Hi Everyone. Before diving into today’s issue, we’re excited to announce a new partnership with Lightspeed Venture Partners!
This comes in conjunction with Lightspeed formalizing their gaming practice (as of today) and funding game studios, platforms and technologies. Our partnership will involve working with the team on a bunch of research content, and even more that we'll announce in the future.
Below, you can learn more about Lightspeed's plans through our interview with Moritz. He has joined as Partner to lead their gaming efforts and someone we've had the privilege of getting to know in the recent years. Our congrats to whole team and we can't wait to see what's next!
Moritz Baier-Lentz: The State of Gaming VC
- His move to LSVP and the team’s revamped ambitions to invest across the games industry.
- Lessons learned as a VC, including how he’s grown as an investor.
- The current state of the venture market and his advice to founders on how to navigate tougher times.
- Insights on investing in web3, AI, game studios, and more!
#1: State of Accessibility In Gaming
Sony made headlines recently at the 2023 Consumer Electronics Show — not for any major game reveals this time, or for any jabs thrown at Microsoft, but for its announcement of Project Leonardo, a new initiative focused on increasing accessibility in gaming.
Project Leonardo is Sony’s codename for a new controller kit that emphasizes player customization and comfort. The controller — created in partnership with charitable organizations AbleGamers, SpecialEffect, and Stack Up — is designed to work “out of the box” with PS5 consoles and other third-party accessibility tools. Sony’s goal for the new kit is to help “players with disabilities play games more easily, more comfortably, and for longer periods.”
This is a welcome development for the industry, as accessibility in gaming is a topic deserving of greater attention. Improving the accessibility of gaming hardware and software makes our industry more inclusive and brings the joy and social connection of gaming experiences to more people.
Beyond being a cultural and inclusivity imperative, this also represents an opportunity to expand the industry as a whole. By making games more accessible, companies grow the pie of gamers who can play and enjoy their products, while also garnering positive media and social sentiment for their efforts. Put differently, designing for accessibility ensures a game can be experienced and fully enjoyed by the widest possible audience. For a good overview on the importance of accessibility, check out this piece from the IGDA Games Accessibility Special Interest Group.
To put some loose numbers around this important audience, we can look to the existing body of research for some rough benchmarks to size the accessible gaming market:
- One study done by the Accessibility Foundation in Utrecht, The Netherlands found that approximately 92% of people with some kind of impairment also play video games. Taking that one step further, the WHO estimates that 1.3 billion people (roughly 1 in 6 worldwide) experience a “significant disability”. Combining those two figures puts the result at well north of one billion disabled gamers.
- Another study conducted by PopCap Games in 2008 found “more than one in five casual game players were suffering from a disability”. If we assume a similar incidence of disability across all other genres and pair that with Statista’s estimate of 3.2 billion gamers worldwide in 2023, we get roughly 640 million gamers with a disability. Using the more conservative 1 in 6 estimate from the WHO instead reduces the count to 533 million.
Of course, these calculations rely on their own set of assumptions — for example, “disability” might encompass a wide variety of conditions. Furthermore, we’ve not considered differences in region, platform, genre, or financial means, among many other factors. Nevertheless, it’s helpful to put some rough estimates around the size of this market. Given that potential return on investment ultimately drives prioritization of accessible games features and products, it’s useful to at least have some ballpark numbers to fall back on.
Beyond market sizing, we also have some limited data on consumer preferences. In one Accessibility in Gaming Report conducted in the UK, disabled gamers were shown to be more likely to purchase add-ons and subscriptions than their differently abled peers. They were also more likely to watch esports and game streamers. Additionally, the report references an Accenture analysis that found that companies prioritizing digital inclusion were “twice as likely to have higher shareholder returns, achieve 28% higher revenue, and see a 30% better performance in economic profit margins.”
Fortunately, Project Leonardo is not the only effort being made to increase accessibility in gaming. Though Project Leonardo marks Sony’s first foray into accessible hardware, the company has previously earned accolades for its use of accessible design in first-party titles like God of War and The Last of Us.
