Eps 2: Hyper casual as a business model
— The Israeli Gaming Industry PodBot
Since 2017, hyper-casual games have seen tremendous growth and both the industry and the players have embraced this new genre.
Not long ago we hosted a seminar at ChinaJoy where we talked about hyper-casual games with several industry experts, including Google.
As hardcore games are seeing their growth slow down, it's very likely that the top Chinese developers will turn their attention to mid-core and, more importantly, hyper-casual games for growth.
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Host
Ann Taylor
Podcast Content
While Hyper - Casual is not an official category in the App Store, many developers note that this genre is stirring up the "App Store." Top Free "charts. Controversy has been sparked by the recent rise of ad-focused games such as Super Mario Bros. and Super Smash Brothers. Rather than simply relying on ads, successful developers can tailor monetization to their customers, with some generating ad and affiliate revenue, others paying IAPs, and some preferring a freemium subscription model.
Simply being the first to market covers a lot of sins in the early days of business, like being the first - on the market, but it's also one of the best business models.
That's why hyper-casual games dominate the app store charts these days, and it's why developers seem to devote so little time to QS. Game development has been streamlined, streamlining the process of making and marketing these types of apps, which is what makes them so successful. I'm thinking of the first Facebook game that seems to be both live and in maintenance mode.
The mobile games market will be worth $80 billion in 2019, and mobile games overall will bring in more than $3 billion, with a significant chunk coming from hyper-casual games such as Clash of Clans and Super Smash Bros. for Android. Since almost half of all game downloads come from these types of apps, it is more important to generate a large portion of the game's revenue in the form of advertising revenue than advertising revenue from IAP-focused games. In hyper casual game, the vast majority of revenue comes from ads, but that's just part of a much larger picture.
Ads are very similar to IAPs in that instead of whales spending a lot on the app, users generate significant revenue by focusing heavily on advertising. The more important the revenue source from advertising monetization becomes, the more information is crucial and important for the business model.
Therefore it is important for app developers to adapt their implementation strategy to the number of users, the type of user base and the amount of available advertising revenue. Rather than simply relying on ads, successful developers channel monetization for each customer, with some generating ad and affiliate revenue, others paying for IAPs, and others favoring a freemium subscription model.
Simply being the first to enter the market covers many sins in the early days of business, such as simply being the first to enter the market. I'm thinking of Facebook, which seems to be in both maintenance and live mode, and I'm amazed at how little time developers seem to devote to quality assurance.
Katkoff says the app revenue from its games is relatively small, but the scale is large and the company is able to operate a huge volume business. Games like Playgendary and Flip Gun must compete with Clash of Clans as the top-grossing games in terms of downloads, even though hypercasual games dominate the download charts. If you make a mid-core casual game, you can monetize it, even though this business model is not sustainable unless you see an enormous amount of downloads.
Marketers have noticed that their audience spends significant amounts of time on apps, which has led gambling companies to look for ways to monetize their audience.
CleverTap lists four different ways to monetize hyper casual games, two of which are through in-app purchases and advertising. Many freemium apps include an app purchase that gives users longer game time, such as a free trial of the game for a limited time.
According to CleverTap, the number of Hyper Casual Games on the US market has increased by 170% over the last five years compared to the average of the gaming industry.
The rapid growth of Hyper Casual has meant that other genres have adopted ads as a source of revenue to offset the declining number of users making in-app purchases. The successful use of advertising monetization by the genre has had an impact on the share of app advertising revenue, which has increased by 34% in core games since the beginning of the year. In addition, marketers can use the massive Hyper Casual user base to promote other in-house titles and confront new audiences with their content while reducing UA spending.
Even though only a handful of players actually make in-game app purchases, the ability to generate revenue from users is highly attractive in a game genre that is able to fully integrate ads into its game flow. In fact, we have seen a significant increase in ad revenue in games such as Hyper Casual over the past 12 months.