The recent performance of overseas manufacturers has made me worry about domestic games - the competition for games on a global scale is becoming more and more intense.
The first thing to notice was the speed of Supercell's turnaround: in February, their CEO Ilkka Paananen had just lamented that the company had fallen out of the top 10 global mobile game publishers, and in March, Sara Bach, the head of online games, said that Supercell was back in the top 10.
This may be due to the fact that Brawl Stars, which was launched in 2018, has seen a significant recovery in recent data. According to Sensor Tower, since mid-March this year, the DAU of Brawl Stars has stabilized at more than 50 million, reaching 68.96 million on March 22, and the game's monthly turnover has exceeded 400 million yuan, ranking among the top 11 mobile games in the world.
In fact, before September last year, the data of "Brawl Stars" as a whole showed a downward trend. If it hadn't undergone a major overhaul, it might have fallen out of the public eye and entered a period of decline.
The best-selling data of US in the past 4 months
5 years after its launch, mobile games have grown against the trend, which is even more unusual for this to happen to European and American manufacturers. For example, last month, Ubisoft's self-developed "Rainbow Six Mobile (Rainbow Six Mobile)" announced that it would stop testing regional expansion and new content launches...... Therefore, there will be many mobile game products jointly developed by Chinese and foreign people, and the Chinese people will supplement the F2P design.
You may think that this is nothing to talk about, after all, "as we all know", not every European and American vendor has been doing GaaS for a long time like Supercell.
But what if I say Supercell isn't alone? MONOPOLYGO has earned more than $2 billion in the first 10 months since its launch, and HELLDIVERS 2 is still in the top 2 and top 3 most popular games on Steam...... Obviously, GaaS has become one of the hot spots that overseas gamers are paying attention to.
That's where my concerns come in. Previously, industry insiders said that foreign large-scale games have a higher degree of industrialization, and domestic mobile game GaaS commercialization design is stronger. But now, more and more European and American manufacturers are paying attention to and investing in GaaS...... Some European and American gamers seem to have understood GaaS.
If this development continues, the global GaaS competition pattern will probably change. Globally, whether manufacturers are making or exploring commercial models, there is no doubt that the competition between everyone will become more intense.
01 全球厂商扎堆涌向GaaS
One of the most obvious phenomena is that in recent years, more and more overseas vendors have flocked to GaaS. This includes many leading international manufacturers:
For example, Microsoft. In fact, a large part of the reason for their acquisition of Activision Blizzard is that they want to lay out the mobile game GaaS market.
At the beginning of 2022, Microsoft CEO Satya Nadella emphasized in an investor call after announcing the acquisition:
...... Mobile games are the biggest genre of games right now, and it's something we haven't been in before. This deal adds one of the most successful mobile game publishers to Microsoft Games, and I'm personally looking forward to learning from the creative team at King (the developer of Candy Crush Saga and part of Activision Blizzard).
Phil Spencer, head of Microsoft's Xbox gaming department, has also repeatedly expressed his concern for the mobile market, explaining that the reason why the company decided to acquire Activision Blizzard is because of its King's mobile game research and development capabilities.
Activision Blizzard's 2022Q2 financial report reported that mobile revenue reached $831 million, accounting for more than half of the total revenue, and it was also the only revenue type to achieve year-on-year growth.
Sony, a major console player, released a document titled "PlayStation: The Road to Profitable Transformation" in May 2022, stating that the company's investment in GaaS games accounted for 12% at that time, and this figure will increase to 55% by 2025. In addition, 12 GaaS games should be made by March 2026. However, at the end of last year, Sony took a more conservative approach: by 2025, six games will be released first, and the rest of the release time is yet to be determined.
The explosion of "Jedi Submarine 2" can be regarded as Sony's "good start" on the road to GaaS this year. It's also Sony's best game on Steam so far.
Ubisoft CEO Yves Guillemot also said in 2018 that the entire gaming industry is changing, and manufacturers are increasingly unable to rely on releasing new games, so he announced at the time that releasing new games is only part of Ubisoft's business, and they will spend more energy on long-term GaaS games.
