iPhones vs Androids are the perfect example of the market competition: we might even say each iPhone purchased worldwide is a loss for Google and Android manufacturers (yet vice versa won't be so accurate).
But how does it work in mobile games? If you run match3 game, would it be correct to consider others match3 as direct competitors in the same sense? All of them or only those with similar style and mechanics? Or those targeting the same demographic group? Does it depend on the case? How do we measure the losses? Are there some hidden profits?
Nope, I won't answer all of those; I'll just show the complexity of this topic. Let's clarify first why we don't like competitors. The main accusations usually are:
- Heating media buying auctions: competitors spend more ⇒ your CPI gets higher
- Audience's churn or loss of interest based on 'I've seen that before’ or 'I've seen better.'
And both are basically correct — but, I believe, dramatically overrated.
Competition Borders
From a media auction perspective, you are competing with all advertisers able to provide high enough bids for the same publishers (= games and social services where your ads are shown) that are good for you. Those are the audience of all games your audience may also like, which usually includes most games of the same genres, plus many of the similar, plus some unrelated, plus many more.
Art style and setting might both narrow or broaden these borders as well. For example, players of anime-stylized games would be more likely to play other anime-stylized games than games of the same genre but with a different art style.
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Audience stickiness towards each genre also differs widely: match3 fans might shift their attention to Farms or Merge2/3's relatively easy (though match3 still has one of the highest in-genre stickiness). Meanwhile, Idler gamers are chaotically teleporting all over the market: from relatively similar tycoons and arcade idles to the picks of midcore like hero collectors, strategies, etc — and the same applies to Hyper/Hybrid Casual gamers, Survivor Arena fans, Tower Defence gamers, and many more. It's not so many genres where a majority of loyal players rarely open any other games; I can guess social casinos and word puzzles would be close to that description; maybe there are more, but not so much.
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Launching a new ‘direct competitor’ shouldn't bother you much — or else you should be bothered about each fifth launch on the market with whom you might also have some audience overlaps.
That's also why you should slap your UA guy hard when he is saying something like "we would compete with ourselves because this new game is like our other game” (heard that a lot).
Parasitizing
There are even more reasons to forget about in-genre competition, considering a lot of them haven't even existed until recently: merge2, random-dice-like TDs, survivor arenas, etc. And while we have some unreproducible black swans (Clash Royale, Coin Master, Match Masters) — most successful games with original ideas create its own sub-genres and successfully exist alongside dozens or hundreds of well-performing competitors.
I would go further and state my doubt in the common idea that games based on another original game and released soon after — are just parasitizing on that original. Sure, later imitators are benefiting from the original, hoping to get some of his audience for free (as organics) or at least cheaper than the original did. That is based on the assumption that the original would create a new market, filled with an audience that loved its ideas and now is open to trying something similar (not the same) — and because of that, 'imitators’ would spend fewer impressions per install.
But that principle works both ways: new competitors are also expanding the market and increasing the pull of the "people who already liked it”. And the original has an advantage: it came earlier and had more time to perfect both it's gameplay and marketing — therefore, it should become the most likely ‘second’ choice for the audience of the expanding market.
Scale effect
I think we can consider misleading creatives as a miniature of the whole game market: each new concept usually starts from one advertiser, rapidly borrowed by hundreds of others, and within the next few years, a significant share of the ads become variations of the same concept. And the decay period of one idea is pretty long: 1-2 years. For sure, each potential player has enough time to get hundreds of impressions with dozens of variations of the same concept. So why do they work for so long while players should realize their misleading nature far sooner?
And I believe they do realize it sooner and properly accumulating the effect of ruined expectations — it is just overpowered by constant and frequent reminders of the likable idea that makes you want it more and more, despite understanding that it's probably not actual gameplay (at most shitty minigame).
So, the hypothesis is that the wide spreading of mislead might also expand the interest in its concept. Therefore all advertisers that are using the same concept at the same time possibly increase its performance for each other. To some extent, of course — from some point, the decay should prevail over repeating.
And where we came?
P.S. One thing is for sure: you should slap your AdMon guy if he suggests excluding competitors’ ads from your placements (sadly, this stupidity usually comes from owners).