The Gameplay

First of all, let’s touch on the gameplay. Power sliding and mini turbos are such a critical part of the modern Mario Kart experience, and I was really skeptical of how Mario Kart Tour could implement this mechanic. It turns out they really did a great job with this! The manual control scheme retains the familiar left-to-right toggling throughout a turn to manage your drift. Some of the other mechanics are simplified. Your driver automatically accelerates forward. There are no brakes or reverse. The game even employs some automatic assistance to redirect your driver back on the course. Ultimately, these are all reasonable compromises for the limitations of the mobile interface to ensure that the mini turbo and drifting mechanics all feel as tight as possible. It works quite nicely!

There’s a pretty nice flow of new content as well. Nintendo releases some new courses and characters every two weeks. There are new challenges and a ranking tournament each week. The multiplayer is still in beta, but that’s something to look forward to. The game is still relatively new, so I suspect Nintendo had a lot of these new courses and characters stockpiled to gradually release. Nevertheless, hopefully they can keep up this pace of content release.

The Monetization Approach

Mario Kart Tour uses the now quite familiar gacha mechanic to get new characters, karts, and gliders. If you’re not familiar with gacha, check out this old post where we discussed the technique. Essentially, you’re using in-game currency, in this case rubies, to pay for a chance to pull a random character, kart, or glider out of a pipe. This is the only way to get most characters, karts, and gliders, but you can also acquire a limited set of the roster with gold (the less rare in-game currency). Collecting duplicates makes an item stronger. Oddly enough, you don’t even get to play with Mario to start the game, unless you pull him from the pipe or buy him in the store with gold!

Nintendo’s two revenue streams are selling rubies and offering a monthly Gold Pass subscription for $5.00. The Gold Pass offers more challenges every two weeks, a faster speed class, plus it gives you a bunch of rubies, gold, characters, and such. Compared to buying rubies directly in the store, it’s a terrific deal. Or perhaps viewed another way, the rubies in the store seem quite expensive. There are always a couple special bundles going on to buy a character plus some rubies, with a not so rare character in a $20 bundle, and a rarer one in a $40 bundle. Even with the added kicker, rubies are still fairly expensive. For what it’s worth, I’m a Gold Pass subscriber, but I haven’t made any other purchases.

Subscriptions have become increasingly common in mobile games in the last few months. While the freemium mindset has traditionally been to focus on whales that are going to spend hundreds or possibly thousands of dollars, there’s a growing stigma against this practice, at least in some circles. The subscriptions are relatively cheap. Mario Kart Tour’s $5.00 per month price translates to $60.00 per year, which is about the price of a console game. That sounds reasonable to a lot of consumers, including myself, who don’t usually buy consumable in-app purchases. Subscriptions also charge the consumer indefinitely until they unsubscribe, so there’s a nice stickiness to the revenue stream. Overall, it seems like a smart approach.

The Financial Performance

Sensor Tower compiled the downloads for the first 98 days after release of Nintendo’s mobile titles.

As you can see, Mario Kart Tour is the clear winner. The game generated more than 3 times as many downloads as Super Mario Run, the second most downloaded Nintendo game for the opening 98 days. In fact, Mario Kart Tour was the most downloaded game in the App Store for all of 2019, even though it came out toward the end of the year. There’s no questioning the broad appeal and reputation for quality that the Mario Kart franchise has built up over the last couple decades.

Revenue is also good, but not as dominant. This time, Mario Kart Tour comes in second, earning about 60% as much as Fire Emblem Heroes. The fact that Fire Emblem can outpace Mario Kart on revenue despite having less than 10% as many users is truly a testament to how well Fire Emblem’s revenue model works.

We’ve touched on Fire Emblem’s financial performance in the past while analyzing Dr Mario World, but let’s discuss why it differs so much from Mario Kart Tour. First, we know gacha games perform better in Japan than in the US. There is less stigma against spending money on mobile games in Japan, so relatively niche titles that target a Japanese user base can outperform franchises with broader global appeal. Second, Mario Kart appeals to a wider range of ages, including many children who don’t have money to spend on games. That’s going to drive revenue per user down. Lastly, RPGs lend themselves to gacha mechanics better than racing games. RPG players are used to leveling things up, which is a critical part of the gacha experience. You can continue to layer in new complexities to the game so the player base always has something to chase. This keeps gamers occupied (and spending money) for years. Mario Kart has traditionally catered to a more casual audience. Sure, you can pull for new drivers and level them up, but it remains to be seen whether Nintendo can add enough complexity to the game to keep players hooked for the long-term.

The Audience Reception

Mario Kart Tour currently has a 4.8 in the App Store and a 4.2 on Google Play, so it’s safe to say that most players are happy with it. I will say the online community sure does complain a lot though (see Reddit). On the one hand, I think this has to do with Mario Kart’s broad appeal. A lot of Mario Kart fans who would not normally play gacha games are playing Mario Kart Tour, and they don’t like the gacha mechanics.

There’s more to it than that though. Mario Kart Tour puts a tremendous amount of emphasis on the weekly ranking tournament. That’s my main focus in the game. This puts you in direct competition with other users. This is different from other successful gacha titles, such as Puzzle and Dragons, where the focus is mostly on the single player experience (Player vs Environment instead of Player vs Player, to use the industry jargon). Consequently, whales are generally celebrated on the Puzzle and Dragons subreddit for their crazy team builds and financial support of the game. The Mario Kart Tour subreddit is mostly filled with hate toward whales for paying to win the ranking tournaments.

