May 25th, 2023: Market Updates

Reading Time: 9 minutes

#1: Nordcurrent 's Surge: Decoding The Leap & Future Outlook

Nordcurrent, the private company known for its time management, hidden object, and lifestyle games, recently announced that its revenue had experienced a phenomenal 42% growth in 2022. The impressive rise, from €62.8 million to €89 million, mirrors a sharp ascent in the company's EBITDA from €1.4 million in 2021 to €10.1 million in 2022. What's even more commendable is that this has happened amidst the current challenging climate of the F2P games industry. This raises a central question: what's driving Nordcurrent’s robust growth, and can they sustain it to meet their ambitious forecasts for 2023?

Before diving into our analysis, a caveat is in order. As Nordcurrent is a privately held entity, we rely on data.ai for our insights and limit our discussion to in-app purchase (IAP) revenue. Interestingly, despite a decline in revenue from Cooking Fever, their flagship time management game, and Airplanes Chef, another time management title, Nordcurrent managed to boost its IAP revenue in 2022. This can largely be attributed to the stellar performance of recently introduced games.

Newly launched games such as Happy Clinic, Murder by Choice, and Pocket Styler have contributed significantly to this growth. Happy Clinic, launched at the end of 2021, emerged as the biggest revenue generator for Nordcurrent in 2022. Its fresh approach to hospital management within the time management genre brought a breath of fresh air amidst the plethora of cooking-themed games.

Similarly, Murder by Choice, a hidden object game launched at the end of 2022, and Pocket Styler, a dress styler game introduced in 2021, also contributed to the higher revenue level in 2022.

Each of Nordcurrent's most recent games demonstrated a higher Revenue Per Download (RPD) than previous titles within the company's portfolio as you can see in the chart below (US, iOS):

Given that two of these newly introduced games belong to the time management and hidden object genres — areas in which Nordcurrent has considerable experience — it's plausible that the improved monetization of these games can be attributed to the company's accrued insights and knowledge from its past titles.

However, these new games show lower long-term retention rates, a trend that Nordcurrent's biggest title, Cooking Fever, also struggles with.

Given this situation, the revenue from the new apps might follow a similar decline as Nordcurrent's older titles. If this trend persists, Nordcurrent's revenue for 2023 could be lower than 2022 and on par with 2021, as seen in the forecasting chart below, jeopardizing its ambitious growth plans.

Future Prospects

Nordcurrent's flagship game, Cooking Fever, hasn't shown significant improvements in IAP monetization or long-term retention despite its longevity on the market. As such, we should expect its revenue to continue to decline.

Conversely, there seems to be more room for improvement for the recent games. Happy Clinic, for instance, could upgrade long-term retention to a level similar to top-grossing benchmarks by incorporating social competitive features and customization in a similar fashion to apps like Cooking Diary and Diner Dash Adventures.

However, these potential improvements might require substantial investment and might not fit Nordcurrent's present strategy.

With Murder by Choice, while challenging June’s Journey might not be feasible, increasing long-term retention to a level similar to its predecessor, Murder in the Alps, could provide a counterbalance to the declining revenue from older titles. Pocket Styler, on the other hand, faces a tougher challenge with low short and mid-term retention and stiff competition from games like Covet Fashion and Kim Kardashian Hollywood, which leverage brand partnerships, and Loving Nikki, which offers more complex gameplay.

Looking at newer titles, Nordcurrent has hinted at a Match-3 and dating game in development, but given their lack of experience in the puzzle segment, expectations remain modest. For Nordcurrent to sustain its growth into 2023, it would likely require a more diverse and robust development pipeline.

All in all, Nordcurrent's remarkable growth in 2022, characterized by a 42% increase in revenue, has been largely attributed to the launch and growth of its portfolio of new titles with superior monetization. However, maintaining this momentum throughout 2023 will necessitate strategic interventions, particularly around enhancing user retention for those titles while also robustly expanding its portfolio with multiple new games.

Game Launch Radar

#1: Monster Hunter Puzzle

Publisher: Capcom
State: Soft Launch
Territories: Canada
Classification: Puzzle — Match-3
Quick thoughts:
- Monster Hunter Puzzle combines the beloved Monster Hunter intellectual property with engaging Match-3 puzzle gameplay. In this game, players embark on a journey to reconstruct Feline Island, which has been devastated by the creatures from the Monster Hunter universe, and provide aid to distressed cats. You can watch a video of the gameplay here.
- Following the conventions of other puzzle and decoration games, Monster Hunter Puzzle incorporates a light narrative where players must tackle various Match-3 levels to earn currency necessary for completing different missions and progressing further in the game.
- Monster Hunter games are typically known for their RPG elements and are primarily found on consoles. Yet with a few smartphone titles released, this isn't the first time that Capcom's Monster Hunter team has explored the mobile puzzle genre. In a previous collaboration, the brand joined forces with Puzzles & Dragons. Additionally, in 2021, Capcom introduced a Japan-exclusive PSP game called Airu de Puzzle, which featured Match-3 gameplay, a Monster Hunter theme, and endearing cat creatures. This release likely served as a significant inspiration for Monster Hunter Puzzle.
- Although the gameplay mechanics will be familiar to Western audiences, the game's 3D art style, graphics, and user interface exude a distinct Nintendo charm. Given these factors and the Monster Hunter theme, it’s expected that the game will primarily target the Japanese market, leveraging the franchise's strong following in that region.
- While Monster Hunter Puzzle may not generate the same level of impact as the upcoming Monster Hunter game developed by Niantic, it can be a nice addition to the overall Monster Hunter franchise.

