Electronic Arts Powers Ahead

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The times are finally changing for Electronic Arts, after years of less-than-stellar returns. The transition of the company to embracing the new digital realities of the game industry has been a rough one, but things are finally looking pretty good for Electonic Arts, as the latest earnings report demonstrates amply. The company may well pass up arch-rival Activision in total revenue this year, which would certainly be the occasion for some high-fives among the executive team.

The numbers EA posted were impressive in many ways: The company’s net (non-GAAP) revenue of $1.22 billion beat the previous guidance of $1.14 billion, and earnings per share (EPS) of $0.73 was above the guidance of $0.50. Operating cash flow was also up by $189 million, and the company has now stacked up an impressive $2.39 billion in cash, and 67 percent of this cash and short-term investment balance is held onshore. That’s a pretty good war chest for funding strategic moves, whether that’s new game development, acquisitions, or marketing expenditures.

CEO Andrew Wilson noted some usage stats during the call. EA had 155 million monthly active users for mobile games during the quarter. “Mobile generated $115 million for the quarter, up 11 percent over the prior year,” noted CFO Blake Jorgenson. “$105 million, or 91 percent, of this was from digital extra content and advertising. This was up 35 perfect versus the prior year and continues to more than offset the decline in the premium business.”

Essentially, EA is going all-in on free-to-play in the mobile space, and the strategy is working. The company is doing very well with its sports titles on mobile, too, and it looks like those titles are helping to drive console game sales as well. Wilson noted that Madden games played are up 48 percent year-over-year, with 89 million games played this year. There are 50 percent more players online in FIFA 15, and the aggregate Ultimate Team player base increased by over 40 percent. EA Sports mobile game audiences are up over 250 percent from last year.

EA may not have a chart-topping mobile title like Clash of Clans, but it’s doing quite well overall with its mobile games. It does lead you to wonder if the company will be looking to create more original (or licensed) mobile games to try and garner some of the juicy revenue available at the the top of the top-grossing charts. It’s worth remembering that EA has the Star Wars license, and it’s easy to imagine some Star Wars mobile games that could do very well indeed if the movie does well.

Overall, despite the weakness of console game sales in general, EA has been doing well there. Wilson noted that gamers spent1.9 billion hours of playing EA games during the quarter — or, if you look at it another way, the company is making less than a dollar for every hour of fun. That’s a pretty good deal for gamers, though no doubt EA would like to boost that ratio a bit.

“EA’s non-GAAP net revenue was $1.22 billion, which was 17 percent higher than the prior year’s results and 7 percent above our guidance,” said Jorgenson. “The excellent performance was led by FIFA 15, Madden 15, and The Sims 4. ” EA announced that Battlefield Hardline is now set to launch on March 17, 2015 in North America, and that Star Wars Battlefront is headed for the holidays in 2015. Both of those titles are expected to do very well.

Moving on to other areas, the emergence of China as a huge and growing market for games has been hard for Western companies to take advantage of, in part due to the restrictions of the Chinese government that preclude non-Chinese companies from doing business easily without a local partner. EA is making progress in generating significant revenue from Asia, but there’s a lot of market potential the company is not yet realizing. FIFA Online 3 is one of the top games in revenue for Korea, so that’s a positive step.

Still, the truth is that EA needs to get substantially stronger than it is in the world’s largest game market. — China. “On Asia, we don’t break out our revenues. It is obviously the smallest part of our international business,” said Jorgenson. That’s got to be a major area of concern for EA going forward, especially as Chinese companies are using their market growth to power acquisitions of Western game companies.

Meanwhile, the company continues its transition to becoming a more digital company than a physical one; on a GAAP basis the company’s digital revenue last quarter exceeded its physical revenue. “Full game PC and console downloads generated $94 million, up 71 percent over the prior year,” said Jorgenson. “Although the percentage varied considerably by title, platform, and geography, the trend towards full game downloads continues. Subscriptions, advertising, and other digital revenue contributed $91 million, up 47 percent over the same period last year.”

One way that EA is performing well is by improving its gross margins. In part, this is due to the higher-margin digital revenue taking an increasing share of the business, but Jorgenson also pointed out how reductions in marketing expenses have contributed to this. “Our non-GAAP gross margin for the quarter was 66.1 percent, an increase from last year’s 61.7 percent and better than our guidance of 65.5 percent. The increase over the prior year was primarily due to growth in our digital business, both full game downloads and extra content, and by The Sims 4 launch,” noted Jorgenson. “Our lower operating expenses compared to guidance were largely driven by quarterly phasing of key expenses in marketing and contracted services, combined with continued cost discipline. We expect some of these marketing and services costs to be incurred in future quarters.”

Activision will be delivering its earnings report on November 4, and it will be interesting to see how these two companies compare in their handling of the game industry transitions — and how successfully they are doing so.

