Top News

#1:  XD Inc Reports A 15.6% Year-On-Year Increase In Revenue

XD Inc, a Chinese developer, publisher, and owner of the TapTap platform, reported a 15.6% bump in H1 revenue (primarily attributed to paying user growth in Sausage Man), an impressive feat given that the rest of the industry faced shrinking revenue.

XD is an interesting company to profile as, besides its publishing and development segments, it is fully committed to its third-party games platform TapTap. Its business is divided into the Games and Information Services divisions, and the Games division includes 20 online games and 22 premium titles while the Information Services division includes non-game-related businesses like ad marketing on TapTap and subscription services like TapTap Cloud Gaming.

As we can see, the majority of the revenue comes from online games, which is only natural as the company started out as a regular developer/publisher. But, keeping in mind the risks of this hit-driven business, XD released the TapTap platform in China in 2016 and globally in 2019. It has since centered its long-term growth on the platform. In a letter to shareholders in 2021, CEO Huang Yi Meng summarized XD’s master plan:

“In a nutshell, our strategy is to offer the most premium and exclusive content for TapTap through game development and publishing, boost the growth of TapTap users with exclusive content, retain users and generate income based on TapTap’s strengths in product operation, and reward and encourage proprietary content creation and third parties content creation through TapTap to deliver more quality contents, so as to continuously boost the growth of TapTap.”

The TapTap Platform

Unlike the App and Play stores, which are mainly app delivery platforms, the TapTap platform is focused on community and content and is more akin to Steam. Another key differentiating factor is that TapTap uses a no-revenue share model and does not take a cut from any in-app purchases but monetizes via ad placements. This move has made it popular in China where it currently boasts 41 million MAU and also scored a deal with HoYoverse to distribute Genshin Impact in China.

While TapTap is enjoying growth in China, its international arm is seeing much less success, and its user base has shrunk around 32% to 8.9 million MAU for H1 2022 compared to 13 million the year before. The company has since built up a team to focus on platform growth in key regions, including North America. In order to do this, it is focusing on a few key areas.

The one is to develop first-party games that appeal to a global audience and build up its reputation. XD currently has a few internally-developed exclusive titles like Flash Party, T3 Arena, and the upcoming Torchlight: Infinite. XD is putting some heavy marketing muscle behind Torchlight: Infinite with ads and influencer marketing and is likely hoping that the popular IP will be key to unlocking the gates to a large international user base. It has also made a big push to legitimize TapTap as a platform in the western market by putting out sponsored content on its annual TapTap Presents show on PocketGamer , IGN, and Twitch.

The other piece of the puzzle is the growth of its content-creating user base. Unlike the other stores which show featured games on the main storefront, the first thing that appears when you go to TapTap.io is user-generated content in the form of reviews, streams, reaction videos, and the like.

Every game page also has a “What’s Happening” section which accumulates posts related to the game from different content writers. Like other social media platforms, you can like, comment on posts, and follow the content creator. Quite a lot of the content is also not mobile-specific, as seen in the screenshot on the right that shows a post about Stray, a PC/Console title.

This focus on user-generated content makes the platform feel more alive, with users actively participating in conversations. For now, though, TapTap remains an alternate platform for the majority of the content creators as it doesn’t have the user numbers and TapTap international is still not being monetized with ads. To spur growth, XD has game-specific creator programs which recruit from its player base to create game-related content (which can be posted on other platforms) in exchange for in-game rewards.

XD certainly has ambitious plans with TapTap but faces an uphill battle to convince users to download and install a strange .apk file provided by a Chinese company. That said, its content-based strategy makes sense, and all it might take is a hit game to boost its name recognition and see user growth explode. Will Torchlight: Infinite be that game? We’ll just have to wait and see.

#2:  Scopely Acquires Stumble Guys from Kitka Games

Scopely recently announced that it had acquired the multiplayer battle royale game Stumble Guys from Kitka Games. Stumble Guys has seen an explosion in users recently and was the most downloaded game in July. According to Sensor Tower, the game has accumulated lifetime revenue of $44 million, with 95% of that earned just this year, even though the game has been live since October 2020.