The tournament emphasis puts Nintendo in a tricky spot. They don’t want to make the game too pay-to-win, but they also need to make sure their paying customers see value in what they’re buying. This whole matter is complicated by the fact that the game actually does have quite a bit of skill. Maintaining a combo over an entire course is very difficult in some levels, and only doable by the top players. Nonetheless, many weaker players seem to think they only lose because they’re being outspent, which frustrates stronger players, and generally makes for a contentious community.

Conclusion

Mario Kart Tour is off to a reasonably strong start. The downloads are tremendous. The financial performance is quite good, though not as strong per user as the top Japanese gacha titles. That’s to be expected though. It will be interesting to see how the revenue develops from here.

The community health doesn’t seem wonderful for the long-term viability of the game, but that can be fixed. When Puzzle and Dragons does ranking dungeons, sometimes they use fixed teams. This way players can’t complain about pay-to-win mechanics. It’s all about skill (and some luck). Mario Kart Tour might be well off to do the same thing from time to time for its ranking tournaments. That would be enough to silence grumblings from the weaker players and show them that they’re not only losing because of pay-to-win mechanics. That would make the stronger players happier. It would also presumably allow the spenders to go about their spending without getting hassled by the community so much. We’ll see if Nintendo follows this route. Either way, they’ve got a hit on their hands! Let’s hope they make the most of it.

The post An Analysis of Mario Kart Tour appeared first on HangZone.

Here we are roughly 30 years later, and Nintendo has just released Dr. Mario World in the App Store. It’s still a puzzle game with the goal of annihilating the viruses, but now you only have to match three of a color instead of four to erase it. How quaint. Now I’m the one who feels like an alien in this modern retelling of Dr. Mario’s pharmaceutical adventures.

The game’s fun. Everyone in the HangZone office is in the top tier on versus mode, and I was the 198th person to clear the special stage in World 2.

Financial Performance

The fun factor is all good and well, but we’re here to talk about revenue. Specifically, let’s consider this chart that Sensor Tower compiled earlier this month. You can see the opening three days of revenue and installs for each of Nintendo’s App Store titles.

On the surface, Dr. Mario World looks like a financial flop, and many news outlets are saying as much based on Sensor Tower’s numbers. I’d like to break things down a little more carefully, and see if we can figure out exactly what the problem is. Let’s consider the different franchises, the varying game styles, and the corresponding financial results.

Super Mario Run

For starters, let’s throw out Super Mario Run from the discussion. It’s effectively a paid game. More specifically, it’s a free game with a one-time paywall after a couple of demo levels. We discussed this monetization model in more detail when the game was released. We know that paid games tend to have a lower upper bound for revenue potential than free games, but the revenue is obviously front-loaded due to the upfront price tag. Consequently, it’s not fair to compare Super Mario Run’s opening three days to Nintendo’s other App Store games which stand to make more money off of users after the initial three days.

Fire Emblem: Heroes

Fire Emblem is a hugely popular franchise in Japan. Fire Emblem: Heroes uses the gacha model that’s found in Puzzle and Dragons and many other top grossing Japanese titles. We’ve discussed the gacha style in the past. Typically, you spend in-game currency to collect random characters for your team. The most desirable characters usually have a 2% chance or less of appearing. You can convert real money to in-game currency to pull more characters. Over time, gacha games will introduce harder content and better characters to keep its players chasing the latest and greatest characters.

Gacha remains arguably the most effective revenue model in gaming. It’s not without its critics, however. Gacha mechanics are heavily regulated in Japan. Europe is actively debating the legality of loot boxes, which are effectively the same mechanic. Many prominent gacha games have shutdown their European servers as a result.

Having said all of this, it’s no surprise that Fire Emblem: Heroes is leading the pack for Nintendo in revenue by a huge margin The combination of a strong franchise and proven revenue model is a recipe for success.

Animal Crossing: Pocket Camp

Animal Crossing already had a history on Nintendo’s own handheld devices. Furthermore, the games already featured doing things with timers, such as growing crops. Sounds like an easy translation to a freemium mobile game, right?

Animal Crossing lets players speed up the timers with in-game currency, similar to Clash of Clans. It’s a proven freemium model. It’s not as effective as top gacha models these days, but it works. Animal Crossing’s revenue has been solid, but not as good as Fire Emblem’s gaudy results. Despite the recognizable brand name in the US, the game still makes most of its revenue in Japan. This is of course true of Fire Emblem and Dragalia Lost as well. Japanese players are now spending up to three times per user compared to the US in many top games, so a recognizable brand in the west may not be as important as you think.

Dragalia Lost

Dragalia Lost is a Japanese style gacha title, but without the name brand of Fire Emblem. It also didn’t launch in as many markets. This makes the lighter revenue and installs understandable. Before you write-off Dragalia Lost as a small-time effort, however, let’s extend our horizon out to one month.

Dragalia Lost finished second only to Fire Emblem in first month revenue among Nintendo’s App Store games. Moreover, it accomplished this feat by making $25 per install, over 4x what Fire Emblem earned during its first month. Fire Emblem has since surpassed Dragalia Lost on revenue per user. Fire Emblem now stands at $38 per user, Dragalia Lost at $33, and Animal Crossing at $3.30 (Sensor Tower). Nevertheless, they’ve performed exceedingly well. Another point for gacha.

