Top News

#1: EA Sunsets Two Key Titles 

Last week, EA didn’t see the strongest Q3 earnings. Bookings, which are naturally volatile alongside game releases, fell 9% year-over-year (from $2.6B to $2.3B), and Q4 guidance was lowered, largely because Star Wars Jedi: Survivor’s release date got pushed back 6 weeks. Yes, the company’s top franchises like FIFA and The Sims continue to excel and churn out cash as a result, but otherwise it was a mostly quiet quarter on the console/PC front. The mobile front, however, was incredibly newsworthy. EA’s leadership announced that it’s sunsetting both Apex Legends Mobile and Battlefield Mobile (including the dissolution of Industrial Toys, the maker of the latter). That is yet another blow to EA Mobile, but let’s break down why the decision was made and what’s next.

Let’s start with Apex Legends Mobile. Despite being elected mobile game of the year, Apex Legends failed to achieve the necessary metrics to keep it competitive. As seen in the downloads chart below, the game struggled to scale compared to the competition: Graph

Apex Legends Mobile arrived a bit too late to the party, as other games had already captured a big portion of the battle royale market. Contrary to competitors like Garena Free Fire and PUBG Mobile, it didn't have a unique target segment. As a result, the game ended up competing with Call of Duty for players and, not surprisingly, lacked the weight of a well-established IP and the necessary RPD ($0.80 vs $1.70 of Call of Duty Mobile at the same launch time), as seen in the chart below, to justify UA costs. In addition, new IDFA rules also made it harder for the game to scale. Graph

To top it all off, Apex Legends displayed below average retention metrics. We already discussed some of these problems in our past deconstruction of the game. But it’s also worth noting that the combination of a lack of installs and low retention in a game that depends on player liquidity was not a good situation to be in. Furthermore, although the Apex Legends IP by itself was probably enough to draw some extra players from the franchise, the shortage of cross-progression elements most likely affected the retention of those players. Graph

Battlefield Mobile, which was soft-launched barely three months ago, probably had the same engagement problems as Apex Legends Mobile, but unlike the latter, it didn't bring any key differentiators compared to other shooters. Instead, the game looked too much like an earlier version of Call of Duty Mobile with fewer game modes and features. As it lacked cross-progression or cross-play, it likely wasn’t relevant enough to bring fans over from the Battlefield IP, and it would likely have ended up in a similar, or worse, position as Apex Legends Mobile.

However, EA leadership still (apparently) believes in both franchises’ potential on mobile, with leadership hoping to roll out new mobile versions of the IPs that connect better with the original games and most likely feature cross-progression elements. Although cross-progression hasn’t been a must-have in the mobile shooter genre, Call of Duty: Warzone Mobile’s upcoming battle pass cross-progression could make it popular. This feature could help differentiate some of these games from their competitors, but it is unlikely that cross-progression by itself will make enough of an impact to turn both titles into highly profitable games. Plus, it’s unclear how or why EA would bring Battlefield, for example, back to mobile after shutting down Industrial Toys and laying off much of that development team.

EA might try to do with Apex Legends what Activision is doing with Call of Duty on mobile: fully bring development of new titles (like Warzone) in-house, which ensures the company receives 100% of the revenue and maintains full control of game decisions. It economically makes sense, but whether these teams have the ability to build these hits without more proven partners remains a big question.

Even though shutting down Apex Legends Mobile and Battlefield Mobile is the right economic decision, it’s still terrible news for EA's mobile operations. As we mentioned in our Glu acquisition essay, EA's management has publicly stated that it expected to grow its mobile business to $2B in revenue by 2024. However, given that its M&A efforts have flopped, that these new releases have to be shut down, that its portfolio is aged, and that ATT headwinds pose further pressures, EA is far behind its revenue goal. With limited exceptions, EA has still failed to learn how to repeatedly develop successful mobile games (or acquire in a value-additive way), leaving the question of whether going in-house for its latest shooter titles would even make sense. 

What's next for EA's mobile operations? 

EA has a new Lord of the Rings mobile title in the works, but otherwise it seems like it will focus most of its efforts on consolidating console/PC franchises on the mobile front. FIFA Mobile still has room to grow and would also likely benefit from cross-progression with FIFA 23. However, bringing other franchises (e.g., The Sims) to mobile will likely pose a challenge. 

While EA's strong IP portfolio plays in its favor, more robust mobile execution will be necessary to make these franchises succeed. Unfortunately, it has been unable to retain the leadership of its past mobile acquisitions, and it's unclear whether Jeff Karp's most recent, and not very successful, experience as General Manager at Big Fish Games will be enough for EA Mobile. More leadership changes are likely needed, and there is little reason to expect EA Mobile to turn around without further restructuring and support from all levels of leadership. Despite the results for Apex Legends Mobile, and despite what management seems to be saying, the best path to launch successful mobile titles in the short-term will still be to partner with mobile-experienced studios. 