Automating Mobile Marketing

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The art and science of marketing has undergone vast changes in the last few decades, and nowhere is this more evident than in mobile apps. The mobile platform (in general terms) is a marketer’s dream: Immense reach, incredible flexibility, boundless creative opportunities, all the data you could wish for. That, of course, leads to an explosion of tools and techniques, massive mountains of data and endless decisions you have to make. Which creative works better Which ad network should you be using for which purpose And even if you know the answers to those questions for last week, will this week be the same

Into this maelstrom of marketing sails Singular, a company founded earlier this year that promises to help marketers navigate through these stormy seas. Singular “enables marketers to unify and analyze their entire mobile marketing operations through a single dashboard, allowing them to optimize campaigns by cost, LTV, ROI, ad placement, a myriad of targeting parameters, and other key performance indicators (KPIs) to drive maximum return on investment.” as their marketing materials put it. Adding to this dashboard is Singular’s latest tool, the Creative Optimization Wizard.

Gadi Elishayov

With the Creative Optimization Wizard, “marketers can now identify the best and worst performing creative assets for each campaign in real time based on full-funnel analysis of CTR, conversions, CPC, CPI, ARPDAU, ROI or whatever KPI matters most to their business,” Singular said. How well does this work According to Singular, customers who used its Creative Optimization Wizard during the product’s beta stage were able to nearly double the click-through rates for creative running on iOS, experiencing an average lift of 91 percent over a 3 month time period.

“The feedback we’ve gotten on the Creative Optimization Wizard is incredibly positive,” said Gadi Elishavov, CEO and Co-founder of Singular. “Creative is such a critical factor in the mobile advertising mix, and yet there are no tools available today to help marketers understand how their creatives are performing across multiple campaigns. With our Creative Optimization Wizard, marketers can see what images and graphics are working best for which audiences, and art directors can test and iterate different concepts for efficacy. The impact is both immediate and significant.”

Top grossing app developer Storm8 was among several prominent customers using Singular’s Creative Optimization Wizard during the product’s beta program. Commented James Peng, Head of User Acquisition and Monetization at Storm8, “With transparency and reporting granularity becoming crucial in the new era of mobile performance marketing, Singular’s Creative Optimization Wizard provides us the clarity that we need, allowing us to invest in winners, cut underperforming creatives, and match the right creative to the right audience to deliver optimal performance.”

The [a]listdaily spoke with Singular CEO and co-founder Gadi Elishayov about the company, the Creative Optimization Wizard, and how Singular is trying to help app marketers.

[a]listdaily: Why did you want to create a mobile marketing platform

Gadi Elishayov: All three founders — myself, the CTO and the COO — used to work at a company called Onavo, that was a two-sided business. There was a consumer app that people used to use to compress their data [and thus reduce their data usage charges]. By virtue of compressing your data, everything would pass through Onavo’s servers. Onavo created the biggest mobile panel in the world on real devices. We had competitive data about real engagement usage, and you could see what people were doing on apps, we could combine that with demographics and offer a unique set of data for a lot of companies. Tools like App Annie offer to see you in the App Store, but this offered engagement data. I was leading research, my other co-founder was leading development, and the third co-founder Susan was leading business development and sales. Working at Onavo we were doing user acquisition ourselves. The concept was getting people to use our application and that made our panel bigger and stronger, and reduced biases in all sorts of segments.

We leveraged user acquisition pretty heavily. As the business grew, many of our customers were really the biggest spenders on mobile and wanted to benchmark themselves. The data Onavo provided helped them to see where they stood against the competition.

Doing all this work with marketers, we realized that there are many gaps in mobile marketing, and that led to us forming this company. It was a combination of seeing our customers at Onavo and experiencing it ourselves. My friend was head of marketing at Onavo, and I remember she was preparing reports for the CEO and she used to work for almost a week manually preparing reports to present to the CEO about the activity they had done in one month of advertising activity, and I was shocked by how manual that was.

After we left Onavo, we got together and asked ‘where did we feel there was a big pain ‘ In mobile marketing, it seemed like things were way too manual than they should be. We started researching that, and we built our first product trying to solve all those problems we’ve seen of all the manual work involved. We were actually amazed to see how many companies are struggling with the same problems Onavo had. We saw many of Onavo’s customers like Zynga, Kabam, and Gree, they were struggling to do the same. We heard they took the Onavo tools and tried to use them to help them do mobile marketing, and it wasn’t really fit for that. They needed tools for their day to day work.

Our concept was we want to automate in that space, we want to replace those manual operations with automated work. That’s how we started Singular.

[a]listdaily: You’re really trying to pull together information across multiple sources and allow marketers to analyze it at a high level, isn’t that it

Gadi Elishayov: That’s a good definition. When you look at mobile marketing you see such an insanely fragmented market, both with the number of networks you have, and publishers, and agencies. Mobile, from a technical perspective, has caused these silos to be created of data, you have so much data on the networks and inhouse that you use to track bids and operations, and you have your own business intelligence systems. In order to do that efficiently people have to pull this data together. That’s what we call the V1, which is tying all that data and surfacing that to people. Part of that is getting the data, and the second part is connecting that.

We have a firm belief that your entire operation could be managed from one place. We want to create tools, a SaaS platform, to help you do all of that. Our creative optimization wizard is a demonstration of how we implement that vision. Creative is a huge place you can optimize. If you think about it, collecting the cost manually from every ad network on a daily level is possible, but when you have so many creatives and you want to get the cost per creative and the revenue that is generated by those users, it gets insane.

