Karl Knights and Lirui Ding On The Data And Trends Defining Mobile Gaming In 2024

[Music] hello world I'm your host for this wrap of some of the best talks and the coolest speakers at PG connects London the global games conference in this episode I catch up with two speakers during the event we have Carl Knights Global VP of customer success at dat. who drw stopped the data proving gaming has not been hit by slowdown as we had thought and we have ler Ray ding senior associate at transcend fund who shares the Esports Trend you need to watch so listen learn and love this [Music] episode so Carl I have to say that it has been a tremendous year in gaming and J AI J is in nearly every article that

I'm writing the big one of course for the first time since the Advent of the app stores gaming revenues are down they're not done a lot but it made the headlines and we're all feeling a little bit sort of like well okay A little sobering but you have fresh new data that we're all going to download because I'm going to include it in the show notes and on the show highlights where are we now there's a natural uh I think we are still very much looking at this period of time from the the kind of false highs of the covid 2020 21 years and as you say in 2022 you know consumer spend in games was down around kind of 6% five and a half 6% right which um is tough news to take what we've seen in 2024 is that kind of level out so it's only in terms of all markets down around 2% 2023 on 2022 but in fact if you go a level deeper that includes data from the the

market in China which not every business is necessarily um able to operate in and obviously there's restrictions of the those that reside in China in terms of usage so we also looked at if you removed that market in fact spend within games in uh 2023 increased by 4% okay so the decline in China was around 11% so in the overall Global figures that means that it year-over-year is down 2% but remove that market it's it's up 4% okay so um in all aspects really whether it's kind of leveling out in terms of downloads um we are seeing you know uh spend bounce back um you know in 2023 to think of some of the games that really stood out in that uh obviously it was a huge year for the likes of Monopoly go um you know so that's a category that you know is kind of made its way into the kind of the top 10 for the first time um you know continued enormous um in-game spend

for the RPG titles like gensin impact HJ star rail Linea gem Pokemon go those continue to be you know significant um uh significant games in terms of generating spend so downloads generally leveling out spend bouncing back a little bit um we always kind of talk about time as well you know that's always a factor of our state of mobile report and each year we kind of come to do this event or any others it's like well hours are up to four hours and four and a half um it's around the kind of 5H hour mark now it's not increasing quite to the same level so I think I would imagine we're getting to a point where you know naturally it's e even more competitive to kind of get mind share and time of uh of of Gamers and customers as a whole but um but yeah we did see in particularly in the in the top 25 markets that time spent gaming is is again just kind of leveling out now there's not enormous growth in that even down around kind of a couple of percentage points in um

in 2023 so yeah downloads level time level but we are seeing Spen just starting to kind of bounce back um and you know another component of that is mobile ad spend as well which You know despite the challenges of the economy in 20123 you know actually saw an 8% increase year-over-year so you know compound annual growth rate in mobile ad spend is around 16.2% and we're expecting that to be even bigger in uh in 2024 that's surprising in itself because mobile ad spend means that we are monetizing through ads been hearing so much about inapp purchase even other ways of monetizing um to still that into maybe the ad formats or the forms is it still like video is massive is it is it playables is it reward what is that ad spend looking like where's it going hard to kind of extract any specific themes uh to to be in terms of kind of creative formats what we do feel is that this you

know as you mentioned both kind of inapp you know kind of purchase being you know arguably the kind of primary way to monetize the kind of blend of the two is definitely something which we see more and more of um so you know even coming from you know the kind of the hyper casual genre um which you know didn't have a great year in terms of downloads but that footprint is phenomenal and you know we are seeing you know for the first time in certain titles you know experimentation within app spend as well in combination with you know their classic way to monetize via VIA ads so that is definitely something we see emerging the kind of the two living quite you know symbiotically and and well together um but yeah I'd have to dig deep on exactly what the creative formats are that are really generating the best results well speaking of digging deeper what I like about your report last time was that you were distilling the key characteristics of successful games now have to admit only heard about about your data right now so

