First Quarter Trends in Mobile Gaming in the Light of the Recent Global Changes | PGC Digital #1

good morning everyone yeah I'm Paul Barnes I'm the managing director for a mere attack Bonnie I'd like to start by thanking the pgc crew really for organizing this I think you know it's clearly a really difficult time personally and business-wise for for pretty much all of us and I think it's important that we do try and keep things going we do strive for business as usual though it's very difficult and I think the I just really applaud this effort and getting it going so thank you very much right so my bit today is is this q1 gaming look back and I'm sure all of you know we do this annual review we published that in January had an amazing uptake this year and then we do these quarterly updates although normally they're pretty low-key it's just a kind of look at key trends any any new games that are coming through and so on this in my four years

or so with that bonnie is just different to any other quarter we've had so there is a lot to talk about what I'll say is you just check might what I'll say is that the effects here the effects of the lockdown the pandemic have come at different times through the quarter in different regions and for certainly for Europe us it's right towards the back end of the quarter so we're not seeing all of the all of the impact in the quarterly data so what I'm going to do within the within the session today is be a try be a little bit more granular we've looked at some weekly data and monthly data trying to see those leading indicators show is what's going on and we will need to come back to of causing in q2 and throughout q2 so that's what that's what we're going to try and do in the next 15 20 minutes or so see that's me I'm not going to spend time on a

penny and I would normally do the bit here at the show of hands who's an a pony customer those kinds of things but we're not going to spend time on that today so hopefully I'm not being arrogant in assuming you all know who we are if you don't then to look us up and we'd be happy to talk to you all right so let's get started I want to give a bit of context before diving into q1 by looking at where we were in what we carried into into q1 from 2019 and 2019 was was a huge it continues to grow continues to be a record year and mobile this is just looking at some really top level numbers so this isn't gaming this is everything in the in the mobile app economy across iOS Google Play third party Android and we topped 200 billion downloads in 2019 but what you see is it's starting to flatten and so this downloads growth even in India you can see the gray line

here for India even those huge markets the emerging markets that have driven a lot of the growth in inbound to starting to flatten out now so whilst downloads are starting to flatten usage and time spent continues to increase and importantly for the discussion today revenue continues to increase at pace so we this is just store revenue it's not advertising revenue but store revenue we had this number across the economy of 120 billion now the key probably a more relevant number for the audience today how much of that in gaming and it's 72 percent of that figure so 86 billion in in gaming in gaming revenue across the stores in 2019 was what we were looking at and the the question was where's that's going where's that going to increase to and and I actually stood on stage the the kickoff of pgc in London in January and

had this discussion with people that are we are we going to get mobile game to a hundred billion in 2020 which when you think the whole of the recording recorded music industry is 20 billion and you Liat it's just a real sense of scale of what's been achieved with mobile game so that's just some context what we carried into the start of the quarter now not all the graphs in q1 of look like this in fact many more have looked like this it's been a tough time economically across the world this is footsy values but you could do the same with most asset asset prices across the quarter it's really been very very difficult and continues to be for many companies for many many of us individually however there's been a change in the way we live and that's impacted people's needs people's demands and so on so with change always comes opportunity

and some graphs have looked differently some graphs have looked more like this so I was going to do a sort of bit of fun with this around trying to get people to guess what it is but I just couldn't find a way of doing it really you can maybe get a clue from the fact it's Google Trends analysis but this is actually searches for best mobile games on Google and you see this crazy spike here obviously a spike in the middle around Christmas holidays you might expect but this is indexed so you see it effectively doubles during the lockdown so the number of people searching for best mobile games doubles they search for other things as well this isn't the only search term that spiked how to cut your own hair oh is one that spiked possibly even more than this I'm sure some of you will have liked me some funny family stories of cutting your own

hair so anyway that's that's where it is but this probably brings my first point there's a few takeaways from the session today this would be the first one which is App Store optimization a lot of gaming companies I talked to don't really spend much attention or pay much attention to App Store optimization and there's evidence for that and when they've tried it hasn't really made a big impact so kind of why bother but you know now is the time there are a lot of new people looking for mobile games to play who haven't looked for them before and they are searching for them so if you want them to discover your games and that you want them to convert to play your games then you need on top of App Store optimization question that follows this is are these converting to downloads I think pretty much everyone here knows the answer to that which is yes it yes they do and so this is is downloads across the quarter and we broke it down where you can see

