Top News

#1. Q1 Mobile Gaming Sales Decline

According to Sensor Tower, first quarter mobile gaming sales clocked in at $21 billion, a 7% decline compared to last year. Broken down by platform, Apple’s App Store experienced a 2% decline (to $13 billion - 62% market share), and Google Play experienced a 14% decline (to $8 billion - 38% market share). This is despite Apple seeing flat downloads (of 2.3B) and Google Play seeing a slight 2.5% increase in downloads (to 12.1B) — pushing total downloads up 2% (to 14.4B). On the surface, this isn’t surprising. After all, Q1 2021’s 25% increase in mobile gaming sales was unsustainable, post-COVID tailwinds exist, and privacy moves like Apple’s IDFA deprecation have left a negative mark on many companies.

According to a survey conducted by Atomik Research, 39% of mobile gaming companies experienced revenue losses due to IDFA deprecation. Interestingly — and according to the same survey — “59% of surveyed firms said they had decreased their spend on iOS and redirected it to Android, and only 27% did the opposite.” However, it’s worth noting that despite many companies shifting spending over to Android, Google Play’s annual decline was even steeper than Apple’s, which hints at broader consumer shifts.

This decline isn’t permanent, of course. We may see more negative growth numbers over the next couple quarters, but most of the damage has been done. This doesn’t mean, however, that the market will revert to mean as we knew it. For example, new regulations — like the EU’s Digital Markets Act (DMA) — look to catalyze more change in the mobile ecosystem. On the surface, some of the changes — such as allowing sideloading (alternative app stores) and disallowing most favored nation clauses in contracts — are definitely positive, but others are clearly negative. The DMA looks to ban companies from incorporating user-level business data into marketing, which, similar to the IDFA deprecation, will make targeting even harder and ROIs even lower. Other DMA elements (like forcing messaging interoperability across apps) technically don’t have much to do with games, but clearly show that the EU cares little for innovation, the privacy technologies that underpin today’s apps (like end-to-end encryption), and will continue to fleece US companies (because, of course, these platform rules don’t actually apply to any notable EU-based companies). In the same way GDPR made a big promise but actually made everything worse, the DMA will probably work the same. That doesn’t mean everything is doomed; it just means that teams must continue to stay nimble amidst a constantly evolving environment.

#2. Wargaming Exits Russia and Belarus

The war in Ukraine continues to affect companies across the games industry. There’s perhaps no better example than what’s happened to Wargaming — the company behind World of Tanks but also World of Tanks Blitz and World of Warships Blitz on mobile — in recent days. In March, the company fired the World of Tanks creative director after he publicly announced his support for Russia’s invasion, but actions have escalated since.

On Monday, Wargaming announced that it will shut down all business operations in Russia and Belarus. More specifically, the company is closing its office in Minsk (the capital of Belarus), as well as handing off all live ops management of its games in those two countries to Lesta Studio (which was Wargaming Saint Petersburg). This transition obviously will hurt Wargaming financially (Russia was a major revenue driver), and fragmenting its staff and operations will only creates inefficiencies and frictions across all console/PC and mobile games. It’s also hard to say how platform bans in Russia from leading storefronts will evolve from here, but it’s clearly all bad for gamers, employees, and shareholders alike. There is no winner.

Of course, Wargaming depends on Russian revenue more than the vast majority of other games companies, so its specific actions were likely to be more complex. Many other companies have already ceased supporting these regions and likely have plans to close their Russian offices, but we still may see escalations come from other teams — mobile and non-mobile alike.

Game Launch Radar

Here are two notable games that entered soft-launch in the past week.

#1: Final Fantasy XV

• Publisher: Machine Zone, Inc.
• State: Soft-launch
• Territories: Indonesia, Malaysia, Philippines
• Classification: Mid-core - Strategy - 4X

• Quick thoughts:

  • This is the next FFXV game from Machine Zone (now AppLovin) since the wildly successful FFXV: A New Empire, which launched in 2017.
  • The gameplay is classic Machine Zone 4X design with a fresh turn-based battle gameplay. See the gameplay video here.
  • It will be interesting to see how AppLovin utilizes the Final Fantasy IP and in-game personalization to run profitable UA activities in a post-IDFA world.

#2: Shadows of Valdora

• Publisher: Kabam
• State: Soft-launch
• Territories: Canada, Philippines
• Classification: Mid-core - RPG - Action RPG

• Quick thoughts:

  • Kabam continues to look for its next hit, and Shadows of Valdora is a new title from the Riposte Games team, who was acquired in 2019. See the gameplay video here.
  • The unique art-style is clearly inherited from Shop Titans, while the gameplay is a casual action RPG with Archero-like character meta progression systems.
  • The most innovative part of the gameplay is the ability to trigger co-op raids while in single-player gameplay. While that’s a great hook, it alone won’t be sufficient to scale UA.

