data.ai’s Lexi Sydow Hot Gaming Trends And Ad Formats That Are Losing Steam

[Music] thank you hello worlds welcome back to the pg.biz podcast with your hosts me Brian baglo and the Glorious globetrotting and Games common Darcy piggy answers Peggy from social media looks like you were one of the people at Gamescom who made the show how are you and welcome back wow I didn't know that I was just doing my thing going around checking out everything that was happening so yeah it was a great Gamescom and of course bringing it all back to our show which is just in the final days actually of whether or not we are going to be voted The Best of British so this is excitement all around very true very true if any of our listeners are inexplicably on a rid of this uh the PG is podcast your window into the world of the global mobile games industry has

been belonging to filling lessons Choice Awards in the British podcast Awards so obviously what we would like you to do is drop whatever you're doing don't stop listening you can't multitask and it's going to vote for us because if we win we have been assured the wealth of the rich is beyond imagining but it's the potent Prestige that I think we both really have to pay you right absolutely and another thing to be excited about is our guest right Brian because if you're like me and I think you are a bit like me a little bit of a day data nerd it's always exciting to look at hot gaming Trends and that's what we have because we have a new report just come out chock full of data that our audience needs to know understand and we don't just have the data right we have may I say it the data Diva yes indeed we do we have actually a two-part series with you to dig into all the data Lexi CDL your director corporate marketing and insights of course at data AI before we

kick it off I think we just both need to congratulate you because I think you just got a promotion yes I have thank you that's very kind congratulations Lexi and and yeah I have to I have to agree with you buddy uh data geek here as well and some of the insight and information that you can pull data.ei app and he has Wars is incredible and I have spent hours trolling through some of the reports that you guys have produced um you know digging into all of the all of the things that um help differentiate the mobile worlds you know it's the monetization techniques it's like the live Ops it's all of the incredible sort of granular information that say developers now have access to so it's an absolute pleasure to have you here and I'm really looking forward to this oh thank you I'm so happy to be here it's been a while since we've done one of these so I'm very excited Peggy says we're going to take our time we're going to really kind of drill into this

because it's just too good an opportunity not to um but in your position your new position I should say uh your passion is all about helping bring that data to life I mean you must have seen and analyzed a lot in the last decade in the mobile World Games world and Beyond if you had to pick an adjective to describe where we are in the current Mobile gaming Market what would it be I think this year we're looking at stabilizing as the adjective um and then I'd add a little asterisk of um but feeling the effects of economic pressures perhaps uh we saw our first sort of decline in gaming spend last year which was largely a result of disposable income kind of squeeze but this year we're seeing it's outside of China we're seeing largely a stabilization where we're seeing sort of flat growth year and year um which is ultimately positive because we we weren't sure if it was going to continue with the economic pressures that everyone's feeling right right now I think that makes sense I think that makes an awful

um because it it does seem as though we've undergone a wobble and so we're here to talk about the gaming Spotlight reports and the review that you just released with IDC can you do the same thing you know it there's a lot in there that we're going to unpick but again do you have one word One adjective you can use to describe this report and why you think it uh it stands out yeah I think I'd say either robust or comprehensive um so the report looks at the kind of full spectrum of gaming so we're looking at mobile console PC Mac and handheld and then there's some other sort of uh cloud-based or Cloud streamed gaming as well so it's a very robust report in the sense that we're trying to give a real picture of the entire lay of the land that's interesting in itself if you think about it Brian because cross-platform you know it is the Mantra what I'm hearing through all of our interviews it's about being everywhere and uh you know handhelds Cloud we

haven't talked about it on our show as much but our guests are talking about it I think we have a terrible tendency in the games world to kind of Silo and compartmentalize console is here PC is here you know mobile is here and it's separate to handheld but but everything exists within this ecosystem and I think that's one of the words that we get uh to get quite a lot Peggy is is the notion of ecosystem so something that really kind of gives the perspective in the context of this report so let's go through the findings in the report starting with spend right because you look at that like see you look where people are spending their time and their money which I think is really interesting and identified what you call pockets of spend and some pretty interesting sub-genres as well including simulation which is a top one so tell me about the pockets of spend and share with us what's driving the growth here on the whole what we're forecasting for

