Since Stillfront Group was formed in the mid-2000s, the industry has changed in many ways; the rise of mobile gamng; free-to-play; hypercasual versus deep community raids; streaming; esports etc.
One thing that hasn’t changed, however, is Stillfront’s strategy to growing its business.
With the acquisition of strategy games developer Kixeye, the company now has purchased 12 independent studios and will be looking to scale each as they see fit.
This, with the firm’s own growth and concentration on long-game life cycles, has seen strong revenue numbers come in for the first half of 2019.
Stillfront has plans to keep growing into 2020. Though as the mobile market undergoes arguably its biggest change in over a decade with the introduction of streaming and subscriptions, will the same strategy carry forward? Or is it time to change course to anticipate where the market is heading?
PocketGamer.biz: How has 2019 been so far?
Jörgen Larsson: We’ve had a very good year. We posted our Q2 numbers and it was showing a 46 per cent growth with a 32 per cent EBIT margin, so we are growing organically fast.
The studio may be fine, profitable and have done a great job yet it’s very tricky to take it from that level up to the nextJörgen Larsson
All-in-all, good numbers but even more important is how we achieved that growth. That was done through good hard work on live ops, which has helped kept our consumers happy.
Stillfront has made a lot of acquisitions. What is it about these specific companies that made them attractive?
We’ve had the philosophy from when I founded this company that let’s try to build a really large company - a company of scale - but still keep that entrepreneurship.
If you can keep that spirit, passion and accountability that comes with being an entrepreneur but still build a large company, then you can beat the big boys down the line. That is what we are trying to do.
When we look for new companies, we try to find what we see as the best independent studios, that have reached a certain level of success. The studio may be fine, profitable and have done a great job yet it’s very tricky to take it from that level up to the next.
What we figured out, is that the probability of going to that next level could increase by the firm being part of Stillfront Group. We try to find the best studios that are really hungry to build.
To take these studios up to the “next level”, is there a specific strategy the company utilises or is it different for every acquisition?
To some extent different, but there’s clearly somethings in what you can improve. Typically, or always should I say, we can improve two things. One is performance marketing or paid marketing because that’s tricky and becomes even trickier if you do it at scale. To get the maximum traction out of your existing product is very hard to do as a small studio.
The second thing is live ops. Again, because it has proven that the more things within live ops can really be transferable from one product/market to another in different studios. It’s really a transferable knowledge and that area is where we can always see room for improvement.
What's been the main driver of revenue growth in 2019?
We have not launched a number of new products this year, however we did release two large titles in January but this obviously doesn’t cover Q2. It’s very much about live ops as I mentioned, driving profitable growth.
We have been able to offer interesting updates to our products for our users, which they have been enjoying. It’s easy for me to say but it’s a lot of long-hours and hard-earned work to make it happen throughout the whole studio. So, to see this is really satisfactory.
What monetisation models do you think are best for you financially but also good for players?
I think from a business perspective and from a user perspective free-to-play is the most efficient model for monetisation. Then, of course, there are as many ways to implement free-to-play as there are games, so you have to go deeper.
It’s very important to not compromise the experience for consumers because if you do that, you will never be able to sustain a long-term game.Jörgen Larsson
It’s very important to not compromise the experience for consumers because if you do that, you will never be able to sustain a long-term game. We focus very much on the long-term gaming experience otherwise it wouldn’t work out.
What I think also, is that if you do apply free-to-play while looking at the consumer experience, it’s good for them as well. If you compare to a premium model, one price does not fit everyone so we cannot grasp users all over the world as we do now.
Instead, we collect revenue every single day from around 200 countries. But then you have to be adjustable when some people don’t have the capacity or willingness to pay, therefore from many perspectives free-to-play is a very, very strong model.
What are your thoughts on Apple Arcade?
We focus on building the best possible content for users to enjoy. We think it’s secondary how this content is distributed out to our consumers. What we see for instance is that many of our products are going more multi-platform so the same user can access the same game experience.
In line with that, we are very positive in general that the more distribution channels and different access methods for games, the better the market is. We will be expanding from that. That’s why we believe the winners are the ones that have the best content.
Could you expand on whether Apple Arcade would ever be something of interest to Stillfront?
Whether it’s an important thing for us in the future, I don’t know. We let our consumers tell us whether they would like to consume our content through that platform. Just as any other initiative for how to present games, we look into it and we follow what our consumers tell us.
Do you think Apple Arcade will succeed?
I don’t know to be blunt. I think it has a fair chance but it’s very hard to say.
How do you expect mobile monetisation to develop over the next few years?
Free-to-play will be the prevailing way still. The reasons is very fundamental. It’s better for the consumers and producers. It’s a very efficient mechanism but I do think subscriptions will increase as part of the mobile market.
We have elements of subscriptions in our games so we’re going down that path, yet again though it’s what fits the consumer behaviour pattern. I’d be extremely surprised if free-to-play and subscription elements were not completely dominating.
What do the next 12 months look like?
Exciting. We have a very clear strategy. It’s the same one since the company’s inception. We will continue with high-intensity to meet with studios that potentially could be number thirteen and fourteen for us. You never know though, as such processes take time and we like to learn the culture of these studios before anything happens.
At the next “Stillcom” one year from now, hopefully we can speak about what we’ve learned from the likes of eRupulik or some other studio because that is what really counts. I think this will show in the financial numbers going forward.
Stillfront recently named Goodgame Studios’ Phillip Knust as its group chief product officer and a member of the company’s executive management team.