[a]listdaily: How do you want to build out your service

Gadi Elishayov: We have a lot of exciting things in the works. We believe in automating the workflow, so our natural progression would be enabling people to do more over the platform. There are a ton of things we can do over the platform, whether it’s helping you manage things or helping you analyze things. There are so many exciting ideas that our customers bring up, and so many exciting things that we have in the works. You will see Singular expanding its tool set to accommodate more of the work people do today. There’s so much untapped potential right now, and when you tie together those different components of what people do it can be so much more powerful. We’re already working with some of the biggest customers, and I think that approach has been working well so far.

 

Veteran Designer Reveals Mobile Strategy

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The siren call of the rapidly growing mobile game business is attracting some of the game industry’s best talents. Nothing illustrates this better than the announcement today that a revived Big Huge Games led by veteran designer Brian Reynold is working on DomiNations, a mobile strategy game from the designer of such acclaimed titles as Civilization II, Rise of Nations and Rise of Legends. Reynolds worked for a time as chief game designer at Zynga, where he created social game mechanics for titles like FrontierVille and CityVille 2.

DomiNations is, in Big Huge’s words, “an epic strategic combat game of advancement, exploration and conquest” that’s being developed for phones and tablets under both iOS and Android. The game is free-to-play, and in the beloved style of classic PC strategy games, follows the rise of civilizations through time from Stone Age technology to the Space Age. Players can explore, advance and grow their civilizations while conquering the world through single-player campaign and cooperative gameplay modes. The game will be published by Nexon’s mobile gaming group, Nexon M.

“Brian and the team at Big Huge Games have built a truly epic new game with DomiNations. Strategy game fans and mobile gamers are going to love the innovation, depth, and player choice DomiNations gives each user,” said John Robinson, general manager, Nexon M.

The [a]listdaily spoke with Big Huge Games CEO, co-founder and game designer Brian Reynolds about the game and his foray into mobile games.

Brian Reynolds

[a]listdaily: You have created games on many platforms before this with great success. Why go mobile now for your latest game?

Brian Reynolds: I’ve worked on a lot of different platforms — PC games all the way back through DOS and Windows, console, Facebook, and now mobile. I’m platform agnostic. I see a platform as a new opportunity to make a strategy game that will have familiar elements but will also have new opportunities based on the new kind of platform. Combined with that, mobile seems to be the biggest new growth area, and I’ve always tried to go where the biggest opportunity to have the most number of players is, and that’s how I arrived at doing a mobile strategy game.

[a]listdaily: What’s been the most challenging part of developing strategy games for mobile?

Brian Reynolds: Almost always when I move from platform to platform, the main challenges that get right in your face come down to user interface issues. With mobile, unsurprisingly, that is definitely the most challenging part. If you look back at the games we did in the past, when you had a big old screen and a mouse and keyboard, that’s a very different control scheme for a game than playing on a mobile platform. You’re both looking at a much smaller display area than console and PC games of the past, and part of strategy games are about having lots of little pieces that are moving around. You’ve got to be able to visually distinguish them from each other, and you’ve also got to be able to select them accurately. That creates differences — in some cases it creates challenges and sometimes it creates opportunities.

You almost have to make your interface a lot better and a lot simpler to work well, and sometimes that leads to a surprising level of elegance or innovation that you might not have arrived at if you had a more traditional set of gaming controls. A lot of our thinking has had to relate to how do you get a really cool, fun, beautiful, deep strategy game experience that works really well on both a tablet and a phone. I’m happy with what we’ve come up with.

[a]listdaily: Are you looking for fans of PC strategy games to play DomiNations, or fans of games like Clash of Clans… or both?

Brian Reynolds: Both and all of the above and more as well, of course! The fact we’ve chosen to go back to the Big Huge Games name, we know that some of our fans from the old days will be reminded of the old games they liked. There’s no question that DomiNations is fully a free-to-play mobile strategy game, so we’re very much in that genre with Clash of Clans and Game of War. I think we’re the first to really have a go at a sweep-of-history game in that genre. I think we’ve gotten a lot of mileage out of that in the game we’ve come up with.

We’ve got the wonders of the world, you move through the ages of history. You start in the Stone age, you move through the Bronze Age and the Iron Age, the Gunpowder Age…we’ve tried to recapture that magical feeling of moving from age to age. Your buildings look different, your opportunities are different, your economy can work in a different way. We’ve tried to capture as many of those things as possible. There’s a mix of the familiar elements, for those who’ve played earlier games I’ve worked on, and there will certainly be familiar touchstones, but we’re not trying to recreate some game we did in the 90’s now. It’s a fully modern aesthetic of free-to-play mobile game design.

[a]listdaily: How does DomiNations monetize? Is the game time-gated?

Brian Reynolds: The main opportunity to spend money is for more time. You can also spend money for bandwidth, to be able to build a few more things at a time. You can unlock everything without paying any money. That makes it an even more challenging strategy game.

[a]listdaily: How did Nexon M become your publisher, and why did you select them?

