Jesse Divnich has moved on from his role as an analyst with EEDAR to become the vice president of product strategy at games publisher Tilting Point. His long familiarity with the industry’s metrics have put him a good position to assess where the game industry is at and where it’s headed. Speaking with GamesIndustry.biz, Divnich shared that on a personal level, he quite enjoys those stretches where the industry is too uncertain for any analyst to provide a clean and definitive perspective.
Jesse Divnich
“Those are the most opportunistic times for publishers and developers,” Divnich said. “Those that rely solely on the data will become market laggards always playing catch-up or having to pay high multiples to acquire their way into an emerging market. Those with the skill, foresight, and ability to reach beyond their grasp will see new market opportunities before others and take full advantage of them before the data agrees with them.”
Not surprisingly, as a former analyst Divnich ascribes great importance to data as a tool for companies to use to get ahead in the business. Of course, in times of rapid change, the key data that you’d like to have is often incomplete or unavailable. “When that data is missing, however, that is when the industry separates the strong from the weak,” Divnich said. “It’s how companies like Electronic Arts came to power in the console industry, how the Nintendo Wii became the top selling platform during a time when all the consumer surveys said gamers wanted bigger and faster consoles, and how King and Supercell turned into billion dollar companies in what seemed to be overnight.”
That situation has served as a catalyst for the formation of companies like Tilting Point, which is offering a variety of publishing services to developers in the mobile arena, from funding to PR and marketing. That’s been a growing field, as more an more companies realize they can use their business expertise to help developers with great games but little business savvy succeed in a crowded market.
“The new digital publishers that are popping up have helped turn this environment into a buyer’s market, which is what it should be,” Divnich said. “Developers are now in a stronger position at the negotiation table vis-Ã -vis publishers. If a developer has something truly unique to offer and it has market potential, they should be in a favorable position to land the best publishing partner. That’s much healthier for our industry, which used to be dominated by a handful of gatekeepers who had a stranglehold on retail distribution.”
While free-to-play games are the most common business model on mobile these days, Titling Point works with each developer on the model that suits them the best. “Most publishers and developers these days are allergic to premium on mobile,” Divnich said. “We are not, and we respect that for some developers, the opportunity to make $300,000 to $3 million in revenue is sometimes a better and less risky proposition then trying to shoot for the stars, potentially making nothing. Leo’s Fortune for example will likely do at least $6 million in gross revenue throughout its lifetime, a figure we are perfectly comfortable with given the budget and total expenditure of the game.”
Consumers have embraced free-to-play games in a big way, Divnich said, but they’re also becoming a lot more savvy about monetization practices, and “less enthused” for hard paywalls or energy systems that require users to pay to keep going.
“Consumers have begun to ask ‘What’s the catch ‘ when downloading a free-to-play game, and they are spotting what the ‘catch is and churning before the game can hook them into the core loop,” Divnich said. “We are seeing this reflected in lower retention rates across the board, especially at Day 2 and Day 7.”
