Last week Ubisoft made a surprise swoop for mobile games publisher Ketchapp.
The French outfit is perhaps best known for its puzzle game 2048 and an intense output of up to a game a week.
For Ubisoft, this acquisition comes just as CEO Yves Guillemot is attempting to ward off a circling Vivendi, which acquired Gameloft back in June and is now keen to strengthen its 20% holding in Ubisoft.
An interesting time indeed for Ubisoft and the French games industry. But what are we to make of it all? We put it to our Mobile Mavens:
- Were you surprised by Ubisoft's acquisition of Ketchapp?
- What does it tell us about Ubisoft's mobile strategy?
John is co-founder of PR and marketing company Big Ideas Machine. Also an all-round nice guy...
I'm more interested in how it fits into the current share buyback and other moves Ubisoft has been making to defend itself from what looks like an intended hostile takeover by Vivendi, following on from the similar acquisition of Gameloft.
Seems to have all gone a bit Game of Thrones over the channel!
I don't think it has much to do with fending off the hostile takeover. I don't think it's that level of magnitude considering the size of Ubisoft itself.
Surprised? Yes, quite.
My two cents: it's an acquisition of big data capabilities and cross promotion network (tech and users, with emphasis on tech).
That's also what it tells us about Ubisoft's mobile strategy; the power of the mobile audience.
I'm a big fan of what Ubisoft does on consoles, so it's really exicting to see them acquiring Ketchapp, an "A-list" publisher of mobile casual games.
My best guess on the motive is a strategy to counter Vivendi's takeover.Nicolas Godement-Berline
My best guess on the motives behind the aquisition is, of course, a strategy to counter Vivendi's takeover.
It has been suggested that Vivendi aquired Gameloft in great part for their growing ad-based monetisation business.
By acquiring Ketchapp, Ubisoft are essentially telling their shareholders that they now own a major player in that area, and thus don't need Gameloft's expertise.
It's no surprise that the deal was announced two days before the major shareholder meeting where Vivendi is expected to request a seat on Ubisoft's board of directors.
Ubisoft's mobile strategy has never been very clear. They've typically struggled on mobile due to three factors, in my opinion:
- Their model of distributed development with games being produced in up to five different locations doesn't lend itself very well to the specifics of mobile game development: smaller dev team + post launch live ops + integration with marketing;
- Focusing on game brands such as Assassin's Creed or Raving Rabbids is extremely tricky as fans of a franchise expect a certain type of gameplay that can't work well on mobile. Some games have found success by extracting the core emotions and DNA of a franchise and building a different game around that (hello, Pokemon GO), but it is typically hard to achieve.
- Most of their mobile games so far have focused on monetising through in-game items, which typically yield lower ARPU than time-skippers or gachas.
The few mobile successes that Ubisoft have had have been with either companies they've acquired (Hungry Shark by FGOL, Trials by Redlynx) or titles developed externally (Rayman Jungle Run by Pastagames).
Also, those games are all low ARPU/highDAU games. From that perspective, the Ketchapp acquisition is in line with what has worked so far for Ubisoft.
Note that Ketchapp is a publisher, so the acquisition will also give Ubisoft expertise in mobile publishing and cross-promotion.
Jean-Philippe has 5 years' experience building startups and advertising mobile games globally. He has a strong entrepreneurial mindset and highly developed expertise in sales strategy, team management, user acquisition, game design, user engagement and monetization.
Jean-Philippe started his career working for the mobile game publisher Chugulu where he was in charge of designing and marketing free to play titles. He contributed to the success of the award winning e-commerce platform lazada.ph while working for Rocket Internet as Global Venture Director in the Philippines. After Rocket Internet, Jean-Philippe joined HitFox as Head of Business Development for mobile games marketing ventures GameFinder and AppLift. He helped grow and develop both companies internationally as Chief Revenue Officer.
+1 with Nicolas on his analysis.
Ubisoft has been struggling with its hardcore titles such as Assassin's Creed or Driver on mobile and seems to be shifting more towards a casual gaming approach where they are successful.
From this point of view, the acquisition of Ketchapp is a great way to access a great inventory of users to promote their upcoming titles.
I think everything that’s been said, about Ubisoft needing a strong presence in casual mobile games, is spot-on correct.
The other side of this is that I believe all triple-A games will eventually transition to free-to-play models, when digital distribution becomes the norm.
As with Activision’s acquisition of King, Ketchapp gives Ubisoft valuable skills in moving to this model.
Yes, I was surprised.
Ketchapp's extremely approachable games drive huge downloads. They are (obviously) monetised through ads, but can also be seen as a great UA channel for Ubisoft's other, better monetising games.
Now all they need is a bunch of well-monetising mobile F2P games to drive that traffic to... which is not all that easy to get.
Oscar Clark has been a pioneer in online, mobile, and console social games services since 1998. He is also author of the book, Games As A Service – How Free To Play Design Can Make Better Games.
Ketchapp are clearly a highly effective team and seem to me to do a great job at delivering traffic and revenues. Congratulations to them!
Ketchapp are a highly effective team and do a great job at delivering traffic and revenues.Oscar Clark
However, as I've said before, it's hard for me to think of Ubisoft without thinking of Gameloft and AMA and how they historically worked with their sister companies before taking mobile 'in-house'.
Despite titles like Rayman, Trials Frontier, Assassins Creed Pirates and the excellent Hungry Shark Evolution (from FGOL) they don't seem to me to have matched the potential shown by their triple-A business.
The question for me is 'was that because of the ability to be discovered or monetise?' I suspect not. I feel that it's more about the mindset behind the design and perhaps even a need for focus on mobile.
Perhaps the Ketchapp team will bring that. Indeed, perhaps they can bring some of the lessons of mobile to the wider company
I'm with William in that I believe free-to-play will effect every game model (although I've largely stopped saying that I think premium is dead now).
But can they do that whilst under the threat of a hostile takeover? I think the jury is still out.
Personally, I was not surprised.
They purchased Future Games of London a couple years back and put out Hungry Shark Evolution and World, which are both mobile-only content. It's been a fruitful relationship.
It seems there is a disconnect between console/PC titles and mobile titles in the players' minds. People seem to want new IP on mobile.
Ketchapp can continue that idea.