GDC 2014 Core Games, Real Numbers: Going Cross-Platform

1. Hi there, thank you for coming. My name is Emily Greer, and I’m the co-‐founder & CEO of Kongregate, the browser games plaDorm and now a mobile games publisher as well 1

2. That’s what I’m going to talk about today, this is going to be something of a post-‐ mortem on our ﬁrst 12 months as a mobile pubisher with the good, the bad, and as much data as I can share. 2

3. My brother, who is my co-‐founder, had previously co-‐founded a small game studio and had a bad experience with a major publisher that failed to market their game, then refused to release the rights to do the sequel, ulMmately leading to the studio dissolving. We wanted to open up more opMons for developers so they DIDN’T need a publisher to make money on their game. There were a ton of generic browser game sites out there, with no persistence between games and no connecMon beyond leaderboards between players. 7 years later we’ve got more than 80,000 games on our plaDorm. Most of our web revenue comes from the 400 free-‐to-‐play games, primarily MMOs and CCGs, and the business conMnues to grow strongly despite dire predicMons of the death of web. Our web traﬃc grew about 30% in 2013, and our revenue grew 55%. GeYng into mobile is an expansion of our current business, not a replacement. 3

4. It’s not like we just started thinking about mobile last year. We’ve been thinking about it since the launch of the iPhone. But the app store was such a closed ecosystem that we didn’t see what sort of role an social plaDorm/distributor could really play without being shut down by Apple. When Android came out we thought there was more of an opportunity since it was a more open system. So we built a light version of the web plaDorm for Android called Arcade. But it turned out that Android isn’t so open to anything it perceives as an alternate app store, and Arcade got yanked the ﬁrst day we launched. A_er some discussion we reworked some features and were allowed back up, but we were quite limited because we couldn’t a) sell anything or b) give the appearance of downloading games. UlMmately those limitaMons fundamentally blocked any real revenue opportuniMes for the Kongregate Arcade, and we stopped development in late 2011 when Adobe announce they were killing mobile Flash. But you learn as much or more from your failures as your successes and we got a lot out of the experience of building Arcade, including a fair amount of tech. Some other things we learned is that despite the promises of HTML 5 and Flash mobile the performance of browser games on mobile was consistently bad. On the good side we learned that we were able to drive a lot of traﬃc from Kongregate & Gamestop, and are now up to 2 million installs despite mediocre game experiences and zero UA. 4

5. A_er we stopped development on Arcade we stepped back and reconsidered our strategy. In mobile Apple & Google are the game plaDorms, but the problem we’ve always striven to solve with our plaDorm – developer friendly distribuMon – sMll exists. Demand for games is fundamentally inelasMc, and the race to the bofom on pricing in the early days of the app store has put developers in a hole it’s hard to climb out of. Prices for paid games would probably have to be in the $9.99-‐$19.99 range you see in the PC market for it to be more viable We know because we got most of it wrong when we launched our kreds plaDorm back in 2008. But over 5 years and 500+ games doing F2P on our plaDorm we’ve learned a lot. I expect a lot of you have seen previous talks we’ve done. So who helps developers with distribuMon & moneMzaMon? A publisher, of course. 5

6. We announced a $10M publishing fund last February Since that’s what we do well with on the web Not every game is going to succeed but we want every developer to feel we’ve treated them well work with us again To put our skin in the game along with the dev. A publisher should share the risk for it to be a true partnership Cross-‐promoMon from Kongregate web, our parent company Gamestop, and porDolio games 6

7. 6 of the live games are new Mtles, but 2 (Lifle Alchemist & Dragon Storm Gold) were live games we’ve taken over in the last couple of months. It’s about half core Mtles, including 3 CCGs (Tyrant, Bloodrealm, and Lifle Alchemist) and half casual Mtles like Sheep Happens, Run, and Endless Boss Fight. 7

8. Here’s a list of the Mtles we have out and what plaDorms they’re available on – our goal is to have every game we publish available on Kong web, iOS, and Android to maximize success, and several of our iniMal games are properMes already successful on Kong web. Tyrant and Sheep Happens have been out for at least six months on all plaDorms, but most of the rest of the live games are only on one plaDorm or have launched very recently, usually both. Because of that my talk is going to concentrate most heavily on Tyrant, which has been out the longest and has the best quality data. 8

