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10 ways the App Store changed the games industry

We look at the impact of the App Store as it celebrates its 10th anniversary
10 ways the App Store changed the games industry

The App Store officially went live 10 years ago today. Since then, it’s made a significant impact on the games industry.

It’s made games more accessible to the masses, slowly but surely ushered in games-as-a-service and led the way for the (in)famous business model of free-to-play.

The most lucrative games sector

The mobile space is now a $70.3 billion industry, outgrowing all other games platforms. It’s also spawned a number of multi-billion dollar games and entertainment franchises, from Angry Birds to Candy Crush Saga and Clash of Clans.

Whether you think some of the trends it led are positive or negative, it can’t be denied that the App Store has had a major influence on the entire industry. It even played a part in premature calls of the imminent death of the console space.

To celebrate the App Store’s 10th anniversary, we’ve put together a list of 10 ways in changed the games industry forever.

Click on the link below to begin.

#1: Brought games to the mass market

Prior to the launch of the App Store there were still mobile games available to play, but the experience was never a particularly pleasant or accessible one like it is today.

Certainly, there wasn’t such an easy one-stop shop for hundreds of thousands of games.

Gaming was also generally tied to the ‘hardcore’ console, PC and handheld platforms. These consoles certainly shifted their fair share of units, particularly the Nintendo Wii which attracted a broad range of users.

New demographics

But with the launch of the App Store, gaming had finally found a place (and then on Google Play too) to be truly both accessible and mass market, attracting userbases many times that of console.

Now anyone who owned a phone, almost everyone, could browse and download any games or apps they wanted.

This opened up the market to new audiences who hadn’t considered themselves gamers before and lowered the barrier to entry from the high cost of a console, PC or handheld for a dedicated gaming device.

Today, billions of people play mobile games. From Candy Crush Saga to Angry Birds, most phone owners will have at least dabbled in app store gaming.

Trojan horse

A sign of just how mass market mobile has become is that Nintendo, which once upon a time would not have dreamed of releasing games on another company’s hardware, is now developing and publishing mobile titles such as Super Mario Run, Fire Emblem Heroes and Animal Crossing: Pocket Camp.

Nintendo wants mobile to become a billion-dollar business - a feat that has happened multiple times for other companies.

It also sees mobile as a trojan horse for the Nintendo Switch and 3DS, getting the mass market once again familiar with its IP and tempting them with its premium experiences on its own hardware.

#2: Games-as-a-service

Games-as-a-service and live operations have become a staple of successful for modern mobile games businesses.

Gone is the notion of 'simply' spending millions of dollars over five years to release a game and then move straight on to the next project. Now, the launch is often just the start.

The App Store top grossing rankings take years to change, and some games have seemingly never moved out of the top 10 thanks to long-term support.

Case studies

Key examples of successful live operations including:

Angry Birds 2 - After a relatively poor start to life, Rovio Stockholm stuck with the game and eventually turned it into a money-spinner for the Finnish company. You can read an in-depth analysis of the changes here.

Pokemon Go - Niantic’s hit location-based augmented reality title is a prominent example of what can be achieved through good live ops. There are constant in-game and real-world events to bring players together, regular new pokemon additions, and more recently the addition of major features such as trading. Two years on, the game is still changing and still bringing in the millions.

Dragon Ball Z: Dokkan Battle - Bandai Namco is another prime case study of the importance of in-game events, and how special events can be built up over time. You can read our full analysis on just how successful it's been here.

Clash of Clans - Five years later, Supercell isn’t done with supporting its biggest game. Major updates such as Builder Base have changed the way the game it plays.

These are just a few examples of successful live ops. And their massive success hasn’t gone unnoticed in the PC and console sectors, which are shifting to a games-as-a-service approach and moving away from those one-off premium launches.

#3: Ushered in free-to-play

Free-to-play isn’t completely unique to mobile, it had been around on PC in Asia. But a few years after the App Store launched, mobile really brought the business model into its own, slowly elbowing out almost all premium experiences on the platform.

