2020 Predictions #2: What Happens When the Hypercasual Party Ends?
This analysis is written by Miikka Ahonen, Niek Tuerlings and Abhimanyu Kumar.
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Unless otherwise specified, all the data has been provided by the wonderful services of App Annie and analysed by the author(s). Please take the numbers presented with a giant grain of salt. They are meant more for trend analysis based on estimations, rather than an exercise in accuracy. Kudos to their unrivalled data support!
This analysis is also brought to you by ironSource. Here are the three things you need to know about ironSource:
#1: They’re developing the most robust, data-driven growth engine for mobile games.
#2: Their secret sauce is closing the monetization and marketing loop to help developers supercharge growth.
#3: They have an awesome Medium blog and podcast called LevelUp. You can find it on Medium by searching for “ironsource levelup”.
First, a Sneak Peak into the Casual Market
As you’ve noticed from the previous prediction post, we actively refer to the categories, genres and sub-genres. In this second post we discuss Arcade games, which we see as a genre in the Casual category. To understand our taxonomy in details, please read this. To understand it at a glance, please look at the image below.
The State of Arcade Games
While the Arcade genre only accounts for 7.5% of the total IAP revenue of all Casual games, it brought in well over half of all the downloads for the category during 2019. In fact, Arcade games alone make up for ~45% of 2019’s total download volume across all mobile gaming genres. With that in perspective, it is easy to realize the breadth of audience this genre serves worldwide and therefore its significance.
Over 2019, Arcade YoY Downloads went from 6.1B to a whopping 9.5B, continuing its double-digit growth rate from 2018 with +55% YoY. While 70% of this growth is driven by Hypercasual game downloads, 2019 did see a lower YoY growth rate compared to 2018 because Hypercasual growth did not accelerate at the same pace.
On the Revenue side of things, YoY growth rate was at +46% with absolute IAP revenues peaking at just over $600M. Again, the 2019 YoY growth rate here was weaker than that of 2018, but Coloring Games were the major driver here. Given how key games in the sub-genre rely heavily on subscription based monetization, Apple’s crackdown on subscriptions in February 2019 massively impacted revenues. And “massive” is to the tune of a -80% YoY drop!
* Ad revenues not included
Between Hypercasual and Coloring Games, the other sub-genres of Arcade also saw interesting moments and movements - including the revival of a forgotten sub-genre, an interesting new player entering Idlers and one sub-genre being absolutely ripe for innovation. All of which shall provide a sneak peak into whats to come in 2020. Let’s dive in!
Hypercasual Out, Hybridcasual In
It is no secret that Hypercasual has seen massive downloads growth in the past 2 years. Hypercasual downloads reached new heights last year, peaking at ~1.8Bn in Q3 2019.
At the same time, the sub-genre’s YoY Downloads growth rate trend tells us a different story. While 2019’s Arcade predictions covered this in some depth, our recent article - Four Reasons Why the Hypercasual Gold Rush is Coming to an End - dived very deep into what is in store for the future of the sub-genre. But to quickly recap, there are 5 key trends to help peer into the future of Hypercasual.
Trend #1: Even though the market is still growing in absolute numbers with double-digit YoY growth rates, the rapid deceleration of YoY growth rates signals systemic concerns across the Hypercasual sub-genre. Said differently, a double digit growth rate is impressive, but the rapid deceleration of growth rate is quite concerning for the future health of the sub-genre at a fundamental level.
Rapid deceleration of YoY growth rates signals systemic concerns for Hypercasual.
Trend #2: Growing market size doesn’t necessarily mean growing number of hypercasual players. This is driven by the fact there is a high concentration of hypercasual games in the top download charts, and therefore market size increases are naturally expected. As can be seen in the graph below, Q2 2019 had a total of 33 hypercasual titles in the Top 100 downloads chart. Of these, 16 were in the Top 25, which is the highest it has ever been since the start of 2017. But, since Hypercasual games primarily acquire players from other Hypercasual games, it suggests that the same number of players are just downloading more games. In other words, the market size of unique hypercasual players is rather stagnating.
The number of Hypercasual titles in the Top 100 download charts, and more specifically the Top 25, has never been higher. This is the major driver for the huge Q2 2019 downloads market size spike.