Game Launch Radar

#1: Squad Busters 

Squad Busters
Source: Supercell 
  • Publisher: Supercell 
  • State: Closed Beta (Feb 6th-16th 2023, closed beta test in Canada with limited participants)
  • Territories: Canada 
  • Classification: Strategy - MOBA 
  • Quick thoughts:
    • In a nutshell, Squad Busters feels like Supercell’s attempt to casualize the Brawl Stars experience further and tops it off with a multiverse-IP strategy. It takes Brawl Stars’ action gameplay, adds in a layer of rogue-like round mechanics, and finishes with a multi-IP character list from all Supercell IPs. This results in an engaging casual-MOBA game that is fun to play and watch.
    • It would be interesting to know whether the multi-IP or casual-MOBA decision was taken first. The former almost requires the latter to make the most of all Supercell IPs driving organic installs. But the latter doesn’t necessarily require the former, even though it’s a great add-on.
      • For now, the game features only one mode (single-player), with gem collection as the primary goal. However, we expect to see more modes being added to the final version, as it is almost necessary for the game to have significant long-term staying power. 
      • Squad-based gameplay is core to the experience, where players start with one hero, and then build their team up through the rogue-like card selection mechanic as the match progresses. In our opinion, that’s a great way to build strategic depth into the action phase and keep gameplay relatively fresh round to round. Players can optimize their team-building strategies by learning more about the different cards offered.
      • The presence of heroes with special abilities from Clash Royale fits perfectly into the narrative and makes the squad-based mechanic work well. Further, Supercell has also gifted other Supercell IP characters, such as the Chicken from Hay Day, with fitting special abilities of their own, which is a great way to repurpose IP.
      • Another element taken from Brawl Stars is the lack of loot boxes. Squad Busters uses a similar ‘unlock by points’ mechanism. You can watch a video of the gameplay here.
    • There are a few things that are currently working well for this game:
      • There is a lot of potential in skins-based monetization, as Supercell tries to veer away from a pay-to-win monetization model, which is especially important for any MOBA-like experience. The higher availability of characters creates more opportunities to buy skins, and any emotional attachment to older Supercell IPs will increase purchase likelihood.
      • Using characters from other franchises is a great way for Supercell to optimize its content treadmill, giving Squad Busters plenty of already-produced content to reutilize. Also, skins produced exclusively for this game could be used in the original games.
      • This game feels fun to watch and also works on mode-based gameplay. That immediately opens the doors to potential esports opportunities down the line, but a lot needs to be proven in terms of the game’s scale potential before considering esports.
      • The multi-IP strategy is a great move to derisk organic installs-driven growth in a post-IDFA world. The challenge would be to convince Hay Day players to play a casual-MOBA experience with their favorite characters. Still, it would also be safe to assume that high-value Supercell fans are familiar with all the Supercell IPs.
    • Squad Busters is an exciting addition from Supercell. Even though it’s still in the very early stages, it already brings a very engaging experience to players and a unique squad-based element to MOBA, and we are looking forward to playing the official version of the game soon. 

#2: Avatar Generations

Avatar Generations
Source: bleddingcool
  • Publisher: Square Enix  
  • State: Global Launch 
  • Territories: Worldwide 
  • Classification:  RPG - Turn-based 
  • Quick thoughts:
  • Avatar Generations brings a gacha turn-based gameplay with an Avatar IP theme and storyline.
    • Although the game has some engaging elements like missions and events, it really misses out by not implementing multiplayer features, which are already present in most top-grossing RPG titles nowadays.
    • There’s a lack of polish in 3D animations and UI and a low quality of graphics. Additionally, although we would expect newer titles to have more bugs and worse performance, Avatar Generations is an outlier, and with a low 2.3 score on the Google Play Store, it really would have benefited from a tech launch. 
    • You can watch a video for the gameplay here.
  • Overall, Avatar Generations is based on a strong IP that is a good match for the subgenre and will definitely make scaling easier given how high CPIs are there. However, taking into account the lack of polish and differentiators and the competitiveness in the turn-based subgenre, it is hard to believe that the IP alone will help the game succeed. 