9. Since I’m going to spend so much of the talk talking about Tyrant I thought I’d give it a larger introducMon. Tyrant is a CCG with a grify sci-‐fi theme built originally as a Facebook game by Synapse Games, a small studio in Chicago. They brought it to Kongregate three years ago and it’s been one of our most popular games ever since with excepMonal retenMon and good if not great moneMzaMon. When Synapse started working with us to publish the mobile version moneMzaMon was one of the things we focused on since we felt that there was a big opportunity to improve the depth of spend possible, mostly by adding in some deeper card progression and fusion systems, but also by increasing the card prices. Those changes were quite effecMve, and though retenMon decreased somewhat relaMve to the original version the overall moneMzaMon improved significantly. 9

10. It hit the top 60 in the gross ranks and has conMnued to grow. 10

11. I menMoned paid UA in relaMon to scaling so let’s start with what everyone is worrying about. Here are the CPIs we by paid by ad network for Tyrant in Decemer: they ranged from $2-‐$8, with highly targeted campaigns and video on the high end. These are prefy inMmidaMng #s, but with a high LTV game like Tyrant you can sMll do it profitably, though not every campaign listed here is. However with an extended revenue curve like Tyrant has (only ~17% of the 6 month ARPU comes in the first month) it takes both paMence and deep pockets to wait for the UA to pay off. 11

12. But that’s not the whole story: CPIs wary wildy by game. We’ve used just one network to get an apples-‐to-‐apples comparison there so here our average CPIs since September for most of our games. Games in hard-‐core, compeMMve genres like CCGs and MMOs have much higher CPIs than more casual games, but if the theme is appealing and/or the graphics are very strong the price comes down a lot. 12

13. Now take the daily #s here with a grain of salt because the sample size on a lot of these days is small and there were a lot of moving parts, but here are the CPIs on Facebook for Lionheart over the last 90 days, all but the last few of which were in test markets. As you can see CPIs are both higher in test markets than they are globally and that in each market they start lower and rise over Mme. This is a natural result of saturaMng a market and a source, but was exaggerated in this case because we weren’t tesMng and refreshing creaMves at the rate that we would for a game in wide release. To ﬁght the CPI creep you need to be tesMng and refreshing creaMves at least every 6 weeks. 13

14. A lot of the reason we can make high CPIs is that we credit paid campaigns with some value from organic users. In our oﬃce there are two camps on what mostly drives organics: one is that paid installs are helping to drive chart posiMon, and chart posiMon then drives organic installs, the other that players are telling their friends about the game. I think organics are a complicated phenomenon with elements of both, but long-‐term I think word of mouth is more important, especially if you’re not in the upper parts of the charts that get extensive exposure. This chart shows our organic and paid installs for Tyrant on IOS since launch, along with our retained DAU, ie our DAU less new installs to just show returning users. Early on there’s a prefy clear relaMon between UA and organics, parMcularly noMceable where we spiked UA around 8/28 and again in October. But long term the relaMonship has gofen weaker and weaker, to the point now where organics are higher than installs from paid UA, and follow the pafern of our retained DAU much more closely. I think that while people are most likely to share a game when they start playing it but there’s sMll some chance of sharing it at any point while they conMnue playing it, so the value of paid UA to installs is long-‐term and cumulaMve and likely cross-‐plaDorm, since the friend of the iPhone user might have an Android, and vice versa. Also changes in your game can help drive word of mouth. Anyone who’s been 14

15. It was prefy clear from the last chart that while UA is important, the app store feature we got for Tyrant along with the Gamestop promoMon were just as important in building our DAU. The eﬀect is much more dramaMc on Android since we were able to get more and larger features there. We’ve been able to secure features on for almost all of the games we have live globally on each plaDorm so are starMng to get a feel for how many installs you get from parMcular types of features. Apple generally features games primarily at launch, prefers indie-‐feeling and more casual games, and keeps their categories/placements fairly consistent. Google is more open to non-‐launch features and refeatures of games with good metrics, which is nice, but the feature value is much more variable because their arrangement changes more. 15

