Navigating the Transition Navigating the Transition - Tom Wijman, Newzoo

[Music] [Music] [Music] talking particularly we talked earlier about how Mobile's getting harder um and more competitive so uh the next talk from uh the data experts Analyst at newu is going to be about how to maxiz your opportunities for moving from mobile uh development to PC and console um so

that's you know an interesting kind of interesting Trend a lot of crossplatform uh activi been happening so do I have my wonderful speaker do I have Tom from newu how you doing you're looking very Natty sir yeah yeah yeah I'm wearing my presentation jacket your presentation jacket I can't just but you got I got one more year fantastic off you go sir all right thank thank you very much for your introduction sorry for the wait everyone was getting miked up um as was already introduced today I'm here to tell you about the opportunity of U moving to PC and console development um I'm going to do this in a couple of Parts um first I'll introduce newu and myself for those who are unfamiliar with us then I'll spend a bit of time talking about what most people in the room know why this happens now why mobile has been going through a bit of a rough spot in the next couple in the last couple of years then I'll present some options um how you can transition to PC and console

uh development or not and finally present some uh examples sluse cases why at least from our perspective we think mobile developers as probably many of you in the room are are um in a very good position to make an impact on a PC and console space good now uh before I start um to introduce neww for those who are not familiar with us we are indeed a data and insights company specialized in gaming um we provide data in three roughly three different pillars um we provide consumer research um a global gamer study which you run annually and a game health tracker which you run on a monthly basis looking at purchase intention uh Etc we um provide title level engagement and Revenue data for PC and console games at the moment so um kind of the PC and console answer to data AI sensor Tower and we we um are in

the business of providing games Market sizing uh estimates and forecasts as well as reports which we do in our Global games market reports that's my business that's why I am here uh on top of all of that we also provide custom and Consulting Services if your inba needs do not fit any of the standard service we are offer um we also have the ability to combine those custom for you guys uh like I said my name is or my name is Tom mman I'm the lead Analyst at newu primarily work in our games market reports and forecasts as well as our Consulting business um for the past seven years good as I said these are the um uh three topics that I want to touch upon today uh state of the market transition strategies and how to navigate the PC and console markets we'll dive right into it um because I am on a Time sh here um why we are where we at today um and that is of course because the mobile

market as unfortunately probably many of you have experienced has been going through a bit of a rough patch and I wanted to illustrate that by showing our uh mobile games Market estimate and this includes this is a global market so this also includes China South Korea Japan as well as Western markets Emerging Markets Etc and I cannot make it more clear than the graph really is it's kind of speaks for itself but I'll do a little bit of commentary anyway um throughout 2015 which is where we started estimating this market up until 2021 the market grew at 21% ker roughly um to almost 100 billion we went back and forth like are we going to cross 100 billion yes or no um peing during the second year of the pandemic with 98 billion in Revenue globally uh this is purely on games this is purely consumer spending by the way just to make sure sure that we're all talking

about the same thing uh there no advertising involved here no B2B revenues no licensing purely generated from consumers spending on mobile games um we had a first correction uh last year where the market declined back to 92 billion unfortunately this year we're forecasting and I know technically we're in 2024 but we do still consider this a forast as um we rely on financial data coming in which is a bit of a so even know it's January it's still forecast from 2023 um we're again the market shrinking a little bit now for the most part that's in eastern markets where um I don't want to get too technical but it's uh the impact of the foreign current exchange rates um in the west the Market's flat but still not growing we do anticipate that we will return back to growth um but it is nowhere near the ker levels that we saw pre pandemic in other words um the mobile market has

faced a Slowdown in the last few years the Outlook is not particularly strong either um doesn't mean there's no opportunities at all of course but it is a much harder Market to succeed in now the other side of the spectrum here is if it's not mobile then why am I here telling you guys or advising you guys to look at PC and console segments as well it is because those markets are um in a slightly healthier spot uh and other opportunities but there is a lot of opportunity there so looking at the um revenue forecast for 2023 Mobile's roughly half the market just 1% short the rest of the market is made up with uh 29% console gaming and 22% and due to rounding it doesn't quite always add up um PC gaming um the outlook for the console Market is the strongest looking at the next three years we forecast that to grow at 7.6% ker um which would roughly

put it at 65 billion by 2026 the outlook for PC slightly down because we also look at browser gaming and browser gaming has been a rough Market to succeeding for years already and it hasn't changed however this year PC was actually a bit of a bright spot technically last year um as it grew on more than 5% year on year and even in the coming years we still foresee growth on the PC Market as well so in short to sum this up why consider PC and mobile well uh PC and console sorry well Mobile's in a rough spot console and PC offer a lot of opportunities there's a lot of space there now how then do you go about um changing to PC and console developing for PC and console very broadly speaking there's two options there's more options but in a very high level there's two you can either take your existing games