Brian Reynolds: At the time I was leaving Zynga. I was looking for a way I could combine some of my knowledge from the past of building these historical strategy games with how Zynga had opened my eyes to how many more people played games. Nexon had a lot of free-to-play experience. I knew from being at Zynga you want a publisher that understands data collection and analytics. They had experience in that, and they were looking to make a move into North America and partner with some North American developers. They let us be creative in ways we want to be creative, and at the same time they have this deep wealth of F2P knowledge.

[a]listdaily: Is Big Huge Games handling the marketing for DomiNations, or is that handled by Nexon M?

Brian Reynolds: On all the strategic kinds of things that would normally be called marketing, Nexon is taking the lead and obviously we provide them with art and materials. Where you’re marketing stuff literally inside the game, that’s a Big Huge Games lead. That’s almost part of the game these days. But in terms of user acquisition, that’s on the Nexon side.

SteelSeries CEO Explains How Pro Gamers Can Help Gaming Companies

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Ehtisham Rabbani SteelSeriesEhtisham Rabbani, CEO of SteelSeries

In the competitive gaming peripheral space, which continues to see double digit growth, SteelSeries has wooed M. Ehtisham Rabbani away from Logitech. The former SVP and SMO of Logitech, who oversaw the company’s games division, is now the CEO of a company that has embraced eSports from the early days. SteelSeries is best known for its line of PC keyboards, mice and headphones. Rabbani explains why sponsoring teams like Fnatic and Navi has helped the brand and what opportunities bigger brands entering the space means for gaming companies in this exclusive interview.

What impact has the rise of eSports had on gaming companies?

It’s not been news to anyone that has been involved in this space that eSports is popular. SteelSeries has been involved in it for years. It’s news to mainstream outlets like the New York Times that have suddenly discovered the vibrant eSports scene. But people in the industry have been seeing this for years and we’ve been participating in this for years. The numbers are staggering with more people watching eSports’ League of Legends Championship last year than the Stanley Cup and NBA Finals. When you add all of that up, there’s a lot of passion around eSports and it’s only going to grow. It’s interesting to see more and more games coming into eSports, offering a greater set of diversity. The first breakout eSports game was StarCraft that really wracked up the numbers. That was an RTS game. Now there aren’t a lot of RTS franchises. There is a lot of development in different genres today because of eSports.

What impact has livestreaming opened up for brands like Logitech and SteelSeries?

The opportunities have been in better understanding and better appreciating what it takes to win. You see a lot of streamers talk about their strategies and their tools and what they’re looking for in a great gaming mouse or headset. It all comes together for a gamer to feel confident that they’re going to win. It’s changed the equation for the gaming hardware business and increased the appetite of gamers who want to learn more about what makes a great gaming mouse or headset. We see a lot more traffic to our website and more people who want to learn about our products. Brands interested in innovation and bringing tools to help gamers win get more respect, rather than those who release cool looking products that don’t enhance the gameplay experience.

What’s the value of working with pro gamers and eSports teams?

They’re valuable because they’re 100 percent focused on winning. They’re professionals. As pros, their entire career relies on having the right tools and winning championships. If we can help individuals win matches and teams win championships, it validates what we’re trying to do. They also have huge audiences — hundreds of thousands of people following them. They’re critical opinion leaders. We work closely with them at every stage in the development of new products. The teams we work with is not a relationship that’s only about giving them money only. It’s about them helping us with product development and design and providing feedback before a product hits the shelf. So by the time a new product is released, it’s been vetted by pro teams. That role for us is an important as them as spokespeople for our brand.

Is there a direct correlation between eSports teams and sales of your products?

I’d love to have an answer to that. We’re making great products and we do a lot of social media and advertising, so it’s hard to figure out what percentage of sales comes from eSports. It’s a bit of a leap of faith, but it’s very natural for us.

What are your thoughts on bigger brands entering the eSports space?

I think that’s a good thing. If eSports can become a place where young gamers can come in and make good money and have pro careers, that helps gaming as a whole. It helps all the businesses that are associated with gaming. I welcome deep-pocketed companies. We have pro gamers who are making six digit salaries today and it’s only a matter of time before that goes even higher. I don’t see a Coke or an AmEx as a threat. They’re not in the business of providing amazing tools to gamers and I don’t see them getting into our business. We have a unique role to play in eSports.

What’s the competition like in the crowded headphone space with new entrants?

There’s no secret that the gaming peripherals business — when you look at electronics in general, very few categories are growing by double digits — and gaming peripherals is one of those categories. A lot of companies are entering that business. They’ll learn that if you’ve been making traditional mice and headsets, the jump to gaming is not simple. You can’t put red flames on a product and call it gaming. There’s some real science that these companies don’t have and gamers see that. I don’t feel threatened by them. We have a decade-long lead in developing great gaming products.

ESports helps differentiate us. These days, major brands like SteelSeries have to be associated with eSports to be an established brand. All my major competitors are involved in eSports in one way or another. You have your brand logo on different teams, but at the end of the day comes down to how good are your products. Our emphasis is on using eSports relationships to make the best products possible.

What are your goals at SteelSeries moving forward?

