Top News

#1: Pokemon Go Reaches $6 Billion In Lifetime Revenue

A recent report by Sensor Tower revealed that Pokemon Go (PG) has crossed the $6 billion lifetime revenue mark, putting it in the same club as Honor of Kings, Clash of Clans, and Candy Crush Saga. Having reached such an impressive milestone, it's worth taking a look at PG’s main markets, how it navigated the pandemic and lockdowns as a location-based game, and finally, where it could go from here.

As these two charts show, the US and Japan are the most important territories for PG. The US is the leader in both downloads and revenue, and while Japan has fewer downloads (around 24 million), it has an incredible all-time RPD of $56! A notable difference between the two territories is that Android outperforms iOS in the US, with 55.8% of revenue and 51.8% of downloads. In Japan, it is the opposite, with iOS claiming 57.2% of revenue and 50.6% of downloads.

Where PG stands out is its excellent mid-term retention rates, with a D30 of 20% and a D60 of 15%. The retention looks even better in the territories where PG is the most important - North America and East Asia. There, D30 is at 25% and D60 at 20%!

Being a location-based game, the lockdowns imposed by many countries during the height of the pandemic had the potential to affect PG’s business. Instead, a smart feature update (which included the ability to raid remotely) at the end of April 2020 by Niantic resulted in a considerable revenue bump and even an increase in active users.

Overall, PG has shown incredible resilience over the years. Sure, the astonishing hype generated when it launched led some to believe that it would burn out quickly, with many articles calling it dead. Still, the reality is that PG’s annual revenue over the years shows a steady increase since launch, with two standout years during the pandemic. PG has also managed to keep its active users steady for the past two years, fluctuating between 40-50 million MAU.

Like with most games this year, the revenue for Q1 has decreased YoY, but if you chart Q1 revenue over PG’s lifetime, you’ll see that revenue is still trending up, indicating that 2022 could see similar revenue growth.

With many parts of the world entering a post-pandemic phase, Niantic has begun holding live events again, with three Pokemon Go Fest events in Germany, the US, and Japan. After two years of only virtual events, there may be a tremendous demand for meeting up with other PG players in real life. The sight of thousands of players catching Pokemon together may well spark a revived interest in playing PG again.

#2: Saudi Arabia’s Rise As A Major Investor In Gaming

Embracer Group (EG), the parent company of 120 game studios, recently announced an investment of around $1 billion by Savvy Gaming Group (SGG) via a direct share issue. The investment will see SGG, a company funded by the Saudi Arabian Public Investment Fund (PIF), own 8.4% of EG shares and hold 5.4% of the votes.

The PIF is chaired by crown prince Mohammed bin Salman, who has previously mentioned being part of the first Saudi generation to grow up playing games. Under his helm, the PIF aims to diversify beyond oil and gas, and the game industry – with a true size of $336 billion – is an appealing target. The investment into EG isn’t the first gaming-related investment made by bin Salman, as he has also made these prior investments in the space.

• November 2020: The Mohamed bin Salman Foundation, a charity organization, acquires a third of SNK Corp’s shares via its Electronic Gaming Development Company (EGDC) subsidiary.
• December 2020: SEC filings reveal that the PIF has acquired $826 million worth of shares in Take Two Interactive, $1 billion worth of shares in Electronic Arts, and almost $1.4 billion worth of shares in Activision Blizzard.
• August 2021: SEC filings again reveal that the PIF has increased its stake in Activision Blizzard by 13.3% and now owns 4.9% of its shares.
• January 2022: SGG acquires esports companies ESL Gaming and FaceIt.
• February 2022: PIF acquires minor stakes in Capcom and Nexon. The EGDC now owns 96% of SNK Corp.
• May 2022: PIF acquires a 5% stake in Nintendo

The rise of Saudi-government-backed investment in games has not gone entirely smoothly, with criticism coming from various corners of the industry on Saudi Arabia’s negative track record on human rights issues. The backlash from fans, staff, and influencers has been strong enough to even push large gaming companies like Riot Games from ending previously touted partnerships with Saudi-Arabia-linked projects like the partnership by Neom, a planned $500 billion megacity in Saudi Arabia, with the League of Legends European Championship.

The staff of ESL Gaming and FaceIt also voiced their concerns about the link to Saudi Arabia, as SGG CEO Brian Ward admitted that “We got all kinds of tough questions like this about LGBTQ rights and the safety of women in the kingdom.”

The concern about the morality behind the money is not limited to the gaming sector, as there is plenty of Saudi money going into Silicon Valley, sporting, and entertainment events. Human Rights Watch deems many of these investments as a form of image-laundering to divert attention away from its human rights record.

What does it mean for the games industry? While there has been much commentary on Saudi Arabia’s human rights violations, actual action is rare. Saudi Arabia has lots of money, and companies want it and will distance themselves from the issues. Expect to see more announcements of Saudi-Arabia-backed investments in the future.