Up until the end of December 2021, though, Stumble Guys was a relatively unknown game that was getting decent downloads in Tier 3 countries but largely under the radar. It had accumulated 48 million downloads and was averaging 2+ million DAU by December, pretty respectable numbers, but only managed $1.9 million in IAP revenue over the same period.

Then, at the beginning of the year, it exploded in popularity in Brazil, as seen in this Google Trends chart of the search term “stumble guys.” While we can’t make a definitive conclusion, there is a temporal relationship with the burst in search popularity and this sponsored post with 3.2 million views released on the January 21st by popular Brazilian TikToker theussxd.

The spike in downloads in Brazil was followed by a similar increase in Indonesia in May, coinciding with a Google Admob campaign that Kitka Games was running there. Fueled by the successes in these two countries, Kitka Games has scaled up UA across other regions including the US on Google Admob, TikTok, Unity Ads, and YouTube with the corresponding increase in downloads.

The success of Stumble Guys has been reminiscent of Among Us’ explosion of popularity in 2020, spending years accumulating a small but loyal audience and suddenly seeing supercharged user growth due to influencer discovery. Still, it was a surprise when Scopely made the announcement of this acquisition. For Kitka Games, perhaps it’s an opportunity to take a break to enjoy the success of the game and give itself breathing room to make its next project. For Scopely, it has acquired THE game of the moment and will be looking to leverage it to the fullest.

What’s next for Stumble Guys under Scopely’s charge? It’ll need to improve the Revenue Per Download numbers, which is pretty low at $0.23. There is also still a lot of room for improvement in the metagame as it doesn’t have stellar long-term retention, with a D30 of 12% and D60 of 7%, which will surely come down once the hype around the game subsides. By then, Scopely will need to shore up some of these deficiencies to make it a game that will stand the test of time.

Game Launch Radar

#1: Lost Light

• Publisher: NetEase
• State: Hard Launch
• Territories: Global
• Classification: Mid-core – Shooter – Extraction Shooter

• Quick thoughts:

  • A new entry to an increasingly popular genre (we covered Earth: Revival in the September 1st update). NetEase’s entrant is basically a mobile-first cross-platform version of Escape from Tarkov and ticks off several of the points we mentioned in our research essay on Extraction Shooters, namely the smaller maps, to make it more “snackable” while keeping the core extraction ruleset.
  • The Steam version was also officially launched at the same time as the mobile versions and it currently fluctuates between 2,000 to 4,000 concurrent players. The mobile versions are seeing around ~70k DAU, so it hasn’t been a huge hit, though it is still early days.
  • It includes a very divisive, The Return, mechanic where a player you have killed can use increasing amounts of cash to return back to the game, get a loadout, choose where to spawn, AND see the location of who killed them. See an example of The Return in action here.

#2: King of Nations

• Publisher: VNG Game Studios
• State: Soft Launch
• Territories: Malaysia, Singapore
• Classification: Mid-core – RPG – Turn-based RPG

• Quick thoughts:

  • The newest published game from Vietnamese unicorn VNG, King of Nations, is developed by Chinese developer Hangzhou Arthur Network, according to this TapTap listing. Like all turn-based RPGs, the gameplay consists of recruiting heroes and deploying them in battles; it isn’t really doing anything new here. It does attempt to make combat feel more epic by having each hero lead a troop, so the battles are army vs army instead of a party of six people.
  • It does lean into the Southeast Asian market, recently releasing a Malaysian hero, Mat Kilau, to coincide with Malaysia’s independence celebrations. So notable was this occurrence that it even got covered by a national newspaper.
  • In a crowded market with established competitors like Marvel Strike Force: Squad RPG and Raid: Shadow Legends, King of Nations does stand out with its national hero theme. Will this be enough to overcome the high acquisition costs of the genre and scale up? Perhaps that is why VNG has decided to focus on SEA as a launchpad for growth.