It’s an authentic gaming brand. We have no ambitions of going beyond servicing gamers. There are very few brands now that can claim that. They’re in search of growth in all sorts of business. But for us it’s gaming, and gamers are our north star. We’re not moving away from that. Our whole organization is laser-focused in delivering things gamers need. We don’t put out products unless there’s a real need for it. That mission is what attracted me to SteelSeries. That purity of vision will grow the company. We’ve seen double digit growth for several years and we will accelerate that. We’re Number 3 in the world today and we hope to move up.

If you look at our history of headsets and simple things like the self-adjusting headband suspension design, gamers needed a different way to wear a headset that you could comfortably wear for hours. Now a lot of companies are trying to copy that. That’s the kind of innovation that we’re doing — it’s need-based. We were the first mouse with an on-board 32Bit Arm processor and that came out of a specific need. New products that we will be launching will address needs in the market.

 

This Week in People: October 24

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Here are some of the top personnel moves in marketing last week. Our congratulations to these people taking on new challenges!

  • David Helgason has stepped down from his role as CEO of Unity to become executive vice president in charge of strategy and communications at the company, while ex-EA CEO John Riccitiello has become the new CEO. Read more about it here.
  • Jade Raymond is leaving Ubisoft after a decade of work with the publisher. Raymond served as producer on the original Assassin’s Creed, and was appointed managing director of the publisher’s then-new Ubisoft Toronto studio in 2009. Find out more here.
  • Coca-Cola has named Marcos de Quinto as its new chief marketing officer, replacing Joe Tripodi, who had been in the role for seven years. Mr. De Quinto has been president of the Iberia business unit since January 2000 covering Spain and Portugal. Find out more here.

If you have a submission for this weekly feature, send info to pr@ayzenberg.com or fill out our Suggest a Story form.

Designing For Marketing

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The past few years have seen massive changes in the game industry, and the changes are still under way. We’ve seen free-to-play games go from an obscure business model in Korea to a a business model that can bring in over $1 billion in revenue for a single PC game in a year. Mobile games have gone from a small fraction of the games business to being poised to take over as the single largest revenue segment of games next year. Digital distribution has overturned the classic publisher model, empowering small developers and leading to an explosion of new games on multiple platforms. Marketing games has gone from a rather dull, standardized process of placing ads in key game magazines to an increasingly complex and creative endeavor with no clear winning strategy.

These changes are only gradually being reflected in the process of how games are being designed, though. It’s past time that game designers, marketers, and business people got together in discussing game designs before the development process begins, and stay in the process throughout development and beyond the initial launch for the (hopefully) years the product will be in the marketplace. Creating a large-scale successful game is really a team endeavor that requires creative input from all parts of the business.

Here are some key things to keep in mind as you start with a blank screen to design the Next Great Game. Remember, bring in marketing when you start having these design discussions, and it would also be helpful to have someone with community management experience, as well as someone who understands monetization, analytics, and statistics. You want all-around expertise contributing to the beginning stages, if you can.

Design for the audience first, not the platform
The days of working relentlessly to just to be able to put images on the screen are long gone. The tools of the trade have developed enormous power, and the hardware has become amazing as well. Yes, you still want to create games that take advantage of the platform capabilities, and work well with the interface the platform has available. In the past far too many games started with getting a graphics engine created, and then once that immense task was accomplished, you’d throw in some thin rationale for running around and shooting people and call it a game.

That’s just not good enough these days, with thousands of games coming out every month competing for attention — and many of them doing a very competent job of displaying pretty pictures rapidly, thank you very much. Think about who’s going to play your game, and why will they play this game instead of a dozen others like it (or a million others unlike it).

Don’t depend on graphics
If there’s any lesson the indsutry should draw from the stunning success of Minecraft, it’s this: Graphics aren’t everything. Or, if you’d like another example of this principle, Destiny is pretty, but the gameplay is still lacking. Bungie would have been better off spending more effort on gameplay and less on polygons and textures. Yes, of course you want your game’s graphics to be excellent. Excellent, though, doesn’t have to mean “photorealistic.” Pick an art style that you can execute well in your time frame and within your budget. The artwork is important in so far as it advances the experience you want players to have with the game. Remember, it should be about the audience first and what kind of gameplay they experience. The technology and the artwork are there to help deliver that — don’t make those things an end in themselves.

Once you have a hit game, bring it everywhere
Don’t invert that, thinking that the way to make a game a hit is to have it on every possible platform at once. That’s a great strategy when you already have a hit like FIFA, but if you’re creating a new game you’re probably spreading your resources too thinly unless you’re a very big company. Pick your platform carefully and build an audience. When you’ve got a hit, and you have the resources, start finding ways to get your game out to as many people as possible. That means geographically as well as technologically. Look for partners who can help bring your game to the fast-growing global market. It’s more than just localization, it’s understanding the culture, the payment processing, and how to market games in that country.

Relentlessly remove barriers to play
Why is free-to-play such a popular business model Because it’s about enlarging the audience for your game by removing barriers to play. Yes, it’s not a magic wand, and doing it right requires careful design and knowledge of your audience. You have to make the game compelling, keep people playing for a long time, and give them ways to spend money that don’t piss them off. None of that is easy, and you may need to test different things to get it right.