the sort of breakdown at the quarter here you can see it's pretty flat it was a good quarter and across across the quarter it was sort of 20% up quarter on quarter it was q1 and 25% up year on year and download so it's a it's a big spike for sure but you see how much of it is weighted to the back end here and we are just looking at high awesome google play here we haven't put third-party Android and China in here but it gives you a sense of the spike this week here this week of 22nd of March which we'll talk about a few times in the session this 50% spike in downloads over the average for q4 in in 2019 so it just gives you just an enormous increase that we had it right at the end at the end of the quarter which made it the biggest week ever from mobile gaming it's the biggest quarter ever for mobile gaming in terms of downloads so the

question I'm sure a lot of people ask is is that converting into revenue so let's look at that the answer is no not so far anyway and there's a few points behind us I guess three points one is the obvious one about economics people economy and people being concerned about that downturn and spending and so on which potential revenue pressures there may be a more impactful point even than that is that a lot of the games that are being downloaded are games they're hyper casual casual games games of monetize predominantly or significantly through advertising so you don't see the impact quite so much here and in the store data but the other the other impacting with the other theory if you like which we're proving at the moment is that a lot of this growth is coming from people new to gaming and whenever you look at a new market you look at segment new group of people and any segment any group like that you always

see this this this this maturity phase maturity or you see downloads kick first people play around with different games they figure out what they want to invest time in and then you see usage increases they invest more time and then you see revenue increase so revenue when you have a new segment of players revenue always lags behind usage usage next behind downloads you wouldn't expect given the timing of this across almost towards the end of the quarter you wouldn't necessarily expect to see a spike in revenue if these are new players okay so that's a global view let's take a look more regionally and open the obvious place to start is China of course we will try and do this roughly chronologically with how the impact rolled out so you can see there in February in China and we're just looking at ir s-- data as an indicator of what's going on in china but you can see that 25 percent spike in downloads in February compared to January which is when the impact was predominant in China

and then you see it does tail off so it's almost back by the end of March to where it was in January this is a sort of January average compared to then the individual weeks of March so that's the download picture it's back to what I was saying a minute ago about downloads and then leading to usage you do look at usage data so this is time spent with weekly hours spent in games in China and again you know we're looking at January this big spike in failure to the average in February being 30% up and whilst we do see a drop it's not the same drop as we had with downloads so there is a real indication here that there are both players playing more and also new people sis's total hours spent new players investing time having spiked and played around with downloads spending more time within games now so the usage hasn't

dropped off in the same way that the the downloads did for China okay so that's the China picture let's look at Italy the next place to go and you can see this this spike is much bigger in downloads it's actually 60% in my in the in the this key week of 22nd of March it builds up it was a slightly slower build-up there wasn't the immediate lockdown in Italy but I said it's a big increase like 60% increase over the average of January and by this this week of 22nd of March and the top games their brain out draw climber and slap Kings were the top three that we're driving this a very casual kept casual thing there so that's Italy let's look at France and you can see it's really marked this is the week where president macron announced lockdown in France and you see this this huge spike straightaway similar to Italy as casual hyper casual

games Park master did very well and perfect cream did incredibly well so I thought was interesting culturally with the cuisine and culinary skills in in France the perfect cream should should do so well about 55 percent increase and then if we look at the UK you see here it's a similar story like so the UK was later in the rollout of the lockdown this this week here is where it really really struck and you see similar so we have 50 percent in UK 55 and France 60 in Italy so really really consistent across these markets is increasing downloads and again it was similar kind of games that Kings did well Kings did well across all these markets actually I don't know if that's a sign of frustration people's frustration have been having to stay in all the time but it was really noticeable one now again just back to this question of these is