Nintendo’s Predicament

After effectively cracking the code to making money in the App Store, Nintendo seemed to be feeling a little sheepish about making so much money. I’ve been a fan of Nintendo since the NES in the 1980s. They’ve consistently put out high quality content. They’ve created several great franchises. Nintendo has more goodwill than any game developer. Freemium titles often turn off traditional gamers, so the company has reason to tread carefully and not agitate its loyal console customer base. They’ve gone so far as to suggest in their earnings call and other interviews that they don’t want gamers to spend too much money on in-app purchases in their mobile games (Wall Street Journal).

This puts Nintendo in an odd sort of connundrum. They know how to print money on mobile, but they don’t want to do it at the expense of long-term profits and goodwill. So what do you do?

Dr. Mario World Revenue Model

How about a different flavor of freemium! Dr. Mario World’s revenue model looks like Candy Crush at first glance. You have five hearts. You use one to play each level, and get one back on your first clear. This allows you to keep going as long as you’re winning. If you run out of hearts, you can buy more. You can also use items in levels, which cost in-game money. This is the typical revenue model for a casual match 3 game.

In an interesting twist, they added a gacha element. You can get different doctors and assistants that have different abilities. Some are more useful for single player, while others are good for versus. Drawing multiples levels them up. Typical gacha.

Casual Gacha

Well, it’s typical gacha as far as rates go, but the problem is that there isn’t as much depth as other gacha titles. There are only 10 doctors and 32 assistants. Many of the assistants’ skills are the same. For the sake of comparison, my favorite gacha game, Puzzle and Dragons, has thousands of characters. Puzzle and Dragons teams have to be carefully assembled to handle all of the dungeon mechanics. In Dr. Mario World, the characters’ abilities aren’t as important for success. My characters’ skills typically don’t have a dramatic impact on whether I complete a level or not. The choice of doctor is important for versus mode, due to substantial match-up advantages (i.e. Toadette crushes Bowser, but struggles against Peach due to her block stat against the #3 attack). However, there’s no way to know which character you’ll play against. Even if I leveled up my characters more, those match-up advantages are so exaggerated that it probably won’t help me much, other than ditto matches without the match-up advantages. This all makes the gacha element less exciting to roll than in other games.

Furthermore, I think the Candy Crush style monetization elements turn off more serious players. The target audience for American casual match 3 games is women over 40. The target audience for Japanese gacha games skews toward the more traditional core gamer. This audience is used to games that don’t have monetization efforts outside of the gacha and stamina refresh. I think the items in Dr. Mario World may serve to cheapen the experience in some players’ minds.

Finally, Dr. Mario isn’t the same caliber of franchise as Fire Emblem. It may be more well known in the US, but when the big revenue is coming out of Japan on mobile, that’s of little consequence. 

Final Thoughts

While these download and revenue figures don’t look very compelling for Dr Mario World, Sensor Tower notes that it’s actually roughly in-line with King.com’s recent match 3 titles. On the one hand, you can consider that solid news. Nintendo delivered a match 3 variant that’s doing as well as the traditional western leader in match 3 games. On the other hand, I’m more inclined to wonder if we’re in the latter days of the casual match 3 era. When Activision bought King.com, they paid a much lower P/E ratio than the average multiple for the S&P 500. The takeout price didn’t suggest the rosiest outlook for growth prospects. It seems that the mobile gaming world has indeed moved on to new things.

For what it’s worth, I think Dr. Mario World is a really unique and fun twist on match 3. It’s not the single move gameplay people think of with Candy Crush. We know complex match 3 with gacha works—prime example being Puzzle and Dragons. If Nintendo really wanted to maximize revenue, they could have focused more on the gacha, possibly scratched the items, and deepened the character complexity. Of course, we also know Nintendo’s primary goal is not to maximize revenue in the App Store. One of Activision’s goals with the King.com acquisition was to convert casual match 3 gamers over to its console titles. Maybe Nintendo also wanted to reach out to the casual crowd with Dr. Mario World and intentionally refrained from using lucrative complexity that might thwart this effort. It’s too early to say for sure, or judge it as a success or failure. We’ll just have to wait and see. Until then, thanks for reading the HangZone blog.

The post A Breakdown of Dr. Mario World’s Financial Performance appeared first on HangZone.

If this massive, growing volume of collectibles, coupled with limited time windows, reminds you of something you’d see in a mobile game, we’re on the same page. Let’s dig into why Nintendo is giving this a shot.

Traditional Collectibles in Console Games

There’s something magical about collectible items. A huge subset of the gaming population thrives on the satisfaction of completion, even if there’s not a special prize at the end of the road. Pokemon is perhaps the most famous collection series of all time. If you catch all 150 Pokemon (excluding Mew) in the original Red and Blue, you get an in-game diploma. That’s it! Most of those last dozen hours or so didn’t net you any Pokemon that are actually useful for your team. They only served as collectibles—“box trophies” to use the familiar jargon of the mobile gaming world. Nevertheless, I completed my Pokedex in Pokemon Red, and I know plenty of other people who got that diploma too.

I logged a lot of hours in Pokemon, but I quit after I caught the last one. That was fine with me. I had plenty of fun hours playing the game. It was fine with Nintendo too. They didn’t stand to make any more money from me playing the game any longer. I’m sure they were ready for me to move to the next game.

For whatever reason, though, I never picked up Pokemon Gold or Silver. I never checked out any of the later major entries in the series either. Sure, I road the nostalgia wave and played Pokemon Go out in the streets with everyone, but that was a fairly short diversion. I don’t have a good reason for why I never got another Pokemon game. I enjoyed the original, and the reviews have been positive on most of the later entries. I just didn’t pull the trigger on the next title.

