MMOGames Business Weekly Report is back to take a look at mobile gamer preferences for free to play games in China, the latest news from Nexon, Ninja leaving Twitch, and a few other topics relevant to the business side of making online games.
Automaton Games Shuts Down
Automaton Games, the folks who were behind the unreleased 1,000 man Battle Royale Mavericks: Proving Grounds, has shut down and in the process the game has died. In the announcement on their website, they cited a lack of funding as the reason for their sudden closure. Thankfully Improbable, the makers of SpatialOS, have said they will be trying to find places for Automaton employees in their company. Mavericks: Proving Grounds is actually the second SpatialOS game to meet its end in recent months leaving some to speculate that SpatialOS falling out with Unity earlier this year may have played a role. If that's true, this might only be the beginning of SpatialOS related sunsets. MMOGames staff will be watching and will continue to bring updates in our weekly business report.
Chinese Consumer Preferences
According to recently released research, over half of Chinese consumers prefer free to play or ad monetized games over premium titles. In fact, the research found that 61% of people prefer non-premium games. 85% reported they spend money on mobile games with 3% spending more than $50 (¥330) a month. In contrast, the average spending is just $5.80 a month. Those interviewed between the ages of 26 and 30 had the highest average spending at $10 a month.
The research also showed there is a high level of brand loyalty. 92% of respondents said they stick with a game for more than a week and 87% say they’ve played fewer than 5 different games in the previous month.
One challenge that developers face is how well divided the market’s stores are. In China, 30% of the market is using the App Store, 29% are using Tencent’s MyApp, and 26% use the Huawei app store. In the West we really only have Google Play or the App Store for mobile games.
It would be really interesting to see this same research completed in a few different Western countries to see how our views differ. I would personally much prefer to pay for a game or even pay a subscription for a game over being nickel and dimed to death by an in-game shop.
Source: Games Industry
Nexon Internal Merger Incoming
The last few months have been a wild ride for Nexon. First, their founder and CEO was putting the family’s stake in the business up for sale, worth between 9 to 11 billion dollars. After months of speculation that everyone from Disney to EA were interested in buying, it seems Kim Jung-ju may have simply decided not to sell. Of course, I’m sure a decision like that wasn’t made lightly. Following the release of this rumor, Nexon’s stock dropped resulting in a loss of up to 5%. Now we know that Nexon is reorganizing and merging their two core business units. No jobs are going to be lost in this internal restructuring, but the company is looking at getting rid of projects with low commercial value. They also hope that the restructuring will improve the company’s operating profits and increase its stock value. News of this restructuring started out as a rumor but was quickly confirmed by Nexon. It is set to take place sometime in August.
Ninja Leaves Twitch for Mixer
Ninja has announced that he will no longer be streaming on Twitch and is instead switching over to Microsoft’s Mixer platform. The specifics on this particular deal haven't been released but last year he was making $500,000 a month streaming Fortnite on Twitch and a paid promotion deal with EA for Apex Legends got him $1 million, so it is safe to assume he got a pretty sweet deal. This marks a major shift for Twitch which has been seeing its growth slow over the last year.
Mixer has always been playing third fiddle to Twitch and Youtube but has also seen consistent growth. Last quarter it saw 119 million hours watched, an increase of 37% year on year. Ninja’s move to Mixer might be exactly the sort of push the platform needs to catch up to its two bigger competitors. However, Fortnite’s popularity, especially in streaming, has been on the decline. It is also possible that many of Ninja’s fans wont follow him to this different platform because they prefer Twitch. We can see an example of this in the industry already looking at people who refuse to play a game that hasn’t been released on Steam. Only time will tell how this transition actually goes.
Source: Games Industry
Zynga Eyes China
At one point in time just a few years ago Zynga was dominating the games industry. They were all we ever talked about it seemed like. Of course the days of Facebook games are long gone now, but that doesn’t mean Zynga is gone or that they’ve even slowed down. Zynga has been transitioning to a mobile game developer and having great success with it. They recently released Empires and Puzzles in Japan and Korea, the beginning of their strategy for expansion into the Asian market. Now they’re eyeing China.
In a call with GamesIndustry.biz Zynga COO Matt Bromberg said, "We are beginning to look at China for Empires & Puzzles as well, and as our portfolio continues to develop we have both Star Wars and the Harry Potter game on our slate for the future. When there are big global pieces of IP like that, which we think will resonate across Asia, we're hopeful that will also help us expand there. We're trying to take a measured approach to it, and learn as we go and make sure we have the right match of game and personnel on the ground and marketing strategy. When you get those lined up it can be terrific, but it is a complicated market and we're still in learning mode."
A complicated market is putting it lightly. Still, if they are successful in their push into China, they’ll be tapping into a mobile games industry with an estimated 586 million gamers.
Source: Games Industry