this growth coming from new people who are playing mobile games we're any kind of investment for the first time or is it existing gamers shuffling and looking for new games to play and we will do more on this the data isn't really clear enough yet to give a solid answer and we will look at things that cross app use and audience it's demographic shift in the in these games one of the things I did just for the talk today was look at advanced reviews so one of our recently released products is I advanced reviews if you're an app any customer you haven't looked at it to take a look at it's really good pulls out somatic analysis and other ways of taking actionable insight out of the reviews you have and I looked at reviews for some of these top games like birther cream sacking before and at this point of the of the lock and see if there was any change in the themes that were coming through in reviews and it's really marked what comes out immediately after the lockdown is lots of players

who are very frustrated they love the game but they can't understand why there's so many adverts in the game now if people are frustrated and don't understand that their adverts in the game then clearly they are pretty much first-time players of these these types of hyper casual games that monetize their advertising so a real strong evidence point that this is along with the growth in search terms that it really is being significantly driven by new players all right so we've talked quite a lot about downloads a bit about revenue let's look at usage again the usage of data will lag behind downloads but we are starting to see some spikes interestingly you know we're looking at a few western markets here but Italy you see where where the pandemic struck first is where we've seen the biggest increase in usage and I think I'm sure we'll start to see this in UK obviously not much impact in marching UK I'm sure seared in April but in terms of the games that that can that are taking most

time at the top of the ranking charts for usage there's some trends in there I think it was it was interesting the Pokemon go at the top of the US which I think they did a really great job in changing the game mechanic to reflect the lockdown and people not being out and about in Italy we saw candy crush double usage doubling in terms of total time spent week on week during the lockdown so a real strong casual impact there in Germany we had a week on we saw a week on week increase of 130 percent on roblox so there's there's really a trend happening there with with the schools being closed kids at home at spending time on that and then finally on this the other one that caught my in France was brawl stars we saw a 50% week on week usage increase in brawl stars and seeing that in some other places as well with these so games of social aspects

are doing very well we talked about it in previous world webcasts and so on about Gen Z and strong impact with Gen Z there but it's it's definitely something that's that's that's part of this of this growth ok so that's time spent looking a little bit broader than the ecosystem discordant which have both spiked significantly during this time you can see this is the rankings on discord France and Germany you see impact around the around the time of the lock down there that's this Court which is the same and you see twitch developing their model now there's cooking other things going on there's clearly people spending significantly more time with twitch so that was just a kind of side point I want to do a little bit on genres I'm not gonna spend too long on this I'm gonna try and wrap up in a couple of minutes in fact so you may have seen this we did this in some of the pgc talks in January this comes from our our own analysis so we have a

product called game IQ which is in in labs since sort of beta at the moment for any app any customers but it's our own taxonomy own categorization of the market so you see that sort of tunings casual casino core and then the themes and their sub themes and IP modifiers all kinds of stuff in there but the message is when you look at it quarterly it hasn't changed so arcade in q1 was 29 percent of downloads across 29 2019 it was 27% puzzle was 23% it was 23% in 2019 action you wanted to percentage point change and some of these but nothing more than that so it hasn't really changed yet now it is quarterly analysis so we may see this shift it's something we should come back to a little bit in q2 we have seen some of the the games at the top change so within arcade subway surfers was top game of 2019 in q1 drops the third woodturning and Johnny trigger a top two in there in

puzzle Bray now had a really strong q1 was top of the download charts there ahead of garden scapes in action hunter assassin came in ahead of pub G so a few changes in the download in the picture of damage but not really at a genre level and it's similar with with revenue when you look at that always see this the RPG numbers driving so much of the revenue seek or driving 2/3 so again this hasn't changed radically since since 2019 some of the games have changed with China having the impact first interesting the game four piece came out top monetization and top game for revenue in court but other than that not a lot of changes casinos done very well still driven really Queen master being the biggest biggest one in there with RPGs not a lot of changes in

monster strike afk arena lineage to top three within their rise of kingdoms in strategy that's pretty much all to say they've got an eye on time as well so just wrapping up these are the the charts EC to start a quarter end of quarter worldwide in the UK we've talked about a lot of the games on here I'd say ones that don't show on the charts roblox minecraft really big increases as you'd expect yeah I think that's probably pretty much it to say on there so just wrapping up and my summary slide for you I'd say that the social side I talked about brawl stars and friends have seen it elsewhere 8 ball pool is an example there are lots of anecdotes had people playing 8 ball pool there with their parents and multiplayer on that there's you know it's pretty obvious but with people not being able to socialize so much we are seeing these games as social elements do really well secondly I said it near the top ASO

