2024 is the best time to create a web shop. Here’s why

It’s no secret the game dev world moves quickly - trends come and go faster than you can say “hyper-casual”. 

But today, in 2024, we’re looking at unprecedented macro shifts that are here to stay, including major regulatory changes, a stricter UA environment, the importance of cross-platform play, and technological advancements. The common thread: deplatformization. 

Here, we’re taking a look at 4 trends that are driving more and more game developers towards a direct-to-consumer approach, which is increasingly shifting control from the major platforms to the developers themselves. 

1. Major anti-competitive regulations are passing

Editor’s note: These regulations are in constant flux, and we’re doing our best to stay up to date and provide the most relevant information.

Huge regulatory changes are coming down the pipe 2024 - in fact, some are already here. The goalof many of these is to increase competition by opening up platform restrictions, finally permitting third-party solutions like payments and web shops.

The reason this is so promising is because for the first time in history, big tech platforms are getting hit with antitrust regulations of this magnitude, both in gaming and across digital markets. It’s the start of a new era of antitrust that doesn’t even need to win cases to be considered a success: “Even if deals eventually close, regulators see value in everyone understanding that all transactions will be more closely scrutinized.”

In the UK and Europe, it’s the first time these types of policies are adopting an “ex ante” model. Ex ante regulations are those that are proactive in preventing future actions. Under an ex ante model, the burden of showing proof to prove innocence shifts from the government to companies, like Apple and Google. These guys now need to prove they’re FRAND, or fair, reasonable, and nondiscriminatory. 

So what are each of these regulations poised to transform the mobile gaming industry into a more fair space? Let’s check them out worldwide:

• In March 2022, the South Korean government passed an amendment to their Telecommunications Business Act that opened the doors for app developers to use third-party payment gateways.
• In January 2024, the US Supreme Court rejected Apple's petitions to appeal the 2020 Epic vs. Apple case - once and for all permitting developers to "steer" US users from their app to third-party payment solutions.
• Epic Games sued Google in 2020 after they tried to bypass the in-app purchase “taxes” - and in late 2023, a jury gave them a complete victory. Like the South Korean regulation, it means more freedom to distribute apps outside of the Google Play store, greater democratization of payment solutions and an expansion of the ways that developers can connect with their players outside of the app stores.
• The Digital Markets Act (DMA) in the EU goes into effect on March 6, 2024 - take note that there’s an exact date on the calendar. This antitrust regulation will enable developers to integrate third party payments natively in-app, relax anti-steering policies, and encourage more out-of-app-store distribution channels.
• The Digital Markets, Competition and Consumers Bill (DMCC) in the UK is expected to pass in early 2024. Similar to the DMA, the DMCC will likely mean more incentives for developers to integrate third-party payment gateways and explore more ways to move off-platform.
• In 2024, Japan said it’s sending new legislation to its parliament that would require Apple and Google to allow third-party payment systems on their platforms. Beyond app stores, the laws are also targeting the dominance of these companies in browsers, payments, and operating systems.  

All of these regulations - both passed and soon to come - are building momentum towards deplatformization, as Apple and Google are set to allow third-party payment systems like web shops. Doing so developers major advantages when it comes to IAP features and functionality, like:

• Saving on costly IAP fees
• Accessing complete player data, rather than anonymized identifiers
• Facilitating refunds
• Running discounts and promotions

Even if the platforms try to implement a fee structure for using alternative payments directly in-app, regulations that relax anti-steering policies and permit sideloading will be hugely helpful for scaling web stores outside the app. 

2. UA is tough - and increasing existing LTV will drive more profit

In terms of user acquisition, we see two trends accelerating deplatformization in 2024: privacy-related policies (like IDFA deprecation) and the death of organic store discovery. 

2021’s anonymized device identifier policies like IDFA and GAID deprecation made it much more difficult to identify users - making effective marketing and monetization way more challenging (but we don’t need to tell you that). As a result, LTV curves became harder to predict and margins for mobile games got slimmer. Naturally, funding became scarce, too:

• Cost per install (CPI) rose 88% on iOS between Q1 2021 to Q4 2022
• Some games saw customer acquisition cost (CAC) rise 40% immediately after the ATT was instituted

UA has become more difficult on the organic side, too, even as it became more important in the post-IDFA era. 2023 was the year that Deconstructor of Fun declared organic discovery dead, as fewer users are using the app stores to find new games and the stores have turned into paid UA channels (Apple Search Ads is now one of the largest ad networks on iOS). In fact, a developer that recently earned a featured spot in the App Store saw impressions increase, but conversions drop to just 1%, down from an average of 5% - 9%. It’s an anecdote that shows an overall trend of app discovery moving away from the big platforms.  

Out of the many studios we’ve talked to, most name user acquisition struggles as a top reason for going direct-to-consumer and adopting web shops. Here’s how launching a D2C channel like a web shop can help with user acquisition: 

Direct contact information

First, establishing this type of D2C relationship is how you’ll get access to user identity data you can’t get through traditional UA channels relying on anonymized MAIDs - like email addresses and phone numbers. With real, unified user identifiers, you can better track and retarget users, or even build lookalike audiences based on your highest spend and most engaged users. 

