Splitgate Finds Its Stride

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#1: Splitgate’s Unexpected Growth

Splitgate Summer 2021 — *Source:* *Splitgate*

The latest indie craze isn’t Fall Guys, Among Us, Valheim, or Rust, this time it’s an arena FPS called Splitgate. Perhaps better known as “Halo meets Portal”, Splitgate was released two years ago and was made by 30-person team. 1047 games came on our radar a few weeks back when they announced a $10M raise to increase server capacity and a TikTok went viral about their efforts to mitigate the issue. Since launching their beta for crossplay in July, Splitgate has exploded in popularity, and after streamers showcased it on Twitch, too, it now regularly clocks almost 200k concurrents across systems. IGN had great coverage about some of the growing pains, but anecdotally due to server capacity, I’ve waited (happily) ~30-45min just to get into a lobby. And as a huge fan of Halo, I’ve enjoyed the fast-paced, punchy, and accessible nature of the game. I’ve played an embarrassingly inordinate amount of hours this week and last.

Splitgate Graph — *Source:* *SteamCharts* *(PC only)*

From a business perspective, I’m intrigued by this game because it’s yet another example of a small dev team’s tenacity, working post-release to bring a game to new and viral heights. This past year, we’ve seen a lot of small dev teams find newfound success and it’s likely this trend will continue. Tools like AWS and Unreal Engine 4 have significantly lowered the barrier to entry for dev teams like 1047 Games to be able to release games. It also speaks to the power and distribution of cross-play, opening up access for multiple communities to come together to play. For Splitgate, there are a lot of intersecting forces: a critical mass of players, a variety of famous streamers marketing the game to their communities, the familiarity of Halo with the added dimension of a portal, and the anticipation of Halo Infinite. The timing couldn’t have been better.

Still, Splitgate has a lot of room to grow, and much like its small dev predecessors, the pressure is on to iterate in order to stay relevant in the zeitgeist. This is something perhaps other small dev teams with live ops capabilities might have missed out on: getting users to return to play their game (though, it seems Rust and Among Us have done a good job at this). With a new round of funding, 1047 Games is in a position to iterate quickly, improve the core experience, and build out new components so that current users continue to come back and buy in-game assets. Here are a few directions that might make sense to grow into as 1047 Games builds out its core team and finds some bandwidth:

As it comes out of beta, gear the UI toward purchase decisions: battle passes, skins, emotes. These economics matter for the game to be able to hit its next inflection point.
Build out capacity for cross-play on mobile (I couldn’t think of a more perfect pairing for a Backbone Controller; I feel like the fast-paced, arena format is so natural to mobile).
Iterate around its most unique value-add, the portals. In my mind, the portals consistently add depth to the player experience in novel ways that other FPS’s don’t. For example, letting users build out their own portal maps (s/o Halo Forge) and share with friends will engage players in new ways.

All this being said, the 1047 Games team has done incredible work: simultaneously rolling out cross-play, scaling a game to 200k concurrents, kicking off streamer tournaments, and dealing with server issues on the fly. With Xbox, Tencent and Sony eyeing the intersections of the mobile games and console spaces, and with FPS’s like Free Fire and COD doing so well on mobile, Splitgate has massive potential to monetize and scale a superb player experience. (Written by Fawzi Itani)

#2: UA’s Emerging “New Normal”

In User Acquisition (UA) circles, the release of iOS 14.5 in April 2021 was framed as apocalyptic event: Apple forced mobile developers and ad networks to completely rethink how they utilize device data for targeting and optimization. Today we know that it was much less the snap of Thanos’ fingers and more the beginning of a tectonic shift in the ecosystem. The direction is irreversibly set towards less device-granular data and more prediction models based on anonymized or aggregated data, but it will take years for a new normal to emerge.

This Q4, Facebook and Google will roll out further policy changes limiting access to device-level data. In particular, the Facebook changes will weaken the reporting advantage Android currently has over iOS 14.5+. Facebook also announced a paradigm shift in their ads platform, with new privacy-regulation-compliant tools rolling out from 2022. Here are the details:

Facebook’s Privacy Evolution

Starting October 29th, 2021, Facebook will no longer allow sharing of device-level attribution data with advertisers by Mobile Measurement Partners (MMPs) like Adjust and Appsflyer, even for devices that clicked on those advertisers' ads. Even though MMPs will offer aggregated performance reports for Facebook campaigns, this is bad news for teams that run Facebook UA on long-lifetime-value-duration games with deep in-game monetization because:

Aggregated reports won’t correctly attribute revenue by devices 180 days after their install date.
The options to tailor reattribution rules and perform incremental analyses via the MMP will be limited compared to what a data science team is able to do with currently available data granularity.
In-game individualization tools won't be able to use Facebook marketing campaign information to determine which offer to make to a user.