Other Game Announcements

• Ubisoft announces a new mobile Assassin’s Creed set in China with a new feature, the ability to create your own character. Link
• Netflix strikes a deal with Ubisoft to release three exclusive games on the streaming platform, including a new Assassin’s Creed mobile (not the one set in China). Link
• Mobile developer and TapTap platform owner XD Inc announces a new card-based psychological thriller game. Link
• NetEase’s cross-platform soccer game, Vive Le Football, will begin an open beta test from September 21st. Link
• Marvel Snap is due to be released globally on both platforms in October. Link
• Call of Duty: Warzone Mobile is officially announced with a teaser trailer. Link
• Beatstar celebrates one year since launch with 38 million downloads and $73 million in revenue. Link
• Niantic announces a new location-based game, Marvel World of Heroes, with a trailer. Link
• Yu-Gi-Oh! Cross Duel, a TCG based on the popular anime, is now out on both iOS and Android. Link

Company Announcements

• Snap lays off 1,300 staff and puts its game ambitions on pause. Link
• Riot Games plans to create multiple new studios across China to develop new games. Link
• Netspeak Games, developers of Sunshine Days, raises $12 million in a Series A funding round. Link
• XD Inc announces a 15.6% increase in revenue YoY while the TapTap store sees a decline in international users. Link
• Space Ape has more games in its quiver and is looking to launch them soon, perhaps as early as the end of the year. Link
• Rovio hires ex-Sybo Creative Director Giorgio Giussani as Angry Birds brand’s Creative Director. Link
• Roblox hires former Adobe VP Stefano Corazza as head of Roblox Studio, the development tool for making games in Roblox. Link
• Istanbul-based Gulliver’s Games raises $750k in a seed funding round to build games in the tycoon genre. Link
• Azur Games acquires 81% of the Mushroom Wars developer from former owners Zillion Whales. Link

Ecosystem Announcements

• Tencent now owns 49.9% of Guillemot Bros, the largest stakeholder in Ubisoft. Link
• The South China Morning Post reports that ByteDance is “aggressively downsizing its video gaming unit.” Link
• EA caps the cash portion of severance pay for executives after criticism that it was overpaying its top executives. Link
• Gamescom Asia announces that its consumer-facing exhibition will shift to being digital-only. Link
• Leaked images show Logitech’s G Gaming handheld with a Google Play Store app, leading to speculation that it is running on Android. Link
• The BAFTA Games Awards is now open for entries. Link

Content Worth Consuming

• Mobile Minute: They Brag About Not Using Social Media, But Is It True? Find Where Gen Zs Are Hiding on Mobile and the Right Partners to Target Them (data.ai): “According to the Pew Research Center, Gen Z is the only generation to have self-reported a decline in social media use in recent years. However, there is a difference in how much we think we use social media, and our actual usage patterns. data.ai’s data shows that Gen Z users in 5 major markets engage more on social than any other age group. Among the top 10 social apps by MAU, Gen Z accesses social apps between 12% more than millennials in South Korea, to 19% more in the US, and up to 30% more in Germany.” Link
• The F2P Game Designer | ft. John Kelly Creative Director at PlaySimple (GameMakers): “The focus of our discussion today will be around the F2P game design discipline: how it’s evolved, what does it take to be successful as a game designer, the tools and practice of a F2P game designer, and where does John think the future is headed for F2P game design.” Link
• Episode 33: How State of Survival: Zombie War Became an Award-Winning Game (GameRefinery): “In this episode of the Mobile GameDev Playbook, Bob Slinn, Head of Business Development at FunPlus, and game analyst Milka Paunonen from GameRefinery, a Liftoff company, join our host Jon Jordan to discuss State of Survival’s well-deserved wins in the most recent Mobile Gamedev Awards!” Link
• Ep. 95: Designing Games For Younger Audiences (Mastering Retention): “Creating a successful and beloved video game is a tall task. It is even more of a challenge to create a successful and beloved children’s video game. This week on the Mastering Retention Podcast, Tom speaks with Luis Cascante (Former Franchise Director at Star Stable) about designing video games for younger audiences and all the challenges that come with it.” Link
• How Innovation and Iteration Have Transformed Survivor.io (PocketGamer.biz): “We may draw several main conclusions based on the case of Survivor.io. Firstly, mechanics in a mobile action game don’t necessarily need to be complex. It is a question of finding a balance between simplicity, challenge, and enjoyment. If you choose to borrow the core gameplay from a PC, don’t forget to adapt it to mobile devices.” Link