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FunPlus “forced to chase DTC” after IDFA deprecation

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Mobile games developer FunPlus was forced to pursue direct-to-consumer strategies following Apple’s deprecation of IDFA, says the company’s VP of business development Bob Slinn.

Speaking during a Devcom session entitled ‘Navigating the new era of mobile games amongst continuous policy changes’, the panel discussed recent regulatory and court decisions around the world, such as the US judge ruling that has opened up the App Store.

Slinn said IDFA changes, which required users to opt-in to tracking, meant the core economics of how it acquired players – and the analytics of how it got those users and calculated LTV in the 4X strategy genre – changed dramatically overnight.

Over time, the company then built up its DTC strategy with its own range of web shops.

“Initially it was a reaction to margin pressure,” said Slinn. “We had to move quickly,” he added, noting it had primarily built for scale through Apple and Google’s ecosystems.

Market evolution

With recent regulatory changes in the US and EU, FunPlus has been accelerating its DTC plans and is actively testing options in its games.

When it comes to the EU’s Digital Markets Act, Slinn revealed the publisher had opted into Apple’s previous alternative business terms.

During the regulatory process, Apple has changed its rules on a few occasions, initially integrating a Core Technology Fee on its alternative business terms. This charged €0.50 per install over a million on an annual basis. It has since proposed changes to these rules following criticism from the EU, changing the CTF to the Core Technology Commission, which are reportedly set to be accepted.

FunPlus “forced to chase DTC” after IDFA deprecation

Slinn said that as a 4X strategy developer, it didn’t drive huge downloads, meaning it was not really impacted by the CTF. However, he said other genres, such as the hybridcasual category, could see a meaningful impact.

On Apple’s new EU terms, Slinn said the Tier 2 level basically means developers pay 20% to Apple and continue to have all its features. Tier 1 removes many of the standard App Store features, such as search and featuring. 

One key change, Slinn said, is that unlike the previous alternative business terms, developers can now select tiers on a per app basis, rather than a one-time, portfolio-wide decision.

As per Apple’s terms, payments still go through Storekit, and developers must show Apple transactions made through the store to ensure they are compliant with the rules on steering.

Slow burn

AppsFlyer director of product for gaming Adam Smart claimed that from a marketing perspective, developers are seeing more of their revenue as a consequence of regulatory and court-enforced changes, noting changes to CPIs and return on ad spend.

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Xsolla EVP of global business development and strategic partnerships Sam Gaglani added that the commerce company is seeing developers steer players to their stores, where they can offer features like personalisation and reward chains.

When it comes to buy buttons within an app to alternative payment methods, he claimed while developers are trying this, some are only showing that to a certain percentage of players as they see how players react.

One benefit of alternative payments, Gaglani noted, is that developers can now offer methods not previously supported by Apple in countries like Brazil – opening up the market to potentially more players and payers.

Overall, Gaglani said it hasn’t seen a large enterprise partner really push the envelope on alternative payments in-app yet. As Smart said, the change is incremental overtime, there’s no ‘boom’ moment.

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