Tencent, the world's largest game revenue company, has been doing GaaS for many years and has been more agile in responding to overseas GaaS opportunities, investing in Riot Games with a team of only a few people as early as 2008, and in 2016, it spent $8.6 billion to acquire an 84.3% stake in Supercell, which was also the largest merger in the history of gaming at that time...... In the early years, GaaS had not even become the focus of attention of overseas vendors.
It stands to reason that in 2016, Supercell's mobile game business is booming and there is no shortage of money. According to Supercell CEO Ilkka Paananen's blog, there were other reasons for choosing to work with Tencent: First, because they could see that Tencent really liked Supercell's games — during the meeting, Tencent President Martin (Martin) discussed games very enthusiastically, and even fell out of the top because of his "Clash Royale" global ranking 100 and distracted, followed by the expectation that Tencent will help Supercell open up the Chinese market, and finally because Tencent promised Supercell to maintain independent operations.
In Tencent's 2019 financial report, Supercell, TiMi, Photon, and Riot Games are listed as the "four major studios", and the proportion of overseas game business revenue in Tencent's overall revenue has increased from 10% in Q3 2019 to 30% in Q4 2023. Now, the global counterattack of "Brawl Stars" also proves that Tencent has once again bet on a blockbuster.
Of course, Riot Games and Supercell are not the only two opportunities Tencent has seized in overseas GaaS - judging from the global mobile game DAU ranking data.ai March this year, Tencent is behind 7 of the top 12 products.
Red Arrow products all belong to the "Tencent series"
Some friends may find it strange: at the end of last year, some European and American manufacturers were cutting F2P projects, including Naughty Dog (Naughty Dog) also cut the original research on "The Last of Us Online", isn't this a sign of retreat?
Not necessarily. In February this year, Grinffin Gaming Partners, an investment company, released a report that they surveyed 537 game studios around the world, of which 65% are making GaaS games, 30% want to make GaaS games, and only 5% said they have no plans. And the studios they surveyed were the most located in the United States.
95% of studios are either doing GaaS or are interested in doing it
Grinffin Gaming Partners调研
The distribution of manufacturers is the largest in the United States
This is not a contradiction, it is a fact that F2P projects have been cut, but this situation cannot be proven, and the research or new projects are not GaaS. It is more likely that the vendor has figured it out: it is not simple to do GaaS, and the previous design may not be suitable.
Naughty Dog said in the announcement of the cessation of development of "The Last of Us Online" that they recognized the difficulty of maintaining the game for a long time, understood that they could not balance the stand-alone buyout and GaaS, and finally considered their current capabilities, faced with "only GaaS" and "focus on single-player narrative games", and chose the latter.
The road of conversion from stand-alone buyouts to GaaS has been completed by some people, and some people have encountered obstacles. However, for most vendors, in an environment where the cost of game production is rising, trying GaaS is more like a trend that must catch up. As the CEO of Ubisoft said, this is not a choice made from the perspective of the company itself, but a change in the industry model.
Moreover, from a demand perspective, GaaS has always dominated the global market. In Steam's best-selling and hot-play lists, as well as mobile game downloads and revenue lists, most of the top products are GaaS products, which is a choice made by players.
Therefore, even if for most stand-alone host manufacturers, this road is not easy to follow, but after seeing the market value of GaaS, the answer is obvious: this road must be taken.
Compared with buyouts, GaaS has long accounted for the majority of the market share
02 The old routine is not working? Supercell has a new way of playing
In the past, I would have thought there was nothing to worry about, but now it's hard to say.
In the past, we always said that foreigners would not do GaaS, one is because of the inertial thinking of stand-alone console manufacturers that "after the launch, it is enough to maintain and develop DLC", which is not suitable for GaaS, and the second is because, although overseas PC online games and casual mobile games have evolved a lot of GaaS plays, such as point card and monthly card system, treasure chest opening, battle pass, etc., but well-informed players are increasingly disobedient to these old routines.
But now, some GaaS products have come up with new ideas, breaking the business model commonly used in GaaS in the past.
