Are games markets bouncing back? | Karl Knights from data.ai

[Music] we're now joined by Carl knights from data. a how you doing today I'm very good thank you very much fantastic uh I understand we spoke maybe two years ago and I think it was 2022 just before everything fell apart in the mobile industry yeah that sounds about right yeah good to see you again you can't be surviv uh so you've already done a tun today is that right that is correct yes um that was was on our state of mobile 2024 report so really it's a review of everything in 2023 uh the various differences from Market to Market genre to genre in the gaming sector and um yeah hopefully that went down well well well we are talking about the negative stuff first to deal with it up front and it's been a tough time for people generally 2023 was was rough especially for developers and it's looking like 2024 is continuing that Trend VC spend is going to be down they're going to be fewer games fewer startups yeah but just after we talked

or around that time it was when Apple was introducing it kind of lockdown its privacy policies just had the GDP us stuff really kick in and uh for a company that trades in data yeah how did you folks react to that yeah it's a great question so um I mean yeah as you say we we're all of a sudden in a you know in in a world as many businesses are dealing with you know fewer fewer signals um thankfully for us our response to that it was was actually some kind of foreshadowing really of that likely to be a um likely to be the scenario so our data science our machine learning capability something we've been investing in for a number of years um and really that AI capability is really what we've leverage the most so as you know I suppose in simple terms as you know signals are becoming more and more scarce you know we rely on our data science or AI applied AI capability even more and um yeah that's really for for

us as a business what we've had to uh rely on um yeah more than more than anything so um yeah well I was looking at your state of play and it's interesting because a lot of people reported 2023 as being a sort of kind of a downtime and a troubled time whereas looking at your data baring a few markets China specifically you actually reported it as a growth year yeah um there's depending on uh which metric you're looking at so in terms of downloads what we've seen in the data is it's pretty much kind of leveled off so last year looked pretty sad against the previous highs of 2020 2021 um but in fact that's kind of leveling out it's only a small decline year-over-year from the downloads perspective when we look at spend um Yes again that follows a similar kind of flattening out 2% decline year-over-year however if you remove the China Market specifically which for many companies here today they may not operate in that market there's certain restrictions as well for those that reside there that significant kind of 11% decline in that

market if you remove that from the data in fact what we see is a 4% growth in uh in inap spend in 2023 on 2022 so um yeah there's certainly signals there that um you know there's some bounce back um you know specifically markets like uh South Korea France uh Brazil and turkey saw double digit growth you know in those those markets specifically so so yeah it's it's it's a it's a better picture than might you might um assume from just looking at the high level numbers yeah that's interesting and when we talked before I think everyone was familiar with machine learning but AI wasn't really the topic of conversation of 2022 was last year where the generative thing brought it into the public eye which then I guess brings the other aspects of it the ml side of things into the public eye as well are people now obviously you've had years of working with AI prior to all of this as as a core part of the business are people more excited to talk about

to talk to you about this than before or is there a slight increased suspicion that's come with this kind of public the way that they look at generative AI it can often be quite a negative perception of what it is and what it does to people's Industries jobs and so forth have you seen a change in the attitude really depends who you speak to I think I think most of most of the um I think our customers I would say as that being the group that I I I connect with um mostly it's optimism you know it's an enabler it's going to enable to to move fast to you know generate creatives to iterate to to really understand what you know uh New Opportunities exist but um you know naturally there's you know there's some sense of uh interpretation about it I guess um I mean for us um you know we're not the generative AI company we work very much in applied AI so answering the question how is X gain performing today or has performed um where we are moving to is is is very much around predictive

AI so uh you know really what are the components of um uh a game or an app they're going to drive sentiment or drive engagement uh so really that better kind of predictive capability uh than uh just doing what we've always done for the last 10 years which is answering the question of you know what is what does performance look like right now so um yeah it's a AI is a broad Church um and you know generative has been the the kind of the primary um kind of growth initially which is you know fascinating and wonderful and has naturally set us off thinking you know in a number of different directions um I suspect the the really killer solution is yet to emerge uh we've seen some great you know manipulation of AI in dating apps in retail apps um and uh you know I think that's that's already a huge interest area um but yeah for us we're still very much a fed and predictive is uh is our

Is our commitment well how much when you speak to your customers are they interested in getting huge amounts of data about their own game about their own results about their own you know the way their customers behaving the way players are interacting the UA of it all and how much of it is an interest in what their competitors are up to because obviously have both those kinds of information which one's more valuable is it a balance of the two obviously or or do people not pay enough attention to the competition it's it's probably the we is probably the reverse actually yeah it's competitor competitor information which is the primary reason you know I would say the majority of customers uh work with us obviously kind of sense checking their own uh their own homework as well but it's really about you know looking across the looking across the market and not just in the individual genres of games for example you know um there's tremendous opportunity to learn from you know the wide range of of different gaming genres as well and you know even in app space you know you can