Other Game Announcements

• Rovio Classics: Angry Birds — a remaster of the original game — is now globally available. Link
• Return to Empire, Tencent’s mobile adaption of Age of Empires, is released in China. This is the first collaboration between Xbox and Tencent’s TiMi Studios, and the global release date is still unknown. Link
• Genshin Impact’s beta for the new 2.7 update recently went live, which led to a flood of leaks. Link
• Diablo Immortal recently opened pre-registrations on iOS. Link
• Ni no Kuni: Cross Worlds, a RPG developed by Netmarble, will globally release by the early summer of 2022. Link
• Guns Up! Mobile, NHN Bigfoot’s mobile strategy game, is now globally available on iOS/Android. Link
• Storylines: Passion and Fashion, Tangent Interactive Media’s first interactive storytelling game, is now globally available on iOS/Android. Link
• Longcheer’s Ollie’s Manor: Pet Farm Sim is now available for early access on Android. Link
• Supercell just published Everdale’s second major update. Link
• Dungeon of Gods, Super Planet’s new rogue-like action RPG, is now available for pre-registration. Link
• Project Overkill, Nexon’s upcoming action RPG, looks to be making its way to mobile. Link
• Alchimerge, PocApp Studios’ new merge game soft-launched in Indonesia, the Philippines, Taiwan, Turkey, and Vietnam. Link
• Tokyo-based Asobimo Games is getting ready to release N-Innocence on iOS/Android in a couple weeks, and is running a pre-registration campaign where players can earn resources, currency, and a character upon 250k sign-ups. Link
• Streets of Rage 4 is open for pre-registration and will globally release on iOS/Android next month. Link

Company Announcements

• Games24x7, an India-based developer behind games like RummyCircle and My11Circle, raised $75M at a $2.5B valuation. Link
• Wargaming, most known for World of Tanks (but also World of Tanks Blitz and World of Warships Blitz on mobile), is ceasing operations in Russia/Belarus, closing its office in Minsk, and live ops is handed over to Lesta Studio (ex-Wargaming Saint Petersburg). Link
• Anzu, the in-game advertising platform, raised $20M more in funding. Link
• Bombay Play, an Indian publisher making hypersocial games like Card Party, raised a $7M Series A. Link
• Battlebound, a web3 developer making games that will soon come to mobile, raised a $4.8M seed round (in addition to $3M in NFT sales). Link
• Miniclip games exceeded 4B downloads. 8 Ball Pool, specifically, surpassed 1B downloads. Link
• Nexters, a Cyprus-based mobile developer behindd games like Hero Wars and Throne Rush, reported $434M in revenue for its full fiscal year, up 66% year-over-year. Link
• TapNation, the French-based hypercasual publisher, surpassed 500M downloads across its portfolio of games. Link
• Utomik, a company creating a PC gaming subscription service, announced it’s bringing over 1,000 games to Android via cloud gaming. Link

Ecosystem Announcements

• During the Epic Games v. Apple appeals process, Roblox announced its support for Apple and its closed ecosystem. This is notable since Roblox was used as a key example in the case as a platform that wouldn’t be allowed to be created today by another party. This strikes us as hypocritical, because by supporting Apple Roblox is essentially pushing for an environment that suppresses competition. Link
• According to Sensor Tower, global mobile gaming revenues for the first quarter were down 7% to $21B compared to last year. Link
• According to an Atomik Research study, 39% of mobile gaming companies experiences revenue losses due to IDFA deprecation and 59% decreased spending on iOS. Link
• The EU’s upcoming Digital Markets Act may make smartphone companies like Apple allow for alternative app stores (sideloading). Unsurprisingly Apple is pushing back on privacy/security grounds, and it’s still not approved, but antitrust pressures continue to mount. Link

Content Worth Consuming

• Highlights and Videos from the Google x Deconstructor of Fun Istanbul Event: “Google and DoF brought together the most influential gaming investors, companies, and talents in Istanbul! Gaming expert speakers talked about the hottest topics in the gaming industry from 2022 predictions to rising game categories, from blockchain & NFT gaming to launch strategies. Friends at mobilegamer.biz summarised every talk and session and divided them up so you can watch each one by hitting play on the embedded video.” Link
• Marketing Analysis: Garena Free Fire Max and PUBG New State (GameMakers): “We breakdown the mobile marketing activities of both Garena Free Fire Max and PUBG: New State, comparing and contrasting the user acquisition initiatives deployed in both games.” Link
• Talewind is looking beyond Roblox – and wants to create gaming’s MCU (mobilegamer.biz): “The numbers speak for themselves – at the moment no other platform can compete [with Roblox]. But we’d be naive to think that won’t ever change. There’s going be a Roblox killer eventually, we just need to stay market-led and go where communities are going. We want to have our IPs across multiple platforms, so our players know what they’re going to get when they see a Talewind game… We want to be like the Marvel Cinematic Universe of metaverse platforms.” Link
• Battle Passes, Merge Games, and NFTs: 5 Takeaways from GDC 2022 (Sensor Tower): “This month saw the long-awaited return of the Game Developers Conference as an in-person event, with thousands of games industry professionals descending onto San Francisco’s Moscone Center, as well as attending the show virtually. The event hosted hundreds of sessions offering insights into the hottest new trends, game design tips, and deep dives into new and existing technologies. Sensor Tower was in attendance at the show, and we’ve rounded up a few key insights and trends for the mobile games space, from Battle Pass analysis and merge game advice, to the use of IP and blockchain technology.” Link
• The App Economy’s Perestroika (Mobile Dev Memo): “As is becoming the norm in the frenetic, post-ATT mobile ecosystem, in the last two weeks, three important developments related to mobile platform payments policies were announced.” Link