Mobile gaming success defined by user quality, not quantity

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Jason

Not since Wilt Chamberlain was in the prime of his NBA career has anyone put up numbers as impressive as Apple (NASDAQ:AAPL). The latest milestone: Apple announced this week that consumers have downloaded more than 40 billion iOS applications from the App Store, including close to 20 billion in 2012 alone and a record-high 2 billion during the month of December.

Apple also said it has now paid out more than $7 billion to its iOS developer partners. In a press release trumpeting the news, the company singled out mobile gaming success stories including Imangi Studios, which reports downloads of its bestselling Temple Run surpassed 75 million in 2012, as well as Backflip Studios and Supercell, which raked in more than $100 million combined for their respective freemium titles Clash of Clans and DragonVale. Temple Run is a household name at this point, but the revenue figures attached to Clash of Clans and DragonVale may raise a few eyebrows--unless you pay more attention to the App Store's Top Grossing list than its Top Paid Apps, that is. While big-name casual gaming franchises like Angry Birds and Fruit Ninja dominate the Top Paid ranks, lesser-known freemium titles like Clash of Clans, Kingdoms of Camelot: Battle for the North and Candy Crush Saga control the Top Grossing charts.

Mobile games on the Top Grossing list may not have the name recognition and eye-popping download volumes synonymous with titles like Angry Birds and Temple Run, but mobile metrics firm Onavo contends they have something even more significant: a deep-pocketed, deeply-engaged userbase. Onovo analyzed the Top 25 Grossing iOS games of November 2012 according to chart ranking, market share positioning (i.e., the percentage of U.S. iPhone users playing each game), average engagement (sessions per month) and the relative value of the title's users (represented by a scoring system based on average revenue per user). The company found that the highest-grossing games with the largest market share--Angry Birds Star Wars (played by 3.9 percent of iPhone owners), Subway Surfers (3.5 percent) and Bike Race Free (3.4 percent)--were not the top moneymakers for the month. In fact, Bike Race Free ranked No. 19 on the Top Grossing list and Subway Surfers came in at No. 24, both hampered by low player ARPU scores.

It's a very different story at the opposite end of the Onavo chart. Fantasy MMORPG battle card game Legend of the Cryptids, though played by just 0.1 percent of U.S. iPhone gamers, ranks tenth on November's Top Grossing chart thanks to its userbase's impressive APRU score. Another card-based game, Rage of Bahumut, ranks No. 3 despite a market share of just 0.4 percent, while Big Fish Casino comes in at No. 12 with a market share of 0.6 percent.

"The moral here? Size doesn't always matter," Onavo says. "It's the quality of users that really catapults games into the Top Grossing list."--Jason

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