Source: Four Reasons Why the Hypercasual Gold Rush is Coming to an End
Trend #3: Voodoo’s short-lived reign as market leader stands testament to Hypercasual also being hyper-competitive. Further, recent strategic moves have been made by Voodoo to open “beyond hypercasual” studios. While the diminishing market share and opening of non-hypercasual studios can be seen as Voodoo’s fall from grace, it can also be viewed as Voodoo’s strategic retreat from the hypercasual market. This can signal that Voodoo wants to diversify its portfolio - after all, hypercasual is also hyper-competitive. But this can also signal that the overwhelming market leader doesn’t find the market they used to dominate just that lucrative anymore.
Voodoo’s short-lived reign at the top stands testament to Hypercasual also being hyper-competitive.
Trend #4: If 2018 was the year of growth for Hypercasual, 2019 was definitely the year of diversity. Over the past year, Hypercasual saw massive diversification in terms of core mechanic design. Most notably, 5 mini-genres emerged within the massive hypercasual party. Though reading between the lines, this diversity signals a great need for developers to differentiate in an attempt to stay relevant and therefore profitable. A natural corollary to hyper-competition.
While Tap (23%) and Steer (20%) were 2019’s biggest gainers, Swipe/Drag (15%) started gaining more traction towards Q4 2019.
Swipe/Drag shows the highest YoY growth rate and lowest number of competing titles. A blue ocean?
Trend #5: A key business metric for Hypercasual, namely IPM, is showing the first signs of flattening and therefore indicating market saturation. As ironSource agrees, a corner stone for making a hit hypercasual game is to reduce CPIs by increasing IPMs (installs per thousand impressions). But with an increasing number of hypercasual games fighting for the same audience with often very similar visuals, gameplay motivations and marketing tactics, IPMs are bound to suffer and therefore indicating market saturation.
Hypercasual IPMs have started to flatten towards the end of 2019.
Source: ironSource Gamefest 2019
Trend #6: One last thing to sink your teeth into. When analysing the IAP revenue trend for Hypercasual, we found that YoY IAP growth rate started increasing over Q3 and Q4 2019. This left us slightly confused given the dropping YoY Downloads growth rate and how Hypercasual monetisation is primarily front-loaded. On looking deeper, it was found that this was driven by two things -
30-35% of the growth was driven by increased IAP integration in various hypercasual mini-genres, most notably Puzzle. Clearly, the move towards hybrid-monetisation tactics has begun in Hypercasual.
The remaining was driven by two titles - “Crane Game Toreba” and “Clawee” - which together raked in ~$45M over 2019. The former has been around since 2015, while the latter was released towards the end of 2018. These games essentially allow a player to control a real “claw machine” through his smartphone, and have real prizes delivered to his home! We are continuing our study of them, and will hold back on an ill-formed opinion. Very interesting nonetheless!
The Hypercasual’s IAP YoY growth rate trend actually started increasing over 2019.
* Ad revenues not included
Data shows that we’re not at the tipping point of Hypercasual, as the sub-genre has in-fact been growing and hit record numbers last year. Nevertheless, a deeper dive into the numbers shows that Hypercasual is facing market size stagnation, hyper-competition and market saturation problems. This implies that the hypercasual market could have peaked.
Something’s got to give. And by mid-2019, Archero entered the scene and took the world by storm. It cannot be understated that the ripples Archero is creating would fundamentally change the way the industry approaches hypercasual from design, production and marketing profitability perspectives.
The Design Evolution: Today, as competition heats up and the market matures, generating unique hypercasual designs that can crack the top 100 download charts is becoming increasingly harder. But what Archero’s design has shown us is that hypercasual core design can beautifully coexist with traditional meta design principles. Armed with that insight, one can imagine what the big publishers of yesteryear will use/reuse their massively huge traditional hypercasual portfolios for. A new breed of hypercasual design is coming, we call it “Hyrbidcasual”, and now it is only a question of when.
The Production Evolution: What Archero also signals is a massive upcoming change to the production process of Hypercasual. While the hypercasual process is a wonderful machine for discovering new core mechanics, the real big money in Hypercasual is going to come from organizations that can turn hypercasual into a cog in the bigger machine. Eventually some place will be so well run they’ll be able to validate myriads of core mechanics via the traditional hypercasual process, take it to market, and find the 1 game in there that has the potential to be grown into a full huge product. This sort of elongated production process obviously has increased project cost ramifications, which only reinforces the above mentioned design evolution - more Hybridcasual!
The Marketing Evolution: Archero accomplished two things with its extremely effective marketing strategy. It leveraged its hypercasual core game design to center its marketing videos around, while also showcasing its more RPG elements in a light and fun way. This allowed the game to capture not only the wide hypercasual audience, but also the well monetising and notoriously expensive RPG audience - all without breaking the bank! Given that, the marketing future we see is one where IAP or hybrid-monetisation focussed games learn how to profit on both hypercasual and IAP inventory.
