Top News

#1: Rovio Sees +26% Revenue Growth

In their quarterly earnings report, Rovio announced a +26% uplift in revenue compared to Q1 2021 amidst an industry-wide decline in F2P sales. Apart from the fact that Rovio moved opposite to the entire market, it is also another record quarter for Rovio and deserves kudos!

Rovio’s top-performing game was, not surprisingly, Angry Birds 2 (AB2) — the company’s top performer since 2015. It returned gross bookings of EUR 30 million, a +20% improvement YoY, and also its best quarter since Q1 2019. This accomplishment isn’t just an outlier either, as according to Sensor Tower, AB2’s RPD (Revenue Per Download) has been trending up ever since its launch, while their downloads have essentially remained flat — which speaks volumes to the AB2 team’s live operations efforts. In the report, CEO Alex Pelletier-Normand credits the live operations and profitable user acquisition as the key reasons for success.

Further, Rovio’s newest slingshot game, Angry Birds Journey (ABJ), was released in January and is now their 3rd best performer, with gross bookings of EUR 10 million, after Angry Birds Dream Blast at EUR 14.9 million. It remains to be seen if ABJ can replace AB2 as the principal game in Rovio’s portfolio, as, after a massive UA spend of an estimated EUR 12 million to support its launch, Rovio has indicated that they will be scaling down UA spend on that title and will be focusing on optimization moving forward.

While launch marketing spend is critical and may not always be profitable (as much of it could be a brand-building expenditure), the resulting revenue of EUR 10 million over the quarter is good, but not exactly a hit. Reading in-between the lines of the CEO’s statement, “After a strong start we are now further developing the game and optimizing user acquisition, which will in the near-term be on a lower level than at launch,” indicates to me that ABJ was not able to attract and retain quality players and they are now working on improvements to try and shore that up before spending more heavily on UA again.

Beyond Angry Birds, Ruby Games (the hypercasual studio Rovio purchased last year) proved its worth by contributing gross bookings of EUR 6.1 million (a +44.7% growth YoY) and was also the second largest contributor to Rovio’s revenue bump. They may also be a big player for the year, as we’ll see further below where we explore Rovio’s new titles.

The first of the new titles is Hunter Assassin 2 (HA2) by Ruby Games, a hybrid-casual game that is the sequel to the very successful Hunter Assassin (~345M lifetime downloads). It’s been in soft-launch since September of last year. As the first hybrid-casual game from Ruby, it will be interesting to see if they are able to replicate their success from Hypercasual.

Another title in soft-launch is Moomin: Puzzle & Design, a game fusing the puzzle gameplay from Angry Birds Dream Blast (ABDB) with the task-based decoration and story mechanics from Homescapes (watch gameplay video here). The Moomin IP comes from Finland, but is popular in Asia, particularly Japan which has 6 Moomin shops and a theme park. The ABDB gameplay is also very reminiscent of Disney Tsum Tsum, which is still huge in Japan (according to Sensor Tower, it posted a Q1 2022 revenue of $41 million). This combination of IP and gameplay could indicate that Rovio are intending to reach the very lucrative Japanese market. And their product and UA learnings from Small Town Murders will likely play a key role in this game’s future success.

Rovio have been searching for a non-Angry Birds hit in an attempt to diversify the portfolio for a long time now, but with not much to show for it. In their report, they announced the cancellation of their narrative-puzzler Supernatural City during soft launch due to performance issues. Other unsuccessful attempts at diversifying beyond the Angry Bird IP include Hardhead Squad, Darkfire Heroes, and Battle Bay.

Regardless of IP, Rovio’s failure to find the next hit since AB2 is a concern. They have released no less than 18 titles since AB2 and nothing has really shone, with the best performer being Angry Birds Dream Blast, which was released in 2018. This may be their best chance yet, as ABJ, HA2 and Moomin are all targeted at different audiences. We’ll be keeping an eye on whether their diversification strategy pays off in the future. Will HA2 or Moomin be able to succeed where so many others have failed?

#2: Less than Half of Mobile Gamers Opt-in to App Tracking

Appsflyer has released a report exploring the outcome of Apple’s App Tracking Transparency (ATT) framework. If you need a recap on ATT and what it means, you can read our deep dive on IDFA here and our digest coverage on ATT when it launched here.

