2019 mobile gaming predictions

2019 MOBILE GAMING PREDICTIONS

MISHKA (MICHAIL) KATKOFFHead of Studio @ Rovio

Founder @ Deconstructor of Fun-------

Studio Lead @ Fun PlusExecutive Producer @ ZyngaProduct Manager @ Supercell

Product Manager @ Digital Chocolate

To know the future, you have to understand the past

REQUIRED:GRAIN OF SALT

WINNER TAKES ALL

Top grossing iPhone mobile gaming apps in the United States as of August 2018

LTV LASTING RETENTION

MONETIZATION

CPIMARKETABILITY

ORGANICS

MOBILE MARKET CATEGORIES AUGUST 2018

Categoryrevenue share

41% 41% 4%14%

$559Mnet IAP revenue

(August 2018)

181Mdownloads

(August 2018)

CASUAL GAMES

CASUAL GAMES: SUB-CATEGORIES

AR Arcade PuzzleLifestyle Simulation

$559MTotal Monthly Revenue

2018/08

10% 4% 61%8% 17%

Revenue

• Puzzle and Simulation category increased year-over-year revenue• New AR / Location based games failed to gain significant

sustainable market share• Lifestyle revenue growth fueled by increase in downloads

Downloads

• Puzzle category downloads in a steady decline due to no new big game launches in last 6 months and the rise of CPIs

• Arcade games’ downloads declining significantly• Simulation category boosted by new bullish entrants

Puzzle

Arcade

Lifestyle

AR

Simulation

Puzzle

Arcade

Lifestyle

AR

Simulation

CASUAL GAMES: LAST 12 MONTHS

CASUAL GAMES: NET IAP REVENUE (MUSD) LAST 12 MONTHS

Casual$6 249M

Puzzle$1 043M

(64%)

Lifestyle$513M

(8%)

Arcade$203M(3%)

AR$489M(8%)

Simulation$1 043M

(17%)

Action Puzzle

Puzzle

PuzzleRPG

Words/Cards/HiddenObject

InteractiveStory

Customization

$2 869M

$333M

$60M

$741MEndlessRunner

Hyper CasualGames

Idler

TimeManagement

Sandbox

Adventures

Breeding

Crafting

$49M$11M

$143M

$101M

$258M

$393M

$103M

$188M

$358M

$155M

Disclaimer:Majority of revenue is generated from ads

(which isn’t shown here)

Idlers“No core nor meta gameplay, just infinite progression”

IdlersArcade Games: Idlers (1/2)

Top Games

* Net revenue from newest month

** Growth percentages newest vs previous month

• Majority of revenue unknown (Ads)• Top games would be in top 50 grossing• Revenue and Downloads balanced• Constantly new games. Still room to innovate.

Idle Miner Tycoon

Merge Planes

Trailer Park Boys

Hyper Casual Games“Games that anyone can just pickup and play”

LTVCPI <

LOW COSTFOCUS ON NOVELTYQUICK VALIDATION

• Majority of revenue unknown (Ads)• Top games would be in top 50 grossing• Constantly new games• Huge drop in downloads after June. Are we starting to see the saturation point?

Instant GamesCasual Games: Hypercasuals

Top Games

33.0Mdownloads

$16.6Mnet IAP revenue

Color By Number

Pixel Art

Kick The Buddy

PUZZLE GAMES


Casual$6 249M

Puzzle$1 043M

(64%)

Lifestyle$513M

(8%)

Arcade$203M(3%)

AR$489M(8%)

Simulation$1 043M

(17%)

Action Puzzle

Puzzle

PuzzleRPG


InteractiveStory

Customization

$2 869M

$333M

$60M

$741MEndlessRunner

Hyper CasualGames

Idler

TimeManagement

Sandbox

Adventures

Breeding

Crafting

$49M$11M

$143M

$101M

$258M

$393M

$103M

$188M

$358M

$155M


Casual$6 249M

Puzzle$1 043M

(64%)

Action Puzzle

Puzzle

PuzzleRPG


$2 869M

$333M

$60M

$741M

• Stagnant user growth• Massive revenue growth• Ever more deeper meta game mechanics

Puzzle RPGCasual Games: Puzzle RPG

Top Games1. Dragon Ball Z Dokkan Battle•Revenue: $27.7M (-42%)•Downloads 0.5M (-46%)

2. Empires & Puzzles•Revenue: $11.7M (+11%)•Downloads 1.4M (+10%)

3. Angry Birds 2•Revenue: $7.6M (+0%)•Downloads 3.8M (-17%)

4. Legendary: Game of Heroes•Revenue: $6.3M (+1%)•Downloads 0.2M (-16%)

5. Best Fiends•Revenue: $3.7M (+2%)•Downloads 0.7M (-8%)



BOSSESCOLLECTIONS

Casual$6 249M

Puzzle$1 043M

(64%)