The Hybridcasual gold rush is on the horizon and these games will have 5 key tenets -
Built with a hypercasual inspired production process
Have simplified meta-systems built on cores taking from hypercasual design principles
Make the most of hybrid monetization tactics
Apply user acquisition strategies that allow them to profit from both traditional hypercasual and IAP users
Implement “lean live ops” techniques that focuses on strengthening medium-long-term retention and lightweight/speedy execution
Reconciling 2019’s Predictions for Hypercasual
2019 Prediction #1: Lion Studios will continue to grow market share, while Voodoo might consider expanding its portfolio into other sub-genres and genres to stay market relevant, following a slow down and saturation of hypercasual games.
Result: CORRECT - Right on both counts, with Voodoo’s recent strategic moves and Lion’s performance in Q4 2019.
2019 Prediction #2: New publishers will continue to enter the market, while existing players will fight to stay relevant.
Result: CORRECT - Correct again, with SayGames and Good Job Games stealing the crown from Voodoo.
2019 Prediction #3: Hypercasual will see the growth of hybrid-monetization models to support ad revenues, and gameplay evolution with light meta system additions to further boost LTVs.
Result: CORRECT - Between the recent IAP revenue trends, 5 mini-genres emerging and Archero entering the scene, we got this one right too.
2020 Predictions for Hypercasual
2020 Prediction #1: Hypercasual downloads will continue its YoY growth rate decline through 2020 and major publishers will focus on two things -
Studio acquisitions and/or portfolio diversification as survival strategies
Reusing their healthy library of hypercasual core mechanics, swift production process and extensive UA scaling data to build Hybridcasual titles
2020 Prediction #2: Voodoo will end 2020 with a hypercasual market share position between 3-5, while it focuses on releasing at least one successful Hybridcasual title from one of the newly opened studios.
2020 Prediction #3: SayGames and Good Job Games will continue their market share growth until the first half of 2020, after which there will be a struggle to maintain market leader positions.
2020 Prediction #4: Hypercasual products will focus on market differentiation through core game design innovation, implementing hybrid-monetization tactics and improving production values.
2020 Wild Prediction: We’d love (expect) to see AppLovin IPO in 2020!
Coloring Games Losing Color
In 2019, Coloring Games (CGs) have finally earned themselves an independent sub-genre within the Arcade genre. Over 2018, CGs didn’t specifically stand out in our 2019 predictions. Their success was mainly fueled by Pixel Art and Color by Number, as these two titles took the market by storm by letting its players create pixelated versions of their own images/photos and color them afterwards.
Once the novelty effect of creating own designs had worn off in 2019, the genre reached another high point when Polysphere and paint.ly were released. These took the players who loved the meditative process of finding & converting numbers to colored sections in a black & white image and gave their own spin on the sub-genre.
“Color by Number” leading the pack, followed closely by Playgendary’s “Polysphere”.
* Ad revenues not included
In fact, CGs have become bigger than any of the the Hypercasual mini-genres on an IAP revenue basis. Over 2019, the sub-genre increased its YoY IAP revenues by +$10M (+18% YoY) to a total of $62M. At the same time, the overall revenue trend has been massively declining. Only 17% of the year’s total revenue was made in Q4 2019, while in fact this should be the strongest quarter of the year for mobile games in general. One could default to the opinion of the sub-genre simply peaking, but there is one other significant fact that can throw some “color” onto the declining revenue trend.
A declining absolute IAP revenue trend from the start of 2019 is unmistakable.
* Ad revenues not included
All of CGs top grossing games have been using the Hypercasual model to monetize players aka showing interstitials and offering an ad-free experience for a premium price. For some games, this is a 1-time IAP. But the vast majority achieve this with a subscription based model that adds new artwork periodically. And given how important content is to the players of these games, this subscription offering naturally became a key revenue driver for CGs.
Though during the fateful month of February 2019, iOS users saw operating system features added by Apple that made subscription management much more user-friendly. Thus, it became much easier for players to remember to turn off the subscriptions on CGs once they had their fair share of engagement with the game. Interestingly enough, the timing of this change from Apple perfectly lines up with the start of the revenue decline for CGs. For the top performing CGs of 2019, revenues have dropped by an average of -40% between Q2 and Q4 2019.
CGs IAP revenue decline lining up well with Apple’s subscription management changes in February 2019.
