2021 Global Insights Report
In the games industry, innovating with the latest insights is critical for finding success around the globe. At Google, we believe world-class games should be powered by world-class insights.
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Search trends
A classic question for Google: what are gamers around the world searching for? Gaming keywords and gaming-related searches across Search have seen immense growth in 2020 — here are some key audience takeaways:1,2
- They searched for hardware and accessories
- They sought competitive communities
- They escaped into immersive genres
- They used gaming to learn new things
New games
As more people stayed at home earlier in the year, gaming has become a growing way to socialize for existing and new gamers alike. This shift can be seen in an increase of downloads from January to June.3
Op-ed
In the gaming world, success is often defined in billions of dollars of revenue or tens of millions of downloads. The reality is that most games on the market never come close to that level. They’re not Call of Duty or Candy Crush. Yet, even the smallest studios can enjoy long-term success if they take the right approach to scaling their business...
Op-ed
In the gaming world, success is often defined in billions of dollars of revenue or tens of millions of downloads. The reality is that most games on the market never come close to that level. They’re not Call of Duty or Candy Crush. Yet, even the smallest studios can enjoy long-term success if they take the right approach to scaling their business. Of course, on the whole, game developers are pioneering some of the most innovative strategies and technology we’ve seen in years, and they’re at the forefront of one of the fastest-growing industries. But if your idea of success is just being popular in a large gaming market, you’re not considering the full nuanced picture.
My team and I spend a lot of time thinking about how every game developer — whether they have 50,000 downloads or 50,000,000 — can find ways to succeed in this highly competitive market. When I talk to different companies, the question I get asked most is, “How do we compare to other game developers? Are we doing well?”
Here’s the thing: Long term success is about understanding where you are right now, and taking measured steps to build on that. While it’s of course important to pay attention to what your competitors are doing, sometimes growing game developers can get so caught up in beating their rivals that they leave things on the table that could help them build a more sustainable business. In other words, don’t let your competitive spirit get in the way of your own best interests. Sure, I understand the impulse to shoot for the stars and imagine success as releasing a AAA title or being a top-grossing app in the Google Play store. But that’s over-simplifying it. What will make you successful in your own arena depends on how you pair your titles with market demand, and the way you assemble and operate your company.
The road to measured growth starts with asking the right questions, even if getting to the answers is hard. Here are a few to consider:
“How are your games resonating with your audience?”
Are you seeing good engagement within the first few minutes of game play? Is retention strong? These are all good signals as to whether you're gaining traction in the market. On the other hand, if you’re having trouble getting people to stay in the game, things will only get harder down the line. If you don’t have a solid base of players that represent a game’s value (for example, reaching the desired level of in-app purchases), and ideal playing frequency, then you shouldn't focus on growth until you find a better fit. Which is why it's completely counterproductive to believe that a successful game is simply some brilliant idea with off the charts retention. What you're looking for initially is not so much a great idea for a game, as a game that could move through growth phases, in the midst of all of this technology disruption.
“How expensive is the game to promote?”
Is your marketing spend justified by the conversion rates? Are people discovering your game in new or unexpected ways? You should be able to clearly and confidently say where you’re looking to invest more resources, and why it would help you grow. Develop an investment “thesis” that you stick with. Conventional thinking, says product makes the game, marketing, markets it. The best gaming companies work tirelessly to integrate the two.
“Is your business model realistic?”
Are you sufficiently staffed to scale as your market grows? A five-person studio that publishes a game every two years may not be learning fast enough to build a sustainable business.
“Is your target market too small?”
Many developers don't think they can afford to expand beyond their local market. Or they believe success means getting big in the US or China, when they could drive substantial revenue by focusing on expanding to a wider variety of smaller countries.
Growing developers who don’t closely consider more focused questions like these risk attempting to scale when they might not be ready. As the leader of a gaming company, the more you think of your organization as a constantly evolving organism, the more you will test your products, the effectiveness of your marketing, and the value of your design — and the more you test (and fail), the more you learn. Remember: When you’re scaling your company in one growth phase and anticipate the next, the healthiest mindset is “what got you here won’t get you there.”
Eventually, every game hits the limit of the markets and players it was designed for. Game studios will then have to decide whether they want to grow by launching new titles. The ability to create another game whose growth line ascends as the other game descends is the dynamic of all successful, transcending gaming companies that truly scale. It’s important to keep in mind that not all gaming companies aspire to do this, and that doesn’t mean that they’re not successful. You have to decide what’s best in your specific case, based on the games that you offer. It’s about finding the right balance for you — deciding how many growth curves you want to balance, and accepting the trade-offs.
One of the great things about the games industry is that there are relatively low barriers to entry, especially for mobile games, and opportunities for winners in all kinds of markets and genres. You can go from zero to 100 at the intersection of market and genre. And the industry continues to expand. There are more gamers than there were a year ago, and revenue is growing at nearly 10 percent per year1. That trend shows no sign of slowing. There's great talent and great opportunity for smaller developers, and more than enough room for many to thrive. But it starts with understanding what success means to you — not the market at large — and thinking even more deeply about how your own team, culture, and product play a part in it.
Female gamers
For instance, the gaming market in China continues to expand, and female gamers are stepping up. As of 2019, China is home to one of the highest populations of female gamers in the world, making up 45% of total Chinese gamers.4
Op-ed
China has long been a powerful player in the global gaming ecosystem. While Chinese consumers have traditionally been receptive to games from the United States, South Korea, and other overseas markets, Chinese publishers have been surging ahead of their international competition in recent years across a wide variety of genres...