LTV > CPIs

Second, to combat rising CPIs, savvy game developers are focusing budgets and attention on increasing the LTV of existing players - they still want and need new users, but recognize there are more immediate profit opportunities with their current user base. By running loyalty and rewards programs, selling more expensive items, and of course drastically increasing margins, web shops are designed to increase LTV of high spenders. 

That higher LTV lets you place higher bids, so you can attract higher-value traffic and monetize them more effectively through the targeting, retargeting, and other campaigns you put in place. 

Web is way cheaper

Finally, it’s significantly cheaper to run campaigns on the web than on mobile ad networks and other traditional sources. Since the LTV of web shop users is already that much higher than the average user, you’ll get a bigger bang for your buck by shifting some UA spend to promote the web shop. 

3. Users are demanding a unified gameplay experience

For the past several years, cross-progression games (picking up gameplay on one device where you left off on another) have become increasingly common, as developers understand it gives them a huge opportunity to create a deeper engagement experience and increase retention. In 2024, with 86% of Gen Z using their mobile devices as primary gaming platforms, cross-progression is going to be the standard. But that’s only possible with some sort of D2C experience. Here's why: 

If you want to meet users on multiple platforms, you need to find a way to connect the experiences - namely the inventory, ownership, and identity. And to do that, you’d need a single user identifier that works across devices, just a mobile device ID obviously wouldn’t cut it. The quickest and easiest way to get there is by building a web shop that collects direct contact information like email addresses or phone numbers whenever users want to make a purchase. 

We’ve already seen many games do cross-progression successfully, like Roblox. Their core user base began on desktop when the game was first launched in 2006. It was released on iOS in 2012 then Android in 2014, but it took until the COVID-19 pandemic in 2020 for its popularity to surge with an addition of 50 million users. That’s also around the time when most players migrated to the mobile version - now 78% of sessions happen on mobile devices. To connect mobile to desktop, Roblox directly collects email addresses. 

Clash of Clans is also moving towards cross-progression, but from mobile to desktop. Meanwhile, Supercell released a desktop version of the game that allows users to continue where they left off on mobile by directly asking players to create a Supercell ID. That same Supercell ID is also connected to their web shop, rounding out their direct-to-consumer offering.

4. Advanced technology is making it easier to go direct-to-consumer

Back-end advancements and new technologies are making it easier than ever for studios to go direct-to-consumer and deplatform - from the ability to deploy a unified codebase across platforms to the explosion of HTML5. 

Unified codebases

In the past, developers were tied to and had to develop for a specific platform. These days, the engines handle the difficult parts of porting, so you can easily build games for multiple platforms at once - and though that’s been possible for years, the quality in which you can do this today makes going cross-platform an even more attractive option in 2024. 

This huge advancement in tech is what’s accelerating the breakdown of platform siloes and even the distinction between mobile gamers and desktop gamers. However, that means that to succeed today, you need to have a relationship with your players that transcends any one instance or device - meaning the platform or device you’re interacting with your players on is less important than your relationship with them and their relationship with your games’ brand. Enter, direct-to-consumer products, which enable you to build that relationship without relying on any one platform. 

Return of HTML-5

In 2022, a market report said the global HTML-5 games market size would reach $3B by 2028, up from $1B in 2021. Since then, it’s been clear that HTML-5 games are exploding … again. There’s a lot of reasons for that - including its relatively cheap acquisition costs in what’s an otherwise competitive market, technology that makes it easy to create HTML-5 games like this one from Cocos, and more. 

In fact, in November 2023, YouTube announced it’s rolling out 30 HTML-5 mini-games to its premium users to add value to its subscription. And TikTok started introducing HTML-5 directly in-app. Plus, there’s been some notable investments in HTML-5 games like Krunker, which in 2022 was bought by FRVR, a top HTML-5 game developer that recently secured $76 million in funding and boasts over 1.5B players. 

The rise of HTML-5 goes hand in hand with the rise of web shops - with more studios recognizing the value of this medium for offering rich media experiences and creating a channel that’s not under the control of the app stores.

The time is now

Between the impending regulations, the current state of user acquisition, and the rise of cross-progression, there’s no better time than 2024 to create a web shop. Get ahead of the competition with a D2C channel that engages higher-spending users directly, so you’re not only driving higher LTV and revenue, but also building a gaming community, and getting access to identifiers that can improve other parts of your operation.

Stash is an out-of-the-box direct-to-consumer solution that does more than just process payments. We actively drive users to your shop and increase spend volume by incentivizing players with both commerce and non-commerce content. Features like loyalty programs, rewards points, tournaments and leaderboards, and exclusive content give your best players a ton of reasons to keep playing your game, stay loyal, and increase spend. And as a D2C channel, you’ll be able to collect valuable email addresses for player communications and campaigns. Stash is a gaming-first gateway built for mobile and PC that’s compliant at every step - both right now and for regulations coming down the pipe. 

So start capitalizing on every one of these trends to boost your LTV. Play with our demo shop here or get in touch to learn more.