Superstar Session: The State of Mobile Gaming 2020 PG Connects Digital #2

and good morning everyone or evening good night maybe to certain certain locations my name is Alex Alex scratch and from Apsara and today I'm going to talk about the state of mobile gaming in 2020 and I guess to to begin with I I think it is very important for us all to acknowledge the fact that even though we are going to talk about growth and opportunity the events of the past few months came at the very significant human cost right and I think we need to be very mindful about that when it comes to when it comes to mobile gaming and the app economy in general 2020 it is definitely going to be a test year for us and if we look if we try to

look into the past and and find and draw some parallels when it comes to 2008 financial crisis if there the funny thing that you know we can't really do that right so app economy is so young so we didn't really we haven't been through a recession yet so we definitely can draw some parallels from video gaming industry performance in 2008 which was pretty solid but still mobile free-to-play was not really there right so in this case I think what's very interesting for us oh now is to is to look very attentively to the to the state of of the market at the moment and and course-correct the strategies and essentially be very be very agile when it comes to everything that we are doing when it comes to when it comes to the present and definitely we also a significant increase in sofa time in terms of in terms of us being in under lock downs and we saw a massive increase

in engagement and usage of different different apps and I guess more more importantly mobile gaming apps as well but it is also interesting to kind of classify the the sofa time or the the the the past few months into two very distinct phases right so the phase phase number one was the initial lockdown when we all found quite a additional time without its disposal but the the financial situation was not really impacted which we can't really say about the second phase of the lockdown when quite a few people lost their jobs and the they were they were becoming in under they were coming under increased pressure when it comes to the when it comes to the financial situation and then definitely we see that we see that sentiment in the data as well moving forward as I said earlier it is

it is kind of hard to to predict but definitely what we see now that even though the the revenues and growth is distributed unevenly we can we should all be proud of the fact that's the mobile industry in general is serving as a very very good partner to to everybody doing this lockdowns right be the gaming app that is delivering entertainment be it health and fitness categories that delivering health benefits and peace of mind at times we don't have a crystal ball yet but we can definitely say that the mobile economy is is doing some very very positive things for for the mankind during this doing this kind of recession so let me let me introduce apps are a little bit and we are a global leader in mobile attribution marketing analytics space essentially we are helping game developers make smarter decision when it

comes to scaling use a user acquisition activity is optimizing their campaigns and essentially driving better users to their games we are a truly a global company with 18 offices around the globe at the moment close to 1,000 employees strong we work with 75,000 different app developers and and close to 6,000 different integrated partners it's also important to note that we are measuring almost 1 trillion events on a daily basis which is which is really really crazy number absolutely when it comes to when it comes to the volumes talking about myself I ran our sales team anemia we do have very strong presence in across Europe and and and Middle East as well and working very closely with our clients from all parts of the region and and very happy to speak with you now in this

virtual PCG edition when it comes to the data sample that I will be sharing with you today it's also important to to describe how how do we prepare that date right so first of all we we will be looking at close to five billion organic installs and close to 3 billion non-organic installs in terms of the app sessions measurements we we've measured 1.4 trillion different sessions and we will also be breaking down the genres into hyper casual casual mid for hardcore and social cuisine that's right so you'll see different different kind of insights for every single for every single category when it comes to when it comes to this those phases that I spoke about earlier it's interesting that when we when we look at the log down phase one right this initial initial period that we can basically started at the end

of February and lasted until the first week of April we saw quite a substantial increase across all gaming categories right we saw 37% increase which could be also tributed to the fact that during this initial log down phase a lot of businesses scale down the acquisition right ecommerce travel and oak Oak a Tagore is being hit very hard by by the coronavirus essentially allowed gaming gaming gaming apps to to scale pretty nicely but when we look at what we see in during the second phase of the log down is is a correction right so we we saw negative twenty twelve percent growth when it comes to user acquisition and it could be it could be attributed to the fact that advertise others are becoming more cautious when it comes to when it comes to the looming

recession and potentially potentially adopting more conservative strategies when it comes to when it comes to you way I have to say that on our website we are running a very interesting updates report on kovat related impacts of different industries we are updating data on on a monthly basis so you can very soon you will be able to see the most fresh data for June and I would really recommend you guys to go on on our website and and basically monitor that situation you'll be able to break break it down into different different genres different different geographies and essentially find find very interesting insights and vision to what we are going to talk about today let's look at some of the some of the global trends right so and you know over here again if we look at those kind of two phases of the of the lockdown we see that globally we kind of peaked around