Removing barriers to play doesn’t stop at lowering the price, though. You’ve got to make the game easy to get into. The days of half-hour intro videos and lengthy tutorials are long gone, especially when a game is F2P. Figure out how to get people into the game swiftly, and how they can tap into the game’s central magic that makes it fun. Don’t let your potential players get bored and wander off.

Build virality into the design
In other words, make it easy and natural for your players to become your sales force. Players love to share their designs for farms, or their lavishly customized race cars, or the gameplay video of their triumphant slaughter of the enemy hordes. Don’t try pasting in a Twitter button after the design is done. Figure out what’s cool about the game and why players would want to share it with someone else. At the simplest level, leaderboards are a cool way to compare yourself to others. Give people a reason to evangelize your game to their friends. That’s the best way for people to find new games these days — hearing a friend talk about how much fun it is.

Summary
It should be said that there are exceptions to all of these rules, and genius lies in knowing the rules thoroughly and breaking them in creative ways. Some games will find a way to greatness by odd and interesting paths, or because they have done something amazing no one has ever done before. Sometimes jawdropping graphics can be a strong sales incentive, especially if it shows off the prowess of new hardware.

Remember when you create a game you are competing against all other things people can do with their time. Smartphones make this readily apparent, since every other activity (music, video, web, texting, social) is just a touch away. In this world of ever-shortening attention spans, getting some of that mind share for your game is tougher than ever. Make your game compelling in any way that you can, and bring in expertise in all disciplines at the earliest stages. There’s no guarantee of success no matter what you do, but at least you can improve your chances.

Your Most Crucial Weekend #MustReads: October 24

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We sort through quite a bit of the fluff out there on the Internet on a daily basis and we’ve found what we think are the most crucial before you head off for your weekend.

Have something else to share Feel free to comment with your contribution below.

5 Trends in Mobile Gaming: What to look for in the coming year in mobile gaming.

Mobile Video Driving Brand Marketing: When it comes to mobile, video is key.

Facebook’s Answer to Reddit is ‘Rooms’: Facebook’s latest mobile app has a *lot* to offer marketers.

Online Gaming Not Welcome To Women: Houston… the Internet has a problem here.

Ello Expands, Raising $5.5 Million: The anti-advertising social platform raising everyone’s eyebrows has raised a mighty number.

YouTube is the Most-Used Social Network for 14-17 Year-Olds: It’s not Facebook and it’s all about mobile video.

Mapping the MMO Market: SuperData ranks the world’s top 10 MMO’s.

Global Games Revenues to Reach $25 Billion in 2014: Mobile is on track to surpass console revenue.

Programmatic, Meet Native: Programmatic and native advertising are quickly growing. Here’s what it means for mobile.

Game Developers: “We Will Never Accept Threats, Hate, Violence or Sexism”: Game developers sign a petition in response to #Gamergate.

Between Two Ferns with Zach Galifinakis and Brad Pitt: A must-see.

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Mapping The MMO Market

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Online multi-player games have been popular for a long time. But in only a few short years, the market for MMOs has changed dramatically in terms of revenue, player preferences and addressable audience. Overall, the total category is on track to generate $11 billion in annual revenues by the end of this year, representing roughly 21 percent of the worldwide digital games market. By 2017, this number is forecast to grow to $13 billion. And so it is hardly a surprise that both small and large publishers alike are trying to claim their share of this thriving market.

Building The Dream
There’s plenty of random information on free-to-play MMOs floating around. And it is fascinating how many companies make million dollar decisions based on anecdotal evidence and things they’ve overheard at a conference. What’s been missing has been a consistent, reliable source of market data that goes beyond traffic estimates and, instead, provides insight into three key components: the monthly active user base, the percentage of players that convert to spending and, finally, the average spend per paying player.

For example, if you compare a title like League of Legends with World of Tanks, you immediately notice that the former has a much, much larger audience. However, the latter monetizes as higher rate and has a higher overall lifetime value. (This was the topic of an article we published earlier this year.) Each in their own way, these titles evolve and develop based on the unique characteristics of their user base and content strategy.

By building a data partner network consisting of developers, publishers and payment providers, we’ve managed to accumulate a dataset that contains the actual spending of over 37 million digital gamers, going back well over a decade. Consider for a moment that in the digital games market only a few percent of players actually converts to spending. This allows us to map out historical performance, read early signs of market saturation, build detailed life cycle curves, and establish title-level performance. Combined with in-depth qualitative consumer insight, we know exactly what drives the market, and it puts our publisher clients in a position to assess marketing budgets, identify major inflection points and benchmark overall performance.

