An Insider Look with Snap, GameRefinery, Department of Play and Liquid & Grit

Uncovering Monetization, Product Design, and Social Gaming Trends*

This article was originally published on ironSource LevelUp.

The gaming ecosystem is dynamic and innovative, with new trends emerging from all corners of the industry. The impact of COVID-19 has only amplified this, as companies seek to tap into the increased traffic and changes in consumer behaviour.

Seeking to uncover all the noteworthy developments and trends of late, we teamed up with ironSource to interview 21 thought leaders from multiple areas of the industry. To make sure you are able to digest all the insights we share, we’re turning this grand analysis into a five-part blog series that focuses on the following areas:

• Trends on Monetization Mechanics, Product Design, and Social Gaming with Snap, GameRefinery, Department of Play and Liquid & Grit
• Trends on Investment and Merger & Acquisitions with Deconstructor of Fun, Elite Game Developers, GameMakers and Mail.Ru
• Trends on Gamer Behavior, Motivations, and App Download with Newzoo, Quantic Foundry and Adjust Part One
• Trends on Gamer Behavior, Motivations, and App Download with App Annie, Game Refinery, Appsflyer and Appsumer Part Two
• Trends on Creatives and Performance Marketing with N3twork, ironSource and Luna Labs

For this particular article, we’ve sat down with Joel Julkunnen from GameRefinery, Will Luton from Department of Play, and Brett Nowak from Liquid & Grit to pick their brains on monetization and product design trends. And given the rise of social mechanics in mobile gaming, we also had a chat with Ben Phipps from Snap to better understand the trends he has been seeing in this specific area.

What are the most notable trends you’ve seen this year in mobile game products & design, and/or monetization mechanics? Feel free to focus on a specific genre or multiple.

Liquid & Grit: I’ve seen four so far. The first one being the ability for players to customize their experience, including the free bonus, IAP bundles, avatars, and more. Second, there have been improvements and add-ons to seasons and Battle Pass. Then, there are event management areas, mechanics, and IAPs that let players progress more easily and quickly to later-stage content. I’ve also been seeing a lot more business development deals with music labels, real-world items, and movies.

Department of Play: As predicted, hyper-casual is increasingly competitive, meaning increased eCPI and pressure on LTV and other KPIs. This has led to the trend of hyper-casual developers hybridizing IAP and ads, alongside deeper meta games, moving hyper-casual much more towards traditional casual and mid-core titles.

GameRefinery: By far the biggest trend has been the Battle Pass and how it has been making its way from mid-core games to the casual space. For example, we’ve witnessed Battle Passes being adopted by numerous Match3s, time management, casino and other casual genres. It’s clear that this monetization mechanic has become the new hit among mobile games and no wonder — it fits practically all game types and it’s a great retention driver as well!

What impact, if any, has Covid-19 had on these?

Liquid & Grit: The increased engagement in games and the decreased engagement in other forms of entertainment, like sports and concerts, have incentivized businesses to look more to games for marketing solutions.

Department of Play: Covid-19’s impact isn’t so much on game products but on the business side. Money is much more cautious now, having a knock-on impact. As consultants at the higher end, we’ve seen a downturn as companies become more conservative, despite increased revenues. There’s an expectation that raising a series round will become hard as the world faces a recession.

GameRefinery: Covid-19 had a clear impact on the content and updates in mobile games, especially throughout March and April. In a nutshell, almost all top games had some kind of reaction to the situation with the most common ones being free gifts, additional playtime, prolonged events and added playable content. Location-based games (e.g. Pokémon Go) even made major gameplay fixes to adjust to social distancing.

Snap: Without commenting on mechanics in games, we’ve seen first-hand COVID-19’s impact on consumer behaviour. As friends look for new ways to have fun together and immerse themselves in new experiences from the comfort of their couch, we’re seeing highly elevated engagement in Snap Games with our highest figures since launch for overall time spent, player count, and usage of in-game social features like Voice and Chat.

We’ve seen a rise in hybrid games, most notably Archero, fusing elements of different genres. What benefits or opportunities can this approach offer developers?

Liquid & Grit: There are two ways to enter the mobile gaming market: take market share from an existing game or grow market share with a new concept. But by combining mechanics from a few different ones, you have a better chance of taking market share with your portfolio. The second benefit is that using proven mechanics decreases some risk in development.

GameRefinery: Mashing up genres is a great way to create something new yet familiar to your audience and it provides ample opportunities for differentiating yourself from other titles. However, it’s not always easy to find genres that work seamlessly together on a feature level, so plenty of research and testing about game mechanics, synergies and features need to be done to maximize your chances of success.

