Introduction

Jon Jordan (00:03.502)

Hello and welcome to the Mobile Games Playbook. Thanks for tuning in for another episode. This is a podcast all about what makes a great mobile game, what is and isn’t working for mobile game designers and all of the latest trends. I’m your host, John Jordan and joining me today, we have two experts. So we have Teemu Palomäki, a senior games analyst at Game Refinery by Liftoff. How’s it going, Teemu?

Teemu Palomäki (00:23.732)

Doing great, great to be here.

Jon Jordan (00:27.309)

Good, good. Also joining us, we have Sonja Skoglund, who is a game analyst at Game Refunded by Liftoff. How’s it going, Sonja?

Sonja Skoglund (00:34.503)

Very excited to be here. Thanks for having me.

Jon Jordan (00:37.453)

Good good. The reason we have you two in particular is you are experts on the Japanese games market, which is useful because that’s exactly what we’re talking about today. So I guess Japanese mobile games often appear in podcasts. I don’t think we’ve done an episode on it for a while. I guess it’s interesting because it is one of the larger sort of games markets in terms of sort of economics and also, a lot of innovation has clearly happened there, it was actually one of the first sort of big mobile games markets. And also, culturally, it’s quite interesting because there are some things that really appeal to the Japanese market, which obviously appeal globally, and some things which appeal to the Japanese market, which don’t appeal anywhere else in the world. So quite interesting from various points of view, which we will discuss. Teemu, are you going to kick us off with a sort of high-level approach? What are the specific things that Japanese mobile gamers sort of really like? What characterizes that market?

Japanese mobile gaming preferences

Teemu Palomäki (01:35.668)

Well, if we look at genres, for example, one thing that we’ve recently talked a lot about is how there is the location-based trend, which is on a totally different level than in Western markets, especially compared to the U.S. So, like in Japan, we have more variety in location-based gaming. There is obviously Pokemon Go, which is the, sort of ultimate brand there. But they also have Dragon Quest Walk for those who like turn-based RPGs or older legacy RPG brands. Pikmin Bloom for casual audiences actually made its first appearance in the top 50 this month as we’re recording it. So that’s also going up there. They even have like 4X location-based game with Nobunaga’s Ambition and Monster Hunter Now that we have here, an action RPG. And there’s also like Eki Memo, you can collect those girls who are also like based on train designs. So there’s a lot of variety, and I think there’s innovation coming up with Kingdom Hearts Missing Link coming there. I think it’s going to have some sort of location-based gaming, but they are hinting that you could also move around the world from the comfort of your home. It’s so interesting to see how that turns out. So that’s one that is massively different from the U.S., but also, like RPGs, the popularity of RPGs. It’s like almost half of the top games in the market are RPGs. And you see sort of they have a lot of anime-based or game-based RPGs there. And if not the like brand actually being from an anime, they have a lot of collaborations with different brands to buff off the RPGs. But then we see also sports. Much more of those sports titles popping up in top 200 compared to the West. Sports based on animes or like cartoony approach, sort of this arcade approach. They can go really crazy. If you’ve ever seen Captain Tsubasa, the way they play soccer is really over-the-top moves. Same with sort of Prince of Tennis or Haikyuu!! for volleyball. So we’ve probably mentioned a couple of times Uma Musume, a game where girls are racing horses and they’re competing, running around the track. So it’s really… Those genres, for example, are really popular. And I think Sonja can maybe elaborate more about like idols and rhythm games as well.

Rhythm and idol games in Japan

Sonja Skoglund (04:58.087)

Yeah, those are, you mentioned, rhythm games and idol games, so-called. Those are two other genres that really do a lot better or exist in a much larger space in the Japanese market than in the Western markets. And well, I think it’s quite common knowledge that rhythm games are on a very different level, the popularity in East Asia in general, but especially in Japan, there’s a long history of rhythm games in the game arcades. And there’s also, they’ve come a long way from just those Dance Dance Revolution, small arrows, and there’s a lot of innovation in the core gameplay there. And then there’s these so-called idol games. There are actually sort of two types, and one is this idol management sort of game where you collect a group of, well, idols, which are like celebrities who are very purposefully produced for business purposes, and people create huge fan bases for these idol groups. So there are idol management games where you collect these idols and then train them in these training programs inside the game. And then there are usually some interactive story elements embedded also. So that’s one type. Then, the other one is actually rhythm games and idol games combined, where you get to enjoy being a fan of these idol groups while actually playing a rhythm game. That’s where the music is taken from the idols’ real-life produced music. And then there are some games that have a whole group of idols, which are completely fictional and not based on any real-life celebrities. So, just for the game series, they created these completely fictional idols and produced music just for the game, and then you can play it inside the game. And this actually interestingly ties back to the sports category a little bit with Uma Musume. And I know we’ve talked about Uma Musume, but it’s a very interesting, very Japanese combination of a lot of things because it is an idol game in a sense, where you manage these girls that are horses but are basically idols. And then there’s the sports aspect. And they also have these concerts. So it also ties back to music games. So that’s a really interesting game to highlight.

Cultural influences in Japanese games and Japanese mobile gaming culture

Jon Jordan (08:12.237)

Yeah, I’m not sure how to unpick all that stuff there. One thing I will say is is something’s getting confusing when you’re saying idol games. It’s that’s I D O L as in an idol game, something of a character you worship rather than rather than often we talk about idle games. I D L E, which are games where you just let the game happen, which are quite popular in the West. But I guess you could have an idle game about idol characters. That would maybe be much too much. But yeah, good. So it’s a good introduction. And I guess what you said there shows, you know, on multiple levels just how different, even in terms of genres, the Japanese sort of market is and so many things to unpick. It’s really interesting that location-based games, so many location-based games have been tried with the biggest brands in the West, Harry Potter [Wizards Unite], I guess being a good example. They just haven’t worked. Whereas in Japan, for various reasons that we can sort of discuss, you have already mentioned half a dozen thereof I guess they’re not Pokemon Go success stories, but they are, you know, they are successful sort of games. Did you think that the fact that, you know, Japanese society is so based on sort of manga and anime, and it’s, and the majority, so the majority of the games will sort of be viewed through that lens. I mean, are there any games, successful games that sort of come to mind that aren’t sort of an anime type game? I mean, are there, do they have the Call of Duty’s or, you know, those sorts of things? Or does that just really not appeal to the Japanese audience?

Teemu Palomäki (09:45.428)

I think there’s room for those games as well. We see games that are popular in the West also be popular in Japan. But I think it’s quite safe to say that if people are making a game with the Japanese market in mind, it’s going to be manga, anime, at least sort of influenced by it heavily. So sort of having that cartoony approach and even like, you know, when you watch an anime you can tell those character archetypes that are there. There are massive fans for specific types of characters, so you want to have those archetypes even though they seem like a cliche. People are really looking forward to specific types of characters. Some people are really into these tsundere characters who sort of look like they don’t like you at all, they hate you, but then kind of like when you get to know them, they might be a little bit shy about it and kind of like you. And so you have these different types of characters and archetypes that people really love, and it shows.

Jon Jordan (11:15.245)

And I guess it’s sort of hard for… I mean, I’m not an expert at all on Japanese culture, but obviously, I haven’t been in games for a while. But I think it’s probably hard to over-emphasize just how the whole of Japanese culture is driven by manga and anime as fundamental to the whole society, no matter whether you’re a kid or an adult in Japan. Even if you’d probably… I’m sure there are lots of people in Japan who don’t like… who don’t read anime books. But it’s just part of the culture in a way that we just don’t have in the West, whereas it’s much more, you watch cartoons when you’re a kid, and then you grow up to watch, you know, Marvel films or something. It’s just really not like that in Japan, in a way. It’s almost like, yeah, there’s a whole, it’s not a subculture. It’s pretty much culture is viewed in that respect. So that’s sort of something to try and get your head around.

Sonja Skoglund (12:03.847)

Yeah, that’s a good point. Like you said, it’s not only kids’ cartoons; there’s a lot of anime and manga specifically written and filmed for adults. And it penetrates through the whole culture. And obviously, we also see that in the gaming market. Even if it’s not based on an existing anime or manga series, the art style of anime or manga is very prevalent.

Jon Jordan (12:42.573)

And I guess, as you say, even some games that aren’t based around that, if they are successful, they do end up then having anime made about them because that’s how people consume that. Any successful culture will be consumed in that way. So it becomes self-fulfilling.

Teemu Palomäki (12:56.724)

Yeah, they even have like, I remember there was also a movie about a mobile game. So there was this, I think it was when in the West was called The Alchemist Goat. I remember that mobile game, they advertised that they had like a movie theatre run of like a film made of the world of that game. So, even mobile games can turn into like these big-screen anime movies.

Jon Jordan (13:29.741)

It’s interesting that I hadn’t really thought about the sports stuff you were talking about before. So, was it right that you said there was Haikyuu!! for volleyball?

Teemu Palomäki (13:40.532)

Yeah, Haikyuu!! is the name of the anime series. So it’s a volleyball anime brand, and they’ve released a really successful mobile game for that brand.

Jon Jordan (13:58.157)

And even in that small stuff, would you see? I guess there will be, say, realistic soccer games and baseball games as well, but there would still be quite a big proportion that would be cartoon, anime sort of stuff.

Teemu Palomäki (14:12.372)

Yeah, yeah, and when it’s realistic, it’s sort of, well, aimed at a more mature audience, maybe. And, you know, I think the realistic sports that we see are mainly soccer and baseball, which are the big ones in Japan. Of course, those are also popular on the cartoony side.

Jon Jordan (14:38.189)

Good. Okay, so we have… Go ahead.

Sonja Skoglund (14:39.943)

And then this… Yeah, sorry. It’s also interesting in this one cartoony, like an arcade sports game about baseball that I played. They have collaborated with real-life baseball players. So also this overlap or mixing of these anime and imaginary worlds with the real world is also something in what we see more in collaborations, I think, in Japan than in the West.

Jon Jordan (15:22.509)

So again, sort of collaborations are something that we, when we’ve spoken in previous podcasts about sort of live ops and that sort of stuff. Obviously, collaborations are a massive thing generally for any mobile game. But again, correct my limited knowledge, I suppose, but the anime scene often has lots of, you have collaborative, you know, the worlds between these anime things are sort of mashed up together in lots of, you know, in every sort of situation. And none of these things are sort of, you know, walled gardens that sort of here’s my anime characters, and they never interact. I mean, it seems like there are loads of them; basically, the whole thing is it’s like a mashup.

Teemu Palomäki (15:55.732)

Yeah, you can go crazy with the collaborations. It’s like the games can have so many different characters just interacting there. But I think it’s always like one collaboration at a time. So, it’s not necessarily like multiple brands clashing at once or anything. But of course, the collaboration stuff stays in the game and is available. So, I’ve built a lot of my RPG teams around collaboration characters. So no original mobile game characters, but all collaboration stuff. Because those can be really strong for a while, of course. When they sort of fall out, they fall out fast. You don’t necessarily release new upgrades for those characters. So that they’re really powerful for a while.