Comparing Top MMOs
Looking at the current top ten MMOs we notice that League of Legends is now the number one MMO with $946 million in revenues so far in 2014. Riot Games’ emphasis on providing a unique player experience, rather than focusing on revenues, has paid off. Remarkably, incumbent titles like Crossfire ($897 million) and Dungeon Fighter ($891 million) managed to maintain their leadership positions, providing evidence to the notion that free-to-play gamers are much more loyal than is generally assumed. What’s really exciting is DOTA 2’s rise in the charts, reaching $136 million in revenues, now claiming the number nine spot, up from number 20 previously. And, finally, ahead of its earnings call Activision is brimming with good news: after announcing an increase in its subscriber base for World of Warcraft earlier, its new title Hearthstone managed to come in at number ten, ahead of titles like Elder Scrolls Online ($111 million) and Star Wars: The Old Republic ($106 million). Of course, there is no way of knowing whether Valve intends to announce Half-Life 3 now that Team Fortress 2 is losing its position and dropping from 11 to 14 with $92 million in year-to-date revenues, but one can dream.

Changing Consumer Preferences
The success of MOBA titles indicates a subtle but important shift in the way people like to play online. Offering the same fast paced action as first-person shooter games, MOBAs have quickly become one of the most popular game genres worldwide, growing their share of the overall MMO category from 16 percent to 24 percent in just the last year. On a title-level, we observe the ascendance of League of Legends and DOTA 2. Certainly, both companies’ eSports strategy played a major role in popularizing the MOBA genre, and it is paying them dividends.

But the popularity of the free-to-play model among consumers does not mean that traditional ways of publishing are on a decline. In fact, whenever there’s a major release on console, either via traditional retail or digital channels, we observe a dip in free-to-play spending. Gamers, the data tells us, play on multiple platforms at once and regularly shift their focus between them, expressed in both time played and money spent. Innovative game mechanics and monetization strategies, it suggests, do not exist in a vacuum, but rather expand and add to the gaming ecosystem. How publishers differentiate themselves in such a volatile market has become a key strategic component.

Changing Revenue Models
The recent news that World of Warcraft saw a 600,000 increase in its subscriber base in the lead-up to its new expansion, Warlords of Draenor, silenced critics of the subscription-based MMO revenue model. Generating well over one billion in annual revenues, the game is on track to tally 8.2 million subscribers by the end of the year. Its underlying mechanics have changed, however, as World of Warcraft now also features microtransactions and a partial free-to-play component. It is a sign that things are changing, especially for the major publishers, when a company like Activision retires Titan and, instead, doubles down on Heroes of the Storm.

A key reason why free-to-play is so popular among publishers is its ability to distribute and monetize new markets. In the absence of an installed console base and in countries where people generally play at Internet cafés rather than at home, free-to-play games offer high-quality game play that is also accessible. Consequently, we’ve seen a spectacular adoption by gamer audiences in markets like Brazil, Russia and Turkey. But Asia remains the biggest market for free-to-play MMOs: with $4.2 billion in revenues, it looms over North America ($3.1 billion) and Europe ($2.1 billion), two markets traditionally central to any successful publishing strategy. The popularity of this model, combined with the protectionist policies of a country like China, has allowed a company like Tencent to quickly become a dominating force in the industry. It has also, however, raised the bar for future growth, as big Asian publishers now ask themselves how to replicate their success in Western markets. Tencent’s answer so far has been to acquire and invest in companies that offer high quality game play that is also culturally relevant, like Riot Games and Epic. We expect to see more of this in the years to come.

So that’s where we are on the MMO market today. We still have a way to go, but by working together as an industry, we have managed to establish a necessary degree of market transparency. Because, let’s face it, game development and publishing isn’t getting any cheaper.

Marketing Games Doesn’t Have To Be Gross

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By Brendan Sinclair

Marketing has a bad reputation among game developers, but it doesn’t have to be that way. That was the message marketing specialist Alex Hayter delivered while speaking at Gamercamp festival in Toronto on Friday.

When developers think of marketing, Hayter said they often picture a room full of suits trying to trick people into spending their money, empty buzz words like “brand synergy,” and cynically sexist ads and booth babes.

Alex Hayter

“This stuff makes you feel kinda gross, doesn’t it As game makers, this stuff makes us find marketing as at best ineffective, and at worst, slimy and disgusting,” Hayter said. “And as people who also buy and play video games, it makes us less compelled and less interested. But I’m here to tell you it doesn’t have to be like that. My main argument is that marketing doesn’t have to be gross, and it doesn’t have to be boring. In fact, it can be an incredibly effective way for people to better understand what your game is about. And it doesn’t have to make you feel ashamed to take part in it.”

Marketing games can be as fun as making them, Hayter said, encouraging developers in the audience to eschew the standard tactics of selling games in favor of solutions that were fun, weird, and surprising. He gave some examples, including a Super T.I.M.E. Force trailer {link no longer active} that cribbed the style of Saturday morning cartoons of old, Nintendo’s original Super Smash Bros. TV spot {link no longer active}, and a German magazine ad for Quake portraying the id shooter as part of an idyllic family portrait.

Hayter said such ads show the developers have a certain sense of humor, and that “they don’t take the tacky, randy world of marketing too seriously.” It doesn’t hurt that these sort of campaigns also lend themselves more to sharing through social media.

“Moreover, it tells you that their game isn’t normal, because normal is boring,” Hayter said. “Weird marketing doesn’t have to inform people about your game explicitly, but instead reaches to your audience to say, ‘Hey, we get you,’ and creates a bond.”