Action Puzzle

Puzzle

PuzzleRPG


$2 869M

$333M

$60M

$741M

• Stagnant user growth• Revenue looks to have peaked

PuzzleCasual Games: Puzzle

Top Games1. Candy Crush Saga•Revenue: $58.7M (+28%)•Downloads 10.2M (-1%)

2. Candy Crush Soda Saga•Revenue: $25.8M (-3%)•Downloads 2.9M (-9%)

3. Toon Blast•Revenue: $25.3M (+8%)•Downloads 4.6M (+4%)

4. Gardenscapes – New Acres•Revenue: $25.1M (-8%)•Downloads 2.4M (-5%)

5. Homescapes•Revenue: $22.5M (-3%)•Downloads 4.2M (-16%)



38.4Mdownloads


• Frequent updates (50 new levels every 2 weeks)• Revenues driven by optimization, competition and events• Developed and ran by a team of roughly 15 people

Toon Blast

Toon Blast in a nutshell• Tap to clear match game• Developed by Peak Games• Successor for “Toy Blast”

4.6Mdownloads


FANTASTIC LAUNCHES

AMAZINGOPTIMIZATION

LIVE OPSEVENT

VS.

NEW GAME

?2019

2018

Guilds & Events

Next in Puzzle?

Note: Information based on worldwide App Annie data but Asia based games have been excluded so data mostly from Western gamesSource: App Annie, GameRefinery & Rovio

Puzzle games with PvP elements?

Best Fiends RivalsBy: Seriously

Puzzle games with PvP elements?

• Soft-launched in October 2017

• Removed from App Stores in August 2018

Super Spell HeroesBy: Flare Games

Puzzle FighterBy: Capcom

• Launched in August• Current lifetime:

• Revenue: $150k• Downloads: 400k

➢Not looking very good

• Launched in November 2017

• Shut down in July 2018

CASUAL GAMES IN 2019• Majority of Growth is on the Revenue side, not Download.

• Live Ops (Events) from existing games is driving the Revenue growth

• Hyper Casual is where the organic/cheap growth was.

• Arcade / Hyper Casual games will start maturing

• Narrative, PvP, and Events focus can help new games enter entrenched genres

• Simulation and Location Based games will continue to grow through new launches and improved live operations.

LIFESTYLE SUB-CATEGORIES

MIDCORE GAMES

MOBILE MARKET CATEGORIES AUGUST 2018

Categoryrevenue share

41% 41% 4%14%

$554Mnet IAP revenue

(August 2018)

120Mdownloads

(August 2018)

MID-CORE GAMES

*Games with 70% or more of the revenue coming from Asia were excluded

MID-CORE: SUB-CATEGORIES

Action Card Games RPGMOBA Strategy

$554MTotal Monthly Revenue

2018/08

15% 4% 31%1% 49%

Revenue

• Action category driven by rise of Battle Royale• Strategy games declining due to decline of Clash Royale and slowed down

growth of the 4X games• RPG games declining due to significant decline of top franchises across all

genres• MOBAs stayed a niche while Card Games dominated by a coupled of key

franchises

Downloads

• Downloads declining throughout all categories due to lack of big launches and high CPIs

• Action category downloads stabilizing after the launches of PUBG and Fortnite in March

Mid-Core Games: Sub-Categories

RPG

MOBA

Card games

Action

Strategy

RPG

Card gamesMOBA

Action

Strategy

Mid-Core$6 677M

Action(8%)

CardGames$245M(4%)

RPG$2 363M

(35%)

MOBA$87M(1%)

Strategy$3 442M

(52%)

FPS

TacticalShooters

BattleRoyal

Snipers

$140M(26%)

$87M(16%)

$66M(12%)

$247M(46%)

Fighting

MMO

Action RPG

4X

Build &Battle

Synch.Battler

$276M(12%)

$280M(12%)

$618M(26%)

$2 325M(68%)

$688M(20%)

$428M(12%)

Turn-basedRPG

$1 190M(50%)

* Bubble size presents categery revenue share

Mid-Core$6 677M

Action$541M

(8%)

CardGames$245M(4%)

RPG$2 363M

(35%)

MOBA$87M(1%)

Strategy$3 442M

(52%)

FPS

TacticalShooters

BattleRoyal

Snipers

$140M(26%)

$87M(16%)

$66M(12%)

$247M(46%)

Fighting

MMO

Action RPG

4X

Build &Battle

Synch.Battler

$276M(12%)