Collectibles in Mobile Games

Publishers understand that there’s always going to be some slippage of previous users from one title to its sequel. Fortunately for mobile game publishers, they have an ace up the sleeve: in-app purchases.

Let’s talk about this phenomenon with respect to DragonVale, one of the pioneers of collecting style games on mobile. Back in 2011, Backflip Studios launched the original dragon breeding game (at least I recall it being the first) in the App Store. The entire game had no purpose other than to collect dragons. There was no battling or any reason you might chase after the rare double rainbow dragon, other than to complete your collection. I played the game, and eventually I collected them all.

Here’s the twist. I didn’t quit playing after I got that Game Center achievement. They kept putting out new dragons, and I kept collecting them. I eventually quit, but if they kept putting out content faster, maybe I’d still be playing. Many people still are.

I’ve written about GungHo’s Puzzle and Dragons on this blog in the past. It’s the mobile game in which I’ve logged the most hours, other than something I’ve developed myself. That game has over 5,000 monsters right now. I remember when it had 2,000 a couple of years ago. They continue to put out a lot of content, and while the game doesn’t generate as much money as it did five years ago, it’s still one of the top earning games in Japan in 2018. Backflip and GungHo are certainly earning more on these seven year old games than they are on their newer titles.

Limited Time Collectibles

Now it’s one thing to keep adding new stuff. It kicks things up a notch when you start taking things away! Both of the games I just mentioned utilize that approach effectively. Dragonvale has seasonal dragons that can only be bred around certain holidays. Puzzle and Dragons is usually running some sort of one to two week event with limited-time monsters. Sometimes these things come back. When I played Dragonvale, they had an event called Bring ‘em Back where you could breed any previous limited time dragon…for a limited time. I can only imagine the uptick in in-app purchases! On the other hand, sometimes these limited collectibles don’t come back. There are some highly sought after monsters in Puzzle and Dragons that appeared years ago as part of collaborations involving some licensed IP that are unlikely to ever appear again.

The knowledge that any limited time collectible may truly be available for the last time ever takes gamers’ collector instincts to a new level. When I played Pokemon Red, I actually took a couple of years off between beating the game and finishing my collection. There was no urgency. Not so in the realm of limited time content! Players are invested in their collections. They’ve put a lot of time into them, and they’re proud of them. If they miss some limited content, that compromises their whole collection! That’s why these collection based mobile games have such amazing retention.

Nintendo’s Game Plan

It’s time to circle back to Nintendo. The traditional console publishers have started to adopt pricing techniques from the mobile world in recent years, most notably in-app purchases. Some companies like EA tend to get a lot of grief over this, but Nintendo has received mostly favorable feedback for offering good value for a reasonable price when it comes to add-on content. There’s already a slate of five Smash Bros DLC packs to be released in the coming months, each with an additional character and stage.

Since Nintendo is pursuing the DLC route more heavily, it makes sense for them to focus on retention tactics that have worked so well on mobile. After all, you need to keep as many players active as possible to maximize the DLC purchases. If all goes well for Nintendo, they can spend much less effort optimizing Smash Bros Ultimate and continuing to make a good reliable revenue stream from it, as opposed to building a new game, which may or may not have as large of an audience. Less cost and more predictable revenue are a combination just too good for the console publishers to dismiss!

Concluding Thoughts

I’ve already got about 200 spirits, plus two of the three limited time ones. You can bet I’m going to have the remaining limited one before time expires. At that point, I’m going to be somewhat invested in my collection. I’ll have to get the next set of limited time items when they come out, or else I would be devaluing my previous collecting efforts by ruining my overall collection’s potential to ever be complete. Since I’ll be playing the game, I might as well pick-up any new in-app purchases that come out along the way. As long as Nintendo keeps delivering good value, I’m happy with that arrangement.

The post The Business Strategy of Collectibles in Smash Bros Ultimate appeared first on HangZone.

The Backstory

To wrap our heads around the change, it’s helpful to recall Game Center’s history and the broader social gaming network past. In the early days of the App Store, single player games ruled the land. These were mostly arcade style titles—think Doodle Jump, Angry Birds, and Cut the Rope. You played the same levels over and over trying to set new high scores. Back then, not many mobile developers were using servers to manage global high score lists. It was a simpler, less expensive time for game development. But no matter! There was a growing, highly fragmented collection of social gaming services that provided leaderboard support. You might remember OpenFeint, among others. Lots of games integrated these social gaming platforms, but there was hardly one universal solution. It’s simply difficult to get users to sign-up for a third party platform, especially when there isn’t a dominant player.

Enter Game Center

With the introduction of iOS 4 in late 2010, Apple created the Game Center app. Furthermore, they automatically added it to every iPhone user’s phone. I think it’s worth emphasizing that when Game Center launched, Apple did not put as many of their own apps on your phone. Users had not accumulated as many third party apps either. At the time, I only had 2 pages of apps, and this was the first time I saw an app automatically download itself on my iPhone. The fragmentation problem with other social gaming networks was gone. Everyone had Game Center.

For years, Game Center served well as a mobile game hub. In addition to powering leaderboards within games, players could browse around between different games’ leaderboards within the Game Center app. Many games implemented Game Center’s achievement functionality as well. Players earned badges for “beating level 4” or “finding all of the golden eggs.” It gave players goals, which added to the excitement and buzz. You could even add friends within Game Center. It was a social network after all! The competition to see which of your friends could clear all of a games achievements first really spiced things up. Game Center was in full swing.