Op-ed
China has long been a powerful player in the global gaming ecosystem. Today, the country easily falls within the top 3 countries in the world with the highest gaming revenue. 1While Chinese consumers have traditionally been receptive to games from the United States, South Korea, and other overseas markets, Chinese publishers have been surging ahead of their international competition in recent years across a wide variety of genres.
In fact, some of the world’s most innovative games are now coming out of China. While titles like Tencent’s PUBG Mobile and NetEase’s Knives Out are delivering cutting-edge gaming experiences in the battle royale category, Mihoyo’s Genshin Impact has been lauded for its revolutionary approach to AAA game development. If you’re an overseas publisher trying to crack the Chinese market, you need to be aware of what it takes to succeed over there. Here are five strategies to consider when entering and succeeding in China:
Continually innovate and improve
Over the years, Chinese developers have excelled at creating high-quality mobile games, like Honor of Kings. At the same time, they haven’t slept on their laurels. To illustrate, Chinese developers have been working on improving mobile gameplay quality to the point that it matches PC and console experiences. The takeaway? It’s not enough to create a high-quality game. You also need to commit to continually improving it and adding new content. You can do that by prioritizing continuous iterations to improve fundamental gameplay and collaborating with IP owners and brands to add engaging content and real-time support capabilities to your titles.
Capitalize quickly on popular trends
Chinese companies move rapidly to identify trends within the gaming community and incorporate them into their newest titles. For years, multiplayer online battle arena (MOBA) games didn’t exist on mobile. In large part, that was because traditional developers didn’t believe the genre would work on smartphones. Tencent believed otherwise, and proved the concept with titles like Honor of Kings — thereby making the seemingly impossible possible. In gaming, time to market is crucial. If a project is delayed by months or even weeks, competitors can get substitute options out faster, quickly pulling ahead.
Chinese publishers understand this notion perfectly, which is why top publishers employ teams of developers around the clock to get titles into app stores as quickly as possible. Beyond that, many even have implemented an internal competition mechanism that rewards the fastest teams with the best-performing titles. To keep pace in China, overseas publishers need to operate with speed and agility, and be able to quickly capitalize on current popular trends.
Plan your marketing budget for the long term
While U.S. and Japanese game publishers invest more heavily in design and development, Chinese publishers are more focused on marketing and user acquisition. To this end, they rely on data-driven business models that calculate the time needed to see a return on their investments — and then use those calculations to determine the marketing budgets for future releases. Overseas publishers that wish to compete in China need to plan their marketing budgets for the long term and make a conscious effort to continuously engage users and add more value.
Integrate social networking and influencers
Embedding social elements into games helps increase player engagement and improve long-term retention statistics. When players see people they know promoting the games they love, they’re more likely to continue playing. If you’re trying to enter the Chinese market, take advantage of short-form apps and live streaming platforms like Douyin (China’s version of TikTok) to promote your games. Whenever possible, partner with key opinion leaders to help create momentum ahead of a launch.
Find a local partner
Since there isn’t a Google Play store in China, developers must work directly with a number of OEMs, many of which have their own app stores. If you’re coming into the market from the outside, this can be a difficult situation to navigate. The easiest way to do it successfully is by finding a knowledgeable partner that has relationships with the OEMs you’re looking to work with and can negotiate agreements with each of them. As an added bonus, the right partners may also be able to help studios navigate the challenging licensing process required to publish games in China.
Ten years ago, nobody would have predicted that mobile gaming would be as popular and exciting as it is today. Looking into the future, I predict cloud gaming will be the same way in 10 years: the era of downloading games will be over. Gamers will just click to play with their friends, and the accessibility of gaming and excitement of gameplay will be greater than ever before. More importantly, I believe that as the nature of technology and entertainment continues to evolve, China will remain a bustling hub of gaming innovation in the future as it has been in years’ past — a source of opportunity that continues to open doors for game developers and gamers around the world.
1 https://newzoo.com/insights/rankings/top-10-countries-by-game-revenues/
Global watch time hours of gaming content in 2020
Viewership
Communities have become more interconnected with each other outside the games themselves by creating and consuming related content. On YouTube, gaming content continues to grow year over year. Globally, there were over 100 billion watch time hours of gaming content and 40 million active gaming channels on YouTube between October 2019 and September 2020.5
From events that pivoted to digital to live streams to an ever-growing library of VOD content, YouTube Gaming was home to all forms of video game content.6 Here are some of the global top videos from 2020:
Op-ed
As a kid, the last thing I wanted to do was watch someone else play a game. I wanted to be in the action myself, so the idea of watching content about something I could engage with myself seemed backwards. And yet, when I became a commentator at Major League Gaming in 2008, something clicked for me: I quickly realized that esports and livestreaming was not only gaining momentum, but would take the games industry by storm...
Op-ed
As a kid, the last thing I wanted to do was be a spectator, watching someone else play a game. I wanted to be in the action myself, so the idea of watching content about something I could do myself seemed backwards. As I got older, my interest in sports pushed me to be incredibly competitive off the field as well, as I discovered the world of video games. I found myself falling in love with esports in 2002 when I played Counter-Strike matches competitively in a league, which then led to becoming a content creator myself -- streaming on Justin.TV and posting my gaming videos on YouTube. What I quickly learned was that I wasn’t alone, and other people shared this same passion. It truly clicked for me when I became an esports commentator at Major League Gaming in 2008: I realized that watching people play video games was not only gaining momentum, but would take the games industry by storm. It wasn’t a matter of if; it was just a matter of how soon.