Jon Jordan (16:57.453)

So that’s sort of some idea of the culture and the genres. And I guess the other important thing that underpins this is that the Japanese market is one of the sort of most highly monetized from an ARPU basis. So for individual players, the average that they’re going to spend is going to be, if not the highest, one of the highest sort of territories in the world. And I guess that the combination of those things, having its own culture and having people that are going to spend hundreds, thousands of dollars a year playing these games sort of combines the fact that you can have these sort of what to us might seem weird niches because you don’t need so many players to make them profitable because you have this sort of quite high monetization. So, do you want to talk a bit about monetization and how the Japanese market ends up at these very high levels?

Monetization strategies in Japan

Teemu Palomäki (17:47.924)

Well, it comes with the gacha mechanics. They are more varied in there. And I think it’s also not just the monetization mechanics but overall game design. So, to make the gachas appealing, you need to have something interesting to pull. So I think the way that the Japanese market is so character-centric also plays into that. And the characters themselves, one thing that is interesting to note is that in the West, the characters talk about the world of the game, whereas in Japanese mobile games, the characters often speak to you, the player. They’re sort of interacting with you, so you are forming this relationship with the characters. They also have the systems to support that. But characters are everywhere when you have that kind of relationship with the characters. They’re relatable content. Then, when you go to the gacha and pull for them, you are more eager to get them, and you build that relationship. And, you know, gacha animations. If I finish my thought with this, gacha animations are a form of art in Japan. So my favorite one is from Fullmetal Alchemist Mobile, where you have this sort of rotary phone that is ringing or rotary phone that you spin a three-digit number on. And that’s the way you pull the gacha. So you put the digits in, it calls, and then a train arrives, and from the train come the characters that you obtained through that gacha. So it’s more interactive, creative, and memorable, and it feels a little bit like you can affect the rates. To this day, I think it doesn’t affect the rates at all, but it sort of adds that element. Like if you’re going to a slot machine, you might put that coin to your hands and blow a kiss or something like I’m gonna do this now and you place it, you put that, you have sort of belief that you, this is improving your odds. So if you put your lucky number in that rotary phone, it feels like you can get better props or something. So it’s a form of art, whereas in the West, it can just press the button, and then you pop, pop, pop, pop, pop, you get the couple of shards that you obtain from the gacha. So, the excitement levels are totally different.

Sonja Skoglund (20:46.279)

And also going back to monetization and this character-centric game worldview. One thing that came to mind is this, especially in games where you collect these beautiful, sexy ladies as your characters, like Teemu mentioned, from all of these different character archetypes like tsundere or cute or innocent or whatever. Especially in those games, we see these player polls where the game organizes a poll for the players where they can vote for their favorite character. Then they promise that in the next big event, they’re going to bring content related to the character that’s most popular. So obviously, that’s a great way of securing your gains in advance and really catering to the audience.

Jon Jordan (21:54.605)

And I guess for, just to explain, I guess most people know what it’s all gacha system is but it’s but it’s basically a sort of random drop system, which is actually, as far as I know, the Japanese game companies invented it would have been like sort of 20 years ago in the first mobile games came out it was a sort of random and it was sort of I guess inspired by Pachinko machines, I think that was the sort of original idea at least and when you’re saying that it’s very character based, would it be then that most gachas would be then creating, you’d be getting a character out of that rather than like in the West you might get sort of gear or sort of costumes or say shards or something like that. But would it be the case in general that most Japanese games would actually be about characters rather than sort of accessories around characters?

Teemu Palomäki (22:45.556)

Yeah, I think that’s the safest way to go because people form the best bonds with characters. The people I think next were some animal mascots, those kinds. And the more inanimate the thing becomes, the less attracted you are to it, the less interested you are generally in it. So characters are the safest way to go.

Jon Jordan (23:18.445)

Hmm. And I guess that’s sort of, I guess, we’ll go on to localization or culturalization. You know, that’s sort of quite fundamental to how those Japanese games are. Whereas in the West, just the game designer would see things in that’s, yeah, you would have characters as part of your gacha maybe, but you’d have a whole bunch of other stuff. You could think, I think all these other cool things I can put in my gacha system, which you think would be much more appealing, but it’s a very deep level. It’s just what people are attracted to, you know, but it’s just very different.

Teemu Palomäki (23:45.94)

Mm—mm. Yeah, and then also the way you advertise the gacha. Sonja had a good example of this, like how the gachas can be different in the West and Japan, with Legend of Mushroom, I think.

Sonja Skoglund (24:05.415)

Yeah, that’s an interesting case. So, actually, Legend of Mushroom was first released in Japan and then a little bit later in the U.S. And I’ve been playing both of those versions. It’s interesting to see the differences and clear localizations between them. One is that the whole game, a big part of the whole game, is constantly pulling this gacha, which is a magic lamp that appears in the main UI, and you keep constantly pulling it. In this case, it’s an equipment gacha, and the focus is more on the constant small dopamine hit that you get from the gacha pulling. The gear is also quirky and a little bit funny, mixing fantasy and modern elements. So maybe that’s like an Asian take on it. I’m not sure. But the interesting part was that when it comes to differences between the two versions, in the Japanese version, again, characters, it’s not just the lamp, but there’s this goddess of the lamp that’s always standing beside the lamp, and she’s very sexy and beautiful and she talks to the player. And then, in the Western version, there’s only a very minor tutorial character who only appears when they introduce new features to the player. But in the Japanese version, the lady is always there. And it was just such a clear way to implement characters yet again. And when they were advertising for the game, they actually hired this actress to cosplay as the lady of the lamp. And she was singing and dancing or at least playing the game. And she was a very attractive lady. And so that’s also like one thing, like cosplaying as the characters is of course, originally a Japanese thing from the conventions and although we have a lot of it in the West now and all kinds of anime conventions and stuff but…

Jon Jordan (26:39.245)

Hmm. It is interesting that you’re having this breaking of the fourth wall. So the characters talking to the player, which again would be, I can’t even think. I’m sure it has happened, but I can’t really think of that as something that I see a lot in mobile games. Whereas, as you say, that could be something that is sort of how players, you know, it’s a very subtle, but very significant change in how a player would interact with the game world where, you know, I’m in charge of the game, and I’m getting. I’m just telling people what to do in the game or getting my characters to do these things, whereas the characters talking back to you, it seems subtle, but equally, if you expect that, then games that didn’t have that, you’d feel sort of like you weren’t very engaged with them because the characters weren’t doing what you were expecting them to do, which is sort of, in any cold way, talk back to you.

Teemu Palomäki (27:35.06)

Yeah.

Jon Jordan (27:38.509)

So, there have clearly been some Japanese games that have been massively successful in the West, and some Western games have been successful in Japan. Are there any trends we’re seeing there? Is there more or less of that sort of stuff happening? There are now lots of good localization, culturalization, and outsourcing companies that handle these sorts of things, so we’re much more technically aware of what we need to do. But is there anything you can talk about there in terms of stuff you’ve seen recently of games doing either well or badly?

Content and events in Japanese Games

Teemu Palomäki (28:17.268)

I believe localization is always important. So, no matter what kind of game you’re making, if you want it to succeed in Japan, you need to localize it well. The way that you translate this stuff, these days it’s popular to just throw stuff through Google Translate or ChatGPT or whatever. But having actual people translate it, check it, that it works. We’ve seen some localization examples where words are broken in the middle. And it can look very cheap. So doing the localization properly, of course, we mentioned the way you can help the appeal is through the characters, bringing characters to the front. Also, like recognizing Japanese cultural events, seasonal events. We have Golden Week starting very soon. So that is something that is often recognized in Japan. So it’s like a week of vacations in Japan where everyone is off and it’s at the change of April to May. So not much is happening during that time. I notice it mostly in the mangas that I follow weekly. Those are on breaks during that time.

Teemu Palomäki (30:10.612)

so forth. So recognizing these events that are significant in there.

Sonja Skoglund (30:20.487)

And also actually Golden Week is sort of the opposite. Like Teemu mentioned that the mangas go on break, but looking at games, that’s when people are on holiday, so they have a lot of time to play. So that’s a really good opportunity to engage players. And actually, there’s another example of Legend of Mushroom and differences between the localizations, because right now there is exactly a Golden Week event in the Japanese version, but obviously not in the Western version.

Teemu Palomäki (30:58.836)

Yeah, but you don’t need to limit it. I think Supercell with Pearl Stars, they had sort of Golden Week event going on in the global version as well. It doesn’t really matter. Like it’s cool skins and there are Japan fans outside Japan who enjoy anything Japanese-y. So seeing these Golden Week skins with like these Japanese cats, I think it appeals to certain audiences and cool skin is a cool skin, doesn’t matter what it’s inspired from.

Jon Jordan (31:37.133)

Yeah. And then, have there been any sort of Japanese games that you think have done a good job of being very Japanese and appealing to that local market, but also sort of doing well globally? Because I guess it is a bit dated now, but sort of historically stuff like sort of Puzzles and Dragons massively successful game, one of the most successful games ever, just in Japan. You know, Monster Strike again, another enormously successful game managed and didn’t really work outside of Japan, even though it’s made a billion dollars. Do you think the Japanese developers are getting better now, sort of appealing to both sort of audiences?

The global appeal of Japanese games

Teemu Palomäki (32:16.276)

Hmm. Well, I’d say, well, first, the first one that comes to mind, Pokemon, but that’s, that’s Pokemon Go, it’s, it’s developed by Niantic. So it’s sort of Western in that sense, but it’s, it’s a Japanese brand. And, and thinking of more, more Pokemon games, I think the, the Pokemon Masters X that, that is, a game that is having decent spikes. And if the IPs are popular enough, I think Final Fantasy VII Ever Crisis did okay for a while out there. But I think mostly if it’s these anime style games that are doing well in the West, it often comes from China, you know, Genshin Impact and Honkai Star Rail. So those are sort of devouring the space from like the games of anime fans. But…

Sonja Skoglund (33:29.415)

Well, there are also the Dragon Ball games, which are… Well, Dragon Ball obviously is a huge IP, also in the West, like one of the few animes that everybody knows, and they are very old games, so that probably has an effect in the equation.

Jon Jordan (33:53.197)

And just to go back to Pokemon Go, obviously, you know, it’s a Japanese-originated IP developed by an American company. In Japan, was that, you know, would there have been any obvious sort of a Japanese person playing that, realise a Japanese company, that particular game, didn’t develop it? Or does that actually sort of show that, you know, for the best games it doesn’t really matter where you are in the world there’s enough knowledge now that these things can be sort of global even though Japan is a somewhat separate market for something.

Teemu Palomäki (34:31.06)

Yeah, I think they probably noticed that it’s not like a Japanese game because they have certain sort of habits when making UI and I could see there being maybe a little bit more gacha elements or stuff there. But like, you know, mobile games they have these Western games as well. So I think it’s also very, very good for them. Obviously, they have enjoyed it very much.

