15 MINUTES. 10 GLOBAL TRENDS(Pocket Gamer’s Q2 ‘Global Trends’ report

condensed.)

Who I am:Will Freeman

Freelance Games Journalist and ConsultantContributor to Develop, Pocketgamer, Eurogamer,

Edge, The Observer, The Guardian etc.

TREND ONE:PUBLISHING IS DEAD. LONG LIVE

PUBLISHING SERVICES

• Some have speculated traditional publishing is regaining relevance in mobile. That’s not quite it.• A new kind of company is emerging that has remodeled the traditional retail games publisher as a mobile-dedicated service provider, empowering smaller teams.• These outfits offer a blend of traditional publishing with monetisation, data analytics, GaaS backend, discoverability, funding services and PR and marketing.• Ones to watch include Scopley and Tilting Point.• “I do believe that the publisher’s role will become more and more important going forward.” Matthew Wilson, Head of Publishing, Rovio Stars

TREND TWO:YOU SHOULD GO TO FINLAND

• Finland, as you may notice by looking around you, remains dominant. Why, for so long? What is ‘the Finland effect’?• 200 games companies with 2,400 staff in a country with only 5.4 million residents• The Finnish games industry valued at $3.03 billion across 2013.• 37 per cent of Finnish games companies are based in Helsinki• 50 per cent of Finland’s currently active games companies were founded in the last two years.• Two words: ‘Nokia’ (est. 1865), and ‘demoscene’.“There’s an attitude among entrepreneurs here that ‘all boats rise’ by sharing knowledge and working together,” states Andrew Stalbow, CEO, Seriously

TREND THREE:THE RETURN OF PREMIUM?

• Once again the ‘return of premium’ is being heralded by some (the press?), but is it really a reality?• Recent premium/’premium with IAP’ mobile successes include: Minecraft, Monument Valley, Out There, Football Manager, Leo’s Fortune, Badland.• Superdata have coined the term ‘Premiumification’• But in February 2014, free-to-play accounted for between 70 and 94 per cent of global iOS App Store revenues (Distimo)• “Are you aiming for numbers higher than $5 million lifetime? You'll need to build a free-to-play game. And in most cases you'll need to spend around $10 million lifetime to build, support and advertise it.” Ben Cousins, Consultant.• Spiraling CPI and such means premium increasingly appeals to creative studios, but F2P remains where the money is.

TREND FOUR:ASIAN M&As ARE CONTINUING

TO RESHAPE THE GLOBAL POWER BALANCE

• SoftBank and GungHo’s $1.53 billion purchase of 51 per cent of Supercell may have set a new standard, fuelling investor excitement (again; the press like the idea).• Those investing in games spent a total of $3.3 billion in the first three financial quarters of 2013. • In that same period eight of the 10 largest mobile game deals were by outfits from Japan, China or South Korea.• “Asian game companies are focusing not only on their countries, but are also aware of [how important] ‘global’ is in the smartphone era. The recent movement represents this trend. The trend will be continued on a global level.” Jun Otsuka, Business Development Manager and Producer, Line

TREND FIVE:THE FUTURE OF

DISCOVERABILITY

• Despite a lack of support from app store holders, CPI and related models continue to be prevalent in discoverability.• And as the market grows and the stores get more crowded, the problem has got worse, rather than better.• Amalgamated data suggests average global iOS CPI for loyal paying users rose from $1.24 (June 13) to $1.92 (April 14).• Android loyal user CPI climbed from $0.90 to $1.01 over the same period.• “The only two viable methods to get your app noticed are support from the platform holder or buying users.” Ben Cousins, Consultant.

TREND SIX:BRAZIL’S CONTINUED RISE

• Brazil puts the B in ‘BRIC’. It feels like it’s been emerging forever, but it certainly continues.• There’s a new Apple factory underway, and 4G has just recently arrived in the country.• Smartphone penetration in the nation near doubled from 2012 to 2013, from 13.8 per cent to 26.3 per cent.• There are now 217 million active mobile phones in Brazil, and 48.8 million regular mobile gamers in the country. 61 per cent of those players regularly invest money in games, giving Brazil one of the highest player/payer ratios globally (Anatel and Newzoo data).• “We have around 200 hundred small or medium developers in Brazil. The majority of theses companies work with mobile games.” Marcelo Tavares, Director, Brazil Game Show.

TREND SEVEN:IS PC STEALING MOBILE’S GRASS

ROOTS STUDIOS?

• 10 years ago PC gaming was considered ‘dead’ my the global press. Steam came along in 2003; a perfect storm for the indie gaming revolution.• In January 2014 Valve confirmed Steam has 75 million active users. That number climbed 10 million in the months from October 2013; a 16 per cent rise. 3,000 games.• So it is dwarfed by mobile, but courts far more press attention, and carries cultural clout.• Hard to put a number on, but many small studios have turned their back on mobile for Steam• “I don’t think there’s a migration away from mobile, but perhaps an increasing preference to launch first on PC and come to mobile after.” Jesse Divnich, VP of Insights and Consumer Experience, Tilting Point

TREND EIGHT:HAS CROWDFUNDING LOST ITS

WAY?

• A sentiment is emerging that crowdfunding is suffering its own discoverability crisis, as project numbers spiral (often 5,000 to 10,000 active ‘game’ projects) and consumer and press interest fades.• Stats, however, suggest rude health. To date $1,140,876,481 has been pledged across all categories, and 62,596 projects have met targets. 3,430 of those are game projects, 34 of which have raised over $1 million. In Q1 2014 alone $112,038,158 has been pledged on the site.• 65 per cent of game projects fail. Success vs. release.“I don't think it's a matter of losing status and influence. It's just that the community has matured and so the platform is now beginning to normalise. The days of ridiculous numbers for any old project are gone.” Trent Kusters, Director, League of Geeks

TREND NINE:IPOS: ON THE RISE OR FAILING

DISMALLY?

• Depending on who you speak to the King IPO was either a crippling failure (the press) or a typical (and mild) example of the initial post-IPO challenge. So are IPOs in mobile over?• Not in Asia.• King debuted on the NYSE opening at a price of $20.50, 10 per cent lower than the firm's original offering price of $22.50. Zynga also struggled.• There’s a new caution about IPOs (Kabam openly treading carefully). Seen as a sign of the mobile space maturing.• “Between the dismal post-IPO performance of Zynga, and the subsequent one for King, it suggests that the market is not a great place for companies like this. More positively, it means that there is not a bubble in valuations.” Nicholas Lovell, Consultant.

TREND TEN:COULD BRAND MARKETING BE

BACK?

• Many suggest traditional marketing is again important to games: TV, print and billboard advertising, merchandising, cross-promotion with food products, etc.• Most agree it is hugely beneficial for paid games, but only in the price range of the free-to-play giants.• Think of video/streaming’s new power as affordable brand marketing.• Separate merchandising and marketing’s goals. Know what is for extra revenue and what is to promote your game.• Make merchandise work as an isolated entity.• “All the Angry Birds products that we bring out are a part of the bigger brand, something that is fun and delighting by themselves; not just vehicles for marketing something else.” Jami Laes, EVP Games, Rovio Entertainment

WHERE TO GET YOUR REPORT:pocketgamer.biz/pgbn

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WHERE TO CONTACT ME:will.freeman@spadgy.com