Minigames Gold Rush: The $7B Opportunity western devs missed by Lemon Choi

publisher are willing to spend the money to on the UA for to drive jive the grow of their whole mini game market. You can see the number of the advertiser grow by almost nearly uh 200%. It is quite crazy because last I say last two year if you talk about med game maybe 3 years ago nobody know that what that is but now everybody is heavily invest in this domain. If you look at the uh player profile or the demography, you will see a very balanced and broad and engaged player profile. The gender is almost very evenly uh split between the male and female. And we look at the geography, the penetration is evenly split between the high tier city and the low tier city. If we look at the core uh player group, young and middle age that form the core user group for the 24 to the 14 years old and almost half percent half of them are very young age.

It's the dice drops made of golden coins. We're the two and a half gamers. The midnight crew talking UA adverts and game design too. Mate feel bringing the insight. We're rocking those vibes till the early day. Master eyes on the prize tracking data through the cyber space. Feeling stacks colors like a wizard in disguise. Jacks lift us to the highest. Two and a half gamers talking smack. Slow hockey sick. Got your back. Ads are beautiful. They like the way. Click it fast. Don't delay. Uh-huh. Uh-huh. Uh-huh. Hello everyone and welcome to today's special episode. I'm Lemo. Today we are going to talk about China's mini game.

Uh for those who don't know me, I'm Lemo. I talk about which mini game on two and a half gamer. I think the episode is still quite popular and I'm a rich minigame blogger. I have over 17,000 subscriber for within the industry and also I'm the founder of hyperjoy. Hyperjoy is a game development studio. We focus on building a tower defense game for the global market. I also have a pleasure to working as a consultant for Scopely advising them on the China's mini game market opportunity. I've been also speaking about the China's mini game this year and the pokey gamer connect Shanghai. So without further ado going to we are going to cover today we will start with mini game market overview and then we will look at a key general benchmark metry. After that I will highlight some of the top winner in the space and we will finish with key takeaway for our

discussion. So let's dive into the first part mini game market overview which I will give you a highlevel understanding about the whole mini game or mini game market. I make a two recording about how the mini games play in WC and the Chinese Tik Tok doing. As you can see it you don't have to download anything. You just open the game inside this super ad and you can play that in a very convenient way. Yeah, that's very frictionless experience compared to the traditional app store game. Then you have to download again for the app store and then you can only play it after it finish download. Yeah, on the the W mini game I'm playing the Gossby Harbor on the right. I think I playing some screw gen things like that. Yeah. Okay, let's move to the next page. Here I made a very clear uh comparison between the traditional app store game and the mini game. Like the mini game offer a very uh

convenient experience for the player to play the game without download anything and then due to the frictionist uh experience and also without download and the UA cost is quite lower compared to the traditional app store game. You can see that uh mini games starting to grow for the past few years and then two years ago maybe three years ago you talk about mini game. Nobody knows what the mini game is but now everyone is talking about the mini game opportunity. We see a very significant year or years growth in the last two years and I think I think their market growth is still going to continue but in a much more slow pace. Also in additional to the growth in the market side you can see the scale of the US banding also maintain a very steady outward trend. Here we call that uh for go rush for recent study for the third quarter of 2023. The mini game sector has showed significant growth in

both their number of the game launch and the number of advertiser. Yeah, I think this uh build a very healthy growth in terms of their whether is the supply for the new game but also more and more publisher are willing to spend the money to on the UA for to drive their grow of their whole mini game market. You can see the number of the advertiser grow by almost nearly uh 200%. It's quite crazy because last I say last two year if you talk about med game maybe 3 years ago nobody know that what that is but now everybody is heavily invest in this domain. If you look at the uh player profile or the demography you will see a very balanced and broad and engaged player profile. The gender is almost very evenly uh split between the male and female and we look at the geography the penetration is evenly

