A crack industry group at the cutting edge of free-to-play mobile game design and live operations, they’re our go-to experts when it comes to all matters pertaining to engagement, retention and monetisation.
And we intend to be calling on their wisdom regularly in the coming months as we attempt to unpick some of the key trends in mobile games.
It’s not a closed group though, so if you think you have the smarts to add something to the conversation, please drop me a mail at firstname.lastname@example.org.
As for our first question of 2019, we went wide to provide a broad canvas for debate:
- Ten years into the App Store era, how much headroom do you think remains for innovation in mobile games, whether that be new genres, mashups, mechanics, tech features etcetera?
- Or is the market now inherently mature, reducing innovation to the level of marginal gains?
Great topic to jumpstart the Mavens.
Despite most of us having felt games are stagnating and there isn't enough innovation when browsing the app stores, I think it's safe to say that just like always: innovation is constant and overwhelming and the best is yet to come!
If we just look at the last five years, we saw the creation and domination of Pokemon Go, Clash Royale, Home/Gardenscapes, Design Home, Empires & Puzzles, Golf Clash, and Fortnite, to name a few of the most innovative and dominating titles on the Western markets.
Innovation will open the door to large-scale profitable esports on mobile.Dimitar Draganov
Yes, in some of these we're talking about a revamp of old ideas, but tweaking a well-known formula and executing well enough to expand the market or captivate the audiences already enthralled by the five-plus year old behemoths that dominate mobile grossing charts and marketing spend, is great innovation in my book.
Looking ahead, there's at least three solid reasons I believe we'll keep getting such game-changing titles regularly.
Firstly, game development keeps democratising and with that, every year we have more and better prototypes being built across the globe and (coming from a publisher background) in parallel I've seen tremendous improvement in the processes by which game publishers identify, sift through these increased number of potential hits and take a title from its garage version to a global success story.
Secondly, it has always been the case in game development that next to the safe road of well-established franchises, the biggest growth for companies comes from innovating and leading the whole pack forward.
Fortnite has been a somber reminder of that for the shareholders of EA, Activision and Take Two and I expect to see a lot of innovation in 2019 and 2020 across all the biggest players in the gaming space.
We've already heard a commitment from Activision to take all of their top franchises to mobile, so as a long-time Blizzard fan, I hope that move by itself will make the next two years much more interesting than the last!
Thirdly, tech improvements and widespread 5G internet are coming.
Without digging too deep into augmented reality that has so much potential to create game-changers, the latency problems on mobile have caused designers to self-censor for quite a while now. That's one of the main reasons we ended up with the inferior asynchronous multiplayer PvP that has dominated mobile for the last 10 years.
Well, this is certainly going to change in the next five years and moving forward I expect to see more and more of the old behemoth titles on mobile adapt real synchronous multiplayer, plus upcoming titles having that at their core just like Supercell already announced for Boom Beach and has done with their last two games.
All of this will of course open the door to large-scale profitable esports on mobile, another area that begs for innovation in the months and years ahead!
Innovation is facing inherent market pressures that will will pose headwinds. It's not dead and there are a number of great examples that Dimitar points out, but it is becoming inherently more risky, driven by both technology limitations and the app stores themselves.
For me the bigger question is will future innovation be noticed by and rewarded by both consumers and/or the app stores?Jeff Gurian
On the tech side, mobile tech updates are slowing along with consumer upgrade cycles. Developers are having to cater games to older devices less they cut out a large portion of users they can reach which will limit leading-edge tech innovation.
Even as mobile tech improves developers can no longer count on mass consumer updates to the newest phones as they could in the past. Mobile network growth (5G) could help offset this some but will depend on how fast it is rolled out by carriers; it will also most likely benefit existing tech like PvP.
App store changes are also having an impact. IOS feature volume is far less than in the past and Android features are more metrics driven. These changes are already putting pressure on small to mid-sized developers who used to rely on app store features, sometimes almost exclusively, for installs and revenue.
This could serve to further cap the level of innovation risk developers are willing to take, especially since the number of organic breakout hits are limited and marketing/UA becomes more important for growth.
Developers have and will continue to innovate. However for me the bigger question is will future innovation be noticed by and rewarded by both consumers and/or the app stores? There will always be innovative breakouts who stand to benefit handsomely if the title becomes a hit, of course,
But the risk/reward economics of innovation for many developers are changing as we speak.
I'm not sure if the stagnation we see in the app stores is directly linked to innovation or the lack of. Most of these games were very innovative - in one way or the other - when they came out.
There's always a second market for companies that take proven concepts and only slightly iterate on them or create quick and well done copycats, but I don't think they will be the ones to dethrone the big games on top of the charts.
I'm not sure if the stagnation we see in the app stores is directly linked to innovation or the lack of.Tim Rachor
I agree with Jeff that it has become very difficult, especially for smaller developers, to break into the mobile market, but they might not need the huge success that large companies need. In the end, their only chance could be innovation when they can't compete with a large studio's marketing or metrics-driven design approach.