The Rise of Multiplayer

The Game Center experience started to change sometime within the past few years. I’m tempted to say that Game Center’s new look for iOS 7 didn’t help, but it was more of an industry shift. Robust multiplayer games were taking over the App Store. Games like Clash of Clans used their own servers to power match making. They didn’t need Game Center to manage leaderboards, since their own servers could handle them. In fact, it was a better experience, because the custom leaderboard interface flowed naturally within the game. The Game Center leaderboards also routinely featured fake scores. Developers often found it easier to protect the integrity of their leaderboards when developed in-house. Clash of Clans did use Game Center achievements, but they maintained an achievement section in-game with their own UI as well. For major budget multiplayer titles, Game Center simply wasn’t as necessary.

It’s easy to forget, but Game Center did add multiplayer matchmaking a year earlier than Clash of Clans. It focused on the style of turn-based multiplayer you would expect in basic card games. I first remember seeing it in Letterpress. It worked for many simple multiplayer games, but never caught on with major multiplayer titles. The matchmaking is often more nuanced in complex strategy games, and if you have to use a server for many other aspects of the game (saving town layouts, managing team chat, etc.), you might as well use it for matchmaking. As the market evolved, players are playing these high-end multiplayer games more, which need Game Center less.

So is Game Center dead?

No. There are tons of single player or simple multiplayer games in the App Store. That still constitutes the majority of the mobile game library in the App Store. These developers don’t want to or can’t always afford to deal with their own server (or even a mobile backend-as-a-service provider, but that’s another story). Game Center is still the best solution for their leaderboard needs.

Retention is a major concern for developers as well. If you want to maintain your own leaderboard, players are going to have to choose a username at some point. Forcing such a life altering decision on players often leads them to abandon a game early. With Game Center, everyone already has a username, so no worries! Achievements are still good for encouraging player retention as well. Game Center certainly still serves a purpose for many developers.

That leads to Apple’s decision to relegate Game Center to the background of the iPhone. The app wasn’t necessary anymore. It was instrumental in getting everyone on the service at launch, but players don’t need to go directly into the app. They simply go to the leaderboards or achievement list from the game they’re playing. It’s a more logical sequence for most users. Similarly, Apple doesn’t have an iCloud app. Its functionality only presents itself when needed. I think few people would argue that Apple is phasing out iCloud. After watching the aftermath of the Game Center change, I don’t think Apple is phasing out Game Center either. They just gave it the iCloud treatment.

The post Why Game Center is Here to Stay appeared first on HangZone.

Now, I enjoy both console and mobile titles, but if you prefer the mobile side of the game industry, you may have felt underwhelmed with E3 this year. Despite mobile gaming revenue eclipsing that of the traditional gaming industry, E3 continues to focus on consoles. Whether mobile gamers and developers want to admit it, there’s still a stigma against mobile games in traditional gaming circles. We’ve all heard the usual complaints. The freemium model isn’t as “fair” as the upfront $60 fee. The gameplay isn’t as deep due to the limited controls available on the touch screen and the weaker processor capabilities. It seems mobile games are for filthy casuals, not sophisticated gamers. Why should they be highlighted at E3?

I’m probably a little biased since I develop for mobile, but I think this divide is getting a little blurry. As far as in-app purchases go, most AAA titles feature some sort of downloadable content (DLC) these days. It gives companies a financial incentive to keep supporting a game after release and give players more content. It’s a nice arrangement for both parties, so long as companies still provide players the proper amount of entertainment for the upfront $60 cost. With so many console titles opting for in-app purchases, even while charging an upfront cost, the mobile freemium model doesn’t look quite so different anymore.

The audience gap isn’t quite so distinct either. Yes, there is a significant difference between the older female Candy Crush demographic and the younger male Call of Duty user base. That didn’t stop Activision from buying King and their portfolio of match 3 titles, presumably thinking there might be some synergies with their own core gaming portfolio. Clash of Clans and other games in the strategy genre actually do have audiences that look more similar to those of the traditional console world. Newzoo cites Clash of Clans’ user base as 77% male with over half of players between age 21 and 35, and fewer than a quarter of users above age 35. Even console gamers need something to play on the go!

Of course the obvious counter is that just because the traditional console demographic plays mobile games, they don’t necessarily play them with the same passion and commitment. I don’t think that’s true, though. Even the most serious console gamers usually don’t average more than a few hours per day of game play. Obviously there are exceptions, but let’s consider three hours a good benchmark for serious gameplay. Although console purists may not know it, that number is on the low end of what it takes to play top mobile strategy games at the highest level. When Jorge Yao rose to prominence in Clash of Clans, he talked about playing 48 hours straight on weekends. I played a good deal of ZeptoLabs’ King of Thieves, and know from the community that it takes several hours per day of grinding for gold gems to hang with the elite. Everyday players spend hours grinding for skill-ups in Puzzle and Dragons, not unlike the grind associated with traditional JRPGs.

The only thing that’s not blurry, however, are the technical capabilities. Consoles are more powerful than mobile devices. If you’re focused primarily on graphics, which are a big part of a trailer driven event like E3, mobile isn’t going to impress by comparison.

But do you know who traditionally isn’t focused on graphics? Nintendo.

Nintendo’s consoles have lagged the technical specs of their peers in recent console cycles. They’re simply more interested in innovative games. They also have a history of success with their own mobile devices, along with a recent blockbuster on iOS and Android in Pokemon Go.