split between the high tier city and the low tier city. If we look at the core uh player group young and middle age that form the core user group for the 24 to the 14 years old and almost half percent half uh of them are very young age uh player. Also if you look at the developer side the small and medium team are winning in this uh mini game market. 18% of the develop team are five to 13 people and all they are currently over 400k mini game developer. If you talk about hyper casual gang and this gang can be done in maybe four weeks and we talk about hybrid game or mort and some game with really complex meta system and game play usually take about three to six month. The average cost for developing a featurerich mini game is about 115,000 uh dollar which uh is 1 million RMBB. I

think the cost efficient is quite strong here. I mean the richer featurerich mini game is something like uh capibana go or survival IO type game play with a very complex meta game. Yeah. Not just some uh very basic uh puzzle game or hyper casual game. So you see the productivity here in China is uh very strong. Part two we are going to talk about milligan genre and we are going to share something about the metry benchmark and data for different genre. So give you a very solid understanding about the whole market chain. If we bring down the whole mini game market into three major genre, you have we we have a hybrid game and we have a hardcore game and casual game. And in the hybrid we have a very fast growing genre like the tow defense line and idol RPG. Hardcore game we have their Xan and SLG game. SLG means 4X in

Chinese context and simulation game and the Chinese RPG game for casual game, hyper casual, merge 2 and match three. I think these are the main big three uh genre in the mini game market. Look at the UA spending between this genre. The market is shifting toward hardcore game. cash game are also in a significant growth area because the last year Tik Tok and which are trying to convert their uh existing audience into mini game player. So the the way they convert is to provide them with some casual game and so that's the reason uh why the casual game is in a very fast uh growing stage. Their hybrid genre however are seeing a contraction due to a lack of innovation. So if you look at the US banding and their subg genre level you can see here their casual game growth is

mainly driven by merge and their match G here you will see about uh 6.6% 6% of their total US spend and also you will see even though the whole hybrid game are in a decline their tower defense scan you can see here is remain quite stable and for the rest the RPG 4S GAN and idle score RPG are showing a modest but very slow growth if you look at the sub general UA spending and you will see as the quarter of the first quarter of this year and the mini market is very heavily concentrating the top three subg genre lighter RPG hybrid and the tower defense game together and they account for nearly 16% of the total US bank casual gas still remain very niche genre in the mini game market unlike in the western uh market so that I think there's huge difference between the mini game market and the western uh mobile

game market you their growth here in mini games manage even by the midcore game or the RPG game. If you look at the competition between different sub genre, you will see that in most sub genre, the market share is concentrating amount just a few top winner. For again, for a new game to succeed this year, you need to have the both or the best quality of the game, but also the best quality of the UA. You need the both in order to succeed in today's market. I think the competition is very cutthroat. So you will see uh their success rate for different genre as are in a very low uh compared to last year. And here you can see the force genre and the top 10 of the forest scan uh takes out 96% of the US bending. uh clearly a winner's taste or genre and for here you can see also the merge and

match genre 19 uh 2% of their US band are concentrating among their top 10 uh game. So if you're top 12 and top uh 20 or something else you you don't stand a chance in this market. So you will see uh the bar for different jar are rising. Let's go to the UA benchmark for the difference genre and you can see we have the CPN and CTR and CVR for Dance J here like casual game look at here which mean the hyper casual or puzzle game if you look at the CPN it has a 15 to 25 uh IMB CPN the CTR is 2.8 a to 3% of CTR is quite higher compared to other general and for scan here SLG and there we look at the CPN is

something between 13 to 14 uh IMCPN CTR is 1 to 1 uh two uh% CTR if we look at the uh retention metric for the influence gener user retention but also we have the paying user retention I think uh this is quite difference mry between difference genre here and for the new user retention here we have something ranging for uh 7% to 22% uh if you look at their merge and their match g have the highest uh retention for day one 17% to 22%. If we look at the day one paying user retention, we see their 4X and their RPG game has the highest uh day one paying user retention ranging for uh 18% to 85%. I think this is the most important metric where we are

uh deciding whether a game is good or bad uh during the soft launch stage because uh like Gan you don't have to download the player come and go very easily what does matter is the whether the paying users will stay and continue to pay so uh day one paying user retention I think is quite important for hardcore for OM genre. If you're looking at the uh payback period and LTV grows for different genre, you will see for the 4S gain which here the SLG have a payback period of of uh 8 to 10 months for most other genre have their payback period and four to six months. Uh conversely general like the live casual game offer very quick return but also with a very lower LTV multiplier LTE multiplier here mean how much time can