I don't know what's in it but have you done that as well have you looked for the common threads that are significant or signify a successful game what we definitely saw in the data in 2023 was you know those games with very strong intellectual property very strong IP really won out considerably so I mentioned Monopoly go before that had a tremendous year um you know we looked into it deeper definitely the kind of the social interaction capabilities to play with family and friends um you know a lot of the kind of mini games and offers within that as well seem to kind of Drive in at purchase very very well um but you know if we look at that kind of Ip across uh the release from Netflix in the back end of 2023 of the GTA Trilogy performed particularly well in just a few weeks um you know EA um EA Sports FC mobile soccer performing particularly well genin impact continuing to you know Drive phenomenal uh in purchas so it is does

feel like it is those uh those games with with the with with strong RP that are really performing uh performing well um probably the other one I would call out would be uh dream games Royal match as well um what we see there which is quite interesting um firstly it's quite interesting to note that there's not a crossover with you know the the leader in that category in Candy Crush which has been you know number one for for 10 years in fact what they're managing to do is is find new new audience there's very little Crossover with Candy Crush only 10% the of those that play Candy Cross play uh Royal match and again just looking at the kind of fairly simple um uh kind of gaming Dynamics there but also tying the inapp purchases to some of the characters um seems to have worked really well for uh for that game which has been downloaded 219 million times and you know almost 2.6 billion in inap Spen so um so yeah I I would say IP

and you know simple game Dynamics driving social interaction feel to be the the kind of the key threads which we're seeing the most successful games follow I'm glad you mentioned dream games because it's a hint to you guys out there I have approached you for a Pocket Gamer podcast a pg. Biz podcast I will not give up this even underlines my determination to get you guys on a show but I will turn back to you again Carl because another point in the last report that stood out was sort of the winning sub genres the ones we're not thinking of that blending that melding you said yourself the monetization models are me are melding yeah and blending together so are the genres everybody I know in hyper casual or hybrid casual saying hey we're looking at casual and Casual saying hey we're looking at puzzle um where are you seeing the trends in the sub genres we

start there with kind of hyper casual the the standout games that we um you know that we observed in 2023 uh so the likes of uh race Master Bridge race um magic title um you know those are just some of the ones that really kind of stood out uh in in 2023 I mean I I I think you know the um the kind of the party genre again I I'm probably kind of coming back to um again Monopoly go but you know the two the lead there is is still coin master from from Moon active um but in terms of the category that stood out the most both in terms of um an increase in downloads and kind of inapp spend was the party category right so you know that's one which clearly you know want to keep going on about Monopoly go but that's clearly one that's that's been able to you know monopolize on uh monopolize on that sorry so it's Shameless plug um but uh but yeah that that that that's the one that we see as as you know has the most kind of standout so you know as a genre sub genre that's where that's

isn't it wild though when you think about it because there are a couple sessions here about how to dig back into old games rekindle them there's money to be made and Nostalgia and there are people who are saying let's go back let's get these old games we don't remember them from 2014 or something and and bring them back and here you go that's what your point is is there a lesson in that for you sounds like easy money it does doesn't it yeah I I my mind's spinning as to what what are some of the other the other board games that we played that you know can can have a a new life you know I I started this this discussion with that kind of strength of intellectual property but combining that with getting the social interaction right and you know simple simple in-game mechanics um you know tying it to another emotive component be that kind of the characters or you know something that enables something special between you and people you care about yeah that's a very very potent potent cocktail a very potent mix um and uh yeah be intrigued I'm sure there's

smarter people than me that are thinking on you know what are the next uh the next IPS that can be U given a given a new life because it does it does connect in a way which you know I I would argue um you know games that don't have that just you know we we this isn't a number of these have been around for a number you know a number of years now and you know perhaps there's a little bit of apathy a little bit of you know people are tired of certain um you know trying and testing but you know look at Candy Crush has remained part of many people's everyday lives for more than 10 years um and you know that's an illustration of how you know that is a true brand IP in itself which has stood a test of time so I think there's a combination of both those that were kind of the initial innovators if you like and establish themselves in this market and really interested to see what could come back in yeah I'm sure success of Monopoly go is going to you know drive a

lot of new um a lot of new opportunities as well so yeah if you're the owner of of Ip it's um it's a good thing talking about IP your biggest IP is your data and you have this this this Matrix this score how are people applying that give me an idea about how it's going to be different in 2024 to understand let alone measure performance yeah good question so yeah um so our mobile performance score NPS is is very much our our move to provide more of kind of predictive AI than you know uh applied AI that we have today so it's really I'd say the value of that is is really to understand the future performance of of apps and games and we've actually seen that pretty consistently in the data so any game or app that has a score of 80 or more is likely to be in the category of games or apps that is respons for 90%

of inapp spend or 80% of download so you know it's I would say that it's its true value is is is its predictive capabilities and um that's how we're seeing you know our customers use it to to best effect and um yeah excited for to see how that evolves um through this year me too it makes for a great pitch deck as well obviously obviously well Carl it's been a pleasure and um we will catch up again because the data it's it's a massive report it's another one of those it's bigger than it's ever been yeah bigger than it's ever been I think it's around 97 to like 100 uh 100 Pages this year and yeah hats off to our team um you know led by Lexi and Emily that um continue to to to to find different perspectives and you know new and engaging ways to to make this uh yeah better year after year so yeah very very proud of it and we'll be glad to have you back on the podcast we had Lexi two parts there was so much of it we couldn't let her go we'll do it again and thanks again Carl awesome to meet you very much thank