* Ad revenues not included
2020 Predictions for Coloring Games
2020 Prediction #1: Key CG publishers will innovate on their monetization strategies to be able to stay relevant, though this will be steep uphill battle due to the no-loss condition of these games. Priority will be on moving more towards hybrid monetization tactics.
2020 Prediction #2: Significant meta game development will occur across the sub-genre to address its omnipresent long-term retention issues.
2020 Prediction #3: Playgendary will expand on its wildly successful “Polysphere” title with 2-3 brand follow ups and reskins, while Fun Games for Free (aka Wildlife Studios) will release more successful CG titles to maintain their market leader position.
Idlers Continue to Idle
In 2019, Idle games saw double digit growth rates with annual Downloads hitting ~470M (+54% YoY) and annual IAP Revenue at ~$111M (+23% YoY). On a high level, Idlers can be categorized into three revenue buckets -
Idle Miner Tycoon lonely at the top at the $2M per month mark
Three successful games fluctuating at about $1M monthly
A handful of games that hover in the $250-500K per month range
The three revenue categories of Idlers can clearly be seen in the above graph.
* Ad revenues not included
But over the course of the year, the sub-genre as a whole has stabilized and slowed down - as can be see in the rapidly declining YoY growth rates across the four quarters of 2019. In other words, the sub-genre has clearly matured even though multiple contenders still enter the ring. Also note that we will be covering Idle RPGs like “Ulala: Idle Adventure” in the upcoming RPG predictions post.
* Ad revenues not included
From a market share perspective, not much has changed when it comes to key competitors in market. Kolibri continues to rule at 25% market share with their smash hit Idle Miner Tycoon, which is also the company’s sole cash cow. Their second game (Idle Factory Tycoon) has flopped, even though the team tried really hard to turn this one around with some very large game design changes. All this has resulted in Kolibri’s portfolio revenues taking a major YoY growth rate beating with a 77% YoY growth rate at the start of 2019 dropping to 25% by the end of the year. This could mean major changes in the company’s future, as Idle Miner Tycoon cannot mine gold forever.
Unfortunately, Kolibri was not able to replicate Idle Miner Tycoon’s success with Idle Factory Tycoon.
* Ad revenues not included
Kolibri is closely followed by Kongregate, East Side Games and Game Hive - all at 11% market share. Kongregate was able to sustain a healthy position due to impressive growth from Adventure Communist. We should also mention that Kongregate has now handed Adventure Capitalist and Communist back to Hyper Hippo, who are now publishing the two titles under their own publishing label - Screenzilla. Further, Kongregate also made two non-Idle acquisitions in the year - dungeon crawling RPG Bit Heroes and 2D Battle Royale Surviv.io. In other words, Kongregate has lost more market share in Idlers, and seems to be focusing on diversification through acquisitions. Idle experts Hyper Hippo too are looking to diversify revenue streams through publishing.
East Side Games doubled down on Trailer Park Boys, showing that a periodically expanding IP based narrative built on well balanced systems can perfectly sustain idle games in the long run. They have doubled down on this strategy with their second IP based narrative idler release named Always Sunny. While being a mechanic reskin of its predecessor, the narrative is fresh due to the new IP but it doesn’t seem to monetizing as well.
Kolibri continues it's reign, East Side sustains, Digital Things grows. Can Habby be the underdog?
* Ad revenues not included
The very interesting market movements came from two other publishers, which gives us some insight into what to expect in 2020. The first is Digital Things, who have followed a solid reskin approach with their portfolio of idle titles. The reskinning is primarily on a theming level (Idle Theme Park Tycoon, Idle Fitness Gym Tycoon), so as to cater to different audience interests. In terms of gameplay, it is interesting to see how Digital Things is popularizing the 3D view of the game environment, which is also a trend we’re seeing in Hypercasual given how 3D Hypercasual games are performing better. Further, Digital Things idlers consist of multiple 3-legged chair systems within a single idle experience. Basically, Digital Things is incrementally innovating on Kolibri’s titles, and it seems to be working for the company as revenue market share for them has been growing over 2019.
The second interesting publisher is 2019’s mobile gaming poster child - Habby, who have now entered the Idler sub-genre with their visually beautiful and surprisingly calming title Penguin Isle. Another title from Habby that is resonating with both Eastern and Western audiences. Not to jump the gun, but the level of gameplay innovation in this title seems low for Habby’s standards and IAP monetization feels quite weak. So how did they acquire a 4% IAP revenue market share?