your day one LTV grow and which mean most of the top general leader scale UA and less than 2% day one row with a very strong LTV multiplier so based on the previously discussed chry and benchmark are water opportunity for different genre. Genres like tower defense, merge and match and for scan are growing and despite fierce competition they offer potential for new heat. If you have an innovative idea general like however general like hybrid RPG and simulation are declining and saturating and making it very difficult and challenging for the new game. And finally, general like RPG and idol car RPG are stable. They have seen slower growth but still offer opportunity due to more moderate competition. Next part part three we are going to talk about new successful mini

game. The first uh game I'm going to talk about is Ice War 3 Kingdom is a W survival clone in Chinese three kingdom theme. is uh top grossing number one in the WC mini game. Uh very strong competitor compare uh with the W survival. Let me play the UA creative. You can see they're using very similar UA creative for W survivor. Just make it in uh Asian three kind. Their strategy is pretty simple. Copy existing proven for scan in the west and make it more localized thing like three kingdom. Three kinder is by far the bad thing for for scan and then you you pair with some strong UA and then scale this game very crazy in the middle market. Move to the next one is also a 4X game is a pop war with a 4X combination is developed and by join game the one for legend of

mushroom. Let me play their game play and the UA creative together. You can see the 4x M. Here you also the popmon uh card and character. Here you have the uh the car collection RPG and the beginning and then it slowly move you to toward the 4S game play and day seven game used to be the number four uh grossing game in the rich mini game one but then uh experienced a slow decline over the next uh quarter to maybe something like the uh 16. Okay, let's move to the next one. But this is a loop warrior publishing by uh 37 G the one for Nobody Adventure Chop Cha and Puzzle Survival. If you remember uh Nobody Adventure and it's a very uh original loop boss RPG and used to be the number one grossing game in the

Witcher mini game market until uh the wild survivor come back to China to dethrone the this game. Yeah. Uh there one I think this one is still in a soft launch stage and there are some western country now. You can see they trying to use this D RPG action RPG theme with some loop loop boss RPG meta system. It's performing quite well this year in the beginning when they launch. The next one I going to talk about Bamb Survivor. Why talking about this game? This game is quite old but uh it's still the top three grossing game in the Witcher mini game market. It used to be the top one grossing top number one grossing game in the Witcher mini game are making daily revenue more than 1 million per day and it's developed and published by Crow Ocean Star. Cloud Ocean Star is considered to be the happy in China because everyone's copy of Bamb Survivor Meta. I think there's a great potential

for success in the western market by combining a better theme with a more simplified meta system. We already seeing the success of uh Galaxy defend in the last uh maybe uh few episode in po two and a half gamer. So we expect to see some uh more uh western uh bamb survivor game to succeed in the future. And the game is a B survivor is so successful that they have to make their own IP to expand to the 4S genre. They just soft launched this game last week and is built upon their whole bamb survivor IP. The game play is quite similar to King Sha with word combination and let me play the UA creative for you. If we play their Bamb Survivor uh long enough, you know, the Bamb Survivor had a seasonal fors mode and the lace uh G stage and so maybe they validate the X game play in their

previous game and then they decide to move into this food 4S game title for this IP. Moving to the next title is also developed and publishing by cloud ocean star is lucky defense with bamb survival meta system uh combination. Last year lucky defense sub genre is very popular is also very hyper saturated with almost more than 18 competiting clone. Everyone is trying to make a LD lucky defense clone but only this title su. So let me play their uh UA creative. I think they are doing quite well also in their some Asia country. Why they see I I believe uh they have a great thing to do with the meta system. They build a very strong robust meta system to monetize their player and also play uh uh pre provide them with a very long-term goal to play the game and other for other uh simply

copy their 111 lucky defense. It doesn't work out well on the wish game market. Uh this year they also have a new title uh uh built upon the 111 uh lucky offense. I bet they change the name to spin squad uh later and also uh quite successful right now. And let me play the UA creative. Yeah, you can see the comparison between these two game. On the right is the 111 lucky offense of spin squad. On the left you can see there is the Minishing the one developed by Cloud Ocean Star. It used a very similar art style uh to uh Acecraft. The cup head as cartoon style and the cloud ocean game also have external uh studio working on throne for plus bamb survivor meta system. And this game is also doing quite well this year in the witch mini game is grossing 20 in the market.