[Music] you lorri I have to say great again to see you at Pocket Gamer last year you were on my panel and I was thinking about everything you've said about Esports investment and action and where the trends are so hey you're my you're my Trends man in Esports absolutely great to have you been a year so let's kick it off with a little bit more what's going on your company because you invest in the Esports winning teams right so I work at trans and fund and trans and fund is the early stage VC that invest in the gaming industry so we have about two funds and across the two funds we have about 40 portfolio companies and most of them are game studios so you might be uh more familiar with some of our gaming unicorns such as that game company we are also the investor of quite of few companies but some of them are still developing the games so you may or may have heard of their games and as an investor maybe we start there because it's still going

strong Esports is going well been talking to some people who say well you know it's lost a little bit of momentum probably because some people are pulling some of the money out right the brand Partnerships aren't as easy to come by as they used to be some teams straight out what do you find interesting and exciting as an investor in the middle of a market that's yeah it's in in a state of transition perhaps no that's a really good question and I should have said that earlier that speaking of Sports I was actually a former professional Esports player and that was way back right so that was about actually more than 15 years ago now and uh I think I understand they had been a little bit about Market adjustment for the last couple of years for E sports but if we take a Long View a longterm view compared with 10 15 years ago when I was still young not B well still professional Esports player the industry has moved down a lot and the market is

way bigger than 10 or 15 years ago I think that's probably the bigger picture I think the second is I think there have been a lot of the Innovations happening in the Esports industry there has been a lot of adjacent opportunities around the Esports and I mean you know there has been so many figures talking about how big the market is but let's not forget the Esports is not just as a standalone Silo platform Esports is actually a very very great way for game companies for game studios to engage with their most loyal most engaged players and people do not have to be like me you know had about 400 apms and be a Esports player people actually can spend a lot of time watching the content and that's actually still a very good way to engage with Esports content yeah so I think these are probably the the big picture I would like to mention there yeah I agree I remember one of the coolest things I saw in Esports I mean not action was right was that you could do a card game as

Esports and people were really into I think it was Uno wasn't it like one or two years ago yeah that's right yeah and I think yeah that's another another dimension as well is Esports does not have to be super competitive PVP shooting game it could take a many many format and for example Candy Crush which is a quite casual Match Game they had a tournament called a candy all stars and that's actually a e sports game in many aspects you know it's still very competitive and there's still you know just a one winner at the end and people spend a lot of time actually training and preparing for it and you know think about the audience engagement of viewership it's actually a very very popular event and if I remember correctly I believe they had uh one of the Kardashian sisters to be the host for that game right so got a lot a lot of the attention a lot of um audience engagement yeah so that brings me to the other point which is you know Esports is

an experience and there's there's money in that for you as an investor if things are you know creating awareness or um brand amplification and and and those deeper deeper deeper kpis that are going to matter later when it comes to team loyalty and game loyalty so putting your investor hat back on although it was really cool to know that you were also a player I'm like now I have even more respect for you been there both sides what do you find exciting as an investor looking at the space yeah I think you read my mind I was going to say that because what I said earlier was pretty much from a player perspective and now if I put on my investor hat on trans and fund is pretty much audience first fund which means we look at you know how fun the game play is but we also look at it commercial returns and how big the market is and I think for us our investment Theses is not just r let's say you know es sports or certain

pillar we are really thinking about what are the best ways to create that really fun and engage ways to interact with you know three billions and hopefully four billion five billion Gamers globally we are thinking about what are the best channels what are the best platforms to engage with these players and then based on that we think about okay from there onward what are the best ways to think about some of the underlying pillars that could have support that really really big scale and of course you know big commercial returns for for fund and of course for our IPS what sticks with me from our last panel last year and I've heard more about it now because I was just looking at for example a liftoff survey of app marketers where they're saying hey we're putting much more investment well 50% more investment in sort of like influencer but 30% more spend in community building so they're on to it

