Rec Room runs out of road and Fire Emblem Shadows' paltry earnings | Week in Views
The games industry moves quickly and while stories may come and go there are some that we just can't let go of…
So, to give those particularly thorny topics a further going over we've created a weekly digest where the members of the PocketGamer.biz team share their thoughts and go that little bit deeper on some of the more interesting things that have happened in mobile gaming in the past week.
Craig Chapple
Rec Room to shut down after failing to achieve profitability from 150m players
Social gaming platform Rec Room, which claims to have attracted 150 million users, is shutting down after it couldn’t find a path to profitability.
A statement from the company highlighted challenges such as high costs “overwhelming the revenue we brought in” and the “recent shift in the VR market”. On top of that, broader industry headwinds were blamed, too.
That “shift in the VR market” can be squared onto Meta, which famously renamed the entire company from Facebook as CEO Mark Zuckerberg went all in on the tech. The former big Silicon Valley buzzword has largely come up with nothing save for a few developers making some money on the platform.
But Meta looks to have given up and shifted to AI. Naturally. The company has lost over $80 billion investing in its Reality Labs division and recently cut 1,500 jobs. Meanwhile, it’s shutting down the VR version of Horizon Worlds to be exclusively mobile.
Meta says it’s still investing in VR, but it’s hard to see how. One of the people impacted by layoffs was Reality Labs’ global head of developer relations Melissa Brown. That’s not a sign the company is serious about courting developer support.
The future may be in augmented reality, but who knows. It looks like, for now, the big Western tech companies are leaving the VR metaverse behind for the promised fortunes of AI.
It reminds me that there is a long history of big tech firms in the West signalling the future of gaming with big investments - Facebook browser games, instant games, cloud gaming with Stadia, etc. - only to lose interest for something new and shiny. It all leaves developers picking up the pieces from broken promises and poor investments.
Rec Room has also faced challenges as a social space from Roblox, was has grown exponentially over the years, with no shortage of money to invest.
But for all the talk of failure and not finding profitability, I enjoyed Ethan Levy's summary of Rec Room's closure.
"When it comes to running companies and making games, I take a broad view of success. If you are measuring yourself only against the metric of a profitable exit, then statistically you will fail, since of course, nearly all startups fail. But there are many other forms of success, and Rec Room achieved many of them.
"Raising $300k is an achievement, let alone nearly $300m.
"Releasing on 1 platform is an achievement, let alone 6 of them.
"Serving 150 players is an achievement, let alone 150 million of them.
"Putting roofs over heads and food on the table for hundreds of employees and their families is an achievement."
Aaron Astle
Fire Emblem Shadows earns just $578,000 in first six months, less than 1% of Fire Emblem Heroes
I’m always happy to talk about Fire Emblem, though I wish I could sing its praises instead of covering its shortcomings. In the case of Fire Emblem Shadows, I’m forced to do the latter.
After the billion-dollar success of Fire Emblem Heroes, it’s a stark difference to see Shadows pick up just $578,000 in its first six months. It shows a company can’t just rely on their successful IP to make a hit. Rather, success on mobile comes from knowing your audience and utilising appropriate monetisation models.
There’s fun to be had in Fire Emblem Shadows, but it purposely diverts from main series gameplay, opting for real-time combat and social deduction over the series’ 35-year-history in the turn-based strategy genre. Spinoffs are all well and good, but I have to wonder how much of an overlap in audience exists here.
Meanwhile, on the monetisation side, there’s little to spend on beyond the monthly season pass - which allows fans to unlock one legacy character per month. If you buy it, well, that’s your purchase for the month. If you don’t, you can eventually get that character for free a few months down the line.
With a model like this, Shadows may feel more at home on a subscription service like Apple Arcade than in the free-to-play, in-app purchases market. And, it’s a strange model to take after the mega success of Heroes, which leverages gacha mechanics and a wide breadth of legacy characters multiple times per month, keeping players spending for a chance at the latest, shiniest iteration of their favourites.
Heroes was an immediate hit, picking up $150 million in its first six months by AppMagic accounts. Shadows has made less than 1% of that. To put the difference in even greater perspective, Heroes has made another $20m since Shadows’ release: over the same timespan, Nintendo’s newest mobile game made just 3% of the nine-year-old one.
When it comes to monetising players, I’ve rarely seen a starker example of the right and wrong ways to utilise an IP. And, for as interesting and experimental as Shadows is, I have to wonder whether Nintendo expected to have another billion-dollar mobile game on its hands - or if Shadows was always meant to be the creative little sister title.
Companies