Basically is it's a refine their uh king throne for meta uh game play with the bamb survivor meta season is doing quite well but they don't have the 4x like the king shot. Moving to the next one is the backpack tower defense with bamb survival meta season is also uh developed and publishing by cloud ocean style is a very successful uh tower defense game is currently still the top 10 in trosing chart yeah they also launched this game in the western uh country but it's not doing that well uh due to the complex in the meta system they still soft launch this game in some Asia and western country and since is the best performing Bpad tower defense game in the Chinese uh mini market for 2024 bet tower defense game there are more than 200 developer doing this uh uh bet uh tower defense uh

genre it's quite competitive but this game is the uh clear winner and also we see other uh developer uh build upon the 111 titles And here this game is a army defense tower defense army defense game and tower defense rock line and it's top uh 135% uh in the takaros in rich mini game estimate monster revenue more than 5 million and the game successful implement and ref mechanic for ball versus zombie uh which is for 111 fail title but they build it with a more robust AR uh meta system for bamb survivor. It's developed and published by Glacier and the one behind the X hero and they are considered to be the Chinese neester or hero wars using very puzzle game with the uh idol car RPG combination. Uh this game is the one

spending uh daily UA more than 2 million. It is a summer and merge game. The game play is quite similar uh to bamb survivor but they change the the button part to something like the rush royale summer and merge and it's quite random and and this game is performing quite well this year. I think it's the uh best performing tower defense scan in the Chinese market this year and I think they are going to launch this scan in the western market in cure and let's wait and see how will they prefer and also we have some uh ben survivor variation with shooting out this game is currently top uh 13 grossing in the witch mini game market same meta system and like bamb survivor you don't have to move the car to like the survivor io the car will auto drive and then you just choose the skill is very idle and it's basically a bamb ban survivor uh clone

in different way you can see there their uh UA creative is quite stunning uh happy heavy is also invest in the medium market uh when they launch their cap bar in the western market they also have their own capabargo risking version for the w med Okay, let me play the uh video here. You can see it's basically uh cap bar go in a different skin. the game pick and ran uh top uh 13 on the W mid game market and then uh decline very fast and and falling out of 100 by late April because I think uh for heavy their meta system is not that strong enough to compete with other uh competitor with Ben Survivor Meta in China. In the west, I think it's they're doing quite well, but in the Chinese market, I think they have have a hard time competing with Ben

Survivor Meta 6. Also, he is testing Capibar Go 2.0 in the Chinese uh which medium. Yeah, basically is a score RPG and build upon the Capibar Go meta system. No meta system. They're using a new meta system similar to WTO defender which is score RPG but the uh game play is score RPG battle and similar to the capar go with random random uh events. Basically they made this game uh and two version the Chinese version is called Jango. They also have a western version Ace Monster. I believe they soft launch this game in Vietnam last year and I going to soft launch again in some western countries soon but uh this game are still uh not performing that well based on my information I still they need more time to finetuning this game before it uh reach a global scale uh uh

standard and also uh heavy is also uh testing a new game uh using very similar uh game play like Crash Quest and with their own new meta system. It's called Shuong Flute Hero. Let me play the video for you. But still in a soft launch stage and I believe this game have a better metric compared to the previous one. I think they are going to launch this game maybe in this year. Yeah, the game play is quite similar to the Supercell Sunset title crash crash, which is something like you just t on the same unit and it will disappear and then attack the uh enemy and then uh if you it kind of like the how to say the puzzle RPG genre similar to maybe some T and T to match genre with some RPG element. Let's talk about