#2: Torchlight Infinite

Publisher: XD Inc.
State: Global Launch
Territories: Worldwide
Classification: RPG — Action RPG
Quick thoughts:
- Torchlight Infinite, developed by XD Inc., is an Action RPG that draws from Diablo and mirrors the UI of Diablo Immortal.
  - As an action RPG, the game involves an assortment of missions punctuated with a light narrative. Players are led through a map swarming with diverse enemy hordes, ensuring an engaging and constantly evolving gaming experience. You can watch a video of the gameplay here.
  - Character customization is a notable feature in Torchlight Infinite. Players can choose from a range of classes, collect weapons during gameplay, and unlock distinct skill trees as their characters level up. This dynamic adds depth and personalization to the gameplay, creating an ongoing sense of progression.
  - The game stands out for its polished graphics and smooth performance on mid-tier devices. However, it does lack a major feature that its main competitor, Diablo Immortal, has capitalized on — multiplayer functionality. This absence could put Torchlight Infinite at a disadvantage in a market where multiplayer play is a significant draw for players.

Other Game Announcements

Harry Potter: Magic Awakened to get a global release this summer (Link)
Hutch celebrates fifth anniversary of Top Drives with new short film (Link)
Hill Climb Racer 2 launches on alternative app stores (Link)
BattleGrounds Mobile India to be 'unbanned' (Link)
Mobile hit Space Marshals to become animated series (Link)
Takeone scores major brand power with the release of the Blackpink game (Link)
Dead by Daylight grows with spinoffs from devs Supermassive, Midwinter (Link)
NetEase announces global release of Eggy Party at the NetEase Connect 2023 (Link)
Honkai Star Rail exceeds $100 million in mobile revenue (Link)
Squad Busters to enter second closed beta test in select regions on May 22, 2023 (Link)
Avatar: Reckoning to enter closed beta test for Android in the Philippines on June 7, 2023 (Link)

Company Announcements

Former DICE creative director and Battlefield veterans form new studio - TTK Games (Link)
Netmarble drew 84% of its revenue from overseas sources in Q1 2023 (Link)
Take-Two full-year financials highlight Zynga acquisition and performance (Link)
Little Dot Studios invests in club developer Formation Games (Link)
Saudi Arabia boosts stake in Electronic Arts by 55% (Link)
Pixel United owners Aristocrat Leisure to acquire NeoGames (Link)
Sea Group sees Q1 success, but digital entertainment disappoints (Link)
My.Games opens regional office in Abu Dhabi (Link)
DDM game investments hit a four-year low in Q1 (Link)

Ecosystem Announcements

Report: Sony fails to appeal Austrian loot box verdict (Link)
Children's advertising watchdog takes aim at Roblox (Link)
Data.ai: Total app revenue, mobile games in-app ad spend (Link)
NYU: 51% of users have encountered extremism in gaming spaces (Link)
Razer adds Supercell titles to in-game rewards programme (Link)
As Apple prepares to open up, they remind us of what's waiting to get onto iOS (Link)
Carry1st brings India's Mobile Premier League to Africa (Link)

Content Worth Consuming

What's Next for Rovio (Deconstructor of Fun): "Japanese gaming giant Sega has confirmed that it’s buying Finnish Rovio in an all-cash deal worth $775 million. Sega’s offer represents a 63.1% premium on Rovio’s closing price on January 19 and a 19% premium on Rovio’s final closing price on April 14. The sale price is 22% lower than the IPO price. Our analysis takes a look into the future of Rovio as a part of Sega." (Link)
Legend of Slime: Idle RPG Post-IDFA Global Launch UA Strategy (Matej Lancaric): "Legend of Slime: Idle RPG is an action RPG. It is a role-playing game with both arena and online idle RPG game elements. This game provides an excellent item system, hundreds of weapons, and the defenses are divided into several different levels." (Link)
Enjoy These Tips to Improve Your UA Operations (Matej Lancaric): “Enjoy these few tips that will help you to improve your UA Operations. If you don’t, at least you spent few minutes reading and not working. Sit back, relax, and enjoy the winter Q2 edition and share this with your UA friends. They will love you!” (Link)
Mastering Retention Podcast: Neb Mitrikeski on Game Design and Ketchup Mechanic Problem (IronSource LevelUp): “In the latest episode of the Mastering Retention Podcast, Neb Mitrikeski, a veteran game designer and product manager, talks about his journey into game design, from making super casual games to working on complex game economies. He also discusses the Ketchup mechanic problem in RPG and hero collector games and how games can address it. Plus, he shares insights on bucketing systems and bucketing user progression over time.” (Link)
Accelerating ASO with the Use of ChatGPT (Azur Games): “Here Azur Games ASO manager Zlata Kazantseva, along with ASO lead Rustam Saidrakhmonov, share their findings after using ChatGPT 3.5 to help create keywords and texts for ASO purposes in their mobile game Survive Squad.” (Link)
Mobile Games Index (adjoe.io): “What does it take to rank as one of the best mobile games in the world? We know that hit mobile games happen when app developers aim for both quality and quantity. High-quality in-app experiences and active users translate into engaged gameplay. A high quantity of sessions and active global users leads to impressive user reach and retention. That’s why adjoe and Statista dive deep into app usage, demographics, and downloads in the Mobile Games Index.” (Link)
The Unity Gaming Report: Diving in with the Team Behind It (Level Up Podcast): “In this LevelUp episode, Melissa sits down with Emory Irpan and Nathan TenBoer, [Unity’s] Director of Operations, Consultancy, and Insights and [Unity's] Lead Partner Manager and Insights, respectively — two of the minds behind the Unity Gaming Report. Together, they get into the data behind the gaming industry, what didn't make the cut, why 2D games are making a comeback, and the value of pretty charts.” (Link)