At one point or the other one of those games might make a big enough splash that other companies take notice and bring in bigger budgets to create the next big thing. We've seen this in the PC market with the rise of battle royale and even though the mobile market seems slower at creating new trends nowadays I'd expect at least one or two games making a bigger impact in the upcoming years.
I mean the gaming industry as a whole is more than 40 years old and we get brilliant new and innovative games every year. I can't see how this wouldn't be true for the future of mobile games as well.
I bet three years ago someone said: “That’s it, no more innovation in the app stores”. In fact we’ve seen quite a lot over past three years:
- Fortnite and PUBG
- Pokemon Go
If we look at these specific examples, they have all being enabled by underlying technologies or economic forces.
I bet three years ago someone said ‘That’s it, no more innovation'.Yaniv Nizan
With hyper-casual, the enabler has been the rise of ad revenue and increasing ARPDAU/eCPMs, allowing companies to create games that are sustainable on ads alone.
With the battle royale genre, it is stronger in PC and console market but the fact that it’s even possible on mobile is a result of devices getting stronger and stronger. Pokemon Go was enabled from the technology side with stronger AR capabilities on devices and at the same time by slow-adopt gaming giants finally moving in.
So I think we will see three trends that you can call innovation:
- Successful PC and console franchises finally getting a mobile version
- More mashups built on newer genres that didn’t exist before (e.g. hyper casual battle royal)
- More genres that are not so IAP-focused becoming economically viable due to the rise of in-app advertising and subscription models.
Ben is a 15-year veteran of the games industry - he's worked as a senior executive, studio head, project lead, creative director and game designer at companies like DeNA, EA, Sony and Lionhead.
He started working on traditional games, but has been focussed on the free-to-play business model since 2006 - an extremely long time by western standards. During that time He's worked on a total of ten separate free-to-play games across five different platforms reaching over 50 million users.
I'm always careful to look at historical precedent when predicting platform cycles. Mobile is really rather similar to console in many ways.
We've seen an era of simple casual games gradually become more complex, expensive and more likely to be built by large corporations.Ben Cousins
In both we've seen an era of simple casual games gradually become more complex, expensive and more likely to be built by large corporations.
We've seen several eras of genre domination (console had the platformers, driving game, action adventure, shooter, open world eras) but just as we see things stagnate things change again.
Console we can see transitioning to games-as-a-service in recent years, I think Apex Legends is the start of the era of triple-A F2P games on console.
I see no reason why mobile is any different from previous platforms like console. There are powerful global trends that developers must acknowledge (bigger market size, higher user LTV, bigger teams building games with better production values), but that doesn't mean that we will see stagnation in genre/mechanics/tech.
The best thing about the Western mobile business is that for once we are following another region rather than leading. So we can look to Asia for the next big thing, as they've shown us what is happening next in Western mobile with reasonable accuracy every time.
The rise of core real-time multiplayer games in out region would be the most recent thing that already happened in Asia three to five years ago.
I agree with Yaniv and Ben: it would be surprising if the market would turn stale, but big innovation happens in spurts.
Creativity/innovation doesn’t happen in a vacuum. As long as development times remain relatively fast and barriers of entry remain comparatively low, mobile is still an innovation-friendly environment just by sheer amount of experimentation.
Creativity/innovation doesn’t happen in a vacuum.Justin Stolzenberg
The mechanics of free-to-play also continue to require show-worthy innovation - at least one easy-to-communicate and impactful enough thing that convinces players to abandon their investment in another game.
But I also appreciate marginal gains.
Clash Royale proved to the western developer scene that synchronous PvP can work on mobile. But at least as impactful (in terms of inspiring other developers) was the marginal innovation of how they pace their gacha and content progression.
One breed of developers I’m particularly fond of are companies who understand how to read market trends and how to create products for a trend by achieving crucial marginal gains that make all the difference for an engaged audience. Spain’s Codigames and similar devs might not look the most innovative, but I like their approach.
With over 15 years’ data mining experience, Mark co-founded deltaDNA, formerly GamesAnalytics, to unlock big data to drive player understanding, introducing the concept of Player Relationship Management to build better games.
Have a look at this slide…
There is a natural cycle between innovation and consolidating. The top chart shows the most revenue progress has been made down the charts, and this is over a very short period of time – 2016 to 2018 based on data in deltaDNA.
The industry now has the luxury of not being surprised by failure.Mark Robinson
This is reflected in the fact that investment money is now coming back into games aggressively as revenues are much more predictable. And revenues are much more predictable because there are solid genre bets out there, better game designs and better deployment of acquisition capital into long sustaining games.
However innovation has not disappeared. It’s there but there is lot of testing under the surface to avoid the embarrassing flameouts. The industry now has the luxury of not being surprised by failure, so bad ideas can go away quietly.
And war chests are filling up so that more risky bets can be made in future to find a new audience or experience – be that esports, skill based slots, combining genres. There’s lots more productive energy right now.
This feels like the difference between innovation within F2P and mobile, and the innovation of the creation of F2P and mobile.
Both the iPhone and App Store IAPs (which enabled F2P on mobile) are innovations that are much bigger than games.