Game Launch Radar

#1: T3 Arena

• Publisher: XD Entertainment
• State: iOS Launch
• Territories: Global
• Classification: Midcore - Shooter - Tactical Shooter

• Quick thoughts:

  • T3 Arena is essentially a 3v3 Overwatch, even down to the art style. Rounds last for 3 minutes - perfect for a “snackable” session of shooting.
  • Publisher XD Entertainment owns the alternative app store TapTap.io, and the game is only available on Android there. It was launched on iOS on May 26th, and it quickly racked up a million downloads there, along with a 4.8 star rating. It also has almost a million downloads on Android since its launch in March, which is noteworthy as it requires players to download the TapTap store first before they can download the game.
  • T3 Arena also features an area of the game called “The Lab,” where players can participate in new experimental modes. An interesting idea that would be good to see replicated in other games.

#2:  Rocky Towers

• Publisher: Meelfoy Games
• State: Launch
• Territories: Global
• Classification: Casual - Arcade - Action Puzzle

• Quick thoughts:

  • The gameplay is a mix of Jenga and block breakers, with the goal of collecting bricks to complete levels. The graphics are simple and somewhat amateurish, although this is entirely subjective.
  • The more interesting story on Rocky Towers is that Meelfoy Games was founded by Elio Polizzi, a game industry veteran who previously worked as a game designer and live ops manager for Ubisoft. Meelfoy Games was founded as a reaction against game design dark patterns and exploitative monetization mechanics.
  • The “ethical gameplay” features include a strict energy system (with no way to acquire more) and a limit on how much players can spend in the store per week. While a noble effort, I don’t think Rocky Towers will be able to find a large enough audience for its anti-dark-pattern design elements to filter to other games.

Other Game Announcements

• Netflix unveils a slew of new games during its Geeked Week 2022, including a new title from the creators of Monument Valley. Link
• Tencent’s China-only MOBA Honor Of Kings will get a global release in 2022. Link
• NUTS edges out Clash Mini and Crash Bandicoot: On The Run to win the Nordic Game Awards 2022. Link
• Netflix announce Castlevania: Nocturne, a game based on the new season of its Castlevania anime series. Link
• HoYoverse teased its upcoming games, Honkai: Star Rail and Zenless Zone Zero, in Summer Game Fest 2022. Link
• Apex Legends Mobile and Ni No Kuni: Crossworlds boost US mobile performance in May. Link
• NetEase released more information on its post-apocalyptic sandbox, Once Human, during the Summer of Gaming conference. Link
• 4X game Million Lords announces partnership with mega-popular YouTuber Mr.Beast to host an upcoming tournament. Link

Company Announcements

• iCandy acquires a 60% stake in HTML5 game developer Flying Sheep Studios. Link
• Andy Muesse, previously head of studio at Rovio Stockholm, will now lead Rovio’s global team as head of studios. Link
• Animoca Brands acquires Notre Game Studio, developer of the hybrid physical/digital card game Scratch Wars. Link
• Indian midcore developer SuperGaming expands with a new studio in Pune, India.
• Riot will bring its games, including its mobile titles, to Xbox Game Pass. Link

Ecosystem Announcements

• Activision Blizzard officially recognizes the union set up by Raven Software’s QA team. Link
• China approves another 60 more games, with 58 of them being mobile games. Link
• iFerg, a popular YouTuber focusing on mobile shooters, announces that he is now co-owner of Tribe Gaming, a gaming content creation organization. Link
• Upstream Digest releases the stats on the most streamed mobile games in May. Link
• Six mobile games are given honors in the 2022 Apple Design Awards. Link
• Apple explicitly disallows ad-tech firms from device fingerprinting. Link

Content Worth Consuming

• Innovative Monetization Features Snapshot Report (GameRefinery): “Player’s choice gachas became popular in China during the summer of 2021. They work by letting players choose which items/characters/weapons etc., appear as gacha prices or sometimes in the entire gacha prize pool. The Chinese mobile games, Three Kingdoms Fantasy Land and Punishing: Gray Raven, have used player's choice gachas, but we've also seen these gacha mechanics appear in the West in PUBG: New State and Genshin Impact.” Link
• Battle Passes - Everything You Ought to Know and Then Some (Deconstructor Of Fun): “Passes tend to cannibalize other purchases and may end up damaging the total revenue, particularly if the game has low spending depth or low pressure to progress. So it’s a good idea to ABtest them, monitor the total revenue and player inventories, and the ARPPU of high spending profiles, to guarantee a positive tradeoff.” Link
• Asbjoern Malte Soendergaard — Games company builder story (Elite Game Developers): “In this week’s podcast episode, I’m talking with Asbjoern Malte Soendergaard, the founder and CEO of Tactile Games, who are based out of Copenhagen, Denmark, and are the makers of the hit game Lily’s Garden. In this discussion, we talk about how company culture has developed at Tactile over the years, how new projects get started, and what kind of a role does celebrating success and failure play at Tactile.” Link
• Subscription services are growing fast, but unlikely to become the dominant form of monetisation (PocketGamer.biz): “However, while there are some similarities, the games sector is fundamentally different from other entertainment sectors. As you will know, most spending on games is on in-game monetisation, and primarily in F2P titles. As such, I think the chances of games content subscriptions becoming the dominant form of monetisation is very unlikely. Across western markets, content subscription services were worth four per cent of the total market in 2021.” Link