Jon Jordan (35:12.877)

Yeah, yeah. Cool. Lovely. Let’s give everyone listening a bit of homework. So I guess Legend of Mushroom is one. But if you were going to encourage someone to download one sort of characteristic Japanese mobile game to take a taste of what we’ve sort of been talking about. Sonia, what game would you suggest people download?

Sonja Skoglund (35:38.343)

I have to say this is my personal favorite but it’s Heaven Burns Red and it’s something that I would not expect to see in the West. It’s anime style and it’s from Right Flyers Studios and they are known for a very elegant and sleek design and very deep focus in the story elements. So I really enjoy the story and there’s a lot of dialogue and a lot of choices and you get to play as a female character interacting with other females and creating these meaningful relationships and of course enjoy a turn-based RPG.

Jon Jordan (36:34.029)

Good. Teemu, what would you recommend?

Teemu Palomäki (36:37.78)

Well, one thing that comes to mind is Memento Mori. I think that was really beautifully experienced. It’s more successful in Japan, not doing so well in the West, even though there is localized version. But it has this really beautiful watercolor art style. Like really it shows that you can make really these beautiful experiences and this is an idle RPG, this time I D L E. So that kind of idle RPG, but really beautiful music, really like sort of it’s a great experience and it’s showing that these different types of games can be really popular. It has beautiful soundtrack, each character has their own song. So that’s something to check out if you want to see something more interesting from Japan.

Jon Jordan (37:45.005)

Mm -hmm. Cool. Lovely. Well, thank you very much for your recommendations, and thank you very much for your expertise in the podcast. Thank you, Sonja and Timo.

Teemu Palomäki (37:56.244)

Thank you very much.

Sonja Skoglund (37:56.455)

Thank you.

Jon Jordan (37:57.997)

And thanks to you for watching or listening to the podcast, whoever you are consuming it. Every episode, we are talking about what’s going on in mobile games, which is now an enormously variation of gaming around the world and lots of different cultural cultures, lots of different trends going on there. So I hope you are enjoying our episodes. Please do subscribe and we’ll see you next time. Bye bye.

Introduction

[00:00:00] Jon Jordan: Hello and welcome to the mobile games playbook. Thanks for tuning in for another episode. This is a podcast all about what makes a great mobile game, what is and isn’t working for mobile game designers and all of the latest trends. I am your host, Jon Jordan, and joining me today, we have two experts who are gonna be talking about the, I guess, as I say, the two sides of the coin of mobile advertising. So we’ve got plenty to talk about, and we have Kenneth Wong, who is the senior director of ads revenue at Scopely. How’s it going, Kenneth?

[00:00:33] Kenneth Wong:  Pretty good, nice to be on this podcast. So, I’m looking forward to chatting about all things industry-related.

[00:00:39] Jon: Good. And you’re on the ads revenue side of things. So, can you give us a little snapshot of what that entails?

[00:00:45] Kenneth: Yeah, so I manage the day-to-day operation for all the ad-related items for Scopely. So, we have all the different kinds of ad formats in our game. So there’s a lot of things, both in-house and external, in terms of communication that I manage, like partner relationships and internal partner relationships as well. So that’s a lot of things that we can go over in this podcast.

[00:01:13] Jon: Absolutely. Good, good. And I guess the other side of mobile ads is user acquisition. So, building out your audience. And talk about that, we have Yumin Gu, who’s the director of user acquisition. Let’s go, please. How’s it going, Yumin?

[00:00:37] Yimin Gu: Hi Jon, hi everybody. Hi, I’m Yimin, and I’m the director of Performance Marketing as we recently rebranded our team from User Acquisition. Yeah, so I’m leading the Performance Marketing team on the social side of the games for Scopely. Yeah, I’m super excited to be here and looking forward to chatting more about everything on the audience and growth side.[00:01:53] Jon: As you say, plenty to talk about. I mean, I think the mobile ads scene has been around for as long as the mobile gaming scene has been, but it seems to be from very much from an outsider’s perspective; it’s one of these things that is constantly changing. And I guess most people know it’s gone through some pretty big changes in the last two years. So, there is plenty to talk about there. But I guess as a  very headline thing, you both work at Scopely. One of the, I guess, one of the most successful mobile games companies over the last 10 years, I think, very, very successful over the last decade and still growing fast with a big acquisition from Savvy Gaming announced. They’re still fairly recent. So, I guess the best is yet to come for Scopely, but we’re not talking about Scopely per se. We’re talking today about ideas of performance advertising and ad revenue. So, what do you want to break down? User acquisition has changed a lot recently. Where do you think we are at the moment? Where are the things you focus on at the moment that may be a bit different from what we saw a year ago?

Challenges of user acquisition

[00:04:07] Yimin: Yeah, well, I think the industry is just an ever or ever-constant changing evolving space. And with it, of course, UA strategies and channels are changing too. In my opinion, the UA landscape as a whole is adapting to two main shifts. One is the way people consume content. And two is how the advertising ecosystem changes. For the first part, for example,  I think our audiences are more used to consuming content in different ways. Like they are watching short-form videos more and consuming influencer content a lot more than before as well. On our side, this has led to an expansion of marketing channels. I think a lot of the performance marketing teams are now leveraging more like influencer marketing or influencer performance marketing.

And another example, the way that people watch TV is also different now than before, right? Like, I think we used to be more watching linear TV, and now connected TV has become more predominant, especially with the younger demographics. CTV has now become more accessible and also a more versatile media platform. It’s also becoming a more leveraged media for performance advertisers. So yeah, I think more teams are just leveraging these emerging techniques like influencer marketing, like connected TV. Also, with all that, I think it requires tighter integration with internal brand teams’ communications to reach a broader audience, for sure.

And to my second point, with the change in the advertiser ecosystem, everybody knows about it. There have been so many changes around data privacy regulations, which has led to the rise of contextual advertising strategies that rely on content and user behavior more than personalized targeting. So, of course, more publishers are also trying to use AI and machine learning algorithms to optimize segmentation, predictive modeling, and campaign optimizations.

But yeah, overall, just to stay competitive in this industry, we just have to, I feel like, stay on top of all these new emerging trends and challenges. As of now, a  lot of teams are taking advantage of new marketing channels and leveraging AI a lot more than before to acquire new users and drive success, but we’ll just have to be very adaptive in this market.

[00:07:32] Jon:  I guess what you’re saying there is interesting because it’s the way I see things. Things were never simple, but definitely, before all the tracking stuff went. There was a general playbook everyone played against. I mean, whereas now you have, not only does that not work anymore, you have all these ever-increasing amounts of channels, and I guess the other thing is for you guys who have quite a wide range of genres that you’re trying to generate audiences for, then the thing that works for game A is probably, unless it’s exactly the same genre, it’s not gonna work for game B. So you have these multi-directional situations where everything’s changing, and that’s why stuff like AI machine learning comes into play because there’s no way that human beings could use that, deal with those amounts of variance in a logical way.

Challenges in user acquisition strategies

[00:08:42] Yimin: Yeah, for sure. I think because Scopely is structured, and different  UA teams support different clusters of games. And, of course, we communicate so often to keep each other posted on the recent changes we’re seeing. But again, to your point, Jon, it’s impossible to share everything on a tiny basis and to adapt and adopt learnings from one another very, very frequently. So, for sure, leveraging AI is one of the solutions that we are adopting more than ever. I think it’s just an inevitable trend and a more efficient solution than ever before.

[00:08:33] Jon: I guess it’s interesting because the basic thing you’re trying to do is, you’re trying to get people to download your games. I mean, that’s the highlight. And I guess the highlight is that you’re trying to get the people who are going to play your games a lot and spend money on those games. I mean, that’s the headline. That’s what UA is about, isn’t it? That’s why you now call it performance marketing, I suppose because it’s the performance of you’re spending money on this end, the end of the flow, you want to have more money being generated. That’s basic business 101. But, so with that thing, how does that play across  Scopely with all its games? As you say, there are different teams running different things.

Are there learnings that you can do across the whole portfolio, or does it break down very much into atomic learnings that worked really well for this channel for these months, and then you throw it away and start again? So you’re not too worried about having some logical system of how it works. You’re just looking at it, and it worked. Does that make sense as a question? I guess it plays into AI. I don’t know if this is the state you have at the moment, but you could imagine that in an AI or machine learning where the result is you put money in, and you get more money out, and you don’t really care what happens, or do you care what happens? Is that part, do you think of your expertise that there is that market knowledge that you have that can influence the system?

Complexity of game-specific UA strategies

[00:11:22] Yimin: Yeah, I think there are definitely things that can be applicable from one to another. But the reason that we now have to leverage AI more than ever is that we want to create more customized experiences for our audiences. Right? And we also want to create more cohesive experiences for our players. Our goal is not to just have them download the game. It’s as you said, play the game, engage with the game, and in the end, probably monetize in our game. To achieve that, we’ll have to make sure that our users have expectations when they see our ads. And then, when they land into the game, they see that the game actually achieved their expectation. And then they stay within the game, retain in the game. And continue engaging and monetizing in a game. That’s our goal.

And for that, we’ll have to do a lot more customization, which is for sure a lot of effort across different teams. We work so closely with our creative team. We work so closely with our product team, all that. So yeah, for sure. It is not just like once we do it and it can be applied to all strategies, it’s more like a catered and bespoke strategy per different gains.

[00:12:55] Jon: Yeah, I don’t know how much you can say about this, but I was reading an article a couple of months ago, and it was just about certain types of games and the amount of creativity they were generating was just like thousands and thousands of ads. I mean, it was just absolutely incredible now that the workflow required to create the ads to fit all these channels was always becoming like game development in of itself in just the amount of work that was required from art teams. And I guess, but I guess ALA solves that as well, does it? Or maybe it doesn’t, I don’t know.

AI in creative production processes

[00:13:35] Yimin: Yeah, I mean, I think generative AI is now also becoming a more leveraged tool in performance marketing as well. I’ve seen it being applied to a lot of creative production processes, especially with simpler assets like iterations adding voiceover or having some simple localisations. So it is, it definitely has provided a lot of value. But again, I think right now, it still needs a lot of more manual human input. For more complicated projects, I think we still need to rely on our internal creative team to produce the assets and cater for this more customized experience for our users.

[00:14:37] Jon: And I guess going back to AI solves it all, one thing that I could do if that was not bounded by your manual input is obviously you could come out with ads that were really successful or really successful in terms of driving audits, but they were not coherent to your game. And I guess in industry, there have always been people who have made up ads that had nothing to do with their game, which obviously works really well, but equally, that’s, I guess, from a reputation point of view, that’s not something that reputable companies like Scopely want to get involved with.

Importance of brand enforcement

[00:15:12] Yimin: Yeah, absolutely. I think we all know what type of ads you’re talking about, and we’ve probably seen them like a hundred times. That’s exactly why we still need to have human input into all this content. Having some core values and brand enforcement is definitely very important in all the messaging that we deliver to our audiences. So, for sure, as a UA team, we work closely with our brand team for a lot of the asset approval as well to make sure that we are following our brand guidelines to deliver the core values to our audiences.