In addition to hybrid games, hybrid monetization models are also being experimented with increasingly, from casual games to social casino games. What is driving this shift in business models, and where do you see it heading?

Liquid & Grit: Mobile gaming is, as I often say, the second most innovative industry. It is competitive, it has a low barrier to entry, there are lots of iterations, and winners get rich. Therefore, we will always see changes and shifts in business models, products, features, and platforms. I am not sure of the shift in business models, but I am sure that there will be constant changes as teams try to find better ways to grow.

Department of Play: I don’t think this is new. IAP driven games have been adding incentivised videos for 5 or more years already. The change is a new generation of developers coming from the other end: knowing ad monetization but implementing IAP.

GameRefinery: The utilization of in-game ads has soared during 2019–2020 and now you can see ads supporting IAP-monetization in almost all genres. With skilful integration and meaningful rewards, ads can be something players enjoy having in games as an alternative for real-money payments. They clearly are not the irritating mood killers they used to be in the past and I see them having a strong future as support to IAP-monetization in the future as well.

From social mechanics to live ops, what product features should mobile games be focusing on this year to stand out from the crowd and improve the gamer’s experience? Feel free to focus on a specific genre or multiple.

Liquid & Grit: This really depends on the game, the players, and the strategy of the company but I highlighted a few in the first question. For top-grossing companies, I would recommend investing in larger, longer-term bets that are defensible and much more difficult to replicate — tactics that you see other large, successful companies taking in other industries. For mid-to small-companies, I would look at cross-genre mechanics because the most successful breakout apps are heavily influenced by not only their own genres but also other genres as well.

Department of Play: The ultimate challenge is still long term retention. So live-ops with rolling events, constant new features and multiple reasons for players to play and spend right now are going to be hugely important. In addition, deep social connections between players are the king of D30 and beyond retention. So clan features, PvP and meaningful social interactions should be a solid focus. My gut tells me the time is right for a new wave of social-focused casual games in the style of Draw Something.

GameRefinery: Playing together and experiencing games with other people has risen in importance during the past few years. This trend doesn’t show any signs of weakening, so I would strongly suggest that no matter the genre you’re in, social features and especially co-op mechanics should be somewhere in your drawing board when planning your feature-set and road map for future updates.

Snap: Augmented reality is growing in popularity and should be on the radar of forward-thinking game developers. At Snap we’ve seen an 18% increase in playtime for sponsored AR lenses, and on average over 75% of our community engages with AR lens experiences daily (*From Snap Internal Data February 22 — March 20, 2020).

And as more and more users are turning to social gaming to pass time, what is the most interesting challenge/development you have seen with this so far?

Snap: 1) As people have more time to spend in gaming, they now have the time to invest in strategy, mid-core, hardcore, console games instead of just casual and hyper-casual titles.

2) Before COVID-19, word of mouth has always been a strong influencer. But, in this new COVID world, users are relying even more on the recommendations of their friends. As a result, there’s a surplus of information being circulated.

3) A challenge to call out for advertisers is to always stay in your lane. If your brand is an expert in a certain gaming genre, avoid stepping into an unknown territory (e.g. experimenting with RPG titles when your core business is casual gaming).

4) Another challenge is avoiding the pitfalls of being misconstrued as opportunistic in your messaging. Instead, only jump into a conversation with your users/community when you’re adding value. This is the time to lead with empathy and innovation, to install a sense of normality and to build brand love.

How do you see social gaming evolving for the rest of 2020?

Snap: In terms of social gaming evolution, multiplayer games are here to stay. Being able to use your own character or Bitmoji to play with your friends virtually can be an extremely immersive experience, especially when we are physically apart from one another. For Snapchat, the goal isn’t to offer a huge selection of games, but to create experiences that will serve different communities within Snapchat. For instance, there might be a game you enjoy playing with a specific group of friends and another game that works with your family.

TLDR;

• Battle Pass is one of the most notable trends the industry has seen on game mechanics this year.
• Covid-19 has incentivized game studios to invest more in their marketing strategy and refresh their in-game content to retain users than creating new titles.
• Given the current climate and to drive long term retention, mobile game studios should focus more on social features, especially co-op mechanics, to improve their gamer’s experience.
• Users are investing more time in strategy, mid-core and hard-core games than just hyper-casual/casual titles.
• It’s not the best time to experiment with creating titles in genres that your studio doesn’t specialise in.
• Social multiplayer games are here to stay — especially the ones that allow you to play with your own character or Bitmoji.

Keep an eye out for the trends on investment and mergers and acquisitions with Deconstructor of Fun, Elite Game Developers, GameMakers and Mail.Ru next week!