$280M(12%)

$618M(26%)

$2 325M(68%)

$688M(20%)

$428M(12%)

Turn-basedRPG

$1 190M(50%)

Top two games generate over 70% or more of sub-category revenues

Mid-Core$6 677M

Action$541M(8%)

FPS

TacticalShooters

BattleRoyal

Snipers

$140M(26%)

$87M(16%)

$66M(12%)

$247M(46%)

Mid-Core$6 677M

Action$541M(8%)

FPS

TacticalShooters

BattleRoyal

Snipers

$140M(26%)

$87M(16%)

$66M(12%)

We will port our successful Steam game with twitch controls to mobile and it will be huge!

- Bluehole -

We will port a console game with even twitchier controls to and it will be even bigger!

- Epic -

2018We will copy a successful Steam game with twitch control to mobile and it will be huge!

- NetEase -

- Mobile Games Veterans -

+600M installs+ 700M in revenue

Battle Pass

How does it actually work?

Battle Pass – Core Idea

• Players unlock Battle Pass tiers by playing the game

• For reaching certain tiers, players get season based exclusive rewards like skins/emotes etc.

• Because of seasons there is always only a limited time to unlock all tiers from each Battle Pass➢ This is extremely effective engagement and retention driver

PUBG mobile

PUBG Mobile Battle Pass (season 3)• 12 weeks• 100 tiers• ~10 dollars

Season 1 stats:• 4 weeks• 30 tiers• ~10 dollars

Battle Pass – Why does it monetize so well?• There is always 2 layers in each Battle Pass (Free & Paid)

• Everyone can progress and unlock as many tiers as they want in the free layer

• The trick is: Upgrading to paid layer instantly unlocks all rewards that corresponds currently unlocked tier in free layer➢ The more you play the more value you get for your money➢ You get the feeling of “missing out” if you don’t upgrade

Free/Basic

Paid/Premium

Fortnite Battle Pass• 10 weeks• 100 tiers• ~10 dollars

Battle Pass – Pros & Cons

Pros

• Extremely good feature as a retention, engagement and conversion driver

• Feels player friendly (is usually used for cosmetics only)

• Fairly easy to include other monetization mechanics such ability to skip tiers or xp boosters

Cons

• Usually requires very high DAU to actually be successful o Lacks “spending depth” i.e. high spenders

are not able to spend much

• Cannot be implemented in all types of games (has not yet proven successful outside of Battle Royale genre)

Pricing Strategy

A business can use a variety of pricing strategies when selling a product or service.

The price can be set to maximize profitability for each unit sold or from the market overall.

It can be used to defend an existing market from new entrants, to increase market share within a market or to enter a new market.

Pricing Strategy: Maximize Profits

Pricing Strategy: Enter New MarketPricing Strategy: Defend Market From New Entrants

Mid-Core$6 677M

Action$541M

(8%)

CardGames$245M(4%)

RPG$2 363M

(35%)

MOBA$87M(1%)

Strategy$3 442M

(52%)

FPS

TacticalShooters

BattleRoyal

Snipers

$140M(26%)

$87M(16%)

$66M(12%)

$247M(46%)

Fighting

MMO

Action RPG

4X

Build &Battle

Synch.Battler

$276M(12%)

$280M(12%)

$618M(26%)

$2 325M(68%)

$688M(20%)

$428M(12%)

Turn-basedRPG

$1 190M(50%)


Mid-Core$6 677M

RPG$2 363M

(35%)

Fighting

MMO

Action RPG

$276M(12%)

$280M(12%)

$618M(26%)

Turn-basedRPG

$1 190M(50%)


PuzzleRPG

$741M

• Second largest category in Mid-Core• Fairly stagnant revenue/download growth• All top games are surprisingly different in comparison

Turn-based RPGMid-Core Games: Turn-based RPG

Top Games1. Summoners War•Revenue: $16.0M (-21%)•Downloads 0.2M (-33%)

2. Fire Emblem Heroes•Revenue: $13.2M (-24%)•Downloads 0.1M (+205%)

3. Final Fantasy Brave Exvius•Revenue: $12.2M (+7%)•Downloads 0.1M (+232%)

4. Star Wars: Galaxy of Heroes•Revenue: $10.4M (+2%)•Downloads 0.4M (-22%)

5. Idle Heroes•Revenue: $9.9M (-10%)•Downloads 0.8M (+4%)



4.6Mdownloads


DIFFERENT WAYS TO SUCCEED

BUT FEW COMMON NOMINATORS

• Live operations • New content tied to gacha • Extremely deep and evolving meta-game • Depth over accessibility and core gameplay