At GDC, Frank Keienburg, general manager of Brawl Stars, and Frank Yan, the curator, shared their experience of turning the tables against the wind, which is a typical case.
Originally, the commercialization path of this game was relatively traditional and single, focusing on Battle Pass and case opening. At that time, even highly active players would take about 10 months to unlock a Legendary Hero. The Brawl Stars team decided that the game's activity and declining turnover had something to do with this design with unclear positive feedback goals, so they made the bold decision to cut out the random reward mechanic of opening crates and instead use Starr Road to provide linear rewards to players.
图源YouTube @Galaxy Brawl
However, later data proved that this change was not well received by players. After Brawl Stars replaced unboxing with Starr Road at the end of '22, the game's stats only picked up for a while, and then activity continued to decline.
They added new content to the game, such as Masteries accessories, more costumes, and customization options...... None of this has saved the game from a downward trend as a whole. By March last year, Brawl Stars MAU had dropped to an all-time low.
This led the Brawl Stars team to reflect:
We don't know what our players want...... It's like we're in an echo room, we can only hear our own thoughts, and we don't even know about them.
As a result, they added random rewards back to the game in the form of Starr Drops - players can open 3 chests for 8 wins a day, and later updates further allowed players to earn Starr Drops rewards through social, ranked matches, events, and other means. From here, the game's 30-day retention gradually picked up. This made them think clearly: "Our players love the excitement and excitement of random rewards. ”
Starting with Starr Drops, the 30-day retention of the game has gradually increased
Later, they followed the practice of Supercell's other product "Clash Royale", adding Hypercharges - when a specific hero reaches level 11, players can use gold to unlock a special ability for them, which is equivalent to providing a development goal, and use Mega Pig to ban team leagues and missions, the threshold for players to participate in team activities is lower, and the number of matches required to obtain rewards is reduced, in short, the team gameplay has become more casual, easier to participate in and get rewards;
Mega Pig
In addition, they have limited Battle Pass to spend money, shortened the Battle Pass season, removed exclusive hero rewards, provided more XP, and introduced a 5v5 tournament mode for the first time......
These measures finally made the game increase in MAU by 2.4 times, DAU by 3.9 times, and turnover by 8.8 times within 8 months, becoming one of the most popular light competitive games overseas.
It is not difficult to see that at the beginning, the Brawl Stars team only used Starr Road to ban case opening, and players Krypton and Liver still focused on unlocking heroes, but the way changed from opening boxes to advancing Starr Road, and there were no more positive feedback paths.
Later, they focused on the needs of players, provided players with rewards of krypton or liver in more ways, and even took care of the positive feedback of players with zero krypton, micro krypton, and micro liver, and the data of "Brawl Stars" began to pick up. Sara Bach, Supercell's Head of Online Games, commented on the reason for Brawl Stars' surge in revenue:
Brawl Stars is a heavy game and gameplay, and they are actually the first development team under Supercell to realize that player needs need to be considered. Their thinking is very community-centric, player-centric.
Now, in addition to Krypton Gold advancing Starr Road, Brawl Stars' gold consumption is also starting to grow, as it can be used to upgrade heroes, buy costumes, power-ups, etc. Players no longer only want to draw cards to get heroes, but will want to get other rewards, which may indicate that the content added later in Brawl Stars is what players need.
Jedi Submarine 2 also makes changes to the traditional commercial design: their main in-app purchase design is Warbond, which is similar to Battle Pass, but the difference is that there is no time limit, so players don't have to rush to top up money or liver games to upgrade Warbond.
Combined with the adjustment of the GaaS design of these products, as well as the complaints of players about GaaS, the old routine that is not accepted by the market is actually the following: using Krypton or Liver to divide the integrity of the game experience, as if spending money to work in the game, and lack of repetitive playability...... The game that solves these problems can still be played.
...... As players, we fully understand that manufacturers are throwing more money into the game and need to make more money. It's just that the manufacturers don't seem to understand how they are off players: we don't get angry because we have in-app purchases, but because someone has dismantled and restructured the entire game experience just to force players to buy Battle Pass and participate in in-app purchases.
