity, leading studios are moving forward, investing in adaptable DTC strategies and adding web store revenue to their income streams.
The Rise of DTC: Publishers Leading the Way
According to Appcharge’s latest report, 72% of top-grossing mobile games already operate a web store, and they’re seeing tangible results. Consider the social casino category, where every top game now has a web store.
Publishers like Playtika have demonstrated that even modest shifts to DTC channels can create big gains. In 2023, Playtika’s DTC revenue climbed to 24.9% of its total revenue, driven by the success of its Slotomania and Bingo Blitz stores. The result? Lower fees, higher margins, and more flexibility.
DTC strategies are not just about bypassing app store commissions. They offer publishers control and flexibility to engage players directly. From tailored offers to loyalty programs, publishers can build richer player experiences and, in turn, increase long-term player value.
Building Revenue Resilience
Adopting a DTC strategy isn’t just a defensive move; it’s an opportunity to build a more resilient business.
Appcharge, a leading web store provider that processes $100 million per year and powers over one-third of top-grossing mobile game web stores, found that a well-executed DTC strategy boosts revenue by 25-35% on average.
This revenue does not cannibalize revenue from in-game sales – it adds to the overall pie. For example, while overall revenue was slightly down in Playtika’s latest earnings report, their DTC earnings were actually up. The same is true for Huuge, who’ve doubled DTC revenues year-over-year and signaled more investment ahead.
Challenges Are Surmountable
However, going DTC isn’t without challenges. Compliance complexities, managing new payment systems, and successfully creating a new habit among players are critical. But these hurdles are surmountable with the right tools and partners. For example, finding a good Merchant of Record provider alleviates the whole burden of global compliance and payment operations.
In terms of instilling new player behaviors, high-ARPU genres like strategy and social casino games have thrived by leveraging their existing foundations in VIP management and loyalty programs to drive DTC adoption.
The Time to Act is Now
As app store regulations continue to evolve, the window of opportunity is wide open. Waiting for policy changes could leave studios playing catch-up; those who move now to implement adaptable, multi-channel strategies are setting themselves up to be market leaders.
It’s clear from the data that DTC web stores are no longer the “next big thing” but the norm. By acting today, studios can unlock new revenue, take ownership of their players, and future-proof their businesses against unpredictable shifts in the app economy.
