User acquisition has always played a crucial role in the fiercely competitive mobile gaming industry. With the mobile gaming market projected to surpass $173.4 billion by 2026, studios are under constant pressure to outspend their rivals or explore innovative tactics to differentiate themselves. However, user acquisition has become significantly more challenging since the introduction of Apple’s App Tracking Transparency (ATT) with the release of iOS 14.

Launched in April 2021, ATT has transformed how mobile games attract and retain players. It has enabled users to decide whether they want apps to track their data, particularly their unique mobile device identifier, which is essential for personalized advertising. Unsurprisingly, most users opted out of tracking; about 25% of users agree to be tracked, and mobile gamers are facing even steeper challenges, with only 18.5% opting in. In specific categories like casino games, the numbers can plummet to a meager 7.5%.

The ramifications of the new tracking policies have been profound, particularly for mobile games. Studios that once relied on favorable lifetime value (LTV) to customer acquisition cost (CAC) ratios of four or five now struggle to break even. The soaring user acquisition costs following ATT have forced many studios to scale back their spending and, consequently, their budgets for acquiring new players. Profit margins have eroded, turning profit generation into a daunting challenge.

So, how can studios reclaim their footing in this altered landscape? The answer lies in adopting a Direct-to-Consumer (DTC) approach that is strategically integrated into user acquisition efforts.

DTC positively influences player LTV, allowing game studios to retain a larger share of their revenue. Traditional app stores often take a 30% cut of in-app purchases. DTC platforms, such as Appcharge, charge less than 5%, providing a substantial 35% increase in revenue margin. This shift doesn’t just impact the bottom line; it can also enhance player spending.

One notable case is a popular casual casino game that transitioned to a DTC strategy powered by Appcharge. Within four months of launching a web store, the studio observed a 33% increase in player LTV. This uptick signifies a dual benefit: studios not only retain more revenue but also drive incremental purchases and expand their overall player value base.

With this newfound increase in player LTV, studios have the opportunity to revisit user acquisition strategies that previously felt untenable. Although CAC remains elevated, the enhanced LTV allows for a more favorable LTV-to-CAC ratio. The increased LTV justifies higher spending on user acquisition, reclaiming the scale that seemed unattainable post-ATT. It is essential to understand that while CAC has not decreased, the relationship between LTV and CAC has shifted, enabling studios to invest more aggressively in acquiring users.

Additionally, a DTC model opens new channels for user acquisition that were previously constrained by app stores. A web store integrated into the game’s ecosystem creates a space that studios control, breaking free from app store limitations. Crucially, this web store becomes indexable by Google, allowing players to discover games organically through search engines.

Utilizing personalized ads on platforms such as Facebook creates opportunities for sending potential players directly to their cart for items they previously showed interest in. This approach not only facilitates efficient remarketing strategies but also expands pathways for reaching new users.

Moreover, incorporating effective communication tools such as email and SMS marketing allows studios to curate personalized offers with deep links directly leading to the checkout flow on their store, bypassing the app altogether. This strategy enhances monetization while also expanding user acquisition efforts by drawing players not just towards the game but directly into the purchasing process.

These advanced strategies unlock significant potential for Return on Ad Spend (ROAS), granting studios greater control and flexibility over player engagement and conversion rates.

If your studio has yet to integrate DTC into its monetization and user acquisition strategies, now is the opportune moment to explore this path. DTC is no longer an outlier but a proven method to scale business operations, with 65% of top-grossing games already leveraging web stores. The potential to boost player LTV, regain previous acquisition scale, and drive long-term growth is too great to overlook. Many studios have successfully reclaimed lost growth through DTC strategies, and there is ample opportunity for others to follow suit.

Thinking about the upcoming challenges and opportunities in mobile gaming? Join industry leaders at events like the Digital Marketing World Forum (#DMWF) in Europe, London, North America, and Singapore for in-depth discussions on strategies that can elevate your gaming business.