When I joined YouTube as the Global Head of Gaming more than six years ago, the business of gaming videos was still in its infancy. Back then, we didn't even have a dedicated games destination on the home page — it was still a subcategory under Media and Entertainment. Today, YouTube is the best place for watching and creating gaming content. We have pages upon pages devoted to the most popular video games, brimming with content from our gaming creators, making gaming one of YouTube's most popular categories. We’re seeing people from all around the world come to YouTube to connect more deeply with gaming creators, watch live video game content, learn how to play new games, or simply master the ones they already love. In fact, more than 200 million people come to YouTube every single day to watch video games content, making it one of the largest gaming video platforms in the world.
“Watching people play video games was not only gaining momentum, but would take the games industry by storm. It wasn’t a matter of if; it was just a matter of how soon.”
In 2020 alone, people around the globe watched over 100 billion hours of gaming content on YouTube, and we had over 40 million active gaming channels. Live streaming on YouTube had an incredible year: We saw watch time from gaming live streams grow to over 10 billion hours. Creators like LazarBeam, Lyna, MortaL, CouRage, TheDonato, Felipe Neto and Typical Gamer are streaming exclusively on YouTube, and we’ve seen Valkyrae become one of the biggest female live streamers across all platforms since she started streaming exclusively on YouTube.
Live-stream content will always be an important piece of the pie, but in today’s reality, live watchtime is still only a small piece of the total pie when looking at gaming video consumption across all platforms. Directionally, I believe gaming is going to be multi-dimensional across not only games and platforms, but content forms too. Whereas VOD content allows edited videos to flourish and Live is great for telling stories in real time, we’re also focused on original short form content via Shorts and Clips, which directs viewers to an exciting or important moment in time. Mobile gaming is also on the rise as more people play mobile games and use their mobile devices to watch content on YouTube. All of this together makes YouTube Gaming a dynamic ecosystem that engages more than 200 million people around the world. But keeping fans coming back for more requires a huge volume of content.
“In today’s reality, live watchtime is still only a small piece of the total pie when looking at gaming video consumption across all platforms.”
One way developers and publishers are approaching this is by offering sandbox environments that turn players into creators, which extends the shelf life of their games and creates new revenue streams. A classic example is Minecraft: its sandbox offers infinite opportunities for creativity and is one reason why it’s been the biggest game on YouTube since its debut. By layering new, original content atop older games, top creators like Dream have found ways to capture and engage global audiences a decade after the game’s initial release.
Here’s what I know for sure: The games that have found long term success and a loyal fan base on YouTube are the ones that allow players to create their own narratives. These days, games are no longer pieces of content on their own. They have become jumping points for an ever-growing library of user-generated content – whether it's updated characters, maps, modes, or other digital extensions. Where there’s fresh content for games, you can be sure there will be more content about it. It's a virtuous circle that's growing at an exponential rate.
There’s a wonderful symbiotic relationship between making games, hardware for games, watching people play video games, and the content creator themselves. People watching other people play video games has inspired more people to play games and, in turn, spend more money on gaming. The relationships between these different groups of individuals continues to be complementary to each other, which I believe has been the catalyst for the remarkable growth that the industry continues to see.
“The games that have found long term success and a loyal fan base on YouTube are the ones that allow players to create their own narratives.”
This will only continue to get bigger as more people are choosing to play and watch video games. As mobile gaming continues in popularity, we see in parallel that of the top games watched on YT in 2020, four were games available on mobile devices1. Over the next five years, the lines between playing and watching will continue to blur through partnerships with games and an expansion of platforms. You could be watching a live stream on YouTube, click a button and jump right into the action yourself, or receive a digital item to use next time you jump into the game after watching. The ability for viewers, creators, and players to influence one another will open the door to types of gaming we haven't even imagined yet. And as mobile devices and infrastructure continue to improve, players around the globe who don't have access to PCs, consoles, or cloud platforms will be right in there with them. These trends show no signs of slowing down, setting mobile up for continued massive growth.
I firmly believe gaming videos will continue to engage both spectators and players in the same way the world of sports has captured audiences: with both athletes and fans actively participating. But what will set Gaming apart is that publishers, creators, and viewers will influence each other in ways traditional sports never could. There’s no doubt the gaming ecosystem has evolved since my days at Major League Gaming. Back then, the stereotype of gamers was some dude playing video games alone in a basement.. That cliche has proven to be misguided as billions across the world are not just playing, but choosing gaming video as their primary category of content to consume. Today, we see larger, more diverse audiences connecting and actively exploring rich, high-gloss alternative realities. And they’re looking for a different kind of experience — one that’s customizable and ignites curiosity, and at YouTube we will always ensure that we are the home for Gamers to do just that.
Global insights
What should game developers make of ever-shifting preferences in both games and gaming content? When ideating, keep high-growth genres in mind to inspire your next creation. Here are genres gamers around the world are paying attention to as they search for their next experience:7
Partner perspective
A considered, focused and responsible strategy: That’s the key to launching a game globally. Ethan Wang, Vice President of NetEase uncovers the process behind a global launch, using real-life case studies to do the talking. From product development to market segmentation, discover what goes into developing an internationally recognised game with Navigating Global Launches.
Player behavior
What's keeping gamers engaged?
Retention
Retention is a matter of keeping them engaged and delighted. Top games have a 45% higher day 7 retention rate than industry average, meaning they retain their community by understanding their differing preferences. Here are some key shifts in game engagement globally:1,2
Op-ed
Over the last decade, APAC has become a gaming powerhouse, influencing developers in every other major market. Thanks to the widespread adoption of low-cost smartphones and affordable broadband, as well as a booming population, the audience and developer community for connected games in the region is surging...