Top 10 download countries for Penguin Isle showcasing a good spread across the East and West.
Penguin Isle’s implementation of ads is quite spectacular, almost making it a no-brainer to engage in watching. If we were to guess, it is probably the game’s ad revenue per user metric that convinced Habby to spend massive UA money and amass ~10M downloads within their first 3-4 launch months. In typical Habby fashion, they again seem to be using Hypercasual advertising techniques to drive down CPIs for Penguin Isle and probably monetizing quite well off a first session ad impression. While we cannot comment on profitability just yet, the download numbers are driving its current market share position.
Examples of Penguin Isle’s hypercasual-esque ads.
Source: Facebook Ads Library
All in all, the declining market speaks to live-ops steam running out from long-standing market leading titles. And the slow market share growth of newer publishers with their unique product portfolio strategies indicates that the Idler sub-genre is ripe for innovation.
Reconciling 2019’s Predictions for Idlers
2019 Prediction #1: Kolibri to further juice its current titles or possibly launch a third title, so as to not compromise its revenue reigning position. Without significant gameplay innovations, Kolibri will get passed by competitors.
Result: PARTIALLY - While we were right about Kolibri further juicing its current titles, but maybe a year off on them launching a third title. The need for a new cash cow to maintain their market leader position is now quite high.
2019 Prediction #2: Lion Studios will grow its idler portfolio through new titles or taking on older titles that could prove to be successful with scaling UA.
Result: CORRECT - This is correct as Lion has grown its Idler portfolio over 2019, though none of the new additions have proven to be massively successful.
2019 Prediction #3: Idler gameplay will continue to evolve with more fresh designs and sub-genre mechanic blending, as older and once significant players fight to stay relevant.
Result: PARTIALLY - This is partially correct as visual fidelity of Idlers has improved in 2019, but gameplay innovation has not been as strong as it could have been. Currently, there is a clear tendency towards more hybrid game design, where idle mechanics are used but not always in the main gameplay.
2020 Predictions for Idlers
2020 Prediction #1: The overall Idler market will stagnate over 2020 with no major new releases that will shake up the current market share graph, as innovation in the sub-genre will continue to remain a challenge. With regards to monetization, incentivized ads will generate a bigger and more elementary chunk of revenue.
2020 Prediction #2: With the loss of its flagship idle titles, Kongregate will try to stay relevant in the Idler sub-genre with 1-2 new releases, but to no avail. Lion too will continue to expand it Idler portfolio, but slowly and cautiously resulting in 1-2 new releases.
2020 Prediction #3: Both Eastside Games and Digital Things will continue their reskinning strategy. The former through another IP, while the latter through continuing to explore a diverse set of themes. Though this will likely lose steam for Digital Things faster than it does for Eastside.
2020 Prediction #4: Kongregate, Game Hive and Digital Things will all choose to diversify out of pure Idlers with game releases in other genres in an attempt to stay relevant.
2020 Prediction #5: Habby’s Penguin Isle will be on the forefront of UA creatives strategy innovation and will use that in conjunction with a Kolibri style production approach to incrementally improve IAP revenues and reach the top-5 grossing Idle games.
2020 Wild Prediction: While Kolibri will continue to remain market leader in 2020, its poor portfolio performance will result in either a third title launch or company exit through acquisition. We’re tilting towards the latter. And if their recent CFO hire means anything, its probably going to be Playtika’s Cheetah coming for the German hummingbird!
Platformers - No Change to Status Quo… Yet
Platformers is a classic genre that continues to rake in stable, hefty download numbers year after year. In 2019, the sub-genre brought in a total of 1.3B Downloads (+15% YoY) with a relatively flat trend over the past two years. In terms of IAP revenue, 2019 was down -11% YoY with a total of $66M and again a relatively flat trend.
* Ad revenues not included
From a Downloads market share perspective, the past years in this sub-genre have been uneventful at best. As our Platformer categorization also includes endless runners, Subway Surfers is the undisputed king with 232M downloads over 2019. Unfortunately, SYBO’s portfolio revenues have massively dropped over 2019 with YoY IAP revenue growth rates plateauing between -30-40% between Q2-Q3 2019.
SYBO’s portfolio revenues have massively dropped over 2019 with YoY IAP revenue growth rates plateauing between -30-40% between Q2-Q3 2019.