Microsoft has also been a leader in this area, with the release of the Xbox Adaptive Controller in 2018. The controller, which retails for $99.99, is designed to be used with a variety of different inputs, including switches, buttons, and joysticks, allowing differently abled players to customize their gaming experience deeply. This release was so impactful that Time named it as one of its “50 Best Inventions of 2018”.
Nintendo has also been lauded for its efforts to increase accessibility in gaming. In 2020, the Washington Post recommended Nintendo’s Switch console as the top accessible gaming device for physically disabled individuals looking to get started with gaming. This was primarily attributed to its flexibility (switching from tablet to docked full-screen), button remapping, and community of enthusiasts developing their own solutions. We also know, based on statements from Nintendo’s former President and COO Reggie Fils-Aimé, that an adaptive controller — inspired by the Xbox Adaptive Controller — was at one time in the works.
Additionally, there are a variety of third-party controllers available for both PC and console to accommodate a range of abilities and needs. Some developers are doing away with controllers altogether, instead relying on inputs like voice commands or even Snapchat lenses. However, one area where accessibility is still lacking is in mobile gaming, where the available solutions appear to be less developed when compared to other platforms. Developers like Sesame Enable have created hands-free tools that can be operated via head control, and most major handset manufacturers have built-in accessibility tools, but compatibility with major games can be hit or miss.
Luckily, there are many sources of information available for both players and developers who are interested in increasing accessibility in gaming. Websites like Can I Play That? provide reviews and information on the accessibility of different games, while resources like Game Accessibility Guidelines provide developers with a comprehensive list of recommendations for making their games more accessible.
There is also a variety of research findings on accessibility in gaming available online, even covering emerging form factors like VR. I personally found this Game Developer piece to be a great overview on the topic and its many nuances, and was particularly struck by how much research has already been done. The information is out there already — the onus is now on developers to prioritize the work.
So, how can we encourage more developers to pursue accessibility features? One way is to continue to bring recognition to forward-thinking efforts by developers operating in the space —for example, through awards like GAConf Awards, which celebrate the best in accessible gaming across a variety of categories. Additionally, as emerging form factors like mixed reality and MILEs continue to gain popularity, it will be important for developers to keep accessibility in mind when creating games for these new platforms. This is especially relevant given the recent trend of building games cross-platform from day one, or spreading existing games to new platforms via cloud distribution.
Accessible design should not be limited to just hardware, either. Game developers should do more to incorporate basic accessibility settings, such as customizable controls, colorblind modes, and subtitles. We as an industry also need to dispel the notion that implementing these types of features somehow compromises a game’s “creative vision”. As the gaming industry continues to grow, it is important for companies and developers to prioritize accessibility in order to ensure that all players have the opportunity to enjoy the games they love. After all, gaming is for everyone, and if a particular game can only be played by audiences with no disabilities, it’s a sign of an unfinished product. (Written by Matt Dion)
#2: Marvel Snap: The Age of Cosmetic Economies
Marvel Snap (MS) is a Collectible Card Game (CCG) in which players assemble decks of cards from a roster of Marvel heroes and villains and take part in 1v1 strategic card battles. The game was developed by Second Dinner, a team of ex-Blizzard and Hearthstone veterans, and published by Nuverse, a subsidiary of ByteDance. With a mobile-friendly portrait mode CCG, battles lasting about 3 minutes, high production values, a cross-platform release, and the infusion of Marvel rich IP, MS ticked all the boxes of becoming a top contender in the F2P space. This is despite CCG-battle games representing only <0.1% of all downloads and <0.7% of all revenue in 2022.
The game comes from the makers of Hearthstone — an F2P CCG set in Blizzard’s biggest IP (Warcraft), the most lucrative mobile CCG-battle game, and Blizzard’s best performing mobile F2P game in terms of lifetime revenue. The public persona that led the creative vision for Hearthstone and now Marvel Snap — Ben Brode — has an epic backstory of his own, initially delivering pizzas to Blizzard’s office, then becoming one of two sole creators of Hearthstone, and now being an executive at Second Dinner as Chief Creative Officer on Marvel Snap (his full saga can be read here). In 2018, after a decade with Blizzard, Ben and Hamilton Chu (previously EP of Hearthstone) left Blizzard to form Second Dinner with several other ex-Hearthstone team members.