Op-ed
Over the last decade, APAC has become a gaming powerhouse, influencing developers in every other major market. Thanks to the widespread adoption of low-cost smartphones and affordable broadband, as well as a booming population, the audience and developer community for connected games in the region is surging. Strong GDP growth also means people have more leisure time and more disposable income to spend on entertainment. As a result, the audience in Asia is rapidly shifting toward higher-quality gaming experiences, spurring continued innovation.
So, what do these converging trends mean? I’m often asked how game developers can stay ahead of the curve by finding success in the APAC market. To them, I say: the ever-evolving environment means ‘cracking the code' to success in APAC can be achieved in more avenues than ever before. While there is no one-size-fits-all approach, here are key insights to keep top of mind:
APAC is not a monolithic market and should be explored in detail
APAC is the biggest gaming market at a global level, and its sophisticated gamers and game ecosystem continue to raise the bar for continued innovation and product quality. However, it’s important to keep in mind that although the market is often spoken about as a region, audiences vary widely from one country to the next.
In mature markets like Japan and Korea, for example, players tend to prefer hard core genres like roleplaying or simulation due to their long PC/console history. They have more money to spend, and their expectations for game play and new features are high. Emerging gaming markets like Southeast Asia and India continue to experience high growth as a larger number of consumers go online via smartphones while Australia and New Zealand are also seeing increased growth as game studios and user acquisition knowledge continue to mature. In those markets, key played genres tend to be casual and hyper casual games. Players are not willing to spend as much money as in mature markets, therefore studios tend to be making money through alternatives to in-app purchases (IAP) like in-app advertising. In China, we see a mix of both: higher paying hard-core gaming fans in the largest cities, more casual and price-sensitive players in suburban areas.
Developers must put in the effort to understand their target audiences and what they're looking for. In order to succeed, studios must deeply understand the audience they’re targeting before trying to win it over and be innovative in capturing their attention. They must master localization, game design and mechanics, preferred transaction methods and revenue models for each audience if they wish to be successful. A recent trend I’ve noticed that is an excellent example of innovating for a new audience is the rise in genre-mixing: when a game mixes new gameplay with traditional methods to improve retention and attract new players (i.e. combining a puzzle game with an anime art style).
Monetization strategies should evolve not just per region, but per country
Ten years ago games were sold almost exclusively as if they were physical goods; today this accounts for perhaps 5% of total revenue. Developers need to combine multiple ways of making money, whether via a diverse games portfolio with different revenue models for each, or by mixing up different streams in a single game based on player behavior.
Game developers should combine as many revenue streams as possible, and to keep doing so as long as it remains effective — whether it’s a varied portfolio of games with different monetization streams in every game, or different streams in a single game, the more diversified a developer is, the higher its likelihood to be successful in maximizing the lifetime value (LTV) of its users. For example, if I am the CEO of a Japanese studio launching an IAP-only game in India or Vietnam, I may be leaving money on the table given the payer percentage is very low in emerging markets vs mature ones. I should know my markets and users, and adopt a hybrid monetization approach that combines both in-app advertising and IAP. This way, I will be capturing the most value from non-payers (in Vietnam and India, a larger proportion than in Japan or Korea), and from potential purchasers (via IAP).
Remember: revenue may be king, but engagement is the kingdom. As players become more engaged (emotionally and socially) with a title, they are naturally more willing to spend (or engage with brand activations) further down the line. Experimenting with how your content can bring your community joy is key to sustainable success.
Growth in female gamers continue to outpace that of male gamers
As of 2019, China is home to one of the highest populations of female gamers in the world: 45% of Chinese gamers are women and this segment continues growing at a rate of nearly 14.8% per year — nearly double the male growth rate at 7.8%. When considering this insight, it’s also important to call out that this growth isn’t limited to age range, either. In fact, a particular segment I find fascinating is the rise of the female/senior player in China (银发族).
Korea, Japan and Southeast Asia have also high female player populations, with 40% share of audience1. This growth is also accounted for from a revenue standpoint. In 2019, female players accounted for 35% of the mobile games revenue, and in 2020 we’re expecting that number to increase up to 39%2. The pandemic was one factor that accelerated this growth, and we expect to continue seeing strong growth among women gamers.
Collaborate with local members of the gaming community
One of the most amazing things about the gaming ecosystem in Asia is the evolving sense of community and the role communities play. At the start of our industry, developers were working independent of each other. Now developers would go out of their way to help each other, even when they compete in some areas. The drive to stay competitive is seen as a communal challenge and is at the core of the region’s innovation over the last decade.
With so many opportunities continuing to unveil themselves every year, we've been urging developers to expand their horizons. If you make casual games, consider making hard core titles or creating hybrids that combine genres to appeal to different types of players. If you rely mostly on ad revenue, consider introducing IAPs. Not every industry embraces community the way game developers do — turn towards it and let inspiration, experimentation, and collaboration guide your next big hit. At Google APAC, our mission is to support our developers throughout their lifecycle — whether you are an independent game developer, or part of a big game studio. I look forward to continuing our commitment to maintain and grow a healthy gaming ecosystem and content creators.
1https://services.google.com/fh/files/misc/levelup_asiagamingindustryreport_2020.pdf
2https://services.google.com/fh/files/misc/levelup_asiagamingindustryreport_2020.pdf
Partner perspective
They’re problem solvers. Forward-thinkers. People-focused. Niantic is evolving the player experience for gamers across the globe. Vice-President of Games, Greg Borrud, taps into the creative process behind Niantic’s success to reveal the mechanics of building captivating, immersive and uniting worlds. Evolve the Player Experience answers the questions of tomorrow, today.