in terms of the US when we kind of picked on the border of those of those two [Music] when it comes to specific genres and I wanted to look into casual specifically it's interesting to notice here that we kind of started to scale with with non-organic installs and we so definitely saw some increase from pre logged on situation when it comes to both organic and non-organic installs but then towards the towards the end of the second phase we we started to see a regression to previous previous numbers and what's also interesting is that we are saying faster faster decrease of paid acquisition comparing to organic position which is pretty interesting when it comes to the sessions and revenue data which kind of following a similar trend for a global Global casual

space but if we look at a hardcore for example we definitely saw a similar trend maybe not that not that evident but definitely similar trend in terms of the growth of non organic installs and organic installs as well but if we look at the at the session in revenue data for a hardcore it's interesting to see that it did not really change to be honest and maybe that's a partially the fact that hardcore gamers are hardcore in general right so they they do not really care for rock downs and endemics but it's interesting to see that the hardcore space is not really is not really being impacted in terms of the sessions and revenue to summarize this kind of phased out approach what's interesting is is that we definitely are seeing the normalization recently but on

top of that it is very important that we do not have any crystal balls at this at this moment of time right we have we are expecting a significant recession in the economy definitely definitely the gaming industry so far is performing pretty nicely but we see declining declining trend in both in revenue and in in acquisition as well right and once again I think in the next you in the next few months we'll have more data to back to back it up and to see how the and how the situation is going to play out essentially moving forward I also wanted to spend some time and talk about the some of the differences that we saw in in the beginning of 2020 comparing to 2019 and what could we kind of expect when it comes to when it comes to the growth comparing to 2019 pre lockdown when it

comes to user acquisition and specifically the share of paid acquisition across different across different genres it is important to note that it is it is very very hard to to compete in in the current app store environment right so organic growth is is is very complicated and we see all pretty much all category is increasing as a share of paid acquisition in their overall user acquisition mix right so casual and hyper casual casual and hyper cacher genres are showing double-digit growth when it comes to the change year-over-year change hardcore and social casinos are a little bit a little bit below that but in general it is something that definitely manifests itself as a major pattern right beta acquisition is something that really drives game developers and they are

engaging in that in high volumes when it comes to retention and specifically when it comes to uninstalls the situation is it's pretty challenging as well right because if you look at for example hard core and hyper casual space average uninstall rate the rapper's 65% which is a pretty significant when it comes to wake up submit corn cargo is in its 50s and Sochi casino is a little bit below 50 so so definitely we have we need to find some additional strategies of how we can work with retargeting and making those making those users stay within the app and engage and engage better in terms of in terms of the growth markets I also wanted to to have a look today at some of the some of the markets that are

driving the growth in in different genres when it comes to casual space we see quite surprisingly we see very very strong performance in in the Middle East right so we see Egypt and Saudi Arabia leading leading the charge there so close to 220 percent growth year over year in those markets Mexico is performing strongly Spain and France as well South Africa China in Norway are also working pretty solid when it comes to the hyper casual space it is interesting to see a staggering growth in in the United States right so close to six six hundred fifty percent growth in the United States when it comes to the hyper casual segment but all the usual suspects are still there Russia Brazil eight back countries are performing very nicely as well if we move on to the to the myth core meat

core is to a certain extent that's similar to to casual will we see Egypt in Saudi Arabia in general Middle Eastern and eight back country is growing very very nicely in silicon rupees and kind of volumes and if you if you are not currently looking at those countries I would highly recommend reaching out to some of your partners to to maybe introduce you to media sources that are performing strongly in those in those Geo's and you should definitely try doing something that least at least is that's potentially let's move on to the hardcore hardcore segment as well and the hardcore is growing pretty pretty strongly as well and well at 60s 60 percent year-over-year in different different markets right so we see lat Tom performing strongly once again Middle East in a pack delivering

an interesting growth as well in social cuisine Oh quite quite similar situation China growing strongly 240 percent over a year and in this case Lapham could be a very interesting very interesting market for social casino developers as well I'd like to talk a little bit about retargeting as well because retargeting is often not not in a toolkit of a game developer right for various reason various reasons a retargeting captive a game developer is not really doing a lot of retargeting but the changes some of the changes in circumstances of app users that we saw during the during the lock downs could potentially present an opportunity for game developers to

stripe as to start doing retargeting as well here I would like to to draw the attention to the to an interesting chart that essentially talks about the the trend of the retargeting trend that we see across our user base and in this case you see the essentially the percentage of apps running retargeting campaigns across different different markets right so we have very interesting trends in shopping and lifestyle but gaming was was sort of flat right so we see more or less 15% of game developers doing retargeting but as I said earlier this there's something that it is something that presents a very interesting opportunity moving forward because if we look at the our ppu KPI average revenue per paying user we definitely see some interesting data over there and for example when it comes to the hardcore when it comes to the hardcore genre we see that the apps that