* Ad revenues not included
The obvious incumbents of 2019 include SYBO with the aforementioned Subway Surfers, Imangi (Temple Run, 184M downloads), Outfit 7 (the various Talking Tom runners, 176M downloads) and Nintendo (Super Mario Run, 46M downloads). Some smaller companies have been able to carve out respectable niches, including Austrian NerByte, who impressively managed to grow their 8-year-old Lep’s World franchise last year to 63M downloads, which is a whopping +79% YoY.
The forefathers SYBO, Outfit7 and Imangi continue their dominance.
The flip side of the coin is the revenue. Proper IAP monetization of Platformers remains an unsolved problem. The category only earned $66M in IAP Revenues last year (-13% YoY). Even the heavy hitters struggle to break the $10M-per-year IAP revenue barrier. Needless to say, games like Subway Surfers are heavy on ad revenue instead. The only outlier in the data in terms of IAP revenue is Cookie Run: Ovenbreak, which notably makes a lion’s share of its $24M yearly IAP revenue (+4% YoY) in Asian markets.
Success of new entrants in the genre was quite limited. Notable new releases include Outfit7's new Talking Tom runner, indie favorite Sky: Children of the Light and ONESOFT’s awkwardly familiar jumping brothers Bob and Bino.
* Ad revenues not included
Reconciling 2019’s Predictions for Platformers
Prediction #1: 2019 will not see any major market movement, as publishers will continue to hold their respective market positions.
Result: CORRECT - SYBO has newly entered our categorization, so that changes overall market share positions. But keeping that in mind, this prediction is relatively correct.
Prediction #2: Possibly some evolution around Platformer meta systems to further grow sub-genre LTVs.
Result: WRONG - Unfortunately, this has still not happened. Even though incumbents have the advantage due their huge user base and organic baseline, the Platformer sub-genre is ripe for innovation. Archero showed that monetizing skill-based arcade games is entirely possible - it’s just a matter of time before someone cracks it for Platformers.
2020 Predictions for Platformers
2020 Prediction #1: Jumping and running is a universal play pattern that’s here to stay. We predict no major change to downloads, as Platformers continue getting nice traction throughout 2020.
2020 Prediction #2: IAP revenue for Platformers will remain meager - unless someone successfully re-imagines progression and monetization for the sub-genre.
2020 Prediction #3: Both SYBO and Outfit7 will not diversify their portfolios in 2020, but double down on Platformers and release reskins to sustain revenues.
Shoot’em Ups - Habby Reviving a Forgotten Genre
Shoot’em Ups (Shmups) saw a big upset last year that can be summarized in one word: Archero. If the arcade phenomenon of 2019 needs an introduction, check out the extensive analysis we wrote up last year - How Archero Shot to the Top, and How You Can Do Better. Driven primarily by Habby’s innovative Roguelite ($73M revenue in 2019), Shoot’em Up yearly Revenue grew to $128M (+198% YoY) with Downloads at 296M (+125% YoY).
* Ad revenues not included
Notably, the genre was set up for a nice growth spurt even before Archero was released in April. Vietnam-based Onesoft has been successfully implementing the age-old strategy of “copy others first, then copy thyself”, taking lead in classic space Shmups with Galaxy Attack: Alien Shooter ($16M in 2019, +37% YoY) and its various different variants. Meanwhile, it was quiet below the top two. In the wake of Habby and Onesoft, both Space Ape’s Fastlane (-46% YoY) and Mail.ru’s HAWK (-36% YoY) declined in revenues year-on-year.
Archero shooting an arrow straight through the heart of this market share graph!
So - the talk of the town is still, unsurprisingly, Archero. One could argue about the categorization of this one: we decided to include it in Shmups due to its core mechanics. At its core, it's a game about evading projectiles, set apart from the Radiant Silverguns of this world only by its controls and theme.
Either way, the game has already spawned it’s first litter of straight-off clones, as well as more deliberate follow ups such as the fresh-off-the-oven Bow Land. The problem with following up on Archero is two-fold. Firstly, Archero’s gameplay is genuinely so good that it’s hard to improve on. Secondly, the user acquisition honeymoon period for this specific core game play is long gone, driving CPIs up for anyone daring to enter. Moreover, as Cheetah veterans, Habby are no newcomers to large-scale user acquisition, and Archero has a pretty good head start on the production of ad creative. Archero-plus-one will not be enough - one needs game play that looks and feels different enough to stand out.
Reconciling 2019’s Predictions for Shmups
2019 Prediction #1: 2019 will not see any major market fluctuation - Onesoft will continue to gain ground in the sub-genre and maintain its sub-genre leader position, while Mail.ru will eat into Space Ape’s market share.