Watchtime hours of live gaming streams on YouTube in 2020
Op-ed
The global pandemic has had an enormous impact on the gaming industry. More than ever, gaming has become a source of connection and community for people around the world while we shelter in place. Over the last year, we’ve seen how staying at home has meant the number of people playing games increased dramatically. The kinds of games people play changed significantly. Mobile game downloads increased 75% in between Q1’ ‘19 - Q1 ‘20, and gaming livestream watchtime increased 45%. According to GameAnalytics, playtime hit a peak of 90M+ hours in the last 10 days of March, a 62% increase compared to the first 10 days of January.
The nature of this “new normal” is one of an integrated experience. As there are new limitations to the number of in-person experiences, players’ relationship to gaming has transformed. People are engaging with games more often during the day, but for shorter periods of time. They’re playing games for different reasons — often just to stay connected with distant friends and family. New audiences for games that developers may have ignored or minimized in the past are now demanding to be embraced as gaming becomes a fundamental part of socially connected experiences.
Games are becoming more integrated into daily lives
With gaming becoming more embedded in our lives, more people are experiencing games in a non-linear fashion. This is especially true for people who’ve been asked to manage kids kept home from school while also trying to get a little work done. Instead of going on six-hour raids, they might play for six minutes during downtime at work or between meals. Cloud-based platforms like stadia enable this by allowing players to stop a game and pick where they left off, or to start a game on one device and continue on another.
As a result of these smaller time increments, people are engaging in different types of activities when they play. Instead of advancing a game's narrative, for example, they might spend that time customizing a character or connecting with a guild mate.
In order to accommodate these changing behaviors, game developers should explore building less rigidly defined experiences. For example, creating more short demos for people to sample, or brief loops they can quickly complete within a longer game. Developers should also consider ways to make it easier for players to hop in and out of the action, by designing their games with cloud gaming platforms in mind.
Games are how people create and maintain connections
As has become clear over the course of the pandemic, people are using games to connect with family and friends they can’t see in person. This ability to play together while physically apart will only become more important over time. Gaming platforms have enabled the ability to engage much larger groups at once, enabling new communities to form and new types of gameplay to evolve.
Because the audience is broader, and playtime is more distributed over the day, there is also increased competition for players' attention. Game studios are no longer just competing against other games. They're competing against everything else people are doing with their free time, like watching Netflix or going for a bike ride.
Developers need to focus on what motivates this new breed of gamers — why they're playing, and what they hope to get out of it. They need to reward players more frequently and in more personalized ways to keep them engaged, and invest more effort into fostering communities that grow over time.
Games must not leave behind inclusion when searching for new audiences
Gaming should be something everyone enjoys, yet there is an enormous audience of potential gamers that remains largely untapped, whether it’s seniors or lower income people who don’t have the means to spend $3000 on a gaming PC. For example, there are between 300 and 400 million people worldwide who suffer from one or more physical impairments — whether sight, hearing, motor or cognitive skills. Until recently, there hadn’t been a big emphasis on supporting disabled gamers by the gaming industry. Now, companies like Microsoft and Unreal have begun focusing on accessible experiences, such as text to speech. It’s critical that the industry address this market directly by building accessibility into the core game experience, creating an opportunity to make gaming truly inclusive for everyone.
Games are the center of democratizing joy
By bringing vibrant and diverse experiences to people through gaming, we can achieve what some of my colleagues at Google have called ‘the democratization of joy.’ Ultimately we’re aiming for a world where anyone can play virtually any game they want, on any device, for as long as they want. Connection, personalization, and accessibility will be keys to success in the digital gaming world going forward.
Monetization
What are gamers purchasing?
Player-first strategies
Top game developers see a much higher retention than industry average, suggesting they are building games people love to keep playing. The best monetization experiences for you and your users are when you’re able to offer them something of value in return that is aligned with their preferences. These preferences and behaviors have continued to evolve within the past year.1
Number of casual gamers who spent more money on games during COVID-19
Gamers who have made in-game purchases
Gamers who have bought a new game
Paid content
In a survey conducted by Google, we found gamers were unsurprisingly more willing to pay for gaming content as they sheltered in place. This spend is increasing in areas that deepen connections within the game, such as:
- Purchasing currency for in-game transactions
- Buying a special bundle with useful in-game items
- Unlocking special / collectible / rare items for characters
- Customizing a character’s appearance2
Partner perspective
Can we balance play and profit? Rovio has run the numbers, and they’re proving it’s possible. Rovio CEO, Alexandre Pelletier-Normand explores how creative monetisation can enrich games. From the developers behind The Angry Birds, discover how this global organisation is evolving their operations to stay ahead of the curve with Connecting Play and Profit.
Op-ed
Developers of free-to-play games often struggle to find the best ways to monetize their titles. Should they rely on interstitial or banner ads? Offer in-game currency as a reward for viewing video ads? Aggressively promote in-app purchases? Develop a tiered subscription model? If you ask me, the answer to those questions is “yes.”...
Op-ed
Developers of free-to-play games often struggle to find the best ways to monetize their titles. Should they rely on interstitial or banner ads? Offer in-game currency as a reward for viewing video ads? Aggressively promote in-app purchases? Develop a tiered subscription model?
If you ask me, the answer to those questions is “yes.”
When you rely upon a single revenue stream, you’re almost always leaving money on the table. Armenia-based game development company Rockbite Games, for example, offers both in-app purchases and in-app ads. By providing two options to earn in-game currency, and by dynamically customizing their digital store through Firebase Remote Config, they were able to further increase their revenue.