optimization it is not something you've looked at do look at it there are new players now who are experimenting trying to find games and they are using search more than you'd see elsewhere partner up I didn't talk about this in the in the in the site socialism maybe there was a lot of we're seeing this trend of big brands partner with mobile gaming I think they really understood that the scale of mobile gaming is so big now that it makes sense but for brands who have never looked at it before to partner so we seen with NFL and for tonight Louie Vuitton League of Legends a lot of those brands are struggling at the moment and partnerships for them with mobile gaming would be so beneficial and I think if you're if that's anything you've looked at really now is the time to go and be proactive with it and then finally I'd say on the revenue side and it'd be creative or maybe be patient is probably a better way of saying it with monetization there are a lot of new gamers that they're not monetizing straightaway there's uncertainty

economically so the key is about getting the new gamers playing your games focusing on the time spent and monetization will come so that's pretty much everything I have to say just a final word if you have follow-ups and if you actually view an app any customer we're here to help so if there's data you haven't gotten you need if you need support talk to your customer success manager or your a.m. and again if you're a gaming company that isn't an app only customer you need data as part of key decisions we are here to support so we're being very flexible through this period if you want trial access or something like that then do reach out to as we are trying to play a role which we see for ourselves in supporting the industry so get in touch if we can help awesome it was really great not unsurprised it's always good but that was really great and really great insights there you've come answered a lot of questions I'll try to type down while you're going but we do have various questions from the audience so we try and get through a few of those

before I rush a fourth or next speaker and one question I won't ask before I get into that though is obviously um and maybe you covered it in the slides I was dashing between and answering questions elsewhere but obviously as you say people get into isolation this is not a desired thing but it's happening that naturally channels people insert into mobile games of the games TV whatever when in China where we're seeing you know or in the parts of Asia where we're seeing a kind of loosening of a loosening of restrictions to some degree do we then see that you seeing that cut trend straight away drop off or are they maintaining a lot of those new users have kind of come in and engaging was it too early to say that I think early indications are that it has changed behavior so there's definitely this this up and down in downloads as people think what are we going to do and then and downloads does drop away but we're seeing the usage data stay high so in terms of total time spent in gaming it

does seem to be staying staying higher and not dropping back as as China starts to go back to work obviously that you know as you say it is it is early days with it but you can see that the usage is is so far staying high yeah ok so I'm gonna get a couple of questions here I'm gonna come slightly randomly I've gone from like from 2 to 9 so there's more than I expected big oh I won't get through all those well try um is it all about the big guys top hundred 200 getting more traffic or is there an uplift for all as an Indian lower chart positions - yeah I think that's a really good question and I think if you look at where people are finding games it's it's three searches obviously featuring those kinds of things are very important at the moment that does tend to skew it towards the the big big games for sure tends to skew it to people to people with with money but I'd say on that App Store

optimization point you know if you if you're smart with that if you were in the game and you you want to get presents really look at here so it could be a way of getting picking up some some new users in a way that and I'm often the big the big companies aren't so good at ASO names the best mobile games are you ready are you seeing any changes in the number of new launchers that's it it's a question I don't have an answer for actually it's not not so far it's not surfaced I think it's something that we we will look at but no I've not seen not seen a significant change in that yeah haven't looked for it I've looked rates before yes I guess I guess certainly initially at least people everyone a little bit of shock so it's not like people are gonna be able to trigger those more game launches yeah you know there's a lag too isn't there

so we may see it'll be interesting to look at that genre analysis in q2 if it's shifting if there's a sort of accommodation going back almost two new players and trying to catch maybe an another another we've talked about kind of end of hyper casual wouldn't be surprised to see you know something out for two years now yeah the end of hyper casual here um I've got a question here from from Allison Allison below impact how much how much lift as a brand give to a game in terms of in terms of users and engagement it's a brand related question yeah I think it can be significant because of the it's it's almost like a a different way of doing user acquisition so the NFL if you look at that impact for tonight maybe but it's a way of tapping into a whole significant user group that you didn't have before and we're seeing it in many

