An increasing number of consumers are now using the mobile platform in browsing the web, checking e-mails, visiting social media sites, playing games, purchasing products & services, and even banking.
Tech companies are in the middle of a mobile war. They are competing to establish a leading position in the mobile industry to generate high revenues. Mobile devices offer different types of mobile applications to enable consumers accomplish certain activities. For example, the Google Inc (NASDAQ:GOOG) Maps enable users to find locations by providing turn-by-turn directions, Zynga Inc (NASDAQ:ZNGA) allows users to play social games, while Instagram’s photo app allows users to share their photos on different social media sites, such as Facebook Inc (NASDAQ:FB) and Twitter. Companies now offer their own applications for their target consumers to gain profit, particularly in advertising.
There is no doubt that an effective mobile app is a key to success. Zynga definitely need to find the right key to open the door of great opportunity to prevent the company from further sinking. The mobile competition is fierce, how can Zynga win the game?
A study from Flurry, a mobile analytics provider, found that consumer’s mobile app engagement and retention are important if they want to win the mobile war. If a consumer becomes loyal in using a particular mobile app, monetization will follow.
The study also found that social games are one of the most frequently (7.9 times/week) used mobile apps, but the users retention declines over a limited time. Within 90 days, the average user retention declines to 29 percent from 47 percent in 30 days. On the other hand, single player games are used by users at an average rate of 3.8 times per week, and the average user retention within 90 days is 41 percent.
The user engagement and retention of social games are likened to users who are dating and looking for a long-term significant other. Once they find their match, they stop using the application.
Draw Something is a good example. The social game was the most popular on Facebook Inc (NASDAQ:FB), with 20.5 million daily active users. Zynga Inc (NASDAQ:ZNGA) decided to acquire the developer of the app for $180 million. After the acquisition, the number of active users playing Draw Something declined every month. According to AllThingsD, the number of active users is now approximately 2 million users per day.
It is clear that Zynga Inc (NASDAQ:ZNGA)’s position in monetizing its social games in the mobile market is challenging. The social games developer needs to understand and improve its user engagement to succeed in monetizing its social games.