Developers who want to maximize revenue and grow their studios need to employ a hybrid monetization strategy. But to avoid alienating their audience, they need to do it by adapting revenue models to each player's personal preferences — the same way they create dynamic content within a game. The key to this strategy is the intelligent application of analytics, which requires a few crucial steps.
Adopt a player-first strategy
Just as you use data to guide how game play unfolds, you should also use it to determine the monetization strategies that resonate the best with each player. Tools like Firebase and Google Analytics can offer rich insight into player behavior and help you predict which players will spend money inside the game and identify those who will not. By segmenting users, you can find opportunities to personalize each player's ad experience, optimizing your monetization strategy.
So the first step is to understand and segment all of your players. Which ones are high spenders? Who is unlikely to ever make an in-game purchase? Players who don’t want to spend money in-game may respond well to rewarded ads, while players who purchase items during game play may find such ads distracting.
The key is to match players with offers tailored to their preferences and behavior. PeopleFun, developer of popular casual games such as Wordscapes, wanted to introduce rewarded ads without cannibalizing revenue from in-app purchases. Using Firebase Predictions, PeopleFun was able to identify players who were less likely to make in-app purchases, and show rewarded ads only to them. The result: A significant boost in the lifetime value of all Wordscapes players.
Use data to drive your decisions
It's important to remember that just because a game is free-to-play doesn't mean the people who've downloaded it are averse to spending money. Similarly, if a type of ad format doesn't resonate with a user (or doesn't appeal to you, personally), it doesn't mean that it won't resonate with others. Assumptions, biases, or models that worked in someone else's game are not viable indicators of how your players will respond. When it comes down to it, successful monetization strategies are built on a foundation of experimentation.
Once you've segmented players based on their purchase behavior, intent, session duration, and other factors, you can test different variables to determine which types of offers work best for each segment. For example, Pomelo Games used Firebase Remote Config and A/B Testing inside its free-to-play game Once Upon a Tower to measure the effect of interstitial ads on revenue and retention. After two weeks of testing, Pomelo found that interstitials boosted ad and in-game revenue by 25% to 35%, with no discernible impact on retention.
Make monetization a core element
Hybrid monetization models maximize revenue without sacrificing the affordability that fans of free-to-play games love.
But monetization is not a feature that can be bolted on after a game is nearly completed. Some studios make the mistake of splitting production into two phases -- first designing gameplay, then focusing on driving revenue. This is a mistake. Your monetization strategy needs to be a core part of the development process, while remaining flexible enough to be optimized later based on testing.
While running experiments in a live game with actual players may seem scary, tools like Firebase and Google Analytics can allow you to easily create experiments and get insights from them without disrupting the player experience or requiring you to publish new versions of each game. In turn, you'll see a boost in earnings, and highly-engaged players enjoying an improved user experience.
Preferences
The method of consumption changes the experiences of gamers, and trends show the world is looking for more ways to experience the fun.
Op-ed
Gaming has changed tremendously since I first began designing games in 1999. The industry has gone from a niche hobby to a global juggernaut that's larger than music, movies, and books combined. And it shows no sign of slowing down. At the same time, game design has also evolved...
Op-ed
Gaming has changed tremendously since I first began designing games in 1999. The industry has gone from a niche hobby to a global juggernaut that's larger than music, movies, and books combined. And it shows no sign of slowing down. At the same time, game design has also evolved. The sheer number of designers has grown exponentially, and expanded into so many niches that there is rarely a single job title called 'game designer'. People who create free-to-play mobile games have little in common with developers working on AAA console or PC titles. And designers of those titles have become hyper-specialized by subgenre.
When the pandemic hit, the changes that were already underway went into overdrive. The need to shelter in place changed how and where game designers do their work. Downloads and cloud-based gaming surged. The types of games that were popular shifted almost overnight, as did players’ reasons for playing them.
Designers who want to succeed in the industry today need to be fluent in these macro trends. But some things that haven't changed: The need to tell a compelling story and to build a community around that storyline. If you can do those things consistently and well, you will thrive.
Innovation under pressure
Thanks to the pandemic, we have seen dramatic shifts in the industry over the past 12 months. But not all of the changes have been negative. It also drove huge innovation across the gaming space. For example, the need to work remotely led to a surge in distributed teams. Writers, artists, developers, and designers no longer have to be in the same place or even the same city to work on the same game. That’s especially true with cloud-based games, where people are already collaborating online.
When game development is more geographically distributed, the cost of producing a game decreases. People don’t have to live in expensive places like the Bay Area to be part of a team, so their overhead is lower. Studios can spend more money on design talent and support. And the people on those teams are likely to be from more diverse backgrounds, which almost invariably leads to greater creativity and innovation in game design.
The ability to work remotely and design games for cloud platforms like Stadia will ultimately allow smaller boutique studios to compete with the majors on a nearly equal basis. And that will benefit everyone.
A different kind of game
These days, the universe of gaming has expanded to include people who otherwise might never consider themselves ‘gamers.’ They may be older than your stereotypical gamer, or from different cultural backgrounds. And more of them are playing casual and mobile games than ever before.
They’re also playing games for different reasons. It’s less about competition and more about connection. In a time when people are still largely living apart, shared gaming experiences are helping to fulfill our need for community. Here, too, cloud-based games that can support larger numbers of players at once have an advantage.
We’ve also seen huge growth of nonviolent ‘feel good’ games that offer feelings of warmth and optimism. This concept of ‘hygge,’ a Danish word that translates roughly into ‘coziness or comfort,’ is a gaming trend we see growing stronger over time.