2023 is 108 billion dollars through the app stores for mobile gaming so this doesn't include ad revenue or ad spend um and the bulk of this uh is pretty stable outside of China so what we're seeing in China is still some of the headwinds from the licensing freeze and sort of that um freeze I guess lifting up now but there's still some slowness happening with getting those licenses for domestic games uh as well as regulations around Gamers um young Gamers that is um so that's another sort of area that is causing some headwinds for the global figure but what we see for sort of these pockets of growth for spend we do see some sort of haul out areas that are driving some of the growth um and some of that is sort of relative to download so for instance we looked at growth in market share so that's letting us look at who's taking over sort of that piece of the pie so even if the pie is getting smaller or it's the same size as last year we're able to kind of see

relative to other sectors where's the money going and part of that is looking at the downloads for what's popular and so simulation is a great one that you mentioned uh driving simulation was the breakout sort of star of garnering that market share and we saw in terms of what's helping to drive that sub-genre um Indian bikes Driving 3D in particular is a title where 80 of those downloads are coming from India but it's very popular from a simulation standpoint we also saw um simulation sports did extremely well uh last year and that was largely due to some soccer related titles so FIFA soccer for instance and then Football League 2023 both of which were quite popular in India Brazil Indonesia FIFA soccer also saw the US and Mexico and turkey up at the top for downloads and the reason I wanted to bring those up in terms of Revenue is just that sort of re-engagement topically with the FIFA World Cup uh helps to drive that Revenue

so we actually saw um FIFA soccer surpassed the billion dollar milestone for its lifetime spend um just this right about in the last couple of weeks um so very strong growth there uh we also saw in terms of the consumer spend pockets of growth one of the biggest areas and it's one of the games we call out in the report is um the sector for RPG games for role-playing Games Team Battle being the sub-genre and the biggest sort of growth factor here is the launch of Han Kai star rail which is the second big title from mihoyo after gentian impact so that one launched in April 2023 and really helped to um boost a lot of Revenue in that space so those are some of the key areas we also saw uh one that I'd like to call out in the the um party Royale genre so we tend to see stumble guys is the Big Driver there for

um topically for usage and for Revenue and downloads but we've seen that sector actually carve out market share in the total spend and it's driven predominantly by eggy party being the breakout app and interestingly that is only available in China at the moment so China iOS is is already showing really strong signs of uptake and that is a title I would keep my eyes on for the rest of the year as it begins to roll out Beyond China I think that it could be potentially a disruptive Force to stumble guys sort of cornering that segment a bit so I like about your reports you get a little peek into those into those Trends into the upcoming um ones to watch as well and another thing that you've pointed out was the sub genres and almost like Sub sub genres and you also stated in the report you think they're going a little unnoticed by Publishers so where should they be watching yeah I think that's a

is it tricky one it depends ultimately on your uh probably your Geo that you're are really focused on as well because they do vary significantly especially for downloads but I think one of the best ways to kind of focus attention is around using that market share figure so we like to look at sort of what are the top subgenres and we're using Game IQ which is our sort of taxonomy uh that we've categorized um the whole gaming space essentially into multiple different categories and there's primary and secondary so you can kind of slice the data depending on what you're looking to see in that vein I think I would say looking at the top categories and then refiltering it by the top categories for sort of what we call breakout growth which would be your kind of Delta but sometimes you've got some very small sub-genres that you know they're growing super fast but it's from a quite a small base for instance we saw that with Hyper casual games having extreme you know triple digit growth rates for Revenue as some hyper casual titles try out some hybrid monetization

very small sector but we're seeing some option in at least in the early days and then I'd also look at sort of your market share so as we mentioned sort of where's what sort of taking over pieces of the pie here and that particular metrics really interesting on a country basis so those are the ways I'd probably look at it what are you seeing you know emerging genres sub-genres you know what what is it that you're seeing sort of growth and excitement around um in in any of the regions around the world yeah yeah games tend to be Stable Market you know we all think of Candy Crush Saga as like one of the biggest titles there and it definitely is um and in the M3 metamatch area we actually have seen Royal match really carve out its own place in the last few years um and this one's really interesting because about 60 of the revenue at the

cut of year to date is coming from the US there um and we see actually that globally about 50 of that revenue is on iPhones 10 is iPad and then 40 is Android tablet and phone combined um and I think that's really interesting that we've seen this like larger share of iPad compared to other potential titles um and then I think in this area I don't think a lot of people thought you could break into the top charts right so Candy Crush has been that kind of title and it's sort of it's properties as well have been dominating um and Royal match was number eight for the match games in 2021 for spend and then number three in 2022 and is now number two in H1 2023 just behind Candy Crush so this to me is one of those areas where I think um contrary to what a lot of people would have thought uh really this game was able to carve into a very pretty mature segment of the mobile gaming