There is nothing which suggests to me that the current pace of innovation is likely to change.Mark Sorrell
Games were one of the major beneficiaries of these inventions, but they were vastly impactful outside of games and effectively defined a lot of what Pocket Gamer exists to discuss.
So the feeling that innovation is declining seems to me to be more likely to come from a relative sense of global innovation in which games fit, to industry innovations within the mobile F2P game industry.
There is nothing which suggests to me that the current pace of innovation - lots of small things, evenly spread (Mark Robinson's graph) and occasional huge breakthroughs (Pokemon Go, Fortnite et al) - is likely to change, as the impetus to cause a new pattern of innovation is far more likely to come from outside of games than within.
The technologies we know of - AR, 5G etcetera - seem unlikely to have that level of impact. But hey, maybe
There will always be a place for high risk, high innovation products in mobile portfolios. What changes is the ratio of resources allocated to these projects.
Personally, I think the current, more mature market justifies increased investment in high risk, high innovation games due to diminishing returns of safer projects.
I think the current, more mature market justifies increased investment in high risk, high innovation games.Dylan Tredrea
Many players have found games that suit them just fine and aren’t actively looking for new experiences.
Virtually all developers are at least ‘kind of’ good at live ops, data analysis, and quantitative marketing. It’s not only the big players that have access to great tools and talent. And of course, every day more and more really well-done games are hitting the stores.The result is safe games aren’t that safe anymore.
In my opinion the only way to generate any kind of reasonable return for your portfolio in this environment is to increase your risk exposure.
While less risky projects with incremental innovation will always be a sizable chunk of well-structured portfolio, I think organisations which increase the resources allocated to higher risk projects will outperform those who continue to rely on safe, incremental innovation to drive growth.
In very broad strokes, I boil it down to an innovation cycle of monetisation and acquisition, and then gameplay as a parallel track.
It seems like the first few years were spent discovering and innovating on monetization, with dozens of ways to monetize F2P. Some of the gentlemen in the group have even published books about this.
Then - in 2013-ish - virality kicked us over the shin with the Crossy Roads-esque games that executed brilliantly on acquisition and brought an entire wave of idle, one-click, one-mechanic games with them.
This was really King's Cross-game promotions on crack. At this point, we began discussing whether gameplay even mattered anymore; ads and brilliant UA and you won. It was a very different kind of innovation.
But through the decades, gameplay has shown to be able to surprise us over and over again. This assures me innovation in this area will continue.
Still I must agree with Ben in terms of the bigger innovation circles throughout the ten years of App Store and the comparison to console. Going forward the only difference between the console scene and the mobile scene will be the controllers we use - if even that.
Long answer because I’ll have to clarify my thoughts on the difference between innovation and iteration.
There have been some really fun and exciting games released over 10 years and while they feel fresh and are a blast to play, I wouldn’t consider most of them to be innovative.
For example, the ad-supported hyper-casual category is no different than the games that once dominated Flash portal websites. The most important innovation has been the mobile device itself, making games more accessible and convenient to play anytime/anywhere.
The most important innovation has been the mobile device itself, making games more accessible and convenient to play anytime/anywhere.Brian Truman
Most of what has been successful in the App Store era has been iterations of previously successful game mechanics, with a mouse click becoming a finger tap. The second most important innovation was the free-to-play business model (mobile payment processing). Social platforms innovated user acquisition and lifecycle marketing.
The most important innovations in games have not come from game developers, but developers found a way to leverage these innovations with proven game designs.
Now that the device and social platforms have reached mass adoption and the free-to-play business model have been finely-tuned, where does innovation growth come from?
Games like Fortnite are innovating the business model. Their success proves that there’s room to innovate the revenue model. I’d also say there’s room for innovation in social and community gameplay, like making audio/video chat and messaging a primary component of gameplay, not just a supplement. Data shows that players who are engaged in some form of community (even loose connections) play longer and have higher LTV than those who do not.
Using hardware features, such as the camera, microphone and the accelerometer, there are opportunities for games developers to make innovative games that provide new experiences to players.
We’ve seen Pokemon Go make use of the camera and location data in an innovative way and some decent accelerometer games out there, but there’s headroom in this space to develop games that provide better controls for an FPS, for example.
AR/VR are in early stages of development and adoption and faster connection speeds are coming.
While I’d consider mobile games to be a mature market, I still believe there are still decent gains to be made through iteration that most large publishers will continue to focus on.
Innovation leading to more impressive gains in the mobile game market will require taking risks and experimenting with game mechanics and features most users will be uncomfortable with at first.
As Brian said, mobile games are a mature business by now. I think we can have a look at the other mature creative markets to make a guess at how things will evolve from here.
Look at movies, TV, music and book publishing. From our perspective, those have been around forever, and as businesses they are quite stable.
There are a few large publishers that dominate their industries and the central business practises stay constant for years.
Still, they are looking for the next hit, with new genres trending and occasionally a larger disruption. Mobile games will be similar in the decade ahead, I'd say.
Learn more about mobile game monetisation on the Monetizer track at Pocket Gamer Connects Seattle 2019 on May 13th to 14th.