16. And will have similar qualiMes as long as the control scheme & playability are similar. Run is a fast-‐paced endless runner with instant respawn that’s been a viral traﬃc juggernaut on Kongregate web. When it launched on Android on December we seeded it with some promoMon on Kongregate and it went viral, hiYng 1.5M downloads without any further markeMng or features. There’s no easy way to tell how much was exisMng fans picking up the Mtle or new viral spread, though I suspect a bit of both. But I think that building a fan base on web and then using that to help launch a game on mobile is a very underrated strategy. Bloons Tower Defense 5 has been in the top 100 grossing charts for more than a year with no markeMng fueled by the huge audience they built for that series on the web over the last 5 years. 16

17. Bloodrealm is a CCG from Making Fun, with the same gameplay and features between the web version and mobile though with a lifle bit of lag. A_er a substanMal beta period on Kong (which allowed them to make substanMal improvements in metrics) the game was pushed broadly on both Kongregate & iOS in November. While day to day there’s variaMon the average ARPDAU between the two plaDorms is idenMcal at $0.19. Now there are two caveats to this data: 1) developers have generally reported Kongregate LTVs as 2-‐3x that of other plaDorms such as Facebook, so comparison between the FB version and a mobile version would probably reflect a similar difference. 2) ARPDAU on its own can be a decepMve stat because two games with similar ARPDAUs but different retenMon rates will have very different LTVs. In this case however I can confirm that the LTV by cohort is also virtually idenMcal between the two plaDorms, and thus retenMon as well. And finally if you’re wondering why I’m using a stat I don’t care for like ARPDAU it’s because I can safely talk about it and downloads without revealing our total revenue, which as part of a public company I have to be careful about, while sMll managing to share relevant informaMon. 17

18. In fact more than half of our revenue is coming from Android right now because our top performing game, Tyrant, has done so well there. 18

19. Here’s Tyrant’s breakdown of revenue by device. Overall our revenue is closer to 50/50 because other games have done befer on iOS. One factor besides the heavy Google features for Tyrant may be that it’s more popular on phones than tablets for some reason, perhaps related to genre. Lionheart TacMcs, which we launched two weeks ago a_er an 3 months in test markets, gets 50-‐55% of it’s revenue from iPad, and Tyrant has always ranked lower on the iPad grossing charts than the iPhone. 19

20. So let’s dig into the comparaMve #s by plaDorm. Here’s a chart of Tyrant’s ARPDAU since global launch on each plaDorm. On average Android ARPDAU runs 10-‐15% lower than iOS except in the mid-‐November to early January periods when there was a big influx of new traffic on Android from Google features. But the overall #s are actually masking a lot, as the traffic mix is quite different between plaDorms. The majority of our traffic on iOS has come through paid user acquisiMon and Gamestop promoMon in North America & Western Europe while on Android our traffic is more geographically mixed since the majority came through features. 20

21. Here’s a breakdown of our installs and revenue by country. Installs are fairly diverse but revenue is completely dominated by English-‐speaking countries, Western Europe, and Scandinavia though Russia is also fairly strong. 21

22. Here is the ARPDAU by plaDorm for just US traﬃc – outside the heavy feature traﬃc periods Android ARPDAU is very close and o_en befer than iOS. 22

23. In Germany Android ARPDAU is usually befer than iOS, parMcularly in the last few months. 23

24. Whereas the moneMzaMon of our Russian Android traﬃc is quite low relaMve to both Russian iOS ARPDAU and US or German Android traﬃc. 24

25. What’s going on becomes clearer when you dig into the devices. Most of the German devices are high-‐end Samsung Galaxy phones, whereas Russian devices are mostly fragmented, lower-‐end devices. 25

26. Devices are a prefy good proxy for demographics: people with new, high-‐end devices tend to be more wealthy and willing to spend than those with older or cheaper devices – the iPhone 5s has2x the ARPDAU of the 4s. Children are more likely to be using iPods. But aside from the demographics of the users: a lot of the older devices may just not play the game very well. 26

27. Everyone talks about Android fragmentaMon, and it is very real. But it’s been 7 years since the iPhone launched and 4 since the iPad and as you can tell from this chart there are a lot of different iOS devices out there, too, with different screen sizes, resoluMons, and levels of processing power, and since nearly every model sold well they’re sMll a lot of the older devices in use. It’s easy to hit performance problem, crashes and instability from too many high-‐res assets or 3D effects on lower-‐end devices. This chart is the tutorial funnel for Lionheart TacMcs early in its test market period. It’s a beauMful 3D game that looks fabulous on reMna devices but as you can see from the chart had very sharp drop-‐offs on older iPhones and iPod touches. The developer (Emerald City Games) was able to opMmize for the lower-‐end devices by using different menus and textures there, and removing lightmaps and other visual effects during bafles but managing all these different version has been more challenging and Mme-‐consuming than they expected. 27