experience um and I think a large a large part of that has to do they've got some great user acquisition strategies they've had heavy user acquisition as of last year to get people into the game and re-engagement as well where they saw um Revenue ticked up as well off of paid UA so I think they're really re-engaging Labs users well and it's very story driven which is a little bit different to Candy Crush so this has been an interesting one the the demographics look similar um where they tend to skew female and tend to skew over 45 but they've cracked into a market and I was looking at our cross app usage data here and I was surprised to find that on iOS in the US only about 10 of Candy Crush users also played Royal match so to me it's showing it's not that they've carved out the same user base they've actually kind of found a tangential user base um and sort of activated that so I think

that's a really interesting growth segment that surprised I think would surprise people um it definitely surprised me from personal experience I've certainly seen um Royal match pushing through uh I have been very very aware of that game in a way that I never was until the first half of this year so yeah whatever they're doing is clearly working um but for me just extend on the sort of the genre in terms of platforms uh what are you seeing it's what is your data show about you know platform and cross-platform gaming uh more importantly we're seeing more indications of you know you got to be everywhere and I think the cloud-based uh the cloud streaming gaming is another really strong indication of that so that's been a really interesting area um that we've seen growth now it is still relatively small so we see about 30 million monthly active users um on mobile accessing cloud-based uh or Cloud stream gaming about 60 million

across the ecosystem for PC Mac as well and when you look at that compared to Mobile gaming most popular game or the most played game of H1 outside of China so it just kind of globally excluding China was Roblox uh at 325 million monthly active users so the scale is very different for them for some mobile games but we are seeing strong growth there um so we're actually seeing the hours spent on uh Cloud stream gaming on a mobile phone is set to double this year um we're seeing it's carving out even more market share almost a quarter of all time uh relative to sort of doing it on a computer or television uh is coming from your mobile phone and we're expected to see about 60 Revenue growth in that sector so it's definitely got some very strong growth rates I think Mobile gaming is still going to be that core but we are seeing indications that there's more cloud-based streaming of games happening on mobile and on your PC

and mac and it brings me back also to our guests very often Brian because they're all telling us you know mobile yes but we're looking at web we're looking elsewhere you know we had quality we had Ryan on recently talking about how he's looking at Steam and you've talked about Gamescom that's where I was learning about Nostra which is another interesting platform that we'll be looking at here as well Brian but you're seeing this as well Lexi and you're also seeing the data behind it we hear about the trends the data does that hold up this trend so I would say it's still it's a very interesting Trend to watch and I think that there's some compelling areas especially we um our partners at IDC who help with this report were telling us about some of the ways that um there's bundling with sort of your 5G or your Broadband kind of capabilities on a local scale especially in APAC in Latin America where there's some rollouts uh packaging there to support

more of that cloud stream gaming um and so that type of infrastructure can really help but ultimately I do think that um some of the most successful titles have really tailored to their markets when they've done their localization strategy and kept in mind any sort of device specs or infrastructure things like that when they've designed their game so that optimization I think is hard to beat but the growth rates are very compelling I mean just the fact that time spent in Cloud stream gaming on a mobile phone has nearly doubled is that alone is something to definitely to definitely watch so we've talked about day verification platform genres uh and gameplay but we also need to touch on monetization because everything we're hearing is that it's tougher than ever and and to add to that difficulty we're now um finding out through your report that the sentiment towards in-game ads is going down and deteriorating so what is

the answer for developers what can they do to find new users in this you know increasingly challenging climate it is a harder climate especially with respect to ads um I think we expect to see from a user acquisition standpoint and so still sort of waiting for that other shoe to drop I guess and also for Google to kind of implement their privacy framework as well um then we'll start to see I think the industry figure out relatively quickly how to sort of navigate when you can't Target your whales as efficiently um but for the moment I mean and what we've heard from from Publishers as well is that you can kind of get what you need through fingerprinting at the moment um but definitely to your point about sentiment it is tricky I do think that there is a way to have hybrid monetization to try to appeal to different user bases um especially looking at your different GEOS that you might be going after

but we did see that sentiment on the whole for in-game ads um has dipped what I will say is that because this is a survey and it is based on you know how people feel I do think that there's how you feel and then there's how you act and we see this with uh time spent so the average person is spending about 5.1 hours per day on their mobile phones but when you ask people how much time they spend it's usually a lot lower than that so I think there's that sort of perception of oh I'm not I don't like those ads very much no I'm they're not as much fun for me or and this is also a U.S survey as well so sentiment could be a little bit different in other markets uh but it also is when you're actually playing it maybe you don't actively act on it too much or it's not that big a deal but if when prompted you might say oh yeah I don't really like them so I do think that sentiment is one of those things that we have to kind of again like so