Story and community above all
Despite all the changes, a few constants remain. For example, two big influences on me as a young player and later as a designer were Sid Meier's Pirates and World of Warcraft. Both embodied universal truths that remain true today.
Pirates showcases how an intricate game still lives or dies on the strength of its storytelling. If I ever designed a game that weaves together mechanical systems with player-driven storytelling as elegantly as Pirates, I could die happy.
For its part, World of Warcraft demonstrated the power and potential of online connections. It created a community that was both so big and yet so closely interconnected that it has influenced every modern multiplayer game that followed. If the last couple of years have taught us anything, it’s the importance of play as a means of connecting with each other.
One of my favorite quotes often repeated by Grace Hopper is “a ship in port is safe, but that’s not what ships are built for”. I recently learned that this is from a book of adages by J. A. Shedd, and there is a phrase that precedes it: “When it is rose leaves all the way, we soon become drowsy; thorns are necessary to wake us.” I think about this a lot lately.
It seems to be a deep part of human nature that sometimes we need thorns to wake us. There can be no question that the coronavirus pandemic has been a tragedy the scope of which we will spend generations fully understanding. But our species is at its best, its most innovative, when challenges like this appear. The silver linings are bittersweet, but we carry on. And often, what these thorns reveal is our most human core -- the ways in which we are all connected.
Partner perspective
As walls between platforms break down, the gaming industry’s leading minds answer your questions: How do we develop games for the future? What does the future of gaming sales look like? Is equality across platforms important? Join Kim Dae-Hwon, Vice President of New Development at Nexon as he takes a deep dive on The Multiverse of Multi-Platform.
Op-ed
As devices have become more powerful and connectivity more ubiquitous, the type of audiences playing games, the devices they use to play them, and the kinds of games they play has rapidly evolved. Game developers now need to develop experiences for a wide range of devices, with back-end services that support cross-play and cross-progression across devices....
Op-ed
As devices have become more powerful and connectivity more ubiquitous, the type of audiences playing games, the devices they use to play them, and the kinds of games they play has rapidly evolved. Game developers now need to develop experiences for a wide range of devices, with back-end services that support cross-play and cross-progression across devices. Prior to this change, high-fidelity games like Call of Duty required a dedicated gaming console or a high-end PC; now they can run on a mobile phone.
This emerging capability to enjoy titles across the device ecosystem has elevated players' expectations. Players now want engaging high fidelity experiences across a variety of platforms. This allows them to easily interact with friends and family, even if one player in the group uses a high-end console or gaming PC and the other is on her mobile phone. Players want to start a game at home on a console and bring it with them on the road with a mobile platform. Throughout all of this, players expect their purchases, rewards, and progression to be reflected and available across platforms.
Although this concept of cross-device play seemingly democratizes access globally to tier one titles, there are inhibitors limiting the reach to new audiences. First, high-fidelity experiences require high-end devices with powerful processors and GPUs and sufficient memory. These devices are affordable and available in developed markets to modestly large populations of gamers. However, these high-end devices are beyond the reach of people in many parts of the world, greatly limiting high quality game content reach to players globally.
“This emerging capability to enjoy titles across the device ecosystem has elevated players' expectations.”
Game streaming offers a solution to this problem, transforming a computationally demanding game into a stream of video bits that can be easily consumed by any commodity device. This is accomplished by moving the powerful processors, GPUs, and memory from the device into a cloud data center and delivering the game as a stream. A key requirement to make streaming work is low latency and consistent bandwidth between the consumer device and the cloud data center. This introduces a challenge, though: many of the places in the world that could most benefit from this democratization of gaming content — rural areas and emerging markets such as South America, Africa, and Eastern Europe — are too distant from cloud data centers for streaming to work as intended.
The solution to bringing the democratizing benefits of game streaming to global audiences is through edge computing. Edge computing shifts powerful CPUs and GPUs from large centralized cloud data centers to decentralized locations much closer to players all around the world, including telco and enterprise edge locations. This shift to the network edge of these powerful computing resources truly opens up the benefits of game streaming to many more locations.
Edge computing brings great promise for players, by delivering high quality streams to all types of devices. However, this shift from a centralized model with tens of cloud data centers to a decentralized model with thousands of edge locations introduces new levels of complexity for game developers. Without a centralized and standardized framework to manage edge computing resources, a game developer would need to interact with dozens of edge providers around the world, each with diverse technology stacks.
“This shift to the network edge of these powerful computing resources truly opens up the benefits of game streaming to many more locations.”
Google’s Anthos platform is designed to solve this problem by providing a centralized control plane for compute resources that run both in the cloud and at the edge. This enables game developers large and small to realize the combined benefits of cloud and edge computing without taking on all of the massive operational overhead of dealing with dozens of different providers and tech stacks. Games which run out of tens of cloud locations today serving primarily large metros and the developed world can run from hundreds or thousands of locations tomorrow serving a truly global audience — bringing an entirely new and more inclusive generation of players into the world of gaming and interactive experiences.
The proliferation of high-fidelity game experiences to a global audience is only the beginning of the potential that edge computing provides. Take for instance, today’s multiplayer gaming experiences. They’re optimized for network latency of about 50 - 250 milliseconds between the player and cloud data centers. That’s sufficient to power games which run entirely on screens in your living room, on your gaming PG, or on your phone. However, there are whole new classes of interactive experiences that exclusively become possible with the lower latency that only edge computing can provide. This ultra low latency (think 1 - 20 milliseconds) could enable new augmented reality and virtual reality experiences that are simply not possible in today’s world.
“Games which run out of tens of cloud locations today can run from hundreds or thousands of locations tomorrow.”