It seems Nintendo is the publisher sitting at the E3 table with the means to move mobile into the spotlight. If they keep delivering innovative ideas to phones and tablets, they’re going to talk about it at trade shows. They have just as much financial incentive to hype mobile as they do everything else. Ultimately, the stigma will fade for other publishers, and mobile will have its day at E3.

The reality, though, is that mobile is already very much in the public mainstream, and inclusion at console trade shows is a lagging indicator of its success. I’d recommend you go ahead and continue to enjoy mobile games, rather than wait for validation from the old guard of the industry!

The post Why Doesn’t E3 Highlight Mobile Games? appeared first on HangZone.

Although these are the most familiar freemium models in the US market, there’s another category in Japan that’s wildly successful: gacha. While gacha was once isolated to the eastern markets, games like Cash Royale have taken this model to the top of the US charts. Nintendo’s recent release of Fire Emblem Heroes, a gacha title from a traditional Japanese franchise, has held fast in the top 10 grossing apps in the US, further confirming a domestic appetite for gacha.

What is Gacha

Gacha is an abbreviated name from the Japanese gachapon, a specialized toy vending machine. The catch is that you don’t know exactly what the toy is going to be, only that it comes from a specific set. Perhaps you’re pulling different characters from an anime. You may want a specific character, or if you’re a serious collector, you might want the entire set!

There are multiple reasons this dispensing method is compelling for both the buyer and seller. As the buyer makes several pulls trying to get specific characters, he will inevitably get a bunch of duplicates that he doesn’t want. Clearly, this is advantageous for the seller. There aren’t too many opportunities to sell someone something he doesn’t want! When the buyer is trying to get the last character in a set, the odds become especially good for the seller!

Despite stacking the odds against the buyer, it’s still an exhilarating experience to pull a character that you want! Furthermore, the cost of each individual pull is generally low enough relative to the value of what you’re hoping to get that it’s a tempting proposition. If this sounds similar to the rush a gambler gets when placing a bet, you’ve got the right idea!

Gacha in Mobile Games — Puzzle and Dragons

One of the first gacha games in the US market was Puzzle and Dragons (PaD). It was originally a Japanese game, and still earns the bulk of its revenue in the Japanese market. Perhaps it came to the US market too early or maybe it just helped prime the US market for the current wave of gacha games. Nevertheless, it’s still going strong.

The primary revenue driver in PaD is the Rare Egg Machine (REM). Players can spend five magic stones to pull the REM in hopes of getting a good character for their team. Generally, only a specific set of characters will be featured in the REM at a given time. As players collect more characters in a given set, the odds of pulling one of the remaining characters instead of a duplicate become increasingly stacked against the player. Many of the elite characters also have lower probabilities of being drawn, many at less than one percent. New characters are regularly released, and they often have better stats than existing characters. Therefore, players chase after the new characters, despite a tremendous risk of pulling duplicates of old characters. It’s not unusual for top-spending players to drop hundreds of dollars chasing after a specific new character.

Gacha in the US Market — Clash Royale

Although Puzzle and Dragons has a significant following the US, Clash Royale has been the most successful gacha title in this market. The game has regularly camped atop the top grossing list since its release in January 2016. Its monetization model is a little different than PaD, though. First of all, there are only around 50 characters in Clash Royale compared to over 3,000 in PaD. While this seems like it’s much less conducive to getting your players to chase after low probability characters, Clash Royale requires you to draw several duplicates of a character to keep leveling it up. Ultimately, this keeps players opening more chests to get the their desired characters.

Second, Clash Royale actually manages to include a double layer of gacha in its core game loop. Players earn a chest from winning a battle, assuming they have room to hold a new chest. Usually, they get a silver chest. Somewhat less frequently, players get a gold chest, which has more cards in it. On very rare occasion, players get a magical or super magical chest. These chests have a ton of cards in them! That doesn’t necessarily mean they’re good cards, though. Nevertheless, players get to experience the high of finding out what kind of chest they won, only to get a new rush when they’re allowed to open the chest after a timer. So much gacha!

Final Gacha Thoughts

Ultimately, the key to both of these games is that you can’t buy exactly what you want. You have to take a chance. Just like pulling a slot machine, your expectations are fairly low, but it might be your lucky day! If you do pull what you want, that’s a rush that players of all demographics and skill levels can enjoy. Japan has known about this for years. The US knows about it now too.

In addition to the techniques utilized by these two games, there are several other forms of gacha that have seen great success. Gamasutra wrote extensively about different types of gacha, including the now banned kompu gacha. It turns out that when you require players to collect every character in a set to unlock a new character (this is the essence of kompu or complete gacha), it’s simply too powerful of a money making technique. Even with restrictions in place, gacha yields incredible results when integrated in fun games. Expect to see a lot more gacha in the US market as developers and players alike get more comfortable with the model.

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It’s important to choose an engine that’s going to be a major player for years to come. When Apple and Android make changes to their operating systems in the future, you want an active game engine that’s going to update for the new changes. Trying to update an abandoned third party tool yourself is not a good experience. Therefore, let’s focus on the three most popular third party game engines by market share: Unity3d, Cocos2d-ObjC, and Cocos2d-x. You want one that’s suited for your game type, but it’s also worth understanding their place in history to forecast how well these engines are positioned for the future.