Even if a developer doesn’t have the budget for slickly produced videos or magazine ads, Hayter said they can still get results on a shoestring budget, and pointed to a few campaigns he worked on as evidence.

For Pop Sandbox’s Pipe Trouble, a game that asks players to build a gas pipeline that meets the needs of the gas company as well as local farmers, Hayter said the team cobbled together arcade cabinets to house demo kiosks of the game, which then traveled to various locations and festivals around the Toronto area. Those cabinets got the game plenty of attention from the press, which then blossomed into a front page scandal as the government-funded game was wading into a deeply contentious area of political debate in Canada.

Other campaigns included one for SpongeLab Interactive in which the company attended conventions and hid sponges around the venue (with permission of course). Each sponge had a note on it saying that it could be brought back to the SpongeLab Interactive booth for a free prize (sponge toffee). For Blot Interactive’s Facebook game Chat Fu, Hayter saw an opportunity to merge the marketing with the game itself. Chat Fu is a Facebook chat where the goal is to trick the other person into saying a specific word, so Hayter organized a press interview from within the game that doubles as a showpiece for its mechanics.

“The opportunities are there,” Hayter said. “It just takes imagination. Next time you sit down and plan out marketing for your game, [have] some fun with your audience and yourself. Do something weird. Do something surprising. It’ll get your game realized, and you’ll have a great time.”

Republished from GamesIndustry.biz. For more, read GamesIndustry.biz and subscribe to the newsletter to get the latest in game industry news, opinions, exclusive interviews, and industry data. 

Global Mobile Games Revenues To Reach $25 Billion In 2014

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Newzoo, the international games market research firm, announced that its latest Quarterly Global Games Market Update, released to clients last week, includes a significant upward revision of growth forecasts for global mobile game revenues. It now expects global mobile game revenues to reach $25 billion in 2014, up 42 percent on 2013, following strong year-to-date growth in both mature and emerging markets, across smartphones and tablets. As a result, mobile games are on track to replace the traditional console market as the largest game segment by revenues in 2015.

Newzoo Revises Forecasts Upward Due to Strong & Broad Year-to-Date Growth
The growth of the mobile market is broad-based, with both “mature” Western and emerging markets growing fast in 2014. The North American market is now expected to grow 51 percent year-on-year and Western Europe by 47 percent. However, the fastest growth can be found in emerging Southeast Asian markets and China (+ 86 percent). The Japanese market also enjoys strong growth in iOS and Android game revenues, though overall remains stable due to the collapse of traditional feature phone game revenues. Despite a widely reported slump in new tablet unit sales, game revenues on tablets are growing faster than smartphones, cementing the position of tablets as a key gaming device.

According to Vincent van Deelen, Market Analyst at Newzoo: “With the public release of these new forecasts, Newzoo is deliberately countering the sentiment aired in recent months that the mobile gaming market is becoming saturated in mature Western markets, especially the US. This is simply not the case. We are also emphasizing that the recent results of individual high profile companies such as Rovio, King, DeNA and GREE are not necessarily indicative of the state of the mobile market as a whole. It is not in our interest to inflate market figures, but the hard facts have forced us to adjust our estimates upward. We have maintained our year-on-year growth rates toward 2017, ultimately leading to a $40 billion+ market in 2017.”

Mobile to Become World’s Largest Games Market Segment in 2015
Newzoo research shows that the high mobile growth rate is driven by both “organic growth”, lifting the overall market, and “cannibalistic growth,”, at the expense of other segments. In addition to the initial casualties of mobile growth (handheld console and online casual and social gaming), Newzoo notes signs of slower growth in (online) PC games and MMOs as spending is diverted to mobile devices.

Mobile is now expected to become the largest game segment by revenues in 2015, an astonishing feat given that Apple App Store only launched in 2008. According to Peter Warman, CEO of Newzoo: “In mature Western markets, we see the battle between iOS and Android shifting toward tablets. In most of these countries, including the U.S., Android smartphones gross more revenues than the iPhone, but the iPad keeps iOS ahead in overall mobile game spending. Android tablets seem to be in the same position its smartphones were in four years ago: fragmented in terms of device specs and a lower share of game and average spending. Amazon’s Kindle Fire is an exception, scoring high on both KPIs, but for now the iPad maintains its lead taking the lion’s share of tablet game revenues. Because mobile gaming is possible on two of the four screens (Smartphone & Tablet) it could theoretically claim half of consumer spending, leaving the other half for the remaining screens (PC and TV).

Apple’s Game Revenues Could Double Those of Nintendo This Year
The Apple App Store remains by far the biggest single platform in the mobile industry, accounting for about half the mobile games market revenues in 2014, with Google Play a close second. Newzoo estimates that Apple and Google will earn close to $4 billion and $3 billion respectively in games revenues in calendar year 2014, explaining the fast growth in Google’s “other revenues” in its recent quarterly results. To put this into perspective, Nintendo’s game revenues amounted to $2.4 billion last year and will likely be slightly lower this year. Other app stores likely to grab a significant market share in Android games include Amazon and several Chinese stores such as 360 Mobile Assistant, Tencent’s MyApp, Baidu Mobile Assistant and Xiaomi’s MIUI.