28. While the device fragmentaMon on Android is worse than iOS the tools they give you to manage it are much, much befer. Detailed crash & freeze reports are extremely helpful in diagnosing and ﬁxing issues and if there are devices that you just can’t support you can speciﬁcally blacklist them. You can also block downloads based on other criteria, such as screen size, which is very helpful in blocking the proliferaMon of low-‐end devices in Southeast Asia. Being able to push beta builds through the developer console and then test them as if they were live is invaluable, second only being able to push a build live to users whenever you want and need to. 28

29. Unfortunately the google transacMon APIs are not as user friendly. A good example is that item prices are returned with a currency symbol rather than a currency code, so it’s impossible to disMnguish something charged in US dollars, Canadian dollars, or Mexican pesos, which all use the same sign. We work around this by puYng the price in the item name and parsing it from there but it’s a bit of a pain to manage. What’s more than a pain is that Google is very slow to verify purchases and overzealous in their idenMﬁcaMon of fraud, especially on higher-‐priced items. This causes customer frustraMon and forces you to ping their servers to check all the users transacMons every Mme they enter the game to make sure they’re granted what they’ve bought. 29

30. The receipt verificaMon I menMoned on the last slide is really important and this graph shows why. It’s the first two weeks of iOS revenue reported by Sheep Happens, a wacky endless runner we launched last fall, which at the Mme was not checking Apple’s servers that a purchase was valid before granMng the currency and many users with jailbroken phones took advantage of the omission. It turns out when IAP is free demand is very high! While the game did decently actual revenue was of course a fracMon of the numbers shown here. I promised you real numbers: these are simultanously real and very inaccurate. Nearly all of our developers had some degree of trouble implemenMng receipt verificaMon, either in the actual receipt verificaMon like Sheep Happens or incorporaMng it correctly in analyMcs calls and it wasted a bunch of Mme for everybody. We’ve baked it into our SDK now so developers don’t have to deal with it but it sMll causes legacy problems for some games, like Sheep Happens, because players aren’t forced to update so old client versions conMnue to send bad data. 30

31. I did a talk at GDC Next last fall about data problems and piDalls and used this image to talk about how under the surface data is o_en a steaming pile of corrupted, inaccurate shit. That’s true for web data but it’s twice as true for mobile for a several major reasons that are interrelated: connecMon issues, client unreliablity and client fragmentaMon. On the web there are just a few major clients, aka browsers, that provide data in a standardized way, events nearly always occur online so you can rely on your own server for Mmestamps, and your biggest headaches come from idenMfying people uniquely. On mobile you need to rely on the client much more, both because important events occur oﬄine and because the client itself is crucial informaMon. But even something as basic as the Mmestamp can be reported very diﬀerently from plaDorm to device to region. We recently had problems with the data from Lionheart TacMcs because a bunch of clients from Southeast Asia were reporMng the date in the Buddhist era calendar, where it’s 2557 instead of 2014 and if you don’t have the right Mme for events you’re screwed. 31

32. We’ve built our own SDK for developers to use on games we’re publishing to take advantage of Kongregate logins and badges and other features, and have now rolled analyMcs into it, but Swrve, Leanplum, Kontagent and many other commercial services will do a much befer job than you’ll do on your own. 32

33. It’s tempMng to instrument your game from the start with everything you think you might want to know but you’re not likely to get it all right, it will be overwhelming to QA, and expensive to store, which is especially frustraMng if you know it’s garbage. We’ve moved to a staged approach with analyMcs implementaMons where we have developers implement the most crucial stuff: player idenMficaMon, sessions, and transacMons (crawl). Once that is QAed move on to basic game-‐specific informaMon like tutorial compleMon, level progress, win rates, and pvp parMcipaMon which are the most acMonable. Finally once that’s solid it’s Mme to run with the really detailed informaMon if the game is deep enough to warrant it. Endless runners, ironically, probably only need crawl/walk whereas that last stage of data is very important in most mulMplayer games. 33