some app monetization uh title IA driven title. This uh is a very successful uh title in the Tik Tok uh mini game is ting IA game in the doing which are t Chinese T mini game and is only app monetization. The developing cost for this game is less than uh 20k and but the estimate ad revenue is more than 1.5 million. Let me play the game play for you. It's heavily uh inspired by the very title gear five but in in a different theme and yeah their core strategy is to leverage their uh Tik Tok live stream organic chaffy. how they are doing how they are going to do that but they develop and integrate 15 more than 15 distinctive uh side game mode within the main game. Each mode will be the focus of a weekly live event creating a constant string of new content to a chat

and engage viewer. So in this game you cannot only play this the main game play you will have maybe more than 15 to 20 different game play to enjoy and then you will yeah let's move to the next one I think this uh one is more very interesting one because you are making basically making the western top uh UA creative into a mini game. It's a number one top two uh in the top grossing IIA G in the WChat mini G is a top number one uh top popular G in the WC min and as and estimate the daily US bank is uh maybe uh 15K and their daily ad revenue is K per day. Let me play the video for you. You can see it's basically steal their uh idea for a royal match or royal kingdom and make it into aure game. Let me replay here for you. This game have crazy uh 156 side game mode in the main

game. You need to watch the ad to unlock each one. So the last part will be some key takeaway for today's session. So the most important thing to remember is that mini game marketing is not mini at all. In 2024 is revenue surpass 6.97 which is close to 7 billion. It has over uh 500 million monthly active user and support over uh 400,000 developer. Most of them are small to medium side team. So I think the markets continue to grow but very slow pace compared to previous year and it still present a huge opportunity for the great gain and also a great team. Some chain we are seeing is the west to east chain major global uh power big player like supercell and centric gang they are bringing their game to the witch mini game. Uh yeah like supercell is going to launch the crash royale maybe in next

month or something like that. Uh BA is already on the W mini game. KSHA when they central game already soft launched this game on the rich media market in the last few weeks and they are going to scale this game very aggressively soon and also we are seeing their gossip harbor for micro front is already launch on the w med game last year it's uh doing pretty good as more and more uh Chinese scan uh scouting uh very aggressively in the uh Asia country we are also expecting to see more successful uh which mini game into the western region. The challenge is that the meta 16 too complex. If you try to make it successful, you must to simplify the game play simplify the meta 16 in order to succeed in the western uh region. Let's wait and see. I believe we see more title like Galaxy Defense, Legend of Mushroom, some new mini games

succeeding in the western country in the near future. Also there's a lot of uh iteration innovation generous uh opportunity happening in the uh whole mini game market. You will see here the top genre are experimenting a lot of a new innovation idea like tower defense with local light social with t defense and the RPG here with social plus RPG and also the 4S game and you see ID arcade with 4S simulation with 4s scan can play the casual one we already saw the one uh trying to turn the UA creative save the king into the actual game play so there's a lot of innovation ation and iteration happening here not just simply copy care for the western title I think there's all very uh strong team here doing some very u great innovation uh in different genre so involving mini I think there's only four

key takeaway for this session the one is mini games not many is present a huge opportunity for great greeting if gang is doing quite well in the western you can find a local publisher to help you to puppet your game in the middle game market. I think is going to do quite well as uh for the west to the east big player like supercell and the sentry game I already in the mid game market who else maybe scoply maybe some other big player we also in this space and it's to global we already see their success story like the bamb survivor in the HR monkey legend of mushroom and the galaxy defense and uh so we are expect to see more successful media in the global market and also if you're a publisher or develop uh investor and try to find a great team here in China I

think there's a great uh abundance of them like especially in the forex genre genre and the tow defense merge too I I think uh in this genre the Chinese developer are leading of the global chain so I think there's a great opportunity here whether your publisher trying to find some new great game and also your investor trying to find more great thing to invest in. I think you should not miss a Chinese mini game. So that's that's it. Thank you for your time. If you like to connect, you can find me on linking or you can add me on WeChat by searching the the Chinese namero on WeChat. And hopefully next year maybe we see some new med change. I'm looking forward to share with you next year. [Music]

[Applause] [Music]