THE CASE OF SAME BUT DIFFERENT

1. Understand the audience of your IP

2. Execute flawlessly

Mid-Core$6 677M

Action$541M

(8%)

CardGames$245M(4%)

RPG$2 363M

(35%)

MOBA$87M(1%)

Strategy$3 442M

(52%)

FPS

TacticalShooters

BattleRoyal

Snipers

$140M(26%)

$87M(16%)

$66M(12%)

$247M(46%)

Fighting

MMO

Action RPG

4X

Build &Battle

Synch.Battler

$276M(12%)

$280M(12%)

$618M(26%)

$2 325M(68%)

$688M(20%)

$428M(12%)

Turn-basedRPG

$1 190M(50%)


Mid-Core$6 677M

MOBA$87M(1%)


MOBAMid-Core Games: MOBA

Top Games1. Mobile Legends: Bang Bang•Revenue: $6.2M (-3%)•Downloads 5.7M (-11%)

2. Vainglory•Revenue: $0.6M (-13%)•Downloads 0.4M (+94%)



6.1Mdownloads


• Most of the revenue coming from APAC (and China)• Esports have not given the expected boost• Influencers / Streamers significant marketing channel

Mid-Core$6 677M

MOBA$87M(1%)


Brawlers

Possibly emerging category

BRAWLERA team of players faces another team. Focus on team-play. Strong core gameplay with progression mechanics.

1. ART STYLE

2. PROGRESSION SYSTEM

2. PROGRESSION SYSTEM

3. LACK OF GAMEPLAY DEPTH

4. CONTROLS

4. CONTROLS

IS THIS A BILLION DOLLAR FRANCHISE?

MOBAS

• Successful in APAC and China • Till date, no marginal traction in the West • Brawl Stars will launch globally • Brawler category emerge in the Eastern market

Mid-Core$6 677M

Action$541M

(8%)

CardGames$245M(4%)

RPG$2 363M

(35%)

MOBA$87M(1%)

Strategy$3 442M

(52%)

FPS

TacticalShooters

BattleRoyal

Snipers

$140M(26%)

$87M(16%)

$66M(12%)

$247M(46%)

Fighting

MMO

Action RPG

4X

Build &Battle

Synch.Battler

$276M(12%)

$280M(12%)

$618M(26%)

$2 325M(68%)

$688M(20%)

$428M(12%)

Turn-basedRPG

$1 190M(50%)


Mid-Core$6 677M

Strategy$3 442M

(52%) 4X

Build &Battle

Synch.Battler

$2 325M(68%)

$688M(20%)

$428M(12%)


• Category created and owned by Clash Royale• 350M lifetime installs / 1500M lifetime net revenue • Revenue down 25% after launch of Fortnite

Synch. BattlerMid-Core Games: Strategy

Top Games1. Clash Royale•Revenue: $29.9M (+19%)•Downloads 4.8M (-10%)



4.9Mdownloads


• Huge esports season launched at the end of Augusto Was covered in multiple media outlets globallyo Boosted by key Esports franchiseso No impact in downloads

Clash Royale Esports

4.8Mdownloads


Clash Royale Esports

• Minimal views compared to any other types of videos on the channel• Clash Royale Esports = 130k subscribers and 25M views• Main channel 5.4M subscribers and 650M views

What about competitors?Is this the beginning of end for Clash Royale?

MID-CORE GAMES IN 2019

• Majority of Growth is on the Revenue side, not Download

• IPs and themes become crucial to lower CPIs

• RPG becomes the biggest category in term of revenus

• New sub-category in form of Brawler(s)

• Blending of genres with goal of increasing depth will continue

• Virtual D-pad and longer sessions are back on the menu

• Esports will remain a curiosity rather than a growth driver

• Influencers / streamers will become ever more important marketing channel

MOBILE GAMES IN 2019

• Majority of Growth is on the Revenue side, not Download

• IPs and themes become crucial to lower CPIs

• RPG becomes the biggest category in term of revenues

• New sub-category in form of Brawler(s)

• Blending of genres with goal of increasing depth will continue

• Virtual D-pad and longer sessions are back on the menu

• Esports will remain a curiosity rather than a growth driver

• Influencers / streamers will become an important marketing channel

• Majority of Growth is on the Revenue side, not Download.

• Live Ops (Events) from existing games is driving the Revenue growth

• Hyper Casual is where the organic/cheap growth was.

• Arcade / Hyper Casual games will start maturing

• Narrative, PvP, and Events focus can help new games enter entrenched genres

• Simulation and Location Based games will continue to grow

CASUALMID-CORE

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2019 mobile gaming predictions

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