Result: WRONG - Clearly, we were laughably wrong on the complete prediction here, as we could not have seen Habby coming. But they giving us the supreme surprise of Archero makes up for it!
2020 Predictions for Shmups
2020 Prediction #1: We’ll see no drastic moves in Shmups from incumbents Habby and Onesoft. Both look to diversify instead, with Habby adamant about only publishing innovative and unique games and Onesoft trying to find growth from new genres such as Platformers.
2020 Prediction #2: Fast followers (and slow followers) of Archero will enter the market in droves. We’ll see things like Archero with guns, Archero in space, Archero with boats, and Archero with complex meta.
2020 Prediction #3: There will be Archero follow ups where the core game play looks and feels different enough, but the graveyard is going to be a big one. Creating great core game play AND managing a successful user acquisition scale up is no small feat.
Other Arcade Brewing the Future of Hybridcasual
From an overall Downloads and Revenue perspective, the Other Arcade sub-genre is not seeing anything juicy. Download market size is stagnating, with Revenues dropping for leading titles in the sub-genre. At the same time, the Other Arcade sub-genre acts as a catchall and therefore looking at it from a Downloads and Revenue trends perspective does not yield great insight.
* Ad revenues not included
What Other Arcade really prides itself for is being the training grounds for “the next big thing”. In 2018, it was Coin Master. Then came Archero. In 2019, three publisher names clearly stick out -
Jelly Button leading the pack with “Board Kings”
Playgendary trying to sustain with a portfolio of titles
Forever9 Games growing with “Piggy Go” (Board Kings meets Coin Master)
Jelly Button leading the pack, while Playgendary sustains and Forever9 slowly grows.
* Ad revenues not included
All things considered, both “Board Kings” and “Piggy Go” are closer to Social Casino than Other Arcade, and we’ll likely cover them in our 2020 Casino predictions. Both titles are structurally built on the same design backbone of Coin Master. The only difference is that the slots based chance mechanic of Coin Master is replaced by dice in both Board Kings and Piggy Go. In other words, neither is really defining of whats to come.
That only leaves Playgendary - the real story of this sub-genre, making up for 25% market share with their impressive portfolio of products.
Placing their portfolio on a timeline reveals an interesting evolution. While 2017 and 2018 were the Hypercasual years for Playgendary, the company already started dipping their toes into the Hybridcasual stream by 2018 - though nothing Archero-esque in terms of design. Though on a portfolio level, Playgendary’s IAP revenues have taken a massive beating over 2019 with YoY revenue growth rate dipping to -23% by Q4 2019. We suspect this huge downtrend is primarily due to two reasons -
Their dependence on subscriptions as a monetization arm, with revenue downtrends corresponding to the launch period of Apple’s subscription UX changes
Ineffective live-ops across non-Hypercasual titles, given how none of their games with extendable content and progression systems have been able to grow revenues on dropping downloads
* Includes both soft-launch and global launch titles
Playgendary’s IAP revenues have taken a massive beating over 2019 with YoY revenue growth rate dipping to -23% by Q4 2019.
* Ad revenues not included
In 2019, as focus on Hypercasual titles dropped, Playgendary’s first full-fledged Hybridcasual title hit the market - “Racemasters” - though title performance remains to be seen. But we hope and expect more Hybridcasual games from Playgendary, as some key commonalities across their titles indicate so -
Core game mechanics built on Hypercasual design principles
Light meta systems attached on top
Hybrid-monetization tactics
Distinctive art/branding techniques to leverage in UA
Reconciling 2019’s Predictions for Other Arcade
2019 Prediction #1: Playgendary will build on the “Bowmasters” brand with a few follow up game launches.
Result: CORRECT - We were right on this one, given how Playgendary has really doubled down on transforming the brand into a franchise.
2019 Prediction #2: “Coin Master” will sustain a position in the Top 25 grossing games list, while “Pirate Kings” will break into the Top 150 grossing games list.
Result: PARTIALLY - Right on Coin Master. Partially right on Pirate Kings, as it had a short-lived moment in the Top 150 sun but failed to sustain.
2019 Prediction #3: More Social Casino Builder and Social Casino games with meta-game differentiation will enter the market in 2019, and synergies will build with the traditional Casino genre.
Result: CORRECT - Quite right on this one as the number of Coin Master clones is only increasing.
2020 Predictions for Other Arcade
2020 Prediction #1: We might be one year off on this, but in the spirit of being bold - Playgendary will be a Hybridcasual force to reckon with in 2020. We expect at least one successful title from them that will set the stage for how Hybridcasual is supposed to be done in the wake of Archero’s shadow.