[00:15:59] Jon: And one final thing on this point, you mentioned the influencers a few times, and I guess influencers, I don’t know, five or six years ago, when they first started coming in, we saw quite a lot of activity around that, but it seemed like in a lot of cases, it was not very, necessarily very sustainable, or it was quite hard to fit into the performance marketing flow because you talk back then at least when I was covering it you’d pay a 10 to 1000 dollars to someone to do a video about it and then they next week they do a video about something else and so it’s all quite hard to certainly be attributable. Have you found that the ecosystem is now more mature, and you can drive a sustainable audience through there? And because obviously there’s we always hear about these massive influences and on these channels bigger as ever, but I  wonder now whether, so we have this situation where there’s a lot more, I guess there’s a lot more smaller influencers who may not give you scale, but if you can handle a lot of influences then that gives you a lot of scale in a more coherent way than maybe some of these very top-end expensive ones.

Influencer marketing trends

[00:17:17] Yimin: Yeah, I think whenever there is a new trend in the market, we need to give the audience some time to educate themselves. I think over the past few years, our audiences are now more used to watching those influencer-promoted content. Now, they understand more that this is how influencers make their lives. And as long as I think the promoted content is more smoothly embedded into their content, then I think it’s probably a much better advertisement to the audiences. In terms of attributing performance, I think there are still two different types of influencer campaigns that we run, one similar to what you just mentioned. OK, yeah, we pay them differently. The pricing model is more on cost per content. They are not really compelled by how many impressions they need to deliver, how many clicks they need to drive, and how many installs they need to drive. So we still view those campaigns more like brand awareness driven.

But there are also, I think, a lot of the industry professionals from the performance marketing side are now joining a lot of those influencer agencies and not only influencer agencies, but there are also teams from bigger companies that are now sectioned out to dedicated to performance marketing. And the campaigns that they offer are more achievable and more performance-driven. And with those, definitely, it is a much better-fitted type of campaign for performance marketing.

[00:19:28] Jon: I think that’s a good point. It does maybe certainly journalists are always thinking of things happening all at once. And as you point out, it does take a surprising amount of time for the audience to get educated on how these things work. And I guess for these industries to grow up and certainly when it comes to things like being able to attribute audiences to different influences, that does take much longer than we think.

Okay, that was good. That was a good overview of where we are on the performance side. Thank you, Yimin.

And Kenneth, you’ve been very, very patient there. Raring to go. So, you’re the other side of the coin. And I have to admit, that’s an area that I  know less about. And I think it’s maybe an area that maybe has not been changing as dynamically. But what do I know about it?

[00:20:01] Kenneth: Oh no, no, I’m learning so much from Yimin.

[00:20:19] Jon: Tell me what’s been going on when it comes to driving revenue.

Transition and challenges in ad revenue

[00:20:24] Kenneth: Yeah, so like you already said, right, it’s the flip side of the coin. So whatever Yimin is faced with in terms of challenges, we are also facing the same thing. Primarily, the first, obviously, is privacy, right? Privacy is a lot like right now with Apple, with the IDFA we’re talking about, the industry averages around 25% ish in terms of people out of LAT.

So there’s a lot of people that we’re not able to talk to and serve targeted ads to. And it is a very chicken and egg thing, right? People are always like, hey, I don’t want to share my info. But at the same time, why are you showing this wealth of ads? And I was like, well, you can’t have it on both sides, right? So for us, it’s very difficult because they are complaining about wealth and user experience, about we’re not serving the right ads, but they’re not willing to pass the concept to us to serve them targeted ads. So I think that’s one key thing that hurts performance. Bidding, as we change into a model of bidding tech right now, most of the networks and partners we’re working with are heading that way. It’s really changed a lot of our operation, I guess, advantages of having any big team where we have the resources to dig into the data and optimize. And that really changes the landscape of where ad monetization is.

And then the other thing is about consolidation. Like in the last few years, there’s so much consolidation, so many M&As. Essentially, what it does is, if you think about the people in the auction house, you have fewer and fewer players. So you have fewer and fewer players who are willing to bid higher and higher to get the maximum performance and revenue for my side. So I think that’s another challenge.

Last but not least, Yimin talked about the shift in the performance marketing budget. So, a lot more money has gone to influencer CTV. Those will not get back to our pocket, like the publisher’s side pocket, right? So that also means that the pie might be, if it’s not growing, it’s standing still. So you add all these factors into it. We’re definitely not in the rosiest place. The huge growth that we’ve seen in five to six years is gone. So how, essentially, what we’re doing is keeping things afloat, and how do we look forward to the next big things that allow us to have the next growth, essentially?

[00:23:02] Jon: Hmm. Yeah. Has that influenced that slowing down? Do you think that has influenced the types of games, not maybe the sculpture making, but it’s all generally in the market? Obviously, if there’s a big growing way in which you can generate ads, money, or revenue from ads, developers are going to be like, right, let’s do more of those things. So do you think there’s been a  switch more towards, right, let’s really focus down on in-app purchases, or is that just too obvious?

Shifts in game development trends

[00:23:32] Kenneth: Yeah, I always think so. Yeah, definitely, there’s just a shift in terms of, if you think about maybe three, four years ago, the rise of hyper-casual, right? And where the state of that genre is right now, it’s not dead because we still very much need hypercasual because it’s fueling the ecosystem. But at the same time, you see less and less, and it becomes more and more difficult.  And that’s one of the reasons why that space might not be as, I guess, high growth as another genre. And there is always the preconceived notion that, at least for the developer side, it’s easier to convert people than to show them the ads because they are developers at heart, right? It’s like they want to make AAA titles. They want the user experience. They basically think ads are evil, ads are bad, like, you don’t wanna show any ads unless I have to, so I do think there is a trend. It is a common struggle with a lot of my friends in the industry as well to pitch ads internally as well.

[00:24:47] Jon: Mm-hmm. Do you think we’re talking about education around the ad model for influencers? Do you hold out any hope that education around gamers will mean that these opt-out rates change significantly? Or is that just yesterday’s model now? That’s gone now.

Addressing privacy concerns and user education

[00:25:08] Kenneth: Yeah, I would say so. I mean, we just have to find new ways to adopt these new rules, right? And I guess that’s the fun thing about being in this industry. You’re never at the plateau, like you always are, you’re never at a peak where the mountain is like, hey, I’m ready to retire. Like just sit still and just let things go. There are always new rules, new policies, new regulations that flow into the mix to make our job more difficult or more exciting. It depends on if you’re a half-full or a half-empty guy, right? So I think we’re adapting. We’re at the stage of how to get a new format into the game that talks about better user experience, less invasive, but at the same time is an additional source of revenue. I think there might be something on the horizon about that, but we’ll have to wait and see. Our industry sometimes doesn’t move as fast as I wanted to.

[00:26:02] Jon: But it’s in some ways ironic that the big battle that was won was incentivized ads in games, which, from all the data I saw, most gamers love those. They’d be like, can I have more ads? Because they give me the things that are in my game. And it’s ironic that the ability for gamers to love ads has now been taken away from them, and they get these ads they don’t want to see. And they’re not so valuable, so they don’t get the same incentives. It was absolutely, from your point of view, I’m sure it is absolutely the wrong thing to break on that.

The future of ads, privacy, and mobile UA

[00:26:35] Kenneth: Yeah, I mean, the fundamentals of the system, if you think about rewarded ads, opt-in ads, it’s still correct, right? It’s that the privacy itself, I think, goes back to platform education. I have discussed it with Google recently, and it’s like, hey, what are you guys going to do? Because soon they would follow Apple’s route in terms of removing the first-party data. So, like, are you gonna be as strict as Apple? Because that essentially is one of the reasons why my side of the coin is to have more challenges than ever before, right? It’s about if you look at the pop-up and say you have all these small tags, and then the next thing you see is ask the app not to track. Anyone who is not in our industry will click that button because it’s so obvious that you should not, and they’re not being specified what they’re tracking, not at least in a bold statement of, hey, we don’t care about who you are and where you live. We don’t know those things. We don’t know your banking information. We just want to serve you more reasonably, related to you. And that’s the experience that everyone wants. And I think that’s where it has to come from at the top, if you like, at the very top in terms of platform. If the platform does a good job in natural education, everyone within the ecosystem will benefit from it. So, of course, that’s bigger and easier said than done because they have a billion-dollar industry that is looking for a billion business today, and they need to run on it. So yeah, we’ll, we’ll see what happens, but I don’t think it’s the format itself, but more about the user education.

[00:28:09] Jon: Yeah. Good point. Well, as we come to the end, I guess I’ll ask both of you, Yimin, we’ll go for you first. What do you think in the next year or so, do you see, do you think there’s gonna be any sudden changes? Is there gonna be any step-by-step function going on there with something like AI coming in or, as much as anyone can see the future? How do you see that one playing out?

[00:28:46] Yimin: Yeah, I guess we’ve already touched a little bit, but the use of AI is definitely going to be more and more prevailing. We already are seeing it being used in creating advertising assets. And probably it’s also being used in, like, game art creation as well. Right? And I think as more companies are going multi-platform, there’s probably a growing effort to create unified user profiles across different devices and platforms while we still respect user privacy and everything. And I think AI is also probably going to be leveraged a lot in this whole process as well. The technologies have become more sophisticated, and they can already deliver more relevant content and ads, but I think in the future, it’s gonna get a little more advanced. And yeah, I think, as Kenneth mentioned earlier, we’ve seen a lot of M&As in the industry in the past years. Now, there are fewer but bigger players in the market.

And to this whole hit topic about more ethical and sustainable advertising practices, I think we need all stakeholders in the space to collaborate more and together, maybe we would be able to work towards establishing some better practices for user privacy and data management. Yeah, but like, I think it’s all my personal perspective into the future of mobile UA, but the industry is just so dynamic, and it can be influenced by a lot of unexpected events and new technical breakthroughs that we currently don’t know, right? So yeah, we’ll just have to stay adaptable and remain informed of the latest.

[00:31:20] Jon: It’s certainly interesting if there was, and I think there maybe is a long-term trend towards people owning their own data. And then that creates some interesting models about allowing you to track them and giving you their data for maybe in-game assets or something like that. And that maybe solves the interruption we’ve had at the moment with platforms breaking what was quite a good model. Kenneth, how do you see next year?

[00:31:49] Kenneth: Yeah, I mean, we’re definitely in the year of transition, right? So we’re definitely trying to understand what the new world is going to look like. I do believe that one of the formats I’m very interested in is in-game advertising. You see it a lot in terms of Netflix, right? Product placement is key to Netflix’s success. So, being in the amount of time people are spending in games, I’m still surprised at how it is not more, I guess, impactful in terms of mobile advertising in games.