learn a lot from a in a travel app from what is executed in a a retail app or whatever it might be the same can apply particularly as we're seeing more and more Innovation and kind of melding if you like of uh of different kind of gaming genres particularly when it comes to monetization in act purchases as well as uh as well as advertising so I think that's really our value is is providing that line of sight to to understand you know where opportunity and inspiration can come from so yeah yes definitely more on the on the competitor side right you mentioned shler earlier on about removing them from the from the use cases because of what's happened over there in terms of restricting in at purchases and that sort of thing no daily rewards all that business yeah is that data useful like because you're seeing kind of an extreme case of a of a country introducing certain regulations that other countries have not so you're getting a kind of like an almost test case of what would happen if we lock down this this this and this yeah and are you still studying that data in the

way that it ends up being useful as uh examples of what happens if you turn these Taps off if you like or is it just kind of kind of usess data yeah um I mean it's some of this data is bit more difficult to to acquire so not all the signals that are available uh you know uh across you know different platforms but um yeah I mean it's um uh yeah the customers ask quite regularly you know if you know just trying to kind of learn from the scenarios and you know obviously as a market on it own it's enormous um you know what Springs to mind is um is it hero hero of Kings quite possibly yeah uh which is um I think released in 2015 I think it was 2017 it passed a billion dollars in in that um honor of Kings not Hero Of Kings honor of Kings honor of kings and um uh yeah I mean that's that's the second to our knowledge the second biggest um mobile game in terms of inapp spend and it's only ever been available in China

right so you know that just that alone gives a sense of just the the sheer scale and learning from a a game like that is clearly you know enormously beneficial um so um so yeah I don't that answers your question specifically but you know I think there's always naturally a an interest of Fascination everything that's kind of taking place in that market which starts with just the share volume and different behaviors than Nuance that we see there but and yeah the other restrictions that come in it's it's something that all customers are looking at yeah it gives you kind of an extreme test case I would exactly to happen you get the actual data from that's interesting well you said you were doing a talk earlier on today um on the topic of it uh what were the responses they have to do Q&A at the end did you get any interesting questions thrown out what's the temperature of the room yeah um well there's a lot of interest in that the kind of the games that that really kind of defined 2023 um so I mean the two that bring to mind uh Monopoly go which was you know

enormously successful um again kind of close to a billion dollars in uh in in consumer spend uh nearly in uh in 2023 it's kind of wild to see that from that like an IP that that's that's that old and it's had numerous kind of variations digitally and often they didn't take off that well but this one's blown the roof off yeah the combination of uh you know the social interaction capabilities with family and friends the mini games the offers um yeah it's driven staggering amounts of uh of downloads but are really impressive level of of spend as well so they seem to have got that kind of equation equation right um exus towards a kind of a female 25 34 audience slightly different in uh in in APAC but that was certainly one that you know I I referenced more than once or twice and probably the other one is um uh yeah Royal match as well so from uh from dream games and um yeah again I think what's interesting in that is the category that it's in which you know is match occupying the same space as Candy

Crush which has dominated that space for 10 years um there's actually very little Crossover with a Candy Crush audience so what we see in the data is only 10% of those that play Candy Crush play uh Royal match so interesting how a game like that has managed to find a new audience in what you might perceive as being relatively limited um in fact not the case and even more so in terms of power they been able to drive monetization and and and in that purchases tying it to to characters the you know the kind of the the simple kind of gaming mechanic it's has worked you know tremendously well so those were kind of two standout games from uh from the talks morning that's interesting yeah what about 2024 so if if last year was technically excluding China a growth yeah do we foresee that Trend continuing like based on the data you have yeah so um so we predict even with the inclusion of uh the Chinese market a growth year um in terms of Ina monetization right so whereas the last 2 years we have seen um

you know a steady decline when we look at all markets we are expecting that all markets yet this year we will see uh an increase of of of of inap spends by something around kind of$ four to5 billion dollar so pretty significant year overy year and getting back on a on a growth trajectory what's even more significant than that is probably the continued rise in mobile ad spend so there's a compound annual growth rate of around 16.2% um we see that being bigger in 2024 than 2023 uh and expectations is that's going to surpass $400 billion in um in 2024 from a around 360 now so um you know good times bad times mobile ad spend you know and advertising your way out of it is clearly a a strategy yes certainly where the body is going to be going by the sounds of it that makes sense well you you've come to the show again today and obviously you've been here before what's what are your once you your talks are out of the way and you know the meeting done what's your reasons for coming to these kind of

things do you have those of meetings still to do or uh yeah I have a few meetings and it's and it's I mean it's it's tremendous we're so efficient to to kind of you know meet customers in such a kind of condensed period of time there's Partners here there's um you know uh there's a multitude of different things that that people really enjoy from just being in in person obviously um but I I I I really do try and make you know uh made my way into a number of the talks as well that was a great one to kick off this morning around kind of investment in uh in the UK specifically and yeah it's um I don't think there's any industry that needs events more than probably mobile gaming because literally each year we come here there is a new big thing whether it's a you know it's it's industry it's it's just a new growing Trend it's stuff just doesn't emerge like we're talking about Monopoly go this time last year did not exist and then here we are it's you know breakout number two game in that genre so it's yeah it's uh you can't not make the time

to be here because you know big things happen every year so um our G is always I I stick my head in the track rooms and if they standing space only so make a quick note of what that track was cuz that's that's the thing that's that's what's going to be happening this year so it's good well it's great to have you back again talk to you once more thanks for speaking us today super thank you very much [Music]