Game industry analyst Ivan Marchand also pointed out that there is no problem with GaaS itself, but in the past, individual manufacturers fell into a misunderstanding when GaaS: not because the game is GaaS and has in-app purchases, players will consume it for a long time, but because GaaS can make the game continue to be fun, players will consume it for a long time.
03 Iteration in the GaaS space: Risks and opportunities are increasing
Global manufacturers are coming to GaaS one after another, so that the risks and opportunities in this field continue to increase.
At the same time, the active participation of overseas vendors may also activate the larger GaaS market. Tencent's acquisition of Riot Games and Supercell is actually to enter the game first and occupy a global market advantage.
So will our domestic games have a better chance of winning in the future? I think it's hard to say, because there are some uncertainties in it:
First, Chinese game manufacturers can be said to have made their fortune in GaaS, and many times they will think in the direction of GaaS, but some designs may not necessarily be suitable for GaaS, while European and American manufacturers will consider whether it is more suitable for stand-alone buyouts.
In the eyes of European and American manufacturers, the consumption power of the stand-alone buyout market is not particularly bad, so they will face the choice of buyout or GaaS. Indeed, some vendors choose to roll back GaaS products to buyouts, after all, individual designs are not suitable for long-term repeat experiences.
However, this will not be the case in China, and most manufacturers will give preference to GaaS. The products that we have achieved better overseas performance are also GaaS.
Domestic games that have successfully gone to sea, here are some of them
I won't list them one by one, swipe left and right to view
Therefore, whether a design is suitable for a stand-alone buyout or GaaS? This multiple-choice question may be despised in China, because there are not many reference paths. In other words, the design of domestic games may not be suitable for GaaS.
Second, overseas manufacturers may complete the GaaS portation of PC/console innovative gameplay to mobile games before the Chinese people, and compete more head-on with domestic games.
This may have something to do with the overseas game ecosystem - platforms like itch.io encourage developers to send out demos to make money, and some solo games will verify the feasibility of core gameplay in this way, and some UGC creators verify their design ideas on Roblox...... And these new ways of playing will further affect mobile games.
However, if foreigners are already familiar with the essentials of GaaS, they may be able to complete the porting of gameplay from PC and console to mobile games themselves, and no longer need to find domestic manufacturers to cooperate in research and development. Tencent has invested in a lot of PC and console games over the years, which is to make up for lessons and explore new ways to play, so as to avoid the risk of being chased and squeezed by overseas GaaS.
"Warcraft" launched last year
It's a GaaS mobile game made by Blizzard itself
Third, overseas manufacturers are more mature in the pipeline of large-scale PC/console games, and may enter the stage of 3A+GaaS earlier.
However, overseas manufacturers make up for GaaS, and domestic manufacturers make up for 3A industrialization...... It's hard to say who will do it first, it depends on who is fast.
It is worth noting that the products we are discussing such as "Brawl Stars" and "MONOPOLY GO" may be just the beginning - the global GaaS competition pattern is becoming more and more fierce, Perhaps, domestic games, together with other game manufacturers around the world, are entering a new stage after iteration: the times are changing, technology is also constantly innovating, if we do not face up to and pay attention to these changes, we want to make the game business bigger and stronger on a global scale, it may become more difficult than expected.
Resources:
Ivan Marchand (LinkedIn)-How to Save Live Service;
PCGamer-Arrowhead CEO says the 'live service' aspect of Helldivers 2 has to be secondary to delivering a 'full experience' for $40;
PocketGamer-Supercell’s Head of Live Games Sara Bach talks company changes, world-beating live ops, and how to get back on top;
griffingp-2023 Game Development Report;
VentureBeat-Ubisoft plans to make fewer games after a decade of annual releases;
NaughtyDog-AN UPDATE ON THE LAST OF US ONLINE;
GamesIndustry-12 live-service games, $300m PC sales, "aggressive" mobile strategy: PlayStation lays out its plans;
MobileGamer-Supercell explains Brawl Stars’ big comeback, from an all-time low to 8.8x revenue.