Imagine that you are attending a sporting event in a 5G-enabled stadium. You hold up your phone and real-time statistics are composited over video of players as they move around the field. Ball-tracking is rendered into the live video to assist visually impaired spectators more easily keep track of the action. And perhaps even 3D models of historical all-star players run plays along with real players on the field. These use cases become possible with the introduction of low-latency rendering and streaming of 3D content from the edge.
Or consider the possibilities at a 5G-edge enabled theme park: why wait for an appointment or trek across the park to meet with your favorite character, when that character can join you and your family at the lunch table interactively streamed to your device? Characters can react and interact instantaneously when the content is delivered at ultra low latency deployed in the theme park. Once unlocked at the theme park, these interactive experiences can be taken home extending the experience and engagement.
Edge computing and streaming present compelling new opportunities to create entirely new types of interactive experiences via virtual reality, augmented reality, and interactive streaming. Cloud providers, telcos, and private operators are busy building out the edge compute infrastructure to power these experiences. As this infrastructure deployment progresses, Google Cloud for Games is excited to partner with game developers and enterprises to unleash developer creativity with these new capabilities and deliver next-gen experiences to players and users globally.
Op-ed
Pitching is an art form unto itself. Whether you're promoting your game to publishers, investors, potential team members, journalists, or platforms like Stadia, the best pitches all have similar things in common. Here's what separates a truly memorable pitch from an ordinary one....
Op-ed
As Director of Business Development at Stadia, my job is to identify the world's best games and bring them to our platform. Over my career I've been fortunate enough to meet with thousands of game developers and publishers from around the world to get an early look at games during the creation process. What I love about my job is that just when I think I've seen it all, someone comes into my office (or nowadays, joins the video call) and shows me something I've never seen before.
Pitching is an art form unto itself. Whether you're promoting your game to publishers, investors, potential team members, journalists, or platforms like Stadia, the best pitches all have similar things in common.
Here's what separates a truly memorable pitch from an ordinary one:
Bring the passion
It’s important to see game developers bring as much energy and passion to the pitch session as they do to creating the games, as well as the same storytelling and design skills. This is your opportunity to give voice to your creation and help people understand why you’re so excited to bring it to the world of players. Translating the magic is key to creating a lasting impression.
I’ll give you an example: when id Software was showing us DOOM Eternal for the first time, I wondered if it was possible to top their previous masterpiece in 2016, which had re-invented one of the world’s most beloved game franchises, and had become one of my favorite games of all time. They could have easily rested on their laurels and reiterated their previous success, but the team communicated their vision for the game in such a crisp and powerful way that the excitement in the room was palpable. They were able to take their enthusiasm for what they were creating and make it infectious — as if it were their first. That is the power of true storytelling.
Tell me why your game is unique
Why does this game need to exist? What does it offer that no other game has? Give me a crisp, high-level description of what your game is about and who it's for. Once you’ve established this, frame why your specific team is the perfect one to bring this concept to life. An investment in any game is really an investment in the people behind the game, yet this is the one thing many developers leave out of their pitches.This is especially important if you’ve already got a track record building games. Build the belief in your team and you’ll have an easier time getting buy-in, whether you’re looking for money, marketing, or help with resources.
Don't just tell — show
There's no substitute for a hands-on experience. I highly recommend bringing something playable or showable with you to the pitch session, to make it real and prove you’ve really found the fun. If it's a video, consider sending it ahead of your pitch session so we have a chance to look at it and come to your session with a memorable impression. This is especially helpful during a time where everyone is working from home and unable to experience your game in person. In order to prevent potential technical difficulties and keep the presentation flowing, I’ve seen demos with recorded voiceover to the video. That way their voice continues to engage with the audience as the video plays.
Tailor the pitch to your audience
While the fundamentals of your pitch won’t vary much from one meeting to the next, you’ll want to fine tune it for the people in the room. If you’re pitching to me, I’ll want to know more than whether it delivers a great gaming experience. I’ll want to know why it’s a great gaming experience on our platform. If you’re creating a game that takes advantage of unique Stadia features like Crowd Play, Crowd Choice, State Share, or Stream Connect, that needs to be central to your pitch. When we see game developers use these features (called Stadia Enhanced Features or "SEFs") in new and innovative ways, that almost always catches our attention, as it can help both the game and YouTube creators engage audiences like never before, and naturally highlights features that make playing games on Stadia unique.
If you’re pitching to a publisher or a design director, you’ll want to go deeper on game play and character creation, the game engine you’ll be using or the end user devices you’re targeting. If you’re seeking funding, you need to talk about where you are in the development process. If you want help with marketing or getting coverage, you’ll need to discuss the audience for your game: who will be playing it? Are you targeting a specific gaming community? What’s your strategy for attracting content creators?
Be clear about what you want
Making an impression is one thing, opening up a conversation is another. Through all the bells and whistles of crafting a memorable pitch, there have been teams whose asks get lost in translation: What is it you’re looking for? What do you hope to get out of this meeting? It could be funding, platform support, coverage, or something else. If getting a positive reaction to your pitch is step 1, what is step 2? Approach your pitch from a micro level (what happens in the room) and a macro level (what happens afterward). The best pitches speak directly to me and the others in the room, where it’s clear the developers have done their homework and understand what we’re trying to do as a business.
I hope this advice leaves you energized and inspired to tell the story of your game with as much energy and enthusiasm as you put in to create the game itself. Take the time to understand the wants and needs of your audience, keep the material and your delivery engaging, and close with what it is you are looking for. With this in mind, remember that pitching is an art form, so have fun with it, get creative, and good luck out there - you got this!
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