#1 ATT adoption is high, but opt-in rates are low: There was generally a high rate of adoption (80%) across all apps, with games leading the way, with 91% of them implementing the ATT. On the flip side, only 46% of gamers chose to allow app tracking. This is a stark contrast to the pre-ATT days when around 69% of iOS users had IDFA enabled (the remaining 31% would have had Limit Ad Tracking turned on). This does look better than expected, as many industry insiders had predicted low opt-in rates of 15-20%, but one very important point to keep in mind with IDFA opt-in is that a user choosing to opt-in in App A but not in App B results in App A not being able to target that user from App B. That means a 46% opt-in rate could likely be a one-way rate, but the effective two-way rate is much lower, which makes the data less usable.

#2 As the CPI for iOS games surged, so did non-organic installs for Android: The CPI for games on iOS increased by +67% YoY (Q1 2022 vs. Q1 2021). During this same period, paid installs for Android increased by +28% YoY compared to only +7% YoY on iOS. While this makes it seem that advertisers were pouring all their marketing budgets into Android, this couldn’t have been further from the truth. True, there was a dip in iOS app install ad spend over the first half of 2021, but spending rebounded during the second half and exited Q1 2022 with a +20% YoY uplift compared to Q1 2021. It’s likely that during the initial stages of ATT rollout, most marketing teams would have been hesitant to go all-in on iOS campaigns without a full understanding of how they would perform. Once the dust had settled and they began investing into UA again, the large increase in CPI (which Appsflyer attributes to inefficiencies in campaign targeting and measurement) meant that teams had to spend more for less. You can’t ignore iOS forever though, so teams would have had to bite the bullet and accept the higher costs and use it as a learning opportunity to optimize future ad campaigns.

#3 iOS IAP revenue decreases -24% YoY vs. -10% YoY for Android: The inability to get user-level data has clearly affected the ability of advertisers to acquire high-quality users. There may be light at the end of the tunnel though, as CPIs for iOS have started to level off, indicating that media sources and attribution platforms are getting better at optimizing and measuring ad campaigns using aggregated data. In fact, Facebook released an announcement back in February that they have managed to reduce the number of under-reported iOS web conversions from 15% to 8%.

#4 Best Practices to Increase Opt-in Rates: In the report, Appsflyer revealed two methods for developers to improve opt-in rates:

1. Show the ATT pop-up early: According to the report, there was a -30% drop in opt-in rates between showing the pop-up in the 1st and the 120th minute.
2. Prompt users to opt-in, even if they had already opted out: The report shows that 17% of games saw an uplift in opt-in rates after day 7 and postulates that it may have been caused by an in-game notification.

The release of iOS 14.5 and the ATT framework has clearly impacted the industry, and with Google also announcing their intention to follow suit with privacy changes, even more upheaval is to be expected in the near future. The good news is that media sources and mobile measurement platforms are constantly evolving tools and best practices so marketers can get the best performance out of their budgets. So, while not all blue skies and sunny days, it certainly isn’t the doom and gloom many predicted when Apple first dropped their bombshell announcement.

Game Launch Radar

#1: Catalyst Black

• Publisher: Super Evil Megacorp
• State: Launch (May 25th 2022)
• Territories: Global
• Classification: Midcore - Strategy - Multiplayer Battle Arena

• Quick thoughts:

  • The gameplay is a top-down team-based shooter with MOBA elements and a key differentiating factor of the Ascension system. By equipping a mask, players are able to ascend into a Primal, a super-powered creature from another realm. This, along with its much larger maps, should see team strategy play a more important role in being successful than the smaller arenas of other multiplayer battle arenas like Brawl Stars. See the gameplay trailer video here.
  • Another interesting tactic they are employing is to allow drop-in-drop-out. This means players don’t have to join a game from the start and can leave at any time with no penalties, while players that complete or win a match will get a bonus in rewards instead. This is a brilliant strategy for the platform and should ensure high liquidity for matchmaking.

#2: Honkai: Star Rail

• Publisher: HoYoverse
• State: Closed Beta
• Territories: Global
• Classification: Midcore - RPG - Turn-based RPG

• Quick thoughts:

  • The testing period for the closed beta is from the 28th of April to the 15th of May. Unlike the previous game in the series (Honkai Impact 3rd), this new version is a turn-based RPG rather than a third-person hack ‘n’ slash.
  • Like Genshin Impact, this is also a cross-platform release on mobile and PC. This looks to be Hoyoverse’s strategy for all of their games moving forward, which is a very smart way to reuse their freshly built Genshin Impact technology layers.
  • HoYoverse (they re-branded from MiHoYo to HoYoverse back in February) has absolutely exploded in recognition in the west since the launch of Genshin Impact, and all eyes will be turned towards Honkai: Star Rail to see if they have another mega-hit in their hands.