that that's gold thank you I think our listeners are going to be delighted I've got one quick bonus question for me which is in terms of AD types is that across the board are you seeing a difference between the interstitials reward dates you know playable and and in in gameplay uh it's as it were that is a great question it uh not all ads are treated equal either so the most popular ad format the ones that people liked the most at least in the US from the survey were rewarded video right because you're getting something in your game that makes sense for having to watch this thing so it can kind of it feels like it's gamifying watching the ad in a sense you feel like you get something out of it there's a clear value exchange the second most popular or the you know the ones that were liked the second most were playable ads so that's an interesting one because that's effectively test driving a game so presumably you've had some kind of positive experience they work quite well with relatively simple hyper casual games um and that gives you that kind of

dopamine hit because usually you'd get through like at least part of that first um level potentially so I think there is that sort of positive sentiment there the next ones were Banner those ones people you know they didn't love but they weren't you know the most hated if you will and interestingly playing video was the most hated of all the types so um over 40 percent of people really didn't like them um there was sort of a 32 percentage point gap between like and dislike and it's up from four years prior so there's a significant Gap there I think ultimately if you're playing a game so this was surveys for people who were playing games and saw a video ad it would probably feel it took you out of out of the out of the moment out of the gameplay maybe it went a little long um so I think I think that makes sense if for instance with a rewarded video you get something out of it that you can tie right back into your gameplay but

for just a basic video I could see how people would not love that as an interruption so it all comes back to you know the ad experience itself which is more than a format you know rewarded as you pointed out it's a little bit like the experience so it fits and that's good so it's about making that match with the player type what they're likely to appreciate where they are in the gameplay and that comes back to context and you're very bullish about contextual data in the report as well what do you mean by that what contextual data should devs be tapping in order to get their ads seen and just not just served the more you can understand contextually about the the player behind those games so demographic data uh cross genre Affinity you know how how much are they likely to play another genre for instance versus the overall population there could be some real

similarities that you see um that might not be as intuitive sort of cross app usage what other apps are they using and playing um looking at gameplay so styles of gameplay as well um the difficulty levels potentially average session length so for instance if you are playing a game with very short sessions and you have a video ad interrupting those sessions all the time that's probably a bit more of a negative experience versus if you have some longer session length you might tolerate videos because it's not as potentially as disruptive it just depends on the difficulty in the gameplay nature but I think all of those are key so to serving the correct type of AD and having it be relevant because at the end of the day the best ads are the ones that are reaching someone who actually goes oh okay that is actually interesting or that's tapping on something I was thinking about or I would also be inclined to play there will be big differences in terms of the the appetite for you know those monetization models

where people aren't required to put their hands in their pockets across the different um countries of the world so can can you give us any kind of insight into where ADS are still being you know well regarded you know interestingly I think it's also a function of the the type of game as well so we still see uh you know casual and Hyper casual being um a gray area we've seen some success with I believe Army Commander was a game that offered essentially like an in-app subscription to remove ads and actually saw they kind of created a new Revenue stream going the opposite way and that's actually an interesting one because we do see for instance with YouTube uh that a significant amount of revenue is generated through the app stores by people in markets like in the US being a big Market there opting to pay to remove the ads so I think kind of an inverse of that is another interesting area um we do see ads working exceedingly well like I said and some of the more

um simple gameplay you know shorter sessions hyper casual being the genres we see ads also working particularly well um in other more emerging mobile markets like Brazil and India some parts of Southeast Asia where you can just shift that burden of cost instead of paying for in-game currencies having the ads helps to kind of keep them free so those are some other areas I I do think there's some really creative ways you can leverage ads in your strategy um and then create additional revenue streams by having people elect to pay to remove in some of the markets if you're targeting like Australia or the us or the UK see that's so interesting because one of the things that we've found one of the things we've discussed with some of our guests and that we write about on the PGA site is that um it gives developers so many more options you know to design designing the monetization choosing the monetization based around your genre your target markets and really gives them a whole

new range of weapons as it were to to sort of get out and get in front of people and engage with the broadest audience they can so I I think for for now that brings us to the end pick it brings us only to the end of this section but of course we have more coming that's what it's all about when you have a two-part Series so in a way it's don't go away we'll be right back [Music] we are also thrilled that our loyal listeners and fans like you have nominated pg.biz for the listeners Choice honor in this year's British podcast Awards so go to the awards website and vote for our podcast the deadline is Tuesday the 5th of September we're counting on you and it would be fantastic to get your vote this show is all about how to do your

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puppygamer.biz podcast and we look forward to speaking to you in the near future until then I'm Brian baglo I'm Peggy and saltz and that's a wrap until next week foreign