Top News

#1: How Will Zynga Change Take-Two’s Mobile Business?

Take-Two Interactive has released its FY22 annual earnings report, and mobile games make up only 12% ($403 million) of FY22 revenue. Of course, Take-Two has just acquired mobile giant Zynga, a move that CEO Strauss Zelnick calls “a transformative moment for Take-Two,” and this will significantly boost mobile’s contribution to Take-Two’s bottom line. To understand how Zynga fits into Take-Two’s mobile business, let’s take a look at its current portfolio of mobile games, upcoming game releases and how Zynga will be able to fill in the gaps in Take-Two’s mobile offerings.

Take-Two’s current slate of F2P mobile games is largely split into 3 categories: mobile-first games that fall under the T2 Mobile umbrella, mobile versions of its core franchises released by 2K Games and Rockstar, and finally F2P games related to its core franchises like WWE Supercard.

The top-performing games under T2 Mobile are Dragon City, Monster Legends, Two Dots, and Top Eleven. According to Sensor Tower, these four games earned $151 million in revenue over FY23 - pretty good but not spectacular numbers. These games have also been out for a long time, and while it's laudable that the teams behind the games have been able to engage players and accrue good revenue from them for so long, they are definitely not launchpads to explosive growth.

What Take-Two is missing is a slate of new games to rejuvenate its portfolio, and its purchase of Zynga is definitely heading in the right direction. Even without Zynga, though, Take-Two has planned the release of 20 new mobile games (not including any releases from Zynga) in the next 3 years.

There are 8 F2P games being planned for release in FY23 alone, and they will be a combination of 4 new IPs and 4 existing franchises. One of the new IPs could be a new unannounced match-3 game being developed by SocialPoint, as seen from this job posting for a cinematic artist. Beyond FY23, Take-Two plans to release a further 12 new games across FY24-FY25. That certainly seems like an ambitious undertaking, particularly as its studios have not released any hits recently. Social Point, PlayDots, and Nordeus have all launched unsuccessful titles within the past three years in an attempt to diversify beyond their core games. With the Zynga acquisition, these studios may be pressured to deliver results sooner rather than later in order to stay relevant within the organization.

Speaking of Zynga, it will bring its impressive and diverse portfolio of games into the Take-Two fold, not to mention mobile leadership and systems that will help run the combined mobile business. This includes casual puzzle games like Toon Blast, sports and racing titles like CSR2, casino titles like Zynga Poker, and its now substantial Hypercasual offerings. One thing that has potential to benefit both parties is Zynga’s advertising business. It will have access to a new portfolio of games with audiences quite different from Zynga’s own pool of games, which could be a new source of ad placements.

Take-Two has certainly worked to grow its mobile business over the years — both organically and via smaller M&A — but this move will make it one of the major players in the space. It’s no surprise that Zynga continues to struggle with growth in a post-IDFA, but the combined business will still be important and worth closely following. Plus, with access to a wider portfolio, more developers, and more IP, it will be interesting to see what sort of synergies the combined team can find, whether it is able to leverage this acquisition to eventually supercharge growth, and how mobile leadership will play a larger role in Take-Two’s future. We’ll be watching.

#2: China’s Mobile Game Market Exceeds $9 Billion In Revenue In Q1

A report by Chinese research institute Gamma Data (also known as CNG) has shown that China recorded 60.432 RMB (around $9.13 billion) in revenue over Q1 2022, representing a modest growth of 2.72% YoY. Games from Tencent dominated the mobile market led by the perennial top-ranking MOBA, Honor of Kings. The chart below from Sensor Tower (iOS only) shows the top 10 mobile games by revenue, with half of them belonging to Tencent (Honor of Kings, PUBG Mobile, League of Legends: Wild Rift, Crossfire: Legends, and Teamfight Tactics).

According to CNG, the main driver for growth was the increase in revenue from existing titles like Genshin Impact and Fantasy Westward Journey, although there were some contributions from newly released games like Civilization and Conquest. This is no surprise as China had stopped approving new games from July last year and only opened up approvals for 45 new games this year, mainly from smaller developers and not including games from Tencent of NetEase. With new game approvals opening up, will we see growth begin to accelerate again?

An article by Gamelook references data from CITIC Securities which showed a growth of 26.47% in the market after the 9-month game freeze of 2018. They speculate that growth will begin to accelerate in a similar manner, with the resumption of new game approvals from April. Tencent, on the other hand, has a slightly more cautious approach. In its quarterly earnings call (see transcript here), Tencent’s Chief Strategy Officer James Mitchell stated that while he believes the industry grossing trends will begin to improve, “it’s not an immediate process and it will take several months to play out.” He also believes that game approvals will not go back to their pre-2018 days, which is why Tencent is now focusing on “releasing and usually developing fewer bigger budget and hopefully better games.”

Game Launch Radar

#1: Marvel Snap

• Publisher: Nuverse
• State: Closed Beta
• Territories: United States, Canada, Philippines, Singapore, Hong Kong, Australia, New Zealand
• Classification: Mid-Core - Card Games - Card Battler

• Quick thoughts:

  • Marvel Snap (Snap) has been announced by Nuverse (Publisher) and Second Dinner (Developer) and is currently out on closed beta in select territories. The game is described as mobile-first, but it’s not mobile-exclusive and will be coming to PC as well. Watch the gameplay trailer here.
  • The developer Second Dinner is a studio created by ex-Hearthstone developers, so the CCG pedigree is definitely there.
  • The unique selling point for Marvel Snap looks to be in the pacing of the games, as Snap is played in real-time. The deck size has also been reduced in an effort to relieve cognitive load and make the game more accessible. One interesting addition is the “Snap!” feature which allows players to double their rewards at any point in the game, leading to mind games. Overall, it looks like a refreshing take on the CCG genre and we are looking forward to playing it ourselves!