Recapping the 2020 Predictions for Arcade
2020 Predictions for Hypercasual
2020 Prediction #1: Hypercasual downloads will continue its YoY growth rate decline through 2020 and major publishers will focus on two things -
Studio acquisitions and/or portfolio diversification as survival strategies
Reusing their healthy library of hypercasual core mechanics, swift production process and extensive UA scaling data to build Hybridcasual titles
2020 Prediction #2: Voodoo will end 2020 with a hypercasual market share position between 3-5, while it focuses on releasing at least one successful Hybridcasual title from one of the newly opened studios.
2020 Prediction #3: SayGames and Good Job Games will continue their market share growth until the first half of 2020, after which there will be a struggle to maintain market leader positions.
2020 Prediction #4: Hypercasual products will focus on market differentiation through core game design innovation, implementing hybrid-monetization tactics and improving production values.
2020 Wild Prediction: We’d love (expect) to see AppLovin IPO in 2020!
2020 Predictions for Coloring Games
2020 Prediction #1: Key CG publishers will innovate on their monetization strategies to be able to stay relevant, though this will be steep uphill battle due to the no-loss condition of these games. Priority will be on moving more towards hybrid monetization tactics.
2020 Prediction #2: Significant meta game development will occur across the sub-genre to address its omnipresent long-term retention issues.
2020 Prediction #3: Playgendary will expand on its wildly successful “Polysphere” title with 2-3 brand follow ups and reskins, while Fun Games for Free (aka Wildlife Studios) will release more successful CG titles to maintain their market leader position.
2020 Predictions for Idlers
2020 Prediction #1: The overall Idler market will stagnate over 2020 with no major new releases that will shake up the current market share graph, as innovation in the sub-genre will continue to remain a challenge. With regards to monetization, incentivized ads will generate a bigger and more elementary chunk of revenue.
2020 Prediction #2: With the loss of its flagship idle titles, Kongregate will try to stay relevant in the Idler sub-genre with 1-2 new releases, but to no avail. Lion too will continue to expand it Idler portfolio, but slowly and cautiously resulting in 1-2 new releases.
2020 Prediction #3: Both Eastside Games and Digital Things will continue their reskinning strategy. The former through another IP, while the latter through continuing to explore a diverse set of themes. Though this will likely lose steam for Digital Things faster than it does for Eastside.
2020 Prediction #4: Kongregate, Game Hive and Digital Things will all choose to diversify out of pure Idlers with game releases in other genres in an attempt to stay relevant.
2020 Prediction #5: Habby’s Penguin Isle will be on the forefront of UA creatives strategy innovation and will use that in conjunction with a Kolibri style production approach to incrementally improve IAP revenues and reach the top-5 grossing Idle games.
2020 Wild Prediction: While Kolibri will continue to remain market leader in 2020, its poor portfolio performance will result in either a third title launch or company exit through acquisition. We’re tilting towards the latter. And if their recent CFO hire means anything, its probably going to be Playtika’s Cheetah coming for the German hummingbird!
2020 Predictions for Platformers
2020 Prediction #1: Jumping and running is a universal play pattern that’s here to stay. We predict no major change to downloads, as Platformers continue getting nice traction throughout 2020.
2020 Prediction #2: IAP revenue for Platformers will remain meager - unless someone successfully re-imagines progression and monetization for the sub-genre.
2020 Prediction #3: Both SYBO and Outfit7 will not diversify their portfolios in 2020, but double down on Platformers and release new IPs to sustain revenues.
2020 Predictions for Shmups
2020 Prediction #1: We’ll see no drastic moves in Shmups from incumbents Habby and Onesoft. Both look to diversify instead, with Habby adamant about only publishing innovative and unique games and Onesoft trying to find growth from new genres such as Platformers.
2020 Prediction #2: Fast followers (and slow followers) of Archero will enter the market in droves. We’ll see things like Archero with guns, Archero in space, Archero with boats, and Archero with complex meta.
2020 Prediction #3: There will be Archero follow ups where the core game play looks and feels different enough, but the graveyard is going to be a big one. Creating great core game play AND managing a successful user acquisition scale up is no small feat.
2020 Predictions for Other Arcade
2020 Prediction #1: We might be one year off on this, but in the spirit of being bold - Playgendary will be a Hybridcasual force to reckon with in 2020. We expect at least one successful title from them that will set the stage for how Hybridcasual is supposed to be done in the wake of Archero’s shadow.