#3: Rainbow Six Mobile

• Publisher: Ubisoft
• State: Closed Alpha (Starting May 3rd, 2022)
• Territories: US, Mexico, Canada
• Classification: Midcore - Shooter - Tactical Shooter

• Quick thoughts:

  • According to their dev blog, the gameplay is based off their successful PC title Rainbow Six Siege, and gameplay from their announcement trailer shows that they are very similar.
  • The title was worked on by 11 internal Ubisoft studios as well as Tencent, indicating that Ubisoft have a lot riding on the success of this game.
  • The shooter space is starting to get crowded, and Rainbow Six Mobile will need to compete against the upcoming global release of Apex Legends Mobile and Battlefield Mobile, as well as the existing shooter stalwarts of Call of Duty: Mobile, PUBG Mobile and Free Fire. Their biggest advantage is that their 5v5 tactical Attacker VS Defender gameplay makes them stand out against the competition.

Other Game Announcements

• Cross-platform card battler Yu-Gi-Oh! Master Duel has exceeded 30 million downloads across all platforms. Link
• Blizzard to reveal a mobile game set in the Warcraft universe on May 3rd 2022. Link
• Hill Climb Racing games surpass 2 billion downloads. Link
• Netease’s Battle Royale game Rules of Survival to shut down servers on the 27th of June 2022. Link
• Gacha RPG Seven Mortal Sins X-Tasy is now available on iOS and Android. Link
• Super Baseball League, a real-time multiplayer baseball game, is now available for pre-registration on Google after a successful soft-launch. Link

Company Announcements

• Playstation hires Kabam veteran Kris Davis as senior director and head of mobile development. Link
• Netease founder and CEO, William Ding Lei, resigns from several senior roles at one of its subsidiaries. Link
• External game development provider Room 8 Group acquires PUGA Studios, a Brazilian outsourcing company for stylized games. Link
• Wordscapes developer PeopleFun appoints Carol Miu, previously their Chief Product and Analytics Officer, as CEO. Link
• Hutch Games opens new office in Scotland. Link
• ACQUIRIS, developer of mobile racer Horizon Chase, enters multi-game publishing agreement with Epic Games. Link

Ecosystem Announcements

• Activision Blizzard stockholders approve its sale to Microsoft. Link
• Square Enix is selling Tomb Raider, Deus Ex, and its Western studios to Embracer Group. Link
• ESL Gaming and Gameloft for Brands launch an esports competition for Snapdragon Elite Gaming™ & Pagani Automobili in Asphalt 9: Legends. Link
• At least 3,000 apps, 38% of them games, face removal from the app store as Apple begins a purge of old and “outdated” apps. Link
• European publishers looking to Turkey for talent. Link

Content Worth Consuming

• Dutch Gambling Authority vs. Electronic Arts, and the future of loot boxes (GamesIndustry.biz): "The judge starts with the consideration that in the case of loot boxes, it must first be established whether obtaining or opening them can be regarded as a standalone game. Only if a loot box is a standalone game should it be assessed whether a loot box meets the definition of a game of chance. According to the judge, in order to determine this, it is necessary to look at how the game is played by the majority of players.” Link
• Testing Farm - Making mobile games testing easier on the cheap (GameDeveloper): "In short, a farm is a testing PC, similar to those used to test computer games, but with more budget hardware and without a GPU (it’s not necessary). The purpose of this setup is to create a place for an employee to get a testing device without physically accessing it. This is especially useful for companies with large device fleets, which would be harder to track otherwise. The more employees you involve, the more difficult it is, as each one would need a gadget. The farm allows you to keep the devices connected at all times and issue them without excess bureaucracy.” Link
• The rise of the Indian gaming market (GameMakers): “Unicorn announcements in India have literally 10x’d. In 2021, India had 44 new unicorn announcements. Only 37 companies had hit that mark in the prior decade. The country is minting unicorns.“ Link
• First Impression Seals the Deal – Introducing Onboarding Best Practices PART 1 (GameRefinery): “As illustrated at length in our earlier blog posts on why stories matter, the power of storytelling in the casual market, and this interesting deconstruction of unique storytelling elements in the RPG scene, storytelling is undoubtedly a powerful tool for creating emotional engagement, which in turn keeps the player coming back and investing in the thing she has a real connection with. The seeds of emotional engagement should preferably be planted right from the get-go and nurtured throughout the early stages of the game to benefit from their power properly.“ Link