The debates around free-to-play were fierce. Was it just picking the pockets of players with its timers? Or was it premium that was really taking advantage of players, charging $60 for what could be a terrible experience?

Model of choice

Whether free-to-play truly won that debate in the industry is moot. It became the model of choice for consumers and so to developers and publishers.

Free-to-play has completely changed the way games are designed. Developers still need to make money, often through pinch points and encouraging spending through the grind.

Poor free-to-play titles are those that are too harsh with their monetisation and ones where it's obvious IAPs were tacked on after, rather than a key consideration in design.

The model continues to evolve. Fortnite has shown that, at least in its own unique case, players will spend big on cosmetic items. While the rise of ad-fuelled games mean that users aren’t pushed to spend - they just have to watch ads.

Mostly known as the business model of choice on mobile, free-to-play has steadily been adopted in the PC and console spaces. And that’s likely to do with the previous trend: games-as-a-service.

And games played over the long-term require a steady stream of money to be supported.

#4: Gacha and loot boxes

The most controversial element of free-to-play and monetisation, in general, is that of gacha, or loot boxes.

Here players can open a box or pull a lever on a machine, with a random item, or items, rewarded to the player. If players are after specific items, they'll have to keep coming back until they are lucky enough to get them.

Time for regulation?

Some users of gacha had players collecting a full set of common items, which could then be combined into a rare item. Some forms of gacha have now been banned in Asian countries, as have loot boxes in Belgium.

That's not the end of the controversy though. As more people liken loot boxes to gambling. Governments and watchdogs around the world are investigating the matter, which could lead to further bans and/or regulations.

The App Store meanwhile has demanded developers at least disclose loot box odds.

It seems unlikely gacha and loot boxes will fully disappear - they are too lucrative for those who successfully harness them.

Whether good or bad for the industry, it’s certainly an example of the App Store and mobile greatly influencing the sector as a whole.

#5: Ads have become a lucrative business model for games

The App Store was a key driver in the rise of free-to-play. And while over the years companies made their riches from in-app purchases (and gacha and lootboxes), more recently the App Store has been home to ad-led hyper-casual games.

With IAPs about monetising the small fraction of paying users, in-game ads give developers the opportunity to monetise the rest.

Viable revenue generator

Companies like Ketchapp and Voodoo have made huge successes of this model for their simple hyper-casual portfolios. Players aren’t required to spend, and so game design isn’t built around the need to generate revenue through IAPs.

Instead, ads are used between gameplay, often when the player has done something that means they’ve stopped playing (completed a level or lost a life), or are using ads to gain in-game items.

The model is enough to have convinced Goldman Sachs to invest $200 million into Voodoo and Ubisoft to acquire Ketchapp. And more App Store developers will continue innovating on the model.

#6: It’s the bedrock of cultural phenomenons in gaming

We previously talked about the App Store offering better accessibility, bringing games to the mass market in the process.

And with that have come some true cultural phenomenons rarely seen elsewhere in games outside of Mario’s long history and Grand Theft Auto.

Famous IP

There are games like Candy Crush Saga and Angry Birds of course, which most people will be aware of.

But recently there have been two spectacular cultural phenomenons that, at least on mobile, started life on the App Store.

Niantic’s Pokemon Go was an experience like no other before it. Hundreds of millions of people around the world were taking to the streets to catch virtual critters.

It was all over national and international news. Everyone who owned a phone - which is most people - was playing it.

That’s an opportunity that simply doesn’t exist on any other platform outside of mobile.

Battle royale

Then there’s Epic’s battle royale smash hit Fortnite. While PC has certainly been the significant revenue driver, it’s really since the App Store release that the game became truly mass market and a cultural phenomenon.

Now everyone can play the game anywhere on their preferred device. Even Drake is playing it, while TV shows can't stop talking about it.

The fact that you can take the experience out of the home is providing a platform for cultural phenomenons unlike the games industry has ever seen before.

And of course, we can’t forget the (fleeting) success of Flappy Bird, and the (still-going) success of Candy Crush Saga.