different places now we're working with some of the exam is one of the big German supermarkets who are actually getting into mobile gaming yeah yes they have an audience there they connect with kids demographics whatever and if you can if there's that brand loyalty and there's that way of reaching that brand really quickly and it's a relevant game it's the same kind of rules is you have with IP I guess it needs to resonate and be relevant but if you get that right I think there's we're seeing some early indicators it's very effective way of doing user acquisition yeah and also what you're saying before yeah in terms of that discovery if it's a more casual audience they're going to go to things they trust us in familiarity I guess um I've got a very specific question here so I don't think I know the answer but I shall ask can you share some insight on word games during kovat 19 why have Scrabble going where's your friends suddenly come to the top 10 in UK I noticed a spike in US rankings also for these two games yeah I think partly

it's the social aspect so a lot of these word games do have a social aspect that they're games you can play with friends and family and it's a bit that they're almost like they're they're kind of towards the board game board game family board game end of the spectrum in terms of mobile gaming so I think that's why we're seeing the spike you hear anecdotally the stories of people playing these games with their parents now because you can't get together and do family stuff you want to do so you want to spend time with family but you want suspense um I don't know it depends of your family I think I think word games this is an obvious one in the same way that puzzles and you know but puzzles tend to be more individual games we're going to where it's got that social and it's easy it's got a connection back to kind of board game legacy that other meant that the new

members family members you haven't played mobile games before doing so I think there's this clear clear logic for and we seen as you look at the sales and board games have gone crazy as well like a physical board game and we get three to three more questions so sorry Chris who's come up next I'm gonna I won't you your time will be short so I'll just gonna because there's a lot he runs a few more of these and making most of all lies there so um do you see me trending tablet usage any different trends in tablet usage in terms of playing games that's a really good question actually and I feel embarrassed that I don't have an answer to don't have all the day in your head I thought you're just going to let me know who the if I've got access to the question or I'll find out who that is yeah well you can mail it that it was an anonymous attendee some of these had gotten so anonymous of 10 you asked that question if you email can help you there's another question on brands here with the might be a very specific one but what would you say the most successful brand gave collaborations in 2019 it's a

challenge sorry max it's it's quiz isn't it it is and I think I mean there's I'm not sure there's any really nailed on in gaming yeah there's ones that are outside of gaming which you can look at snapchat Mike I think was a really strong one in 2019 but I don't think anyone's I think we're still playing around with it you know I do like the Louis Vuitton League of Legends one I think that got a lot of coverage and explore some of the potentials there so in terms of publicity success I like the LVMH Vuitton and League of Legends one but I don't think anyone's really nailed it and I haven't seen too many of the stats from NFL and fortnight but I think that's a good one see yeah okay don't do two more and then I'll let you go and get the next one so this is questions been asked why suffer so nice it felt like I heard in a panel yesterday that

IP Bevin used the PC and console increasing that games a cheaper form of entertainment from getting to me the restaurant etc why a mobile game IEP revenues not increasing do you think they will increase I assume they are increasing but I don't know I mean not increasing significantly yet and I think yes they will I think partly it's because a lot of the games that have spiked first are add monetizing games rather than IOP games and I think partly there's a lot of players who are new players who haven't yet settled on the games they're playing to make a decision about whether they're gonna spend money on it so then you into those free-to-play casual games there they haven't quite crossed that point where they're ready to spend money yet so I think we will I think we will see that spike in store revenues yeah probably pretty soon you know maybe it may be as soon as this month I know this isn't necessary core but if do you think a sort of strange

question asked about how people relate to that is do you think that that's the decreasing eiope revenue not decrease but will it will affect eCPMs of add monetize do you think ad monetization will increase yeah I don't know because if you look at macro level there's obviously challenges with your whole advertising industry at the moment because that's funded by people spending money on advertising and brands and so on so I think there's it's really hard to say there's so much uncertainty in the entire advertising space at the moment that I would I wouldn't be brave enough to make a call on that okay well I could talk to your morning but I think we should let some nos speak for bit you'll be back you're joining us are you joining us again latest with ya I'm one of the panel's later on talking about company culture actually which is close to my heart stone look important fantastic well right applause for me I'm sure they're already pause already else Paul - very much good sign