Cocos2d-ObjC

Let’s start with Cocos2d-ObjC (formerly known as Cocos2d-iPhone). This engine dominated the early mobile game market. It was open source, free, and used Objective-C, the native language of iOS. Due to its popularity, it had a large online support community. We used it for Pico Time and Fizzy Factory. It’s a good engine. The main drawbacks to Cocos2d-ObjC are that it focuses on 2D development, and it only supports iOS. Neither of these was a big issue in the early days of mobile app development. Developers made substantially more money from Apple’s App Store than from the Google Play Store, largely due to user demographics. The more expensive iPhone attracted users with more disposable income for apps. The 2D limitation wasn’t a problem either, since devices weren’t powerful enough for elaborate 3D games. Consequently, Cocos2d-iPhone ruled the market. Those are both major drawbacks now, though.

Cocos2d-X

By 2013, there was a greater push for cross-platform solutions. High-end Android devices grew in popularity, and users of these devices spent money similarly to iPhone users. As a result, many developers flocked to the Cocos2d cross-platform offering, Cocos2d-x. Although written in C++ instead of Objective-C, the methods were mostly the same. At the time, the English support community was small and some functions from the Cocos2d-ObjC library were missing. That has all improved now. We rewrote Fizzy Factory in Cocos2d-x to port it to Android. The transition went well, so we also programmed Spelldom in Cocos2d-x.

One downside to Cocos2d-x is that it isn’t as convenient as Cocos2d-ObjC when integrating third party libraries. You almost certainly want at least one analytics sdk, like Flurry, in your app. It’s very likely you have Facebook integration to handle your login process or some other social interaction. You might have a bunch of ad networks integrated for monetizing your app too. Assuming you’re developing for iOS, all of these sdks are written in Objective-C or Swift. Since your Cocos2d-x code is in C++, integration is bit more challenging. Despite this minor setback, the ability to more easily port your app to Android is huge plus that makes Cocos2d-x a superior option to Cocos2d-ObC for us.

While we’re comfortable recommending Cocos2d-x over Cocos2d-ObjC, neither of them are inherently 3D game engines. Cocos2d-x plans to integrate more 3D functionality going forward, but for now, it’s primarily a 2D engine.

Unity3d

As devices have gotten more powerful, 3D games have started to appear on iOS. We’re still in the early days of this transition, but if mobile follows the same trajectory as other platforms, 3D games are here to stay. Unity3d is the main player in the mobile 3D market. It has the highest mobile engine market share, and that share is growing. It is currently free to use up to $100,000 in revenue, and the support community is robust. Unity supports cross-platform development, and is a major player in the PC and console game markets. If you’re going to make a 3D game, Unity is the best option for mobile.

Furthermore, Unity is actually capable of 2D games as well. I think the learning curve is bit tougher than the Cocos2d engines. You program the games in Unity’s own IDE instead of Xcode. That’s something else to learn and likely overkill for your 2D efforts. Since you are working in a separate IDE, you have to export your Unity project to Xcode whenever you want to test it on a device. These are minor setbacks, and it’s easy to see why Unity is doing so well in mobile.

The Verdict

Unity seems better positioned for the future than any other mobile game engine. It’s the natural choice for a 3D project. For a 2D project, there’s some debate. Cross-platform functionality is important, so I’d focus on Unity and Cocos2d-x instead of Cocos2d-ObjC. I think Cocos2d-x is a more natural environment for programming 2D content. It’s totally free at all revenue levels, which is a nice plus. If you ever want to build a 3D game in the future, however, it probably makes sense to get used to using Unity now. You’ll be well positioned for the future—at least as well as you can be—in the rapidly changing mobile world!

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Mario Run is a 2D endless runner. While endless runners traditionally cater to the casual game audience, which dedicated blog readers know favor free games, Mario is a long standing franchise with appeal to both core and casual gamers. Furthermore, its top-notch art and relatively nuanced controls put it a step above most runners in the App Store. Based on what we’ve learned about monetization strategies, can you decide if this means the game should be free or paid?

Well, it seems Nintendo wasn’t sure either.

The game is clearly designed as a paid game. It has no ads or consumable in-app purchases. But it’s free. The game does make use of a relatively under-utilized monetization method, though—the non-consumable in-app purchase.

The main reason you don’t see non-consumable in-app purchases that often is because they rarely represent a revenue maximizing strategy. Most users don’t spend any money on in-app purchases regardless of the price. The 5 to 10 percent that do, however, often spend a lot. That’s why many developers like to use consumable in-app purchases to give these users an endless supply of virtual goods to buy. Nonetheless, non-consumable in-app purchases are a natural fit for paid games or ad based games that want to add extra level packs, typically after providing the player with a lot of core content. Flow Free did this successfully.

Super Mario Run took things a step further. They didn’t use a non-consumable in-app purchase for a few extra levels. They used it to lock-up substantially the whole game, otherwise known as a paywall. We’ll circle back to this shortly.

Mario has been out for over one month now, and the major news outlets have done nothing but write about its averageness. It’s rating is only 3 stars. Nintendo’s stock actually suffered on its release day, but despite the reviews, I think it’s one of the best auto-runners in the App Store, right up there with Punch Quest. A lot of other people do too. Take a look at the reviews.

It’s a barbell distribution. The reviews are mostly 1 star or 5 stars. So what’s going on? Usually when this happens, it’s because an otherwise high quality game has a technical issue that causes some portion of the users to experience crashes. They give it 1 star and everyone else rates it highly. Limbo experienced this phenomenon when it launched and didn’t work on older devices. That game has since recovered to the 4.5 star rating it deserves.

But Mario hasn’t recovered. This is something different and much more avoidable than a bug. This is a poor monetization choice: the paywall.