are running retargeting in the heart space are on average getting 95% more RP PU comparing to the apps that are not running it of course every single app is different and it should be very very mindful when it comes to running this it comes a-running retargeting but we definitely see companies having an increased appetite towards retargeting the gaming space as well next thing is revenue and when it comes to the when it comes to revenue it's also quite quite interesting to to look at at the kovat effect on on different revenue streams that we saw across different genres it is it has been a trend that many many developers were playing around with with advertising monetization strategies even even if advertising is not really the core monetization strategy of the game but

what's what's interesting is that if we compare March to January we saw a quite a substantial increase in IP revenue and when it comes to enopp advertising we saw a pretty significant declines right specifically in the mid core and hard core segments where the decline was close to 20% we definitely are going to continue to monitor this trend because more and more advertisers are looking for creative ways of some sort of a hybrid monetization and it is definitely interesting to see how the pandemic essentially is affecting the advertising revenue when it comes to when it comes to monetization it is very natural to talk about fraud moving moving forward because it has been quite a significant challenge for for many developers throughout the past few years but when it comes to app install fraud we

definitely see that currently it is not really a major challenge not really a major threat to most games if you compare it to known gaming categories where it is much more profound we see that casual and mid core general are you know our August don't have any fruit ready when it comes to the app install fraud these days hardcore and social prisoners are experiencing a bit of a bit of a higher numbers of fraud but but in general this as I said this is not really the major trend what's interesting though is that in a prevent fraud is emerging as much more much more challenging threat to most game developers when we talk about Apple event fraud we talk about some sophisticated behaviors that forces are trying to forces us trying to mimic legitimate users behavior within your apps either generate certain revenue

related activity or maybe try to mimic the game playing behavior and essentially if you are not really attentive to this to this types of fraud and that's still looking at at the at the app install fraud I would definitely recommend you start measuring much more different much more events when it comes to your when it comes to looking at your paid acquisition performance but also start using some machine learning techniques and AI algorithms that are available in the market now as well to to see if you can catch those behavioral fraud within the you know down stream from the from the teen up from the installation of the app essentially I'd like to sum it up in a few in a few key takeaways I guess so first thing is that as we discussed IPS are become

increasingly important it is it is interesting to see if the in-app advertising revenue is going to bounce back for genres where we saw a significant decline but definitely definitely IPS are also potentially going to be affected if if they are considered somehow as as a luxury good potentially moving forward when the recession is going to be more pronounced developing markets are presenting an interesting opportunity as well right so we saw amazing performance in Egypt and Middle East in general and we definitely see some some game developers and app developers having very good results coming out of those markets second trend is retargeting and as I said probably your users back in the day when you tried doing retargeting you didn't see an incremental lift the circumstances of

your users might have changed and they might have they might be very much responsive to retargeting these days right so I would definitely recommend trying some retargeting strategies and definitely testing a few if you were targeting partners potentially then in-app event fraud in up event fraud has been sort of overlooked by by the industry for some time when people were mostly dealing with different install hijacking mechanics and trying to simulate click time to install kind of fraud but processes are becoming much more sophisticated and definitely trying to mimic the behavior of existing users so let's let's all be very attentive to downstream fraud and and try to once again try to trust adjust things and be more attentive with what con events you're tracking and the final the final remark here I'd say is is once again we

don't have a crystal ball here right so it's very it's very hard to drive any parallels with with the previous recession we've been to yes gaming industry performed very very nicely in 2008 recession but mobile free-to-play is it's completely different and we definitely should be very attentive to to what what the nature brings to us forward right so I'd like to I'd like to thank you guys for for your time and I'll be very happy to answer any questions that you might have I think we have some some five minutes sounds great thank you that presentation that's really good I know it's it's really tough trying to pace it and and and do it without that feedback even if when people don't say anything in the physical room is just sing humans it's so believable how different the experiences but yeah obviously um we've got some questions and I'm through a

couple of them now so trying tight stuff together so question start with it's interesting that the casual games and advertising and both trending down I think I'm one of your earlier he'd have thought all she thought that's the new audiences in this kind of kind of time would mean a big increase in in casual and hyper casual players is that yep question where it's yeah definitely if once again if we look at this at this additional time that we had at our disposal right we were thinking that more and more people are going to play and more and more people are going to engage with apps but what's what's interesting is as I showed right that the we we sort of peaked when it comes to the engagements around the around the beginning of the second phase of the lockdown and then we are kind of going down towards the towards the pre pre

lockdown positions and in certain industries but I think what's what's more con alarming maybe is that if you look at the paid acquisition you definitely saw some some rallies game a game developers in the beginning when when a lot of different competing categories scaled down but then people started to adopt much more conservative strategies right and from my let's say personal conversations with with with a number of game developers we definitely see a certain certain let's say caution when it comes to when it when it comes to investing more in you a at this point of time right because yes the the engagement and revenues might be might be kind of on a better trend but people

