This is the introduction to a deep dive on evolving backend game services. To read the full essay, click here.
In the past, games were self-contained adventures, existing solely within the confines of a cartridge or CD. Whether it was a pixelated rescue mission or navigating barrels tossed by an enraged ape, the gaming experience was limited to the physical medium.
Today, however, games have evolved into expansive, interconnected universes, constantly updated and simultaneously experienced by millions globally. This transformation extends beyond the surface, as significant advancements in backend technologies have played a pivotal role in enabling this shift. Amidst the captivating graphics and narratives of contemporary games, it's essential to recognize the hidden but crucial infrastructure that shapes the rhythm, pace, and evolution of our gaming experiences, without which modern games as we know them would not exist.
This network of backend services remains largely hidden from players' eyes but influences the overall experience of games. With an industry estimated to exceed $187B by 2023, understanding the nuances and future of backend services is a competitive necessity for developers and decision-makers.
Many games that stumble at launch often do so due to bottlenecks in login and matchmaking processes, both of which are key responsibilities managed by the backend system. Consider the case of Payday 3: its launch was marred by backend challenges, manifesting as severe server errors and matchmaking issues. These technical shortcomings have significantly tarnished the game's player reception, business performance, and will have a knock-on effect on the future of the franchise. It just underscores the essential role of backend systems.
The backend encompasses all the systems running behind the scenes, from data storage, player management, in-game economics, to the distribution of new content. But to label it merely as the game's ‘operational unit’ would be a disservice. It's the silent engine, ensuring that millions of global players experience a game as intended – seamlessly, securely, and in sync. It's the bridge that connects disparate players into cohesive worlds, and the wizard that magically introduces new challenges, landscapes, and narratives into games without the need for hefty downloads or disruptions.
However, crafting this is no minor feat, as game backend development is fraught with challenges:
- Scalability: Modern games, especially multiplayer ones, need to handle vast and unpredictable player bases. A game's backend must smoothly scale up during peak times – such as game launches or special events – and scale down during quieter periods, all while maintaining optimal performance.
- Security: With real-world economics deeply intertwined with virtual worlds (think in-game purchases and trading), ensuring data security becomes paramount. Breaches can result in not just financial losses but also erode player trust.
- Synchronization: As cross-platform play becomes more prevalent, backend systems need to ensure that a player's experience is consistent whether they're logging in from a console, PC, or mobile device.
- Rapid Iterations: The gaming landscape is dynamic, with player feedback, bug reports, and new content continuously pouring in. Backend systems must support quick iterations without causing significant game downtime.
In light of these challenges, one might wonder, "Why invest so heavily in something players rarely see directly?" The answer lies in understanding that the backend's health directly influences player satisfaction, retention, engagement, and monetization.
- Seamless Experiences: Players expect games to run smoothly, with minimal loading times, no lag, and real-time updates. A robust backend infrastructure is essential to meet these expectations. Any issues with the backend can lead to player dissatisfaction and possible churn.
- Longevity and Adaptability: Games that wish to remain relevant beyond their initial launch phase need to evolve – introduce new content, tweak mechanics, and adapt to player feedback. A flexible and strong backend allows for this evolution, ensuring that games remain fresh and engaging.
- Financial Viability: In the Games-as-a-Service era, consistent player engagement is key to maintaining revenue. However, downtimes, bugs, or data breaches can lead to substantial financial setbacks. By investing early in a robust backend, developers can safeguard against these issues, ensuring both consistent revenue and trust from players.
- Enhancing Meta Game: A robust backend is key for developing engaging metagames, and crucial for player retention. It allows developers to seamlessly add depth and complexity to the primary game, keeping players engaged over time. This not only enriches the experience but also ensures the game's long-term appeal and player involvement.
As we explore the gaming industry's backend landscape, one truth becomes evident: the future of gaming is as much about unseen technologies as it is about visible experiences.
Backend-as-a-Service (BaaS) solutions, such as those offered by Playfab, Unity, and most notably Pragma, one of the first venture backed BaaS solutions in this latest generation and one of Naavik’s Open Gaming Research Initiative partners, are emerging as essential tools for cross-platform developers. These ready-made backend solutions can handle much of the heavy lifting, allowing developers to focus on gameplay mechanics and user experience rather than getting bogged down by infrastructure challenges.