34. SomeMmes the hardest thing to know is that there IS a problem, but if you’re cross-‐ checking across mulMple sources they are easier to ﬁnd. We’re constantly cross-‐ checking our internal analyMcs against AppAnnie and Ad-‐X, which we use for markeMng tracking, and will soon add Swrve which will add another data point. 34

35. This is something that came up for us in part because of the gap between a publisher’s commitment to analyMcs and the developer – some of our developers are as into analyMcs as we are, but some have been implemenMng the schema more for us than for them. The result is skimpy tesMng on their side and in our hurry we haven’t always QAed enough either. On several games we launched into test market with fundamentally bad data and it was a waste of both Mme and markeMng $s. Everything doesn’t have to be perfect yet but you need at least the basics for retenMon, revenue, and player progress tracking. 35

36. A game with bad data is a black box. You might have a great game, and it doesn’t mafer. More likely you have a game that could be befer but without data it’s hard to know even what direcMon to go. Now I’m not in any way in the school that thinks you should be A/B tesMng every bufon color – for games to have soul and to innovate you need to look beyond data. But data is crucial in diagnosing what is and isn’t working, generaMng theories of why, and eventually confirming if your changes had the effect you expected. Sheep Happens was a black box –as you saw earlier the data from the game was quite messy, and we launched with them only parMally fixed and a hazy view of the metrics and issues with the game. We’ve done our best guessing at what needed improvement but with so much corrupt data in the system it’s difficult to tell if it has had much effect. Unfortunately the answer is probably not. 36

37. And you can really improve your game over Mme. Here’s Tyrant’s ARPDAU chart again which you can see increased dramaMcally over Mme even with conMnuing influxes of new traffic. Since they launched last August they’ve pushed nearly 20 builds, nearly all with various fixes for UI issues, performance across devices, and bug along with constant tweaking of the matchmaking algorithm, all working to improve the base player experience. Along with that every month or so Synapse has done a release of a major new system to increase the depth of the game, parMcularly the late game. Those features don’t necessarily drive moneMzaMon themselves, but they increase player engagement and retenMon without which there can be no moneMzaMon. What drives the revenue spikes you see is the regular release of new content, parMcularly of limited Mme events with rewards, which are Med to the release of new gacha boxes and occasional special offers. 37

38. Last summer when we first started launching games we were expecMng to spend 4, maybe 6 weeks in test markets and we pushed our first two games, Tyrant and Sheep Happens in that Mme frame. We had some internal deadlines that we needed to hit – the games needed to be out on both iOS & Android by the beginning of September to get significant promoMon from Gamestop because once GTA V and the new consoles started launching there wouldn’t be an opportunity again unMl a_er Christmas. For Tyrant this was the right call – while the game was missing some features that we knew were going to be important long-‐term, like guilds, and that the UI and matchmaking needed more tweaking the game was in fundamentally good shape with solid data and metrics. We didn’t get the fullest possible value from our early Apple feature but that was more than made up for by the value we got from Gamestop promoMon. But Sheep Happens was a black box that wasn’t ready. The game did okay anyway, and has been profitable for both us and the developer, but the value of the heavy Apple features we secured for it at launch were likely much, much less than they could have been. Holding a game longer in test markets definitely has some costs, and the pros and cons need to be weighed carefully. If you’re not going to get a launch feature or 38

39. Staying longer in test markets fits in with something I like to say, which is that things are a marathon, not a sprint. It’s definitely true that free-‐to-‐play games are a marathon. Good games can grow and maintain revenue for years, as long as the systems keep the players engaged and the developer can keep adding content and events. Tyrant started solid, but a lifle slow, and at launch both Synapse and us were a lifle disappointed since we thought the game was capable of more. Over 8 months the game has come to meet and exceed our expectaMons, hiYng top 50 grossing in the US iPhone charts just last week. A crucial part of that long-‐term growth story is the relentless pace at which Synapse worked pushing content and changes, making mistakes, learning from them, fixing them, pushing for the kind of LTVs that make paid UA profitable, even for a niche game with a grify theme. You can’t sprint forever, and since January Synapse has sefled into a steadier, more sustainable rhythm but the type of drive and speed they’ve shown is something we now look for in every team we sign, because the rate at which you improve a game mafers as much to its ulMmate success as the iniMal quality. 39

40. 40

GDC 2014 Core Games, Real Numbers: Going Cross-Platform

emily_greer

GDC 2014 Core Games, Real Numbers: Going Cross-Platform