#2: Arat: TPS MOBA

• Publisher: Dreamstar Network Limited
• State: Early Access
• Territories: Philippines, Malaysia, Indonesia
• Classification: Midcore - Shooter - Classic TPS

• Quick thoughts:

  • The gameplay is, as its name suggests, a hybrid 3v3 third-person shooter with MOBA mechanics. There isn’t anything too ground-breaking in here, although the arenas that you play on are quite diverse in theme — from playing on the rooftops of an abbey to a level made up of cakes and chocolate.
  • Where Arat has innovated is in the meta; beyond the shooter gameplay, players can also mingle and socialize in a hub called BitCity. Players can show off their customized avatars, chat, and even spark off a romance.

#3: eFootball 2022

• Publisher: Konami
• State: 2022 Update
• Territories: Global
• Classification: Sports & Driving - Sports - Realistic Sports

• Quick thoughts:

  • The coming update on June 2nd to eFootball 2022 has been a long time coming, with delays of up to 10 months as reported by GamingOnPhone.
  • The 2022 update includes a major feature: cross-platform play. Mobile players will be able to play against PC and console players with the small caveat that they are required to use a controller.
  • In terms of revenue, eFootball and its main competitor, FIFA Soccer, are neck-to-neck with $40+ million in revenue each during Q1 2022. Where they diverge is in downloads, with eFootball being downloaded 15 million times vs 38 million for FIFA during the same period, resulting in a much higher RPD for eFootball at $3.50 versus $1.30 for FIFASoccer. The majority of eFootball’s revenue comes from Japan and South East Asia while FIFA Soccer gets most of its revenue from China, Europe, and the US. Will cross-platform play be the killer feature that allows it to breach new markets? My prediction is that the requirement to use a controller will severely hamper actual cross-pollination of the player base and may not move the needle all that much.

Other Game Announcements

• Catalyst Black announced its global release date to be May 25th. Link
• Roller Champions, a AAA game for PC and Console, will also be released on mobile with cross-play. Link
• Underground Gang Wars, a battle royale game “made for India”, will be open for pre-registration on May 22nd. Link
• The PUBG Mobile World Invitational (PMWI) 2022 has been announced and will be the largest invitational event to date. Link
• Final Fantasy: Ever Crisis, a mobile re-telling of the FVII story, is set to release in September. Link
• Following its global launch, Apex Legends Mobile is the most downloaded iPhone game in 60 countries. Link
• Supercell announced its 2022 plans for Clash of Clans, including the already released Clan Capital. Link

Company Announcements

• TikTok is planning a big push into gaming. Link
• NetEase hires PlayStation PR executive David Wilson as Director of Public Relations in Europe. Link
• 10% of Take-Two Interactive’s revenue comes from mobile. Link
• Gameloft opens up a new studio in Paris. Link
• The Battle Cats hits the 70 million download milestone. Link
• Mobile multiplayer specialists Funday Factory announced the appointment of Jeppe Kønig, ex-Director of Publishing of Kiloo Games, as Head of Publishing. Link
• Genvid, creators of Massively Interactive Live Events, announce former Disney exec Andrew Schneider as President of Genvid Entertainment. Link
• Casino game specialists Product Madness opens a new studio in Spain. Link

Ecosystem Announcements

• GameRefinery unveils its finalists for the 2022 Mobile GameDev Awards. Link
• Game distribution company Flexion has reached an agreement with FunPlus to distribute its game King of Avalon on alternative app stores, including the Huawei App Gallery and Samsung Galaxy App store. Link
• Hyperlab, an Istanbul-based Hypercasual studio founded by ex-Crytek staff, raises valuation to $6.5 million post-seed funding round. Link
• Saudi Arabia’s public investment fund now owns 5% of Nintendo. Link
• Andreeseen Horowitz announces $600m Games Fund One. Link
• Mobile game marketing analyst Eric Seufert announces a $10 million investment fund backed by Supercell and Huuuge Games. Link
• Digital advertising firm Tappx acquires mobile developer From The Bench. Link
• Mobile marketing platform Leanplum is acquired by CleverTap, an engagement-solution platform. Link
• Blizzard faces class-action lawsuit over Hearthstone card packs. Link

Content Worth Consuming

• Here’s the talk Supercell CEO Ilkka Paananen called “inspiring” - Trailmix’s guide to diverse design (MobileGamer.biz): “We think players get really excited about this because most mobile games don’t have as much diversity, so it’s something different and special, and it’s also moving to players who feel personally underrepresented to see themselves reflected in the game.” Link
• Mod.io's Scott Reismanis on the impact of UGC in games (GameDiscoverCo): “There's not a mobile studio that we can talk to, that isn't thinking about this in some form or another. And they’re considering their strategy and approach to this. From my perspective, there's a few things that I don't think studios are always aware of. Content creation doesn't have to happen on the device of consumption. If you've got a passionate player base, modding is a multiplier of success. And so there'll be a percentage of your users that see themselves more as creators than they do as consumers. When you enable this functionality, they'll figure out whatever you offer to do it.” Link
• Keep Your Players Coming Back – Introducing Onboarding Best Practices PART 2 (Game Refinery): "Another interesting example of combining new player daily login mechanics with new player tasks can be found in Garena Free Fire. The game has a system called “Newbie Corner,” which is a daily system with daily login rewards and daily new player tasks, granting different essential rewards for the player, such as weapons, characters, and skins. When the new player tasks are open only daily, there is a sense of urgency and a need to come back to the game every day.” Link