they know it's important you'll invest in games that have great communities I remember though that from our panel we were saying you know really a lot of games can build communities maybe not be massive like the Esports and a stadium but um is there something you have to say to them about look at that over 2024 think about being an Esports game yeah I think uh when you think about Community Beauty and Community man agement there are definitely two layers the first one to think about how big that Community is you know how many players how many users Etc but another layer which is equally important or even more important is you think about how engaged these Community are because you don't want to have you know lots of lots of the members but no one really talk about in that channel right you want to have ideally a big group of community but in the meantime people are really engaged with the content people are really engaged with each each other and I think that's the

best way to think about that and any of the otherwi thinking about how to build and how to manage a community should really based on these two pillars yeah and I always believe that if you have scale if you have the engagement and then the monetization of money it would come naturally maybe from you maybe from you but what was also interesting and what we were chatting about before so I grabbed you said come up here with me is looking at that experience because may be changing we may be seeing VR coming to Esports that is just mind-blowing trying to figure it out you know will be an audience and they all have the VR headsets on or you know they're watching or there's so many different ways to imagine this what are you seeing why do you believe this might be the next thing yeah no that's a great question and uh one thing I should have mentioned or may have mentioned earlier was as a fund we're investing a v studio called a stress Lev Zer and they make a

few really really amazing VR games for example bone labs and Bone works both of them are top selling VR games on the steam platform so I think that means you know we already have a lot of the understanding and knowledge for the VR and the thing we are seeing increasingly more and more from this investment and also from our interactions our research is V is moving more from single player dominant to single player heavy content to more and more multiplayer games so one of the session I heard earlier at the beginning today was someone was saying on the top on the mobile platform for the top 100 games about 70% of the are multiplayer games for VR it's still by a single player heavy but we believe that you know that multiplayer is coming and there are a lot of the great you know multiplayer games are coming to the VR platform and Esports is a segment of that you know you can think about you know the PVP Esports MMO RPG Etc ET that multiplayer could take many many

Dimension the thing we think the Esports on VR could be really interesting are really three aspects the first aspect is Esports for VR is really a great way for Esports to expand to another platform to expand to another Channel you know we talked earlier about how some of this let's say you know let's say Market adjustment for the revenue for the sponsorship but then now Esports is finding new ways to reach the audience find a new way to engage so I think that's great for the overall industry the second way is to actually think it from the player experience because that has completely you know require a very very different kind of skill set when I was a Esports player this is you know 10 15 years ago my you know the thing I always BR about was how quickly I can click the mouth and the keyboard combined this is something called APM which stand for Action per minute so

that's about like you know 300 400 if you want to be a real good Esports player but then think about Esports player in VR that's totally different dimension right it's no longer about you know one dimension about mouse and keyboard it's no longer about that 2D Dimension movement in the game it's actually 3D dimension there could be so many combos you know if you think about a fight a fighting game let's say or a shooting game so that you know that that' be very very different and my wife always joke about this is if I were a Esports player in VR I would have six packs already right yeah which I'm I'm you know I'm training my heart towards that right so that's the second one which is about you know player engagement and then the third one is also about the player experience because this is also very different in the sense that traditionally when people watch Esports it's always a big stadium that pretty much about flat screwing experience I wouldn't use traditional to describe

Esports but let's say you know for the nonv Esports right but if you think about VR Esports that a The Experience could take many many forms they could have watch it also with a VR headset so they could have be let's say you know a virtual character in the game they can freely move around they can see different perspectives oh they can understand why that player didn't dodge that bullet or why that player did that move so that could be one or they could steal watch that as the traditional way of viewing ESP Sports which is you know a larg stadium flash screen that's very interesting or they could even you know we talking about VR and AR or they could even have let's say a location based esorts what I meant for that is if you think about if you have a Arena so probably pretty basic layout you may have some basic barrier you may have some basic holes but then the VR can project additional content or additional details in into that you know that setting so let's say if it's a

hole you may just need to dig a hole in the physical environment but that in the VR Sports you could all of a sudden that hole could have lots of skeletons or snakes so that completely changed the you know the viewing experience for the players and also for the users as well so yeah that's why you know I woke up about you know I think about 7:00 a.m. this morning and you know have been on meetings for the whole day and I still feel like really really energetic because I feel like there are so many possibilities for the whole industry and of course you know there are lots of possibilities for many many of the Developers for the players and of course you know for the investors like trans ourselves well what's exciting about that why I'm just like mind blown is that it is about the experience we're all talking about well you know it has to be the experience you have to have gaming is the destination right and live Ops and everything has to keep everyone coming back that ongoing cycle of content and this is like an entirely

different experience that gets us out of a lean back gets us really involved and to your point as an investor now that's going to be audience metrics that really matter I'm excited about it like you um don't need to uh to train like you do though won't be worry about won't be worrying about that here but when is it when is it Larry when are you see it coming you Mayan uh for the the real the real signs of arrival because you're you've invested in companies that are you know making these games seeing the opportunity but we've been talking about VR come on yeah well VR maybe not mainstream but VR more melding with these games to bring them out of the screen and and into the world right yeah oh I see yeah I think for VR if you ask me I think the the industry had this running joke about okay when is the next inflection point and people always say it's a 3 years later you know