But the good news is that there are more companies doing it now. I think it’s going to be on the rise. And I think that’s probably one of the better user experiences in terms of advertising that, hey, you get the brand in there, but then you’re still playing the game. You’re not exerting out. If anything, the user experience is probably the best. Right?

It goes to everything else about AI and privacy. And I agree Unified ID will be something very interesting. I hear some big platforms are thinking about in-game surveys, about things like what they can do in order to collect first-party data. And I think that’s the key, right? Collect as much first data as possible in the way that they play. How do we create a dynamic experience because of that? I think that’s another key point.

In terms of AI and ML, I think the machine learning part is more related to the UA side, but on AI for us, it’s definitely we are already using automated tools to help become more efficient in terms of a lot of the operational tasks, we automate it so that, we save time and use those time to do more like out on others things that might be, helping the business, right? In terms of thinking about A-B testing, thinking and segmentation, those are the things that are top of mind for us, for sure.

[00:33:50] Jon: So I guess that’s summarized that in the medium term, you get, or at least hopefully get, some optimisation boost from just this new technology. The AI stuff is clearly going to be important, but maybe in the long term as well, we hope that there’s going to be some more structural changes as everyone’s a gamer now. So I think, I think the nice thing is I think, people realized I’m giving my data to Facebook, and not only am I not getting anything from it, I’m getting ads or that data has been given out to people. I don’t want to have that data. Then that’s clearly one thing. But if it’s like I’m playing a game that I love and it’s not really my personal data, it’s my gaming data. And if I’m getting more stuff in the game that I love from doing that, then I think that’s a very different dynamic. So maybe, hopefully, in the long term, games will become more valuable for advertisers because it’s not your real-world data in the same way it is for these other products.

[00:34:47] Kenneth: Exactly, exactly. It’s a virtual world of data, for sure.

[00:34:51] Jon: There we go, that’s the hopeful future. Well, thank you very much to Kenneth and Yimin for their expertise and for helping us try and unpick some of these interesting dynamics that are going on in space. Thanks for your time.

[00:35:04] Kenneth: Well, thanks for having us.

[00:35:06] Yimin: Thank you for hosting us, Jon.

[00:35:08] Jon: And thanks to you for watching and listening to the podcast, or however you are consuming it. Every episode, we talk to people who are deep into the mobile games industry, the largest single part of the games industry and one that is reaching billions and billions of people and is really fascinating in terms of all the dynamics and what’s going on. So please subscribe to the podcast, and I’ll see you next time. See you then, bye-bye.

Introduction and celebration of the 50th episode

[00:00:00] Jon Jordan: Hello, and welcome to the Mobile Game Playbook. Thanks for tuning in for another episode. In fact, I’ve just been reminded this is our 50th episode. Well done to us.  If you haven’t listened to all 50, you need to have a look at your podcast history and see what we’ve been talking about for the last 49 episodes. Just a reminder, this is the podcast all about what makes a great mobile game, what is and isn’t working for mobile game designers, and all of the latest trends.

I’m your host, Jon Jordan, and joining me today, we have two experts to dig into a particularly interesting area. We have Kalle Heikkinen, who is the chief market analyst for China at GameRefinery. How’s it going, Kalle?

[00:00:40] Kalle Heikkinen: Very good. Thanks for asking. How about you, Jon?

[00:00:42] Jon: Not bad at all. 50 episodes, wow. That crept up on me there.

[00:00:47] Kalle: Wow. That’s amazing.

[00:00:48] Jon: Good. I think for the first time– It’s always exciting to have a new expert, so we have Inka Reinola. How are you doing, Inka?

[00:00:57] Inka Reinola: Inka, yes. I’m doing fine. How are you?

[00:00:59] Jon: Very good. You are another Chinese market expert at GameRefinery as well. Obviously, we are talking about China. It’s hard to know where to start with China, I think, with it being the largest mobile games market for quite a while just in terms of having a lot of people who play a lot of games, but increasingly also is the place now where games are made that are successfully globally, and not just in the Chinese or the Southeast Asian region. Kalle, you’re going to kick us off. Just give us a top overview to get our minds into shape around the Chinese mobile games market. Then we’re going to drill into some various topics as we go.

Overview of the Chinese mobile games market

[00:01:42] Kalle: Yes. I was thinking about what makes the Chinese market so special, and I really made it down to three major points, I think. I would say, first of all, it’s like you said, Jon, the market is huge. They have a big domestic market that has a big appetite for gaming. For example, last year, the market size was something like $45 billion. 500 million people in China play online games, which translates to 52% of the population. That’s quite interesting numbers, and that’s a huge market by any standards.

The second point is the access to capital in the market and access to a very talented and relatively inexpensive workforce. There is money to make investments domestically as well as overseas. That’s why we see these splashy investments: Tencent buys shares of Riot, Epic, Supercell, and stuff like that. As I mentioned, great access to relatively inexpensive labour then enables studios such as miHoYo to exist that have a headcount of something like 4,000 employees or something like that.

Then, as the third point, I would say the regulations in the way that they shield the domestic market from foreign games to enter the Chinese market. I know that we are going to discuss this topic later on. Let’s just put it that way: it has never been a very straightforward process for Western developers to enter the Chinese market and operate their games.

[00:03:31] Jon: As you said, we’ll discuss this; it’s not always been the easiest place for Chinese developers either.

China’s unique gaming history

[00:03:38] Kalle: That’s true as well. Also, I think it’s good to– People a lot of times ask why is mobile so much associated with Chinese gaming and stuff like that. I guess just giving a bit of context around that could be interesting as well. Concepts like games as a product, boxed products and stuff like that, and console gaming in general, never actually played a big role in China. There are various reasons for that. We don’t want to go there right now, but things like piracy and the fact that console gaming was banned for a long time in the country played a role.

The gaming population was always exposed to free-to-play and mobile gaming from the get-go. There wasn’t a big shift from box products or console gaming to free-to-play we saw in the West. Instead, what we saw is that for a lot of Chinese players, their first exposure to gaming was through mobile and PC, and the prevalent business model has always been free-to-play in China.

A lot of Chinese also live in relatively small and cramped apartments, and the families are big. There’s often multiple generations that live under a single roof, so it’s not easy to find a place where you can actually have your PC rig set up or TV console set up installed. Even if you did, gaming has never been commonly perceived as a healthy hobby. The underaged have always been forced to go outside or play secretly, and mobile devices allow you to do that if you understand what I mean.

[00:05:29] Jon: That’s a good point to know. I guess the point at which free-to-play mobile games were getting big was also the point at which you had this big change in the Chinese market as well. You have, obviously, a large population and a lot of very strong middle-class people developing there just at the same time when the world is really getting free-to-play mobile, and there’s just no history of gaming anywhere else.

You have that a little bit in Japan, but Japan would obviously be massively into consoles as well. In Japan, you have really strong consoles, not a lot of PCs, but a lot of mobiles, but in China, just all that growth and all those interesting games were just pushed into free-play mobile. That’s just why it very quickly became this enormous power.

[00:06:11] Kalle: Yes. That’s a good point. There are overlapping timelines there, for sure.

[00:06:18] Jon: Cool. That’s our headline. Now, Inka, you’re going to go into a bit more about what’s going on trend-wise at the moment, which is obviously– Give us some detail.

Current trends in the Chinese mobile games market

[00:06:28] Inka: Yes. It was a bit of an oral market at first, so Tencent and NetEase still dominate the market. Mid-core is still a big thing, but actually, interestingly, the casualness has been on the rise right now. It’s like last year: Mid-core lost 7% of the revenue market share, casual actually grew 4%, and casino 2%. There are a lot of different interesting things in the casual world that have been affecting this, and one of the most interesting is the game called Eggy Party. It’s this stumble guy type of game, which has very deep social experience. For example, you can walk into a shop and see other players at the same time there. Eggy Party was actually the third biggest in Q2, and it’s grown into this whole big thing within a year. That’s drawing a lot of casual players in. In addition to that game, there are also a lot of other casual games that are interesting. For example, there’s one merge game called Fat Goose Gym. Merge games are not very common in China, but that has been very popular. General-wise, there’s also a lot of interactive story games that have been published. Not quite recently, but there are new interactive story games every now and then, so it’s definitely growing. Also, there’s this cozy game thing. It’s also in China because there’s this one tycoon game, which is this very beautiful water-painted soothing game where you manage a village somewhere in the fantasy world. It’s very cozy and soothing and a nice gameplay experience. Also, feature-wise, there’s interesting stuff happening, like limits on gacha spook gacha discounts. They have all become more popular, and there’s a big difference between the top 20 games and other games. The overall idea is more casual, I think.

[00:09:01] Jon: You go ahead.

[00:09:03] Kalle: Go ahead.

[00:09:03] Jon: When you say cozy games, that’s more like a genre or a style of game that makes you feel comfortable.

[00:09:11] Inka: Yes. I think that’s also a Western thing. In general, people like to have these cozy games, and apparently, China also has this kind of thing happening that some people want to play these more chill games, not so stressful. Yes.

Social elements in Chinese games

[00:09:30] Kalle: I just wanted to add on the– Inka mentioned about the socialness of the game. If you look at basically all the top games in China, but also the casual games, we mentioned Eggy Party, which is obviously entirely based on social experiences. Inka mentioned the social hub that is there, and you can create your own home there, decorate it, invite friends to come over, decorate the home with them, and engage in all kinds of social activities in the game with your friends. Also, the Fat Goose Gym that you mentioned, the merge game–One of the things, there’s actually a lot of interesting aspects in that game because, in the West, the merge of two genres has been a little bit of– How should I put it? Stagnant in the sense that we haven’t seen large feature evolutions in the genre. I’m not saying Fat Goose Gym is doing anything super wild there, but what they have there is, for example, a chat function. They have friend lists and send-us features, which are something that we haven’t seen in the top-grossing Merge Two games. That just tells about the Chinese developers and their emphasis on the social aspects of games. No matter the genre, they are thinking about how we can add social elements into the game, which obviously, as we all know, is a huge weapon for you to utilize if you think about retention and how to make your players stick to your game and stuff like that. They are definitely masters of that.

[00:11:13] Inka: The Chinese people especially love the social aspect of the games, but of course, it’s like in Western games, it has also become more popular to have some kind of social elements. Maybe it has something to do with China having a lot, so we don’t know.

[00:11:33] Jon: I guess, again, very high level, not an expert view for me, but mobile apps in general are much more sophisticated in that respect in terms of China. People in the West say people are spending too long on their mobile phones or on Instagram or something like that. Obviously, in China, you have these– We’ll see what Elon Musk manages to do with X, but this idea of everything apps. You have these apps that are Facebook, Twitter, and shopping all merged into one.

I guess, in general, that audience just expects a more sophisticated experience from just it being a game that you have your game friends in there. People are just much more, I think, used to sharing that sort of stuff. At least, that’s my impression.