In this article, we will explore three forward-facing trends that are reshaping the gaming experience. Each is testament to the backend's capability to support and elevate the gaming industry. They are not isolated advancements, but interwoven with the backend's strength and flexibility.
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The team actively advises and supports portfolio companies in marketing, recruitment, technology, product development, and regulatory insight, accompanying founders from seed to early-stage, growth stage, or exit. Lakestar’s Games and Media team has made 18 investments, including in 1047 Games, Zebedee, Modulate, and Trace.
Game of the Week: Zenless Zone Zero
Written by Evtim Trenkov, Naavik Senior Consultant and Operations Lead
Platform: iOS, Android, Windows
A New Entry in the HoYoverse: miHoYo has just started the closed beta test of its latest title, Zenless Zone Zero (ZZZ). The closed beta will run until mid-December, and reportedly, only players who participated in a 20-minute-long survey are invited to join. In typical miHoYo style, it's an action RPG, but one that takes place in a post-apocalyptic future metropolis. ZZZ is also heavy on story, opening up with a cinematic intro and featuring a diverse set of characters with their own abilities, personalities and distinctive visuals. That also means a character collection-driven gacha monetization system, once the game fully launches and as was previewed during the closed beta.
One-upping Honkai Impact 3rd: ZZZ's combat is dynamic and feels really good. It is quicker than Genshin Impact’s, is reminiscent of Honkai Impact 3rd’s (HI3) combat and also features Quick Time Events (QTEs). Additionally, the urban theme is likely an attempt to pull a slightly different audience into the HoYoverse. Pairing those points with HI3's naturally declining revenues (launched in 2016), we think miHoYo is essentially looking to one-up HI3 here, capturing the audiences and revenue of fast-paced ARPG gameplay without reusing the Honkai IP again, to avoid confusion and cannibalization of the turn-based Honkai: Star Rail (HSR).
The Game is Too Easy: Difficulty has been mentioned by reviewers as a potential improvement opportunity for ZZZ. It's not hard to go through waves of enemies easily, which carries the risk of reducing the necessity for players to fill up their character roster and max them out, which will negatively impact the game’s Gacha usage and revenues. Wanting higher difficulty is something that the hardcore gamer fanbase of Genshin has been vocal about as well. However, what should be noted is that miHoYo is deliberately working on making its games easier to get into. Given HSR's poor monetisation performance due to its generosity (as we explored in our HSR deconstruction), there is clearly an opportunity for miHoYo to strike a better balance with ZZZ here.
Combat is Not the Focus During Onboarding: In the closed beta version, players encountered the first combat approximately 5.5 minutes into the game. Depending on how quickly players consume the story in the first half an hour of gameplay they could expect to only fight in three encounters. This is rather unusual for an ARPG, and more so for ZZZ where the combat is a huge draw. It remains unclear to us why ZZZ's focus on narrative is so high, but the lack of combat during the first session of a ARPG is likely not going to bode so well from an audience retention perspective.
Cannibalization is Still a Risk: A key finding from our HSR deconstruction is that miHoYo started cannibalizing Genshin Impact’s revenue with its release of HSR. And miHoYo's mobile portfolio monthly revenues continue to stagnate, which means the cannibalization continues.
ZZZ appears to be an attempt to fill the revenue hole opening up from the gradual decline of HI3, and it's likely going to make a lot of money. If ZZZ takes players away from HI3, retains them better, monetises them better, and also brings in new audiences (due to its unique theming), then it will likely be net positive for miHoYo by taking some players/revenues away from HI3 but delivering much higher revenues, sustained over multiple years in ZZZ. Then HI3 can slowly fade away.
However, with hundreds of millions of downloads for miHoYo's other titles already, a significant number of ZZZ’s players will most likely come from miHoYo’s wider portfolio. The biggest risk here is that this is existing users’ attention that is being pulled from Genshin Impact and Honkai: Star Rail, so in the short term, we will likely see some revenue cannibalization. After that short term cannibalization phase is over, things will normalise between all four titles and it’ll be interesting to see whether it does result in more revenues for miHoYo or not in a steady state. But to eliminate this risk long-term, miHoYo desperately needs to find a new source of players (not just getting existing portfolio players, who can only play and pay for so many titles in the HoYoverse), and it’ll be interesting to see how they evolve their marketing strategy to make that happen.