Opportunities for a breakout hit in the hypercasual market are going to become harder to achieve, according to Sunday’s Managing Director, Christoph Sachsenhausen, with fewer companies having the expertise or funds to compete effectively.

In a recent interview, the casual company’s MD reflected upon the success of the hypercasual games market, as the global games industry looks ahead to a global downturn and potential recession.

According to Sachenhausen there have been three major issues in the recent past, which have had an impact on the hypercasual market - and games in general:

• Following lockdown, people are spending less time with their phones, which is in turn impacting revenue
• With inflation and rising interest rates in countries around the world, consumers are becoming more conscious of spend. In terms of advertising, there are a growing number of games, but ad spend is not increasing. So the amount of money being spent per game is decreasing
• Market maturation makes it more difficult for new content to break through with the growing number of games leading to market saturation still needing to be divided among all of the games. 

Evolving marketplace

While Sachsenhausen likes the challenge of the evolving market, he remains confident about the potential of the hypercasal genre: “The mobile market has actually dropped for the first time in history in Q1 and Q2 of 2022 by seven percent. It’s never happened before; until then it had been steadily growing like 10 to 30 percent a year. Even though the drop didn’t affect the long-term growth that much, it still caught people off guard. But when you think about it, it’s normal that we go back to more of a baseline curve from this super-inflated growth that happened during the lockdown times.

When you look at it pragmatically, there’s a growing world population, and people will continue to have more smartphones. There will always be a need for free games. For example, people still watch TV or Youtube for free by watching commercials. The same will be true for games. There will always be games that can monetise through ads the same way any other media format in the world does. And as long as the population and the number of mobile phone users grow, hypercasual games will also benefit from it.”

In Sachenhausen’s opinion, there are three types of company currently working in the hypercasual space:

• Those that are established within the genre who are continuing to pursue the same approach to hypercasual. According to Sachenhausen: “My prognosis would be that many of them will fail if they continue doing this, and then they’ll need to reorient, go broke or get acquired for a low price.”
• Companies which will look for “the path of least resistance” which may mean switching genres, looking to emerging technologies such as NFTs or the Metaverse, moving into hybridcasual or casual games. Again Sachenhausen expresses doubt about the viability of this choice as: “It looks like an easy solution at the beginning, but it’s not, because these games require either higher investments or years of development and are not that easily marketable.”
• Sunday’s approach is to recognise the change and tackle the new challenges in a different way or, as Sachenhausen puts it: “Okay, the obstacle just got higher. It’s more difficult, so we need to get better, but we still want to get over the wall”.

Strategic and long-term

Sunday’s approach to this ‘obstacle’ is more strategic and long-term, according to Sachenhausen: “To get better at climbing over the obstacle, you need to have a long breath. What does it mean? You need the willingness to invest in this and go deep, as well as the money for it. We’ve got this. We are in this for the long term. We’re going the strategic way and we’ve secured a $100 million investment to build this ecosystem at the beginning of the year.”

As a result, the company is now utilising this additional funding to develop its own ad monetisation. The enables the company to avoid the revenue share which third-party partners normally take and create ‘direct partnerships’ with advertisers.

Sunday will also focus on the quality of its output and aim to be the trendsetter within the market, building the ‘best hypercasual games’ rather than trying to ‘fast-follow’ those titles which achieve success.

To do this, Sunday plans to utilise data, analysing all of the ‘cash cow’ titles which have hit the market, looking for patterns and reasons behind their success. Rather than try to replicate that experience, Sachenhausen compares the studios’ approach to remixing music tracks to create a new twist on the original.

Remix culture

“Yes, we found those patterns,” says Sachenhausen, “and now we try to recreate them. However, you should never do just a copy of anything, right? You could compare it to a remix in music. Let’s say, ABBA and Madonna: ABBA invents the melody, and Madonna takes it and reinterprets it to put it in a fresh new context. People still recognise the melody and they like this music from the past, but there’s something completely new and unexpected about it.

“That’s the same effect that we want to trigger with games that have a familiar feel but are still innovative and fresh. You know, there are a lot of people downloading certain games two, even three years after they got released. So we want to give these people something new that they will love, something that other developers haven’t.”
The company plans to remain firmly within the hypercasual genre where it’s achieved its existing success and is prepared to play the long game, says Sachenhausen.

“It’s clear that Sunday is ready for a marathon and is not getting off the hypercasual track. We’re equipped with a team of gold, a clear vision, and exciting new strategies. Want to know more? Stay tuned, because soon we’ll be sharing more insights on how to make it in the industry.”