[00:12:25] Kalle: Yes, that’s a good point. There are a lot of gaming experiences in China that, like you said, they offer under one roof. As to say, they offer a lot of different experiences. Just to give you an example, you have Honor of Kings, which you all know is a MOBA game, but you can have four-guys mode there, you can have an auto chess mode there and stuff like that, or QQ Speed, which is a Mario Kart racer. You can have a dancing game mode there, you can have among us mode there and stuff like that.

They’re very quick to look at what’s trending not only in China but also in the West and then add those elements that they see trending to their own games. It doesn’t matter if the core genre or the core loop in the game has anything to do with that trend that they’re looking at. That’s always very interesting to see when those things happen.

[00:13:29] Inka: Yes. Also, the addition of something else in the core game is the thing. For example, in the Fat Goose Gym that you mentioned and I mentioned before, it’s a merge game, but there is this menu where you can access multiple different mini-games. You will never get bored because if you’re bored with the merge game, then you can play some other type of game mode at the same time.

I think the new games now have added even more of that stuff than before. There’s also this new MMORPG called Justice, and that one also has a really social wall where you can see where your game friends right now are doing whatever they are doing inside the game. I think they’re thinking about it even more than before.

[00:14:22] Jon: Maybe a silly question, but I have to ask it.  Obviously, you talk about games, which I guess the translation or the transliteration of something like Eggy Party or something like Fatgoose Gym obviously sounds funny in a maybe different way to us. In China, does something like Fat Goose Gym— Is that just like a translation of those words? In China, does that seem like in English, stumble guys?

[00:14:49] Inka: It depends on the game. Sometimes, they have their own translation name, but sometimes, we just need to put it into action by ourselves, and it might sound a bit silly.

[00:15:01] Jon: Yes, because I’m wondering, there may be phrases in Chinese that the game title plays off of, which would make sense to a Chinese audience, whereas for us, it just sounds like no one here would release a game called Fat Goose Gym, or I don’t think they would do that. [crosstalk] Maybe. I don’t know.

[00:15:17] Kalle: I know that Eggy Party, at least, is the official name that they use, but actually, with Fat Goose Gym, I’m not 100% sure if one of our analysts made it up or if we look it up from somewhere. That’s actually something that I’m not 100% sure about.[00:15:31] Inka: Yes, unless you’re a writer.

Changes in player demographics

[00:15:33] Jon: Yes. Interesting. From what you’re saying there, it’s interesting that mid-core, which is Chinese and Asian markets, has always been very focused on because that market size is better. I guess maybe if that’s going down a little bit, maybe the market will expand a little bit. Can we make that as a broad trend, or is that my making stuff up there?

[00:16:01] Kalle: You mean that the market expanded beyond mid-core to agile and other spaces?

[00:16:06] Jon: Are people playing less mid-core and moving on to these other things? I imagine over time, more people who wouldn’t call themselves gamers eventually end up playing games, so you have a widening of the audience but maybe becoming less concentrated in the more core element.

[00:16:25] Kalle: The way I see it is that I think we, as players, at times, might be motivated by different things. If we think about games, like I mentioned, that a QQ Speed has– Maybe a mid-core game is a better example. If Honor of Kings has a casual-ish game mode in there, I think a lot of people don’t mind playing that casual-ish game mode, even if it happens inside a mid-core game.

Especially these big games that have tens of millions of players, there are so many different player types and so many different motivations to play the games that a lot of them might have additional motivations and appetites for the game genres in addition to, let’s say, the mobile gameplay in Honor of Kings. I think that’s just adding more value to these players and giving something that they can– the specific motivations that they might have. I guess that’s how I think about that.

[00:17:55] Inka: In addition, I think that it might have something to do with the same thing as in the West, that the gender who play the games have also diversified. Maybe earlier, it might have been a more male-dominated thing, and then it’s more female players. Often, they play, for example, interactive story games, customization games, or something else casual. There’s a need for those genres to– Yes.

[00:18:29] Kalle: Yes, that’s a good point. I think it was researched some time ago that the demographics, for example, for Honor of Kings, was– The percentage of female players was really high. It was close to 50% or something like that, so that was really surprising. No wonder that they’re also looking to serve that kind of demographic.

Chinese games going global

[00:18:58] Jon: Honor of Kings is like a mobile MOBA; it’s effectively a League of Legends type game, isn’t it? That would be an interesting point of view if it were that the audience had a wider demographic because you have these games which are about one thing but have all these other things in there. That’s a more interesting audience. Whereas it is striking– In the West, I don’t know, probably culturally that if you had a shooter game and then put a merge in there, the family would be– Maybe this is me putting too much stress on the point, but it seems to me maybe that Western ordinances treat the coherence of the game as that’s quite important.

If you have a game, the game needs to make sense. You can do weird things in the game, but there needs to be some sort of reason why you’re doing weird things in the game. Whereas I think Asian markets, not just for China, it doesn’t matter if you’ve got a shooter game and you put a merge game in there. If everyone likes it, that’s fine because we’ll get on with it.

[00:20:00] Kalle: Yes. Then, on the other hand, in the West, we’re seeing a lot of hybrid games, and we have things like puzzle RBGs that combine mid-core elements with certain casual elements and other examples like this. Yes, I get your point. Maybe in the West, it wouldn’t be that easy in a way to pull that kind of thing off.

[00:20:18] Jon: I think for a live game, you probably find the core audience. The core audience generally gets very moany about things they don’t feel are part of the core experience. Anyway, let’s move on. I guess one of the other big trends over the last probably maybe five years, more than that, but previously, Chinese were already good at making games for China, Southeast Asia, maybe Japan, Korea, but we’ve really seen now, I guess, Chinese games be very successful globally.

The Chinese developers co-develop or have access to IPs like Harry Potter and Diablo and all these things. Really that’s been, I think, quite a big change to my mind that Chinese games aren’t as big globally as they are in China. Do you think that’s a fair assessment? Is that a big trend, or am I overseeing that?

[00:21:11] Kalle: Chinese games not being so big?

[00:21:14] Jon: No, they are so big now. Previously, Chinese games tended just to be big in Southeast Asia or China or those areas, whereas now I think Diablo clearly was– There’s lots of discussion around that game and how grind it was going to be, but I think most people just think Diablo Immortal is a really good game. That’s my impression of it, at least, the fact that it was made by a Chinese developer. Call of Duty Chinese developer. Almost like all the big IP games now.

[00:21:46] Kalle: Yes. I think there’s been a definite change that we see a lot more China-originated games in the West and globally as well. If you look at, for example, the forex strategy space in the West, it’s all China games. Really, it’s dominated by them. We see they have a big presence in genres like RPGs and shooters. Where I think the next big move is going to be is going to be casual. We are already seeing some signs of that in Merge Three; for example, makeovers have origins in China, and games like Gossip Harbor by Micro Fun and stuff that I think will get bigger.

Chinese regulations in the gaming market

[00:22:41] Jon: Cool. One thing we headlined at the start was Chinese regulation. I don’t know how much detail you want to go into on that one because that could be a podcast in and of itself, all the changes that have happened.  How do you want to inform us about the Chinese regulation of mobile games and the impact that has?

[00:23:00] Kalle: I think, as you said, this could be its own podcast, and definitely, I’m not the expert out there when it comes to this topic, but it’s always been an interesting one, and definitely as a China analyst, you get exposed to this stuff. I guess what I want to just go through is the different types of regulations that are there because that’s also sometimes a bit confusing.

People talk about regulations, but what do they actually mean? Obviously, there’s regulations on the market entries for Western developers in China. You need that special license to enter the market. Maybe some of the listeners might know that there were several years when no licenses were given to Western games, but now, in the last year or two, these regulations have been slowly being eased off. That’s one thing.

The second thing is that there are regulations on children’s playtime and money spent. How they are tackling this is with different kinds of locking credential requirements and stuff like that, but according to some of the reports and research that I’ve found, apparently, the restrictions can be bypassed quite easily. Actually, when minors’ playtime has been researched after these regulations have been implemented, there hasn’t really been any major decline in minors’ playtime. It might be that these regulations haven’t worked as well as they were initially planned to work.

The third one is regulations on the content of the game. China being China, there are things you need to consider when it comes to LGBTQ content; for example, you cannot criticize certain things about China in games and also about sexual topics and stuff like that. That’s also a bit different when it comes to operating in the West, obviously. Then monetization regulations.

One thing that comes to my mind straightaway is, for example, that starting from, I think, 2017, all the games have had to disclose their gacha drop rates, for example, in the game. There’s a lot of different types of regulations. When people talk about regulations, it’s always good to clarify what kind of regulations they actually mean.

The challenge of Western games in China

[00:25:49] Jon: In terms of the first one, are there any notable Western-developed games that are doing well in China these days that would be good to point out?

[00:25:59] Kalle: There are some, but there is a clear change that has happened. I’ve worked here for seven years, closely following the Chinese market. When I started, it was very common for Western developers to have the same game with the same game ID that they have in the West in China as well. Whenever there was an update to the game, you could always rely on it. It’s the same build, the same ID, the same update, and the same content. Of course, they still could have the texts in the game, copywriting, translating, and stuff like that, but it was the same build, the same game. That has completely changed. I think the change happened three or four years ago.

Nowadays, you have all the Western games that we see in China, let’s say, Supercell games or Playrix’s games and stuff like that. They operate with their own IDs. They usually have a partner company that they’re cooperating with. Maybe it’s NetEase, maybe it’s Tencent, maybe it’s something else. If you look at the publisher of the game, that’s usually the publisher of the game.

They might have been not only translated but really localized. Maybe the live ops monetization has been localized to a much greater extent than what the differences were seven years ago. There has been a clear shift when it comes to that. You asked what kind of games there are. There’s a couple of Supercell games, Inka, you can actually correct me if I’m wrong, but I think Clash of Clans is in the top 200. We have Brawl Stars there. Then we have Homescapes: Gardenscapes, Inka, does something else come to your mind?

[00:27:54] Inka: No, I think that’s pretty much it.

[00:27:56] Jon: Really?

[00:27:56] Kalle: Yes. One thing to know is that the number of these games has been decreasing all the time. Now it’s a very interesting time to look at how things will evolve now that new licenses are also given to Western developers. Will we see new Western-originated games getting into the top 200, or is it going to stay the same?

[00:28:22] Jon: Certainly remember when Supercell started launching there, it was seen as a very big thing. I guess that was the peak of when the Chinese market was more open, and I think it’s been downhill since then. Actually, that did remind me of one thing we have mentioned in passing a couple of times, and it may be good to go into a bit more detail.

We do mention Tencent and NetEase as the two big companies in China. Can you give some idea of just how big they are? It is not like we’d say, “Oh, Activision and EA are quite big in the West.”? There’s quite a lot of other ones as well. I don’t know the exact figures, but they are just enormously bigger than anything else, aren’t they? It’s all a duopoly.