In fact, Second Dinner’s first 5 employees (introduced in this team announcement video) are all ex-Team 5 members from Blizzard’s Hearthstone team. By the time Marvel Snap launched, the team consisted of about 60 employees, primarily in the engineering, design, and art divisions. As Ben states in the official announcement trailer, Marvel Snap is the result of 4 years of work as “the culmination of everything we have learned about making super fun card games."
Since its global release two months ago, Marvel Snap made $24.8M in mobile revenue from 10.8M downloads, with the US accounting for $13.3M (58%) and 2.41M downloads (29%). South Korea comes in second, accounting for $1.7M (7.3%) of revenue and 0.4M downloads (4%). The revenue trends show a good balance of western and eastern markets, though the downloads mostly skew westward. The game has also launched on PC via Steam, with cross-play enabled. Although being published by a Chinese publisher, MS has yet to see a release in China — the biggest market for mobile F2P CCGs. That may of course come one day, and NetEase, which invested $30M into Second Dinner, most likely will be the one to publish the game in China.
Marvel Snap has made a heroic landing in the market of CCG strategy games, making it in the top 10 by revenue in 2022 despite being live for just 2 months. The market by revenue for CCG strategy games is led by Yu-Gi-Oh and Hearthstone in the $53-77M range. This is in stark contrast to the strategy genre led by top 3 titles like Three Kingdoms Tactics, Clash of Clans, and Rise of Kingdoms, making $445-550M in the same period. CCG games don’t make it into the 100 top-grossing games list, featuring titles with +$100M in revenue. An important caveat is that these CCG games are available on PC and other platforms and make decent business there. For example, when Konami reported its fiscal earnings, celebrating the success of Yu-Gi-Oh (link), only 6M of the game’s total 30M downloads were from mobile. Yet, MS has made a big splash upon arrival, and in its first 60D of being live, it’s made it to #1 by revenue in CCG strategy games by making $21.9M on mobile — more than twice the revenue of Hearthstone, which is #2 on the list with $9.7M.
Looking at its performance on US iOS in the first 60 days after launch, Marvel Snap is a cut above the rest, with $7M in revenue from 1.2M downloads. Yu-Gi-Oh! Duel Links, which comes in second place, had a similar number of downloads in its first 60 days but less than half the revenue at $3.2M. Magic: The Gathering Arena (MTGA) comes in at third place with $2.6M in revenue from just 0.4M downloads. Right out of the gates, Marvel Snap is outperforming Hearthstone on US iOS, which made $2.4M from 0.8m downloads in the same time period. Clash Royale, a strategy CCG with summon battles, is in a league of its own, however, making $49M from 5.6M downloads.
On the Revenue Per Download (RPD) front, MS’s $5.97 comes in second to MTGA’s $7.13 and well above Hearthstone’s $3. This early performance shows that the Second Dinner team has created a game that's got broader appeal (higher downloads) thanks to the Marvel IP and is able to monetize its audience better (with higher RPD and overall revenue). The team obviously plays to its strengths and genre mastery and is able to apply its learnings in order to make the best bet going forward.
Winning The Game Awards 2022’s Mobile Game of the Year and being coveted by many publications as the player-friendliest mobile F2P game (link, link), MS has managed to create a lot of positive buzz on release. The most common aspect discussed about the game is the lack of “predatory F2P monetization” practices and relying mostly on cosmetics monetization that “don’t affect gameplay.” The best thing going for MS is its unique, streamlined take on card battles — it's fast, fun, and there's nothing that plays quite like it with an addictive balance of skill and luck. The Marvel IP infusion helps reach a broader audience in the world of post-IDFA marketing, and the less aggressive monetization helps retain that broad audience for hopefully a longer time period.