mobile games and Port them directly or with a little you know you will always have to do a little work on it to make sure that it fits a bigger screen different input devices um but you can Port the games and like the examples that I pulled here but there's many more um supercell's gone through um Google play games PC which is a beta product by Google um that's pretty much Android run and it at least if you believe their marketing would make transition very easy there's also the option to go direct the uh example that I pull here is Fire Light 84 that's a mo batter roale shooter game by live games um and on top of being available in the App Store you can also download their game on Steam or directly on their website so um how we how I see that at least is that the benefit is it's it's a lowrisk but medium reward kind of strategy um

you can reach multiplatform Gamers and I'll look at it look a bit more into what that means in a second um you can improve profitability routing players to web store I saw there's a lot of talks about Web Store as an alternative app store billing uh here so that's definitely a Hot Topic uh definitely improve profitability a bit it makes it a bit more logic to pay things on a web store if you are um already playing on a PC um and it's a light reuse of research compared to completely new development which is the option two that I'm going to talk about uh downsides I think the main downside here is in the middle actually it's a lower likelihood to expand your total addressable Market um and and just to get into that a bit more the way I see these sort of ports is that you're making sure that your game is available to your existing players uh most of the time where they are when they want to play how they want to play and what device um but it is um much less like likely that you are going to convince

current PC and console players that do not play your game at the moment to start playing it just because it's available on PC and console like there's already so much content and the content that you're porting directly maybe doesn't exactly match their preferences their needs so um like I said lower risk lower rewards as I promised a bit of a look into why it can still be lucrative um looking at the uh multiplatform gamer of today this comes from our consumer research um we look into um both platform overlap but also the playing and spending habits of people that play on one or multiple devices so on the left um the vend diagram you see here still a slight majority of the gamers that are part of our panel um and this is a panel that we run in 36 markets across the world in 23 uh 2023 we ran this uh still roughly half play on on one platform and the

majority of that is exclusively on mobile 35% of the player population that we sampled uh 8% on PC 9% on Console the other half however play on multiple devices sometimes two sometimes in three 15% of them what we also found in that and again you know logically makes a little sense but those players that play on multiple platforms they have a higher share of converted play payers so people that are spending on games one platform down to 41% plays for games when they play on three platforms it's up to 85% of people that convert into payers uh across all games by the way of course these are not conversion rates that any one game can uh attain if you're not paid to play um similarly the average 10 time spent playing per week almost triples when you look at multiplatform Gamers so there is absolutely something to set for having your mobile Gam even though they are

developed from mobile available at least on PC uh maybe also on Console although that requires a bit more work with the platform holders just because um purely based on on what the research tells us those players that play on multiple platforms are going to be your um spending more time higher engagement and also much more likely to be spending on your games so serving them where they are makes a lot of sense option two however and that's where I'm going to get into for the last part of this presentation a bit more is to develop brand new experience for the PC and console audiences because mobile developers which I again I expect that I'm addressing mostly mobile developers can tap into a new market new players with a higher arpo um with usually again more time spent playing particularly if you target those multiplatform Gamers um um

and there's a lot of learnings and experience from building mobile games that can now translate into PC and console development some examples that I pulled um but there's a bit more although this is relatively new uh Disney Dem Val of course develop by Game Loft uh for console PC and I think also mobile uh and 10 cent just out last Sentinel during uh what was it um the game awards actually which uh tend and of course primarily known as a mobile development studio um has established a studio dedicated to PC console development they just announced their first project um now benefits like I said you tap into a new addressable Market console PC and console players spend more on average likelier to convert to payers as well um the markets are less susceptible to sweeping changes made my one or two parties um and there's the ability to build experience

from the ground up for the audience and for the platform that you're targeting um obviously on the downside it requires different expertise it requires more development resources and it basically expects you to Pivot at least a part of your studio so I'm not saying that it's easy um but there's a lot of upsides to it now for the last part I wanted to talk about the the second the right side of the slide why can mobile developers compete on a PC and console Market obviously because you were all great developers but realistically um we think there's two or three uh very specific um pointers to the fact that we think now is the right time to consider this pivot um first of all the quality of mobile games particularly ones that are being developed um in the last few years show that mobile game development can be on par at least um with some of the bigger budgets uh or

the bigger titles on PC and console the second Advantage is that uh and I'll show you again some consumer research data in a minute um the mobile market in terms of what games are being developed is already used to developing for a very Broad and diverse audience and for finding niches within that audience that are underserved right now by PC and console development which for the majority again particularly in the the more successful titles tends to focus on an outdated perspective of what a player is uh typically male young young adult um that wants to play action games and that particular part of the market is heavily served but there are other parts of the market in audience interest that are currently being underserved by existing PC console development and that is an opportunity to look to and the final part is that um mobile Studios mobile development from