[00:29:04] Kalle: Yes. It’s a very drastic difference, especially if you compare it to the Western market, which is much more fragmented. If you just look at the, let’s say, top 200 grossing games, you look at the publisher, if you had an Excel CSV output of the publishers of the top 200 games, you would see a lot more fragmented charts of the publishers. Then, in China, NetEase and Tencent have a huge, huge market share of the top 200 games. I don’t have any exact numbers to throw at you right now, what is the exact percentage number, but the difference is like night and day if you compare Western and Chinese markets.

[00:29:49] Inka: Also recall that Honor of Kings takes a really big market share of overall revenue, and it’s the top one game.

[00:29:57] Jon: Yes. I think at one point it was– Was it 100 million DAUs or something? I think maybe it’s dropped a little bit since then, but it’s the biggest game in the world on any platform by miles.

[00:30:09] Kalle: Yes. An interesting thing is it’s still, I think, in the top 10 downloads. Even if it’s, I don’t know, seven, eight years old games. Yes. People, I guess, turn out for a little bit and then they reinstall the game, and it’s always at the top. Yes, interesting.

Future of the Chinese mobile games market

[00:30:27] Jon: Good. We’ve had a look at where we are and a bit of the past. How do we see the future of the Chinese market? What products are going to be there? Any significant changes, or is it going to continue in the gradual upward trend that we’re seeing?

[00:30:47] Kalle: Yes. When it comes to Chinese publishers, I mentioned this already, but they most likely will try to gain even more foothold in the West because the Chinese domestic market is– Of course, all the markets are highly competitive, but the Chinese market is fiercely so. The Western markets are very, very attractive for Chinese companies. We mentioned the acquisitions that they’ve made and stuff like that. I see them as an active player in the West in the future as well. I already mentioned that I think the next big moves are going to happen in the casual space.
One interesting example of that is Micro Fun. I mentioned this already as well. They operate the game Gossip Harbor, but they have several other merge games as well. Some of them merge three games, and some of them Merge Two games, but they have a clear portfolio strategy where they cross-promote inside one app the other app so that you get rewards in the app that you’re playing if you download the other app and do certain tasks there. They’re definitely trying to move their players across their portfolio games and then increase the overall value of their portfolio that way, which apparently is not–Let’s put it this way. I’m not sure if it’s 100% something that you actually are allowed to do in a sense in the West, but yes, that’s something that Micro Fun is doing. I think that strategies like this will be something that the Chinese publishers will definitely consider. Then, just regarding M&A, I think that in the future, they will most likely be challenged by Saudi money. We’re already seeing some big moves from, for example, Savvy bought Scopely and stuff like that.
In the future, with the M&A things going on, I think they’re going to get more expensive for Chinese companies to engage in just because of the fact that the competition of the investments is also getting higher. Of course, on a macro level, now the overall M&A market has cooled down a little bit, but in the longer term, I do think that it’s not going to be so easy for them for various kinds of reasons to engage in that strategy as well.

[00:33:37] Jon: Yes.

[00:33:38] Inka: I would also add that I think that because there’s a lot of these Chinese games that have been published in the Western market, they’re exactly the same, and sometimes it doesn’t work because it’s maybe a bit more Chinese in taste. I guess that they will get better at localizing them to the Western market in the future because younger people may understand better how to do that localization. I believe that they will get better at that.

[00:34:10] Jon: It’s almost the reverse of what you’re saying, Kalle, where, to begin with, Western developers were putting just their normal game into the Chinese markets and then hoping it did well. Maybe for the last few years, Chinese developers have been putting their Chinese game into Western markets and hoping it does well, but actually, they’ll realize, “The game we have for China it’s a good game, but we need to just–” Maybe some subtle differences or maybe some more substantial differences over time is a way to optimize that for different markets. Certainly, the taste of Western gamers is still quite different from Chinese and Asian gamers. Maybe it’ll be the reverse trend that they’ll be learning from that way. Cool. Good. Thank you very much to Kalle and Inka. I hope you enjoyed that. Every episode, now we’ll be episode 51 next, wow, we’ll be talking about what’s going on in the mobile gaming world. There’s just an awful lot going on, very dynamic. Very big markets and these big companies coming in, and it’s always changing. I hope you subscribe via your podcast channel of choice or by the video. Now, I am doing a video. Thanks for watching and listening, and come back next time. See you then. Goodbye.

Introduction

[00:00:00] Jon Jordan: Hello and welcome to the Mobile Games Playbook. Thanks for tuning in for another episode. This is a podcast all about what makes a great mobile game, what is and isn’t working for mobile game designers, and all of the latest trends. I’m your host, Jon Jordan, and joining me today; We have one expert, but what an expert he is, Teemu Palomaki. Good to have you back on, Teemu. Your official title is Chief Game Analyst Japan for Game Refinery, and you are talking about one of the most defining, I guess, Japanese games today. So you are the perfect man for this. Tell us what we need to know about Final Fantasy.

[00:00:36] Teemu Palomäki: Great to be here talking about it. I’ve played a lot of them. I’m hoping I will be able to shed some light on things that could be helpful for non-Final Fantasy developers today.

[00:00:54] Jon: Yes, it’s a massive subject, and it’s one of the longest-running. I mean, whether you see it as an interesting franchise, isn’t it? Because pretty much most of the games are single games, but to some degree in some shared universe. Then there are some direct sequels, but then there’s an awful lot of side-quests and multimedia, and over time, that’s become bigger. Very interesting from that point of view. Also, we’re timing this now because Final Fantasy VII: Ever Crisis has fairly recently been released as a mobile game. Again, that’s another retelling of the classic Final Fantasy VII game as well. That will be something we’ll cover. How do you want to start? How do you want to start this massive overview?

What makes Final Fantasy special

[00:01:42] Teemu: First, what makes Final Fantasy so special? Thinking about it. Obviously, as you mentioned, there’s connections. Some follow in the same universe, while most of them are totally different and maybe share only gameplay mechanics or themes. I think that’s what makes it so good, at least for me. The way they can keep things fresh. If I play Final Fantasy VII, which is a sci-fi world, and then I play Final Fantasy XVI, which is the latest one for PlayStation 5, which is sort of like Game of Thrones, like medieval Europe thing.

Those don’t have much in common if you look at them like that, but when I’m playing them, there are these elements that make them familiar and easier to approach. I think that the way the series evolves is the way that it catches people’s attention and keeps them interested in it for a long time.

[00:03:09] Jon: I guess there’s always the view that unless you really don’t like RPGs, which clearly that’s not the franchise view then. If you do, you’ll have a favorite, but you’ll probably have one or a couple of games that you really like historically because the story really worked, or for the more modern ones, it’s just something that really chimes with you. That means you’ll always be interested in the next one, even if the setting isn’t something that you like or, for some reason, you don’t like the one. It’s an interesting sort of what is very basic advertising. That’s one of the reasons it’s lasted so well.

Obviously, the quality of the games has been great. Anyone who’s ever played a Final Fantasy game and liked part of it is like, “Well, I wonder what this next one is going to be like.” It seems that sometimes, let me just say, with James Bond films back in the day, where everyone always watched the next one, even if the last one was rubbish. There was always that idea. You know, some of the Final Fantasy games are really actually not going to be very good, but there’s enough good stuff in there that you’re just like, “They’ve learned from their mistakes before.”

Hits and misses in the Final Fantasy series

[00:04:15] Teemu: Well, mainline Final Fantasy, so obviously, some games are considered massive hits. 7, I think, 10 would count as a massive hit. 16 is a really good hit right now, despite the smaller install base in PlayStation 5. There are those that people consider misses, like Final Fantasy VIII, which was a bit off-putting for many, and 13 is always getting a lot of hate from the fanbase. That’s the main line. That is also the case for the mobile games, the spinoffs that are on mobile. There’s been a lot of really weird ones that have not resonated at all.

One example was the Final Fantasy All the Bravest, where you just had a ton of different characters, no story, no anything. It’s just monetization, and not really much to do. There’s just a lot of effects happening on the screen, and players really didn’t like that one. There have been spinoffs from the Final Fantasy-type zero game. There was an Agito game about the school setting. Since Type-0 didn’t resonate well with the players, the spinoff didn’t resonate either. There’s been a lot of mistakes. Most recently, the Final Fantasy VII: The First Soldier, you might remember the Battle Royale game. I think it lasted only four months before it was killed because it was trying to do something ambitious.

Personally, I liked the gameplay, what they introduced to the Battle Royale setting, and the way you can kill monsters; you can choose to go PvE to focus on the monsters or PvP and try to kill the players. It was interesting, it was fresh, but the game just didn’t keep me hooked long enough, and it seems like it didn’t find its audience at all.

Comparison of Japanese and Western audiences

[00:06:38] Jon: I guess generally, we’d be, say, comparing the mobile ones to the non-mobile ones. Clearly, mobile games are cheaper to develop, and so there’s a level of experimentation there that is more addressable. Then also you have this problem with mobile in a way that the– Particularly on mobile, the way the Japanese play mobile games compared to how non-Japanese or Westerners play mobile games is very different. Whereas if you know you’re making a console game, you have to make it work everywhere.

Mobile has more flexibility, but equally, it has more stratified audiences. Every Final Fantasy game has probably, we can say, sold more in Japan than not in Japan. I don’t know if that’s actually true, but you would think broadly that a lot of its hardcore audience is more Japanese than it would be globally.

The flexibility of the Final Fantasy IP

[00:07:38] Teemu: Definitely. Looking at the performance of different Final Fantasy games, as I was looking through them, they’re always performing much better in Japan. Where in Japan, gachas are more favorably looked at. Whereas here in the West, not so much, people tend to shun them. Especially the console game audience. You have to remember that these fans of this IP, they’ve played console games from, like, if they became fans somewhere between 1 and 12, they’ve never had enough purchases in those games. They grew up thinking that this is like a whole game, and any additional monetization feels like a scam for them or a rip-off.

Still, there are those success stories that still resonate in the West as well. I listed a lot of those games that were not received so well, but there are good games performing well. Brave Exvius is doing quite well. Brave Exvius: War of the Visions is also a spin-off from that mobile title. Then the Dissidia, Opera, and Omnia doing well. Final Fantasy XV: A New Empire is their 4X game. I don’t know how, but it found its audience. If I consider a Final Fantasy gamer, I don’t think of them as a 4X type of player but as an audience.

[00:09:31] Jon: That was quite an interesting one, wasn’t it? Because actually there is– Machine Zone, at the height of its power, was doing these massive complex 4x games with very mainstream advertising around it as a UA funnel. Then they signed a deal with Square to basically reskin one of their 4X games as a fun fan game, which is interesting in and of itself that Square, in a way, would, I’m going to say, allow someone to do that. Obviously, they do those things, those license deals are to make money. Equally, I think those machines owned 4X games, even at the time, they weren’t greatly loved among most people. People who played them loved them. It was an interesting use of the Final Fantasy license. Then there’s actually been another one, which hasn’t been so successful.

There are actually two 4X games from Machine Zone using the Final Fantasy license. That is interesting, it shows nothing to do with RPGs, but there is amongst maybe a small subset of people who really like playing and paying for games. Actually, Final Fantasy is a license that really works in a way that you wouldn’t think it would. That’s a positive to the flexibility of the license to attract an audience.