With a novel take on a cosmetic economy, a cross-platform release, wide appeal to a broad audience, and by monetizing a large part of its audience with downright submissive IAPs (designed to be repeated in short bursts in daily and monthly cycles) MS is likely to maintain its position at the top of the CCG charts. In this deconstruction, we’ll cover the ins and outs of MS:
- The differences in iOS and Google Play performance
- Breaking down the Core Loop and Metagame design
- A deep dive into the Collection and other Progression Vectors
- MS’s unique Monetization Strategy
- The future roadmap
Let’s dive in.
Content Worth Consuming
MapleStory’s Metaverse (Dirt): “Every few years, whenever my life reaches a stalling point, I succumb to a familiar urge. I boot up MapleStory, a massively multiplayer online role-playing game that I have intermittently played since I was about nine years old. First launched in 2003 by the South Korean game developer Nexon, MapleStory is an open-world adventure game with a simple premise. Players select a specialized job class — warrior, mage, thief, bowman, or pirate, among other more elaborate classes — that informs their avatars’ skills. Armed with these magical abilities, they set out to explore the greater Maple World, hunt down monsters for training experience (XP), and complete quests to fulfill their heroic destiny.” Link
GameCraft: Mitch Lasky and Blake Robbins launched a “limited series about the modern history of the video game business.” The first few episodes on F2P and publishing have been phenomenal. Link
Gaming Industry Report Q4 2022 (Konvoy): “Our analysis of the gaming market in Q4 2022 covers industry-specific trends in venture capital funding, public market data, and qualitative themes our team is monitoring as we enter a new year. While gaming has historically been resilient to adverse market conditions, this past quarter has demonstrated substantial headwinds that will have to be addressed head-on in 2023.” Link
How "Battle Royale" Took Over Video Games (New Yorker): "In the mid-nineteen-nineties, Koushun Takami was dozing on his futon on the island of Shikoku, Japan, when he was visited by an apparition: a maniacal schoolteacher addressing a group of students. “All right, class, listen up,” Takami heard the teacher say. “Today, I’m going to have you all kill each other.” Takami was in his twenties, and he had recently quit his job as a reporter for a local newspaper to become a novelist. As a literature student at Osaka University, he had started and abandoned several horror-infused detective stories. But the well had long since run dry; he had left his job with neither a plan nor a plot in mind. The visitation wasn’t a haunting; it was an epiphany." Link
5 Secrets Behind Mr. Autofire's $40M Success with Co-Founder Miikka Ahonen (DoF): If you've triggered a rewarded video ad anytime in the past few years, you have most likely seen a captivating, easy to understand advertisement for Lightheart Entertainment's hit game Mr. Autofire. With over $40m in lifetime revenue and still growing, Mr. Autofire is an understated and indisputable success story. In today's interview, Ethan sits down with Lightheart Co-Founder Miikka Ahonen about the founding of the company and the birth of Mr. Autofire. Most importantly, Miikka reveals the 5 Key Questions the Lightheart team used when assessing the concept behind the game and deciding whether this was or was not the right first game for Lightheart to bring to market. Link
- Dims: Game Engine Programmer (Stockholm, Remote)
- LBank: BD Manager (Remote)
- Mod.io: Developer Relations Lead (Remote)
- Immutable: Principal Engineer (Australia, Remote)
- Carry1st: Lead Game Designer — Cooperative Social Slots (Remote)
- People Can Fly: Senior Market Research Analyst (Canada, Remote)
- GoFashion: CTO / Senior Unity Developer (London, Remote)
- NetEase: Strategy & GameDev Enabling Manager (Remote)
- PlaytestCloud: Full Stack Engineer (Berlin, Remote)
- FunPlus: Lead Game Developer — Casual Games (Barcelona)
- FunPlus: Senior Game Developer - Unity (Barcelona)
- FunPlus: Senior Game Developer (Barcelona)
- Included Games: Senior Mobile Game Designer (London, Remote)
- Stillfront: SVP Operations Management & Processes (Stockholm, Remote — Europe)
- Naavik: Managing Editor (Remote)
- Naavik: Roundtable Panelist (Remote)