UA teams on such long-IAP-LTV games will have to rely on data science to create prediction models that can bridge these gaps based on aggregated reports in order not to lose competitiveness. On the bright side, unlike Apple's de facto deprecation of IDFA, this change doesn't negatively affect an advertisers' ability to send device-level optimization events to feed Facebook's — for mobile games — most profitable types of optimization goals (Event and Value Optimization).

Beyond the short-term, Facebook seems to have accepted that government and platform regulation will continue to constrain the collection and sharing of user- and device-granular data. According to an official announcement on August 11th, Facebook is "investing in a multi-year effort to build a portfolio of privacy-enhancing technologies". The overarching goal is to limit the information any party can learn about an individual user while preserving algorithmic targeting and optimization.

Facebook calls out two approaches:

Multi-Party Computation, which should enable two or more parties to process data like purchases attributed to an ad campaign. This will optimize targeting without having data that would allow them to infer which specific people did a certain action. A first product called "Private Lift Measurement" has been in testing and is supposed to be broadly accessible in 2022.
On-Device Learning, where targeting-relevant data points like in-app purchasing behavior are processed on-device and are never shared with providers like Facebook.

Google tightens data access

Earlier this year, Google announced a similar direction to replace third-party cookie tracking on the web, and it would be natural to assume such a solution to be part of future Android OS version. In the short-term, Google will also tighten the access and usage of "personal or sensitive user data" on Android apps distributed through Google Play as part of various policy change announcements.

Specifically they announced a "Prominent Disclosure & Consent Requirement". The announcement sprouted speculation that this would be Google following Apple in a de facto deprecation of the device advertising ID by introducing an opt-in requirement. However, this does not seem to be the case: in its policy changes Google consistently distinguishes "personal or sensitive user data'“, "persistent device identifiers", and "resettable device identifiers" (which includes the advertising ID). Accessing the advertising ID will not require developers to implement additional disclosure or consent.

What Google's updated policies will actually do is enforce a user's option to opt-out of personalized advertising with Android 12+. Amongst others, Google forbids linking the advertising ID to personal or persistent information, as that could be used to forward fill IDs for opt-out users. The negative impact on Google Play UA will be low for years to come, as only users who bother enough to find the opt-out setting are lost to deterministic UA attribution. For reference, it took four years from Apple's release of the equivalent change in iOS for 20% of the iOS user base having opted out.

All of these changes mean that UA teams will increasingly rely on data science teams to fill reporting gaps with prediction models. Companies relying on mobile UA should also expect and embrace major changes for years to come. (Written By Justin Stolzenberg, Co-Founder of Phoenix Games)

📚 Content Worth Consuming

Why Microsoft Should Acquire a Mobile Games Studio (WindowsCentral): “Simply put, the mobile gaming industry is absolutely massive, and enjoys the lion's share of recent industry growth. According to Newzoo, the industry stands at roughly $180 billion dollars as of 2021, and 59% of that comes from mobile spend. Most of the growth is also in mobile too, hitting 26%, while consoles and PC hit less than half of that in the same time period. Despite its size, the mobile game industry comes with some significant challenges. The cost of user acquisition in the mobile game space is similarly enormous. The competition is incredibly aggressive, and curation on storefronts like the iOS store and Google Play means that bigger studios and teams need to pay out literal millions of dollars just to get their apps seen. Outside of unique indie hits that blow up on social media, navigating the market is complex and quite costly, if you don't know what you're doing. Arguably, I'd say Microsoft has shown a lack of expertise in this area — or at least a lack of will.” Link

Is The Future of Games Instant? Ft. Emily Greer and Lars Doucet (Gamemakers): “We talk about the history and future opportunities for Instant Games. Joining us is Lars Doucet who wrote about this in his blog post and Emily Greer, who as the former founder and CEO of Kongregate, has a strong perspective on this.” Link

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Spirtual Opium and Gcommerce (2pm): “Headquartered 20 miles south of Tel Aviv, Sayollo Media is billed as “the world’s first mobile platform to enable uninterrupted native blending of video content within real-time virtual environments in mobile games.” The company refers to its practice as gCommerce. Led by CEO Jonathan Attias, Sayollo has built remarkable technologies around broadcasting in-game imagery that promotes in-game commerce. Imagine seeing an in-game Domino’s billboard and ordering a pizza to arrive, all while playing the game. This is the thesis that Attias believes will revolutionize commerce principles within mobile gaming. In a greater sense, this melding of the real world with the virtual is the next step towards comfort and dependence on this form of consumerism.” Link ($)