I think now if you ask most people most people say 3 years later I remember asking quite a few people 3 years ago back then people said it would be 3 years later I actually asked people six years ago people say three years later but I genuinely believe I think that the inflection point is coming up quite soon and I think that's driven by a number of factors the first one is the hard work is getting better and better and I think this is thing I don't think you know I need to expand too much but anyone has you know a quest Apple Vision Pro HTC Vibe Elite they would know they will all know how much improvement the hardware have been doing for the last few years the second one is the content is also catching up because there had been a bit of the chicken ACT thing is it going to be you know content first and I have you know enough attractive content then you have you know big audience space but then you really need to have a big audience space in order have to have you know attractive exclusive premium content on VR but we have been seeing a

lot of the great VR content on various you know VR platforms babber Resident Evil 4 stress level Zer bone lab bone Works Etc we've been seeing a lot of that content is coming up so I think it's definitely getting there and if think about let's say you know the player base or the install base and they have been various in Industry estimates and most of them think the VR has depending how you content are easily over 10 million 20 million in store base already and for any gaming company or any game studios that's a very very sizable Target to think about yeah so I generally think you know hardwa is getting there content software is getting there and also you know the general people's perception is getting there as well I mean my son he had a birthday party actually yesterday and they were playing VR games and you know all the kids you know seven8 years okay you know for them it's very very natural

and I think you know the think about you know transcend being audience first fund I do think the market acceptance the audience acceptance is getting higher as well so hopefully if you ask me you know this question in three years time I would say it's already here well actually I was going to say since we've made this into a tradition we'll see each other probably next year because it's a it's a great show to be at it's a great way to start the year let's say we meet next year what you what do you want to be telling me something you're happy about proud about surprised about you know maybe you've been working out you can come and show your muscles no I'm just kidding but really seriously what do you want to be sharing a year from now with me yeah it's a very good question and I think you putting me on the spot uh the first thing I really want to say is I hope the industry will become bigger uh that's for sure and we have seen so many unfortunate news recently and hopefully all our friends in the industry will be able to you know recover and then fund the New Path I

think that's definitely you know my first uh hope of predictions and in the second is I think gaming as a medium as as um as entertainment format I think will become even more mainstreams and hopefully we're going to see more and more opportunities that transcend the traditional uh media opportunities so meaning going from one platform to another platform going from one channel to another Channel I think that's what we going to see the third one is hopefully we're going to see more and more very very interesting engaging games coming up I know I've got you know a top 10 Leist a captain myself but hopefully you know all these games will come out next year um and I think that will definitely uh something as a players as industry participants we are all very looking much we're all looking forward to yeah absolutely and I'm looking forward to cat catching up with you again next year and uh you probably got some great ideas here of some

companies maybe you can share a few who are coming into the portfolio or what you find exciting I'm am always ready there and for you and may I say it was a pleasure was it oh there we thank you all right nice talking to you py yeah thank you for having me yeah absolutely this show is all about how to do your job better how to make an amazing game how to Market it and you have per say so if you have a story or know someone we need to shine a light on then we would love to hear from you we want to hear from you we want to reflect the reality of the mobile games Market in all its wonderful complexity and strangeness so if you have any suggestions for us if you have any feedback for us you can always get in touch you can email us at podcast pocketgamer.biz you can find us on Twitter @ PG Biz and you can reach out to us through the pocketgamer.biz website if you're interested in listening to all of our podcasts you can find them at

pocketgamer.biz SLP podcast and we would love to hear your thoughts on future showes and we've got you covered on all the major platforms so subscribe to the audio podcast as Brian said look for us on YouTube if you want to read it hey you can do that too because we have a companion post for you as well on the pocketgamer.biz website tune in again for the next edition of the pocketgamer.biz podcast and we look forward to speaking to you in the near future until then I'm Brian Bago I'm Peggy and saltz and that's a wrap until next week