The theory behind the paywall is: (1) Free games do better than paid games because users don’t want to risk a dollar on a game that might be bad when there are so many free options. (2) Users would rather pay upfront for a game and avoid the freemium economy,  if only they could rest assured that the game would be good. Therefore, you make the game free, give users a very small taste of the action, then make them pay to go any further.

It must have sounded like a good idea to Nintendo. Perhaps they didn’t consider that when most users reach a paywall, they don’t buy the game. They get angry, and many decide to leave a 1 star review. The worst part of this is that Nintendo already has a reputation for making great games. Most people who were willing to pay for Super Mario Run, could have rightly assumed that it would be a good game without seeing the trial content. Of all developers, Nintendo’s name recognition makes them well-positioned to release a paid game and get plenty of interest. They could have avoided the majority of the 1 star reviews, and had an overall 4.5 to 5 star rating if it was paid. The higher rating likely would have attracted even more downloads, and maximized Nintendo’s revenue from the title.

Super Mario Run was clearly designed as a paid game with no consumable in-app purchases. I suspect the success of Pokemon Go as a free game had Nintendo second guessing the paid approach, and led them to list free with a paywall. Lucky for us, they gave us a fun game and a monetization lesson at the same time!

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Let’s assume that your goal is to maximize the revenue that your mobile game earns. You could theoretically have other goals—perhaps your game is a promotional product to draw attention to a product launch. In that case, your goal is to maximize users, in which case you always want to go free. Free games tend to get at least 10 times as many downloads as paid games. Back to our goal of maximizing revenue, if we get 10 times as many users with a free game, then we only need to make one tenth as much revenue per user to earn the same amount of total revenue. While $0.99 was the most common price in the early days of the App Store, there are actually more $2.99 games than $0.99 games on the App Store’s top “Paid” chart today. Therefore, an equivalent grossing free game needs to earn about $0.30 per user.

So how does a “free” game earn $0.30 per user? Traditionally, free games monetized with banner ads at the bottom of the screen or full screen images in between levels. In recent years, developers have found that letting users opt-in to watch video ads in exchange for virtual currency is often more lucrative. An opt-in video ad might net the developer about $0.01 per view.

The biggest money-maker of all, however, remains consumable in-app purchases. While approximately 90 to 95% of a game’s user base never spends money on in-app purchases, the ones that do often spend a lot. While developers are protective of their revenue per user figures, consider that user acquisition costs through Facebook often hover around $5 per install. If only 5% of your users spend money, you need to average $100 per user that spends money in order to break even at this rate. The reason that Facebook ads cost that much is because some developers have indeed designed in-game economies that encourage the whales of their communities to spend a lot. Ultimately, the top earning freemium games are floated by a relatively small percentage of their players.

You may be thinking the argument should be over here. If free games get dramatically more downloads on average and the top performing free games are netting more than $5 per user, what’s the point of a paid game?

The answer is that the the consumable in-app purchase model only works that well for a very limited number of game types. Take another look at the “Top Grossing” chart again. There are 3 genres that encompass most of the games listed here. There are town building games like Clash of Clans, match-3 games like Candy Crush, and collectible card games like Hearthstone. Then there’s also Puzzle and Dragons which fits into both the match-3 and collectible card genre, which sports an average revenue per user in excess of $10. There are a few exceptions. Pokemon Go doesn’t technically fit into one of these genres, but collecting Pokemon is essentially the same motivation as collecting cards in the broader collectible card genre.

If your game doesn’t fit into one of the models, the free model is no longer the obvious choice. Let’s start with the first half of the monetization equation: revenue per user. Other game genres simply have not had as much luck with consumable in-app purchases. If you’re restricted to making money off of ads and non-consumable in-app purchases, you’re going to have a much more difficult time making an acceptable revenue per user.

The other half of the monetization picture is your total number of users. Free games do tend to have more than paid games, but that ratio varies dramatically across genres. If your game isn’t designed around a consumable in-app purchase loop, the revenue per user likely won’t be high enough to use traditional mobile game advertising inside other apps. Fortunately, running mobile ads in other games is not the only means of discovery. If you make a good game, review sites will write about it, forums will chat about it, and the early adopters will find it. Early adopters tend to be a little different than the average player, though. Take a pass around the Touch Arcade forums or any of the major review sites, and you’ll notice a distinct bias against free games. The users here are generally more serious gamers, as evidenced by their participation in an online gaming community, and they usually prefer the paid model, much like they’re used to in the traditional core gaming world in the console market. In-short, your user free game may draw worse reviews and not spread as virally as paid game that avoids ads and in-app purchases (even the non-consumable variety).

That creates a bit of a conundrum. What’s a developer to do?

There’s no one answer for everyone. You have to pick what makes sense for your audience. Do you have a pixel-art retro adventure game? Make it paid. Adventure games don’t lend themselves to consumable in-app purchases in most cases, and that game will resonate more with core gamers that prefer paid games. Do you have a puzzle game with an easy learning curve, but it doesn’t fit the in-app purchase model? The presumably casual audience still makes this a good candidate for a free game that will probably maximize its revenue with ads. Do you have a wild west themed town building game where you attack rival mining towns for their gold? Make it free. Town building is one of the 3 major consumable in-app purchase genres. An in-depth platform game with a high skill requirement and high-end art lends itself to the paid model. A quick play platform game aimed at a broader audience will likely do better as a free game.

If the monetization model organically fits the game, you’ll be good to go.

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