#7: Birthed new multi-billion dollar brands and companies

The App Store, and other mobile marketplaces, have provided the springboard for multi-billion dollar IPs - some of which didn’t exist before it.

While King was already in the browser space, the launch of Candy Crush Saga on mobile was what raised the company to new heights, eventually resulting in its $5.9 billion sale to Activision Blizzard in 2015.

Billion-dollar club

Supercell pivoted to mobile with the development of Clash of Clans and hasn’t looked back since. The game has reportedly made more than $4 billion to date. Not content with one smash hit, Supercell did it again with Clash Royale, making over $1 billion.

Then there’s Tencent’s Arena of Valor (Honor of Kings), Mixi’s Monster Strike, Gungho’s Puzzle & Dragons, Sony’s Fate/Grand Order and Niantic’s Pokemon Go.

Mobile is a tough market, particularly now it’s in a period of consolidation. But for those that can break through, the sky's the limit.

Another benefit of mobile's billions is that in some cases, that money has helped spur on games industry hubs, particularly Helsinki, with Supercell a willing supporter of Finnish studios.

You can check out mobile's billion-dollar club here.

#8: The App Store has slowly killed off premium

Premium started out as the go-to business model for success on the App Store. Rovio was making a mint off of premium Angry Birds and Gameloft was at the height of its powers.

But then the winds of change began blowing as the industry moved to free-to-play. As King and Supercell grew, Rovio and Gameloft struggled.

In 2018, premium isn’t quite a thing of the past. But it’s close.

Last hurrah?

Ustwo and Fireproof have kept the model alive with the excellent Monument Valley 2 and The Room: Old Sins. While other titles like Florence, Old Man’s Journey and Gorogoa prove there is some room for success in premium.

But it’s not a sustainable model for most devs, whether indie or especially the top publishers.

There are still people interested in premium, one-off payment experiences. But with the mass market appeal of free-to-play and the move to live operations, premium is all but dead for most.

A point particularly proven by comments from Square Enix Montreal studio head Patrick Naud recently, who confirmed the excellent (and premium) Go series is no more.

#9: New ways to play

Touch control was a new way of interfacing with a device that was unique to mobile. Upon the release of the app store, a new spate of accessible touch-based games opened up.

Consumers no longer needed to contend with then complicated keyboard and mouse setup of PC and controllers of console - but instead could use an intuitive series of touch and swipe gestures to interact with the device.

It’s a way of interfacing with games that developers ran with to huge success.

Rise of AR

More recently, Apple has released ARKit, a framework that helps developers build augmented reality-based apps and games for the App Store. Now it’s possible for users to bring the virtual into the real world through their phone's camera, ala Pokemon Go.

The nature of mobile also means these experiences can be played on the go with location-based gaming set for another boon with the upcoming release of Niantic’s Harry Potter: Wizards Unite.

And the App Store is providing the perfect home for these experiences: there’s a special section dedicated to AR apps.

There’s some virtual reality support too… but Apple doesn’t seem to much care for that as it does AR.

#10: The App Store has spawned a host of imitators

Since the launch of the App Store, we’ve had the launch of Google Play for Android devices and a host of third-party Android stores in Asia.

And they’re all imitators of Apple’s hugely successful marketplace.

It’s certainly not perfect - discovery has become a huge issue on the App Store, sparking rising user acquisition costs.

New changes, same old problems

Apple has attempted to make changes to the storefront, completely redesigning it last year,. Arguably the changes have been good and favourable to developers, particularly with the game of the day feature. But some problems like UA costs and general discoverability remain the same.

The App Store may need to reinvent itself further over the next few years however, with the rise of instant gaming.

The threat from chat apps like Facebook Messenger is real, given that’s where users spend the majority of their time. Google Play meanwhile allows instant experiences within Google Play, offering snackable gameplay before downloading the full app.

Apple owns the iOS ecosystem so it won’t go down without a fight, but if it refuses to accept the rise of instant gaming in the chat ecosystem - it does have iMessage games but it pales in comparison to the main App Store - it could quickly find itself looking old and creaky.

Though given its dominance, at least it won't find itself irrelevant.