almost the start has focused on success being successful in life Services being successful in user acquisition Performance Marketing these are all capabilities expertise that I'm not saying the PC and console Market totally lacks but it is very clear I think also from the last couple of years that this is something that is relatively new in those markets and they're having somewhat of a hard time to adjust to it so again this is an opportunity um to step into and what I wanted to show here is that some of this pivot and actually developing is already being successful um we looked at the uh what I looked at is the top 100 PC and console titles again this is data that newu has by AMU and check which one are also available on mobile and as of October 2020 3 so couple two months ago pretty much um 15

out of top 100 games are available across platform so some of these games that are being developed for PC console and mobile are finding a lot of success uh two examples there Disney speed storm honkai starvel both um got into the top 100 uh PC and console titles by meu in October 2023 and they're purely crossplatform games good so last part how do you actually go about it how do you find your Niche how do you find your Market if I had the best answer for that um I wouldn't be standing here part of the work will be on you guys but I just want to give you some pointers what you can do um first thing you can do uh look for look for genres identify genres with high crossplay potential um what can you do there of course you would need Market data to do that hi guys um basically there are certain genres

that tend to do well across PC console and mobile so it makes a lot of sense to then developed for that um genin impact honkai starv combining elements from adventure games with RPG games both those genas score very high in terms of um consumer spending across all platforms so it almost makes sense that becomes successful the alternative way and an alternative way of looking at it is you can also look at very high market share on mobile but not so much in PC and console and that can show a gap that you might be stepping into because as I said there might be parts of the markets that are being underserved by current PC and console development that you can step into right now that's puzzle casino and trading card games three genres that I found the highest disparity between market share on mobile versus market share on PC and console so who knows that may might be where the next hit comes from um the second opportunity uh Building New Growth areas by developing

for underserved underserved audiences and I put the hyphen there because I don't want to imply that it's undeserved um uh again the opportunity g game Disney Dreamlight value very interesting for us because it's it's a PC and conso in Premier that is a very different aesthetic um and very much developed for um uh a more female audience or well typically anyway I don't want to generalize too much um and what I wanted to show here is that you know there's a very Diversified audience on PC and console I showed here um this is a look at Generations so how much different Generations play um and you can see that even if you go Millennials Gen X Baby Boomers there's there's a significant more than significant chunk of them that plays and pays for PC and console games so um and I could have put in a genre here as well and i' be showing the exact same thing like what want to show here is that the notion that you should develop for a

younger male audience is is very outdated last part that I wanted to put here that thought about bringing life service and UA expertise from Mobile to other platforms um again uh over the years um the PC and console business has actually grown closer than mobile to mobile than vice versa mobile is and started um and grew uh large with its strength in in Ina purchases freet toplay life services and you know over a longer period of time U monetizing its users PC and especially console is only just getting there and it's been clear in the past years from seeing where development priorities and resources go by the bigger developers that this is also what the future is and to illustrate that I looked at how we split um recurring and premium Revenue for PC and console separately from 2015 2019

and current year but you know again I think part of the data speaks for itself you can see more and more revenue is going through that recurring boosted by life services and that's exactly where mobile exp developers have the expertise to step in so again I think those are the three gaps I wanted to wrap up uh first looking at why why should you consider this the mobile games Market is in a challenging position so diversity to platforms is advisable there's two options you can Port existing games which is a lower risk lower word play or you can add or pivot to multiplatform development and I think I want to emphasize that it's not necessarily pivot to just PC and console but really thinking about developing for mobile PC and console where the biggest opportunity is and then how do you go about finding some of these opportunities there's only so much I can tell you in a

20-minute presentation 23 um but identifying the right genres look at Opportunity either by seeing where there's already success or where there's gaps um building for new audiences that are underserved right now and bringing that life service expertise to a changed PC and console Market uh that's all for now I don't know if I have time for a question I can I can force one quick question if it's a quick one is there a quick question there's a quick question there is oh hello how are you lovely Hello nice to see you nice see too uh thank you really good uh presentation uh I was wondering like are you also changing your payment solution or you keep the same as you have on mobile like when you think about crossplatform games I I would absolutely switch to a different payment solution just because you can get much better margins uh than what you uh can probably get right now on mobile any recommendation Do you have a name there on your hat that I should mention I

think it I think if you walk around here then there's plenty of recommendations that you can find and some of the talks in the afternoon cool thank you so much big round Applause please for Tom thank you very much very much