are still not very let's say not very bullish when it comes to make additional investments during doing it say in the wake of the potential recession right so that's that's basically where I think it's more of a let's say a kind of mental problem on the on the on the side of user acquisition managers so that design another question here from John Cook said ad spend up ad monetization down he said that seems counterintuitive is that kind of in the same ballpark I didn't waste so I'd spend up I'm just I'm just the messenger yeah I think it was actually quite the opposite right so we saw that the the ad spend was up doing the first phase of the log down right so we saw ads been growing then we saw that the a spent actually scaling down but in for certain for certain categories the the monetization stayed the same right I think when the point about spend-down

was related to the to the advertising revenue that we saw for hardcore and mid core developers right so we we saw that for some reason if we compare the log down carry it with with January when the ad revenue monetization was was down for some reason we we have to monitor it closely but III wonder if if the participants see similar friend for their apps as well okay yeah no it's a lot of interesting it's still quite raw the date it's a lot of interesting is coming out I guess gonna continue vein as a question here asking whether you believe in the long run with the increase of unemployment rates and possible recession I don't think it's possible recession I think is pretty definite recession the decline will be more radical in the games business as well again you said you haven't got a crystal ball is there anything you think games developers can teach prepare

themselves sure I I think it I think it it is definitely interesting to look at at the different monetization strategies right because again if we if we draw some parallels with a 2008 crisis right we saw that video games performed very very nicely right but but again if we compare video games to mobile free-to-play right it these are two very different products in a way right you can buy a let's say video game and it gives you hours and hours of entertainment right that can potentially substitute go into movies watching whatever TV shows and things like that whereas whereas free-to-play essentially is a service right you you you need to you need to spend you know and it's it's a different discussion where I paid to win discussions and things like that but but definitely we can probably anticipate that to a certain extent the

usage is going to stay the same but the the revenues might scale down right because people still want to to engage people still want to to entertain themselves but the but the situation with monetization will will remain unclear to be honest right definitely definitely we see certain advertisers outside of the gaming space not being very bullish when it comes to advertising these days we just have to see how it's gonna play out to be honest like yeah with wrong with transmission team over a little bit over time micros might be patient I'm sure you will be able for him but I well I think it's when we've got I just is have discussion going on I think there's a couple of kind of questions here but I've fraud one is what is in a prevent fraud and the other is are the certain

genres of demographics have seen a larger share of in-app fraud or certain types of IP it more likely to be fortunately removed so when it comes to the first question let's listen maybe define in a prevents fraud right so basically when it comes to when it comes to you know prevents you mobile developers select what what kind of events they wish to measure right it might be level ups might be purchases it might be a lot of different different events that are being measured the question is that these days it is pretty let's say if we if we look at device farms for example right where you have a real devices connected to the same server they are they are all carrying a legitimate IP they are downloading they're downloading the game for example and then later on they're trying to mimic the real behavior of the user so let's say you have the you work the way

you work with your user acquisition partners is that you are looking at retention let's say they fear attention or they 7 retention and you look at the number of in-app critical enough events that are potentially signaling long term rows for your app moving forward right so in this case a lot of a lot of forces these days are kind of trying to mimic those enough events behaviors right so if you are looking at data retention they would try to mimic they fear attention right if they're looking at certain certain certain other in-app event metrics they will try to mimic those right so the idea essentially is is that forces are much more sophisticated with mimicking that the behavior because most of the time you would assume that you know if I already go to user I see that the user is doing something in the app it's a legit user right but we just definitely see emulators and and boats can can

essentially perform human-like behavior within within the app right so that's what we define as in-app event for okay okay sorry you are the part to the questions right yeah and the second part of the question if remind me it was about the Gio's right it was the particular types of games yeah yeah I think when it comes to the Gio's you you always have to remember that the forces are where the money they're following the money right so if you are if we see to you when countries showing you know the best monetization or they would try to they would try to mimic q1 users essentially right and in this case it's definitely it is differently very much app specific but but different different different countries show different types of fraud and maybe maybe within the maybe I can actually find a

an additional report that we've done that we've done a few months ago and post in the in the chat in that in the PCG chart right that we're gonna have throughout yeah yeah so let me just try to find it and in post we because we had an interesting kind of visualization in terms of different geo-specific fraud essentially all right um there's a lot more questions but I'm going to have to push on now but there is if Alex you've got a few minutes you could drop into the discord group and maybe get answers filled a few more questions they have you want would be able then I'm sure they kept the the event but thank you so much Alex Thomas very informative and yeah okay thank you Chris

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