Other Game Announcements

Games Hub
Source: Gameshub
  • Tomb Raider Reloaded is available for pre-registration on Android ahead of worldwide release. Link
  • Street Fighter Duel is coming to the West in 2023. Link
  • Roblox to hold NFL Super Bowl concert starring Saweetie. Link
  • Marvel Snap launches its friend-fighting Battle Mode. Link
  • Hunter X Hunter Arena Battle, the Japan-exclusive card-battler RPG based on the hit anime series, shuts down service after three years. Link
  • Stumble Guys adds themed in-game goodies and a new level in NFL collaboration event. Link
  • KartRider: Drift will launch Season One and cross-play with consoles on March 8th. Link
  • Honor of Kings opens pre-registration in Brazil, with the rest of the world to follow soon. Link

Company Announcements

  • Merge Inn maker Original Games acquires Mergedom from Bigger Games. Link
  • Layoffs at Tilting Point as it restructures and switches strategy. Link
  • Rovio is now officially in talks with Playtika — and others — about a sale. Link
  • NetEase included in 2023 Bloomberg Gender Equality Index. Link
  • Shares in EA have plummeted more than 10% this week. Link
  • Nintendo's financials are slightly down to $9.8B, with mobile dipping 2.3%. Link
  • Take-Two misses sales guidance and downgrades forecast again. Link
  • Square Enix sees a 6.6% drop for the past 9 months as it pulls in $2B. Link
  • Activision Blizzard delivered record quarterly net bookings after Call of Duty: Modern Warfare II became a record breaker. Link
  • Playstudios to appoint Playtika vet Mickey Sonnino as new COO. Link
  • NCSoft West CEO Jeff Anderson leaves amidst layoffs. Link

Ecosystem Announcements

  • Google to provide developers alternative user payment options in India. Link
  • US government calls for changes to Apple and Google’s “harmful” app store practices. Link
  • Amazon has reportedly purchased Tomb Raider from Embracer Group for $600M. Link
  • AdLiven announces AI image generation tool for playable ads. Link
  • MENA-3 games market to grow 56% by 2026. Link
  • Cyberagent's operational profits are down 69.9%. Link
  • Google Play and iOS App Store reached 142B downloads in 2022. Link
  • Mobile is the dominant platform for accessing media and IP. Link

Content Worth Consuming

  • The Biggest Mobile Game Development Trends of 2022 (Game Refinery): “From the rise of roguelite and minigame mechanics in mobile games to the growing popularity of IP-based mobile games and new midcore games, plenty of new development trends emerged in the mobile market during 2022.” Link
  • Hypercasual Games CPI, Ad Spend, & Retention Benchmark Report – Q4 2022 (Tenjin + GameAnalytics): “The much-awaited “Hypercasual Benchmark Report” for Q4 2022 is here to provide you with up-to-date data on key performance indicators, user behavior, and trends in the hypercasual gaming industry. This benchmark report consists of anonymized data collected by Tenjin and GameAnalytics for hypercasual games in the date range of 01.10.2022 – 31.12.2022.” Link
  • Performance-Driven Mobile Ad Trends (AppLovin): “Discover the top-performing creative trends for mobile gaming apps and all the ways to drive better-performing, highly creative ads. SparkLabs — AppLovin’s in-house creative team — produced tens of thousands of creatives in 2022 and analyzed the concepts and variables that produced the most impressive results. These successful performance-driven creative concepts serve as an inspiration for mobile advertising campaigns in 2023 and beyond.” Link
  • 3 monetization mistakes your strategy game is making and 5 must-have rewarded video placements (ironSource): “In this article, we’ll get into our recommendations for rewarded video ad placements that work best in strategy games and tips on how to integrate them. But first, let’s talk about some common mistakes we see strategy game developers make when they first start monetizing.” Link
  • SocialPeta 2022 Mobile Game & App Marketing Report (Social Peta): “This report is a combined version for mobile games and applications. We invited industry partners such as Singular, Tenjin, Digital Turbine, Moloco, Storemaven, AdQuantum, etc. to provide valuable perspectives. The nearly 200-page content will help mobile marketing practitioners gain insight into the global market and provide new ideas and inspiration for marketing strategies in 2023.” Link
  • S02 E07 Trailmix’s Philippa Layburn on Identifying Winning Creatives (Pocket Gamer Podcast): “Want a winning formula to pick your winning ad creative and streamline your A/B testing? In this episode of the PocketGamer Podcast, our hosts, Brian Baglow and Peggy Anne Salz, chat with Trailmix’s Senior UA Manager, Philippa Layburn, on how she is changing the ads playbook with constant creatives analysis. Part of her secret: think outside the box and measure success using a metric blend that makes sense for their game. This episode isn’t one you want to miss, as Philippa details hook rates (her new metric, by the way) and how she hacked Google Ads using UGC.” Link

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