Experimentation with the IP

[00:10:56] Teemu: Yes. I think that’s one of the success elements for these games that the Final Fantasy mobile games have done well. If we look at Brave Exvius, it was developed by Alim, who was the maker of the Brave Frontier game. This Brave Exvius Final Fantasy game is basically like a reskin of the Brave Frontier game, but now with Final Fantasy and all the additional fancy animations, the CGX attacks. That’s the game that introduced us to collaboration characters of Ariana Grande and Katy Perry, who are now Final Fantasy characters as well.

Then the War of the Visions, a spinoff of the Brave Exvius, is developed by Gumi. Those are the makers of the Alchemist Goat game, which was really a popular crit-based RPG game in Japan. It was okay in the West, but it’s killed now. Once again, this game is pretty much a reskin of that game. There is an existing concept that they then mix with this Final Fantasy IP. If there is enough overlap with interest for players, then they succeed quite well.

Utilizing source material for success

[00:12:37] Jon: I think that’s a good point where you have these– Brave Frontier is a perfect example, I suppose, of an incredibly successful game, pretty much just in Japan. Western audiences, unless you’re really into JRPGs, it wasn’t mass market there. Final Fantasy is sort of that license that you can take something that you know works at least to some audience, and then Final Fantasy, by putting that license on it, you know you’re going to attract 10 times more people to at least download it and see what on earth it’s like. It’s a very interesting global play on that.

As you also pointed out, I think going back to the experimentation that Square Enix does on mobile, my impression is all those games that you just mentioned Square weren’t developing in them. They were publishing them, but they had well-known Japanese developers taking their style of game and then putting Final Fantasy in there. As you say, Final Fantasy games are often– These characters fighting against evil is a bit of a cliched thing.

Those characters always have interesting or interesting interpersonal relationships. Which I guess is something else, which is a characteristic of the Final Fantasy games that the setting doesn’t really matter there. Even if the storytelling and if that FMV stuff is somewhat a bit of a cliché, it actually works. They seem to elevate the story, the plot, and the characters to a higher level. Which may be, again, another characteristic of that franchise. I guess looking at JRPGs on a very broad scale, the other big comparison in Japan is Dragon Quest, which is equally as big in Japan, but just never has worked in the West for reasons I wouldn’t know.

Comparing Final Fantasy and Dragon Quest

[00:14:27] Teemu: Yes, maybe the Final Fantasy aesthetics work better for the Western audience. You mentioned a lot of these were created by companies other than Square. Square Enix has also had a good hit game developed by themselves for mobile, the Mobius Final Fantasy. Which was created by the big stars of the company who are like, the current brand manager for Final Fantasy was a producer there. The people who worked on that game are now working on the upcoming Final Fantasy VII Rebirth games and really filling big boots. They had made big mainline games before.

When you put the best people to work on these, those people that have made those great console games, when you put them to make the mobile game that is meant to be a great experience akin to the console gaming experience, then they can create something great. Mobius Final Fantasy was doing really well. I think part of the reason why they killed it might have been so that they could get those good people to work on the other project, which is the Final Fantasy VII remake trilogy.

[00:15:58] Jon: I guess, if there’s a less experimental game that you know is coming with a Square stamp of approval, then you just push that out slightly. I guess the other thing is, we were talking a bit about the FMV, the full motion video where you’re funny that you’re playing with these slightly down red characters and then suddenly do an attack, and beautiful graphics come into play. Obviously, back in the day of Final Fantasy VII, that was the big thing, and that was because you couldn’t run those graphics in real time. Whereas obviously, now you can, but it’s still that nostalgia, even though technically you could do it all in FMV, I suppose. That’s funny.

I guess another characteristic of it is the audio and the music and all that stuff, which, again, is something that those games always have. They never have a bad soundtrack. That’s the absolute sort of– you know you’re going to start with good music.

Music and nostalgia in Final Fantasy

[00:16:50] Teemu: It’s Final Fantasy soundtrack. Those are always great. I think that’s also one thing that makes the games stick in your memory because when there are those impactful moments in the games when you hear the music in those, the music is memorable. It also hits your feelings whenever you’re listening to that soundtrack when you’re at the gym, or running, or commuting or whatever you are doing, working. Then you remember those moments, and it just builds the connection better. The sounds are always definitely important.

[00:17:34] Jon: You’ve been playing a lot of Ever Crisis, the latest one. Do you want to go into a bit of detail on that, obviously based on the Final Fantasy VII Classic World?

Final Fantasy VII: Ever Crisis

[00:17:45] Teemu: Yes. The Final Fantasy VII: Ever Crisis, is a really interesting experiment from Square Enix. I think it’s doing okay now, the little bit that we’ve seen its performance. What the game does is it tries to compile all of these different additions to the Final Fantasy VII World into a single mobile game. What they have done is they’ve remade the Final Fantasy VII original story, and they’ve also remade Final Fantasy VII Crisis Core, which is the prequel one.

Then there’s also currently in the game the original story from The First Soldier, which was the failed Battle Royale game. There is a storyline about that game which is the mobile-only part of the story. What they can do and what they are planning on doing is also introducing playable content from the movie Advent Children and the novels Traces of Two Pasts or On the Way to a Smile. These stories that are not playable and novels I think most fans of Final Fantasy VII have not even read. Bring those new things in there. Really nice experiment on how to bring a console MIP to mobile.

The gameplay. I think the core gameplay is possible. It’s fun, but soon you move it to auto-battle. It’s nice that it’s easy to auto, but you can still kind of affect it. It shouldn’t get too boring, but I have to see a little bit of fan reactions, like how they take it. I think there is enough customizability through, like, what skills you can put in there that the fans will be okay with it. I think it is a good mix, but it remains to be seen. Story, obviously, the source material is really good. Then when you get to the first Soldier’s story, you kind of feel that it is the mobile game story because it starts lagging. In that, there’s a lot of this discussion that doesn’t lead to anything when compared to the original source materials, the seven, it just– here’s this important moment, here’s this next important moment. It’s constantly moving. You feel what is mobile only.

Monetization in Ever Crisis

[00:20:41] Jon: How about monetization? Have you got a feel of where it sits for that?

[00:20:48] Teemu: There is something really interesting about that. Usually, characters are what you get through gachas, but in this game, you unlock characters automatically. There is no monetization related to unlocking the characters. What you do unlock through gachas is the weapons for them and the skins for the character or armor. You can also use them as skins. That is really interesting. The way the gachas are done, you have the gachas, which give you those weapons, but if you want those armors they are not obtainable through the gacha drops, but there is a separate stamp system. With each pull, you get from 1-12 stamps, and I think for every 12 stamps, you can get the armor or skin for a character.

You have to pull multiple times to get those skins. I think that feature might be something that will turn off many console players who come from those games and are not accustomed to gacha monetization. It can get a little bit frustrating because there is a random element on top of the random elements.

[00:22:31] Jon: Did you say that that’s very in the Japanese mobile gaming psyche? They invented it, and as other territories or other developers are moving away from it in various forms, it doesn’t seem like that’s–. They’re just doubling down on gachas. It’s just a cultural thing, I suppose, isn’t it?

Gacha mechanics in Japanese gaming culture

[00:22:52] Teemu: Yes. On other monetization aspects, battle pass is there. It feels a little bit like an afterthought. Well, you get valuable items out of it, but it’s forgettable. The subscription plans, they have a couple of those, but they last for seven days. I think the price point was something closer to $10 for seven days, and I think that might feel a little bit steep for many players. The value increases your rewards from that quest. If you’re going on a seven-day grind fest, then it could be definitely worth it. I think many players will ignore those.

Interestingly for the weapons that you obtain from the gacha, the game has the highest rarity levels that I’ve ever seen on mobile games. Basically, you obtain 3-star weapons that can be upgraded to 5-star, but then on top of those 5-star, you can over-boost them. You can first over-boost them to 10 stars, then to 15 stars. Then after the 15 stars, this is based on what I saw in achievements. There are 15 stars plus 20 that you need to reach to get a certain achievement. I think you can go up to 35 stars. Before this, the biggest I remember was 10, in mobile games. They’re going really next level, kind of Final Fantasy, Brave Exvius War of the Vision surprised me with their gacha. Usually, you have 5 gacha banners, maybe 10 at most. I remember when I was analyzing one event for them from that game, and they had like 60 different gacha banners, and I was like, “Why do you need this many?” They like to go experimental on these amounts.

Unique weapon rarity levels

[00:25:12] Jon: A Final Fantasy game would be the one– thinking a Final Fantasy VII-based experience would be the one where you think somehow the nostalgia kicks into some of these middle-aged players who remember playing it on the PlayStation. There we go.

[00:25:29] Teemu: At least there’s a death there.

[00:25:32] Jon: Absolutely. I guess something else is passing. It’s interesting when I was just looking through the app store to see the Final Fantasy games and see all this list and stuff. As you say, a lot of the games you’ve mentioned have been in for a couple of years and then come out as many mobile games are. If it’s not economical to run them, but still, the vast majority of the games sitting on there are premium games.

It is interesting that you could almost see any new Final Fantasy free-to-play game being launched. It also highlights the fact that you’ve got maybe 10 of the old remakes of all the games that are– I think they range from up to $20, $25 for the most expensive ones sitting there as premium games. Which I presume our people are still buying because why wouldn’t they?

Premium games and mobile releases

[00:26:23] Teemu: Yes, the nostalgia there. It’s nice. Personally, I prefer purchasing them on consoles because that’s where I’ve played them. That’s where I feel most comfortable playing them. Having them available on mobile is something people can then play on the plane. They don’t need an internet connection for most of them. From one to nine, I think the remakes are there for the PlayStation, up to PlayStation One. They’ve also made Final Fantasy XII games for mobile, but those are cloud versions. Since cloud gaming never really got going that much, at least yet, those were interesting experiments, forgettable.

[00:27:19] Jon: Oh, okay. At the beginning, you mentioned there were some conclusions you thought for developers. What are those, then? Let’s really broaden it out.

Conclusions for developers

[00:27:34] Teemu: Well, I think the biggest thing to learn may be from these Final Fantasy mobile games. When you look at them, the successful ones play to the key strengths of the IP. If you’re making a console game or mobile game. I think many– At least Sony was very interested in this. If you’re trying to make a mobile game, then it just doesn’t resonate with your core audience. If I take, for example, Horizon Zero Dawn, you’re hunting these massive robot dinosaurs and animals with Aloy. If you take that concept into mobile and you go like, “Okay, everyone plays match-3 on mobile, so let’s make match-3 with Aloy and friends.” It just doesn’t resonate with your audience because there’s not much to match.

Now if you make it say base building, a 4X game where you’re fighting wars between these different tribes, still a little bit different than what the core IP is, but there is that appeal that, “Okay, there were those tribes, they were having these conflicts.” There is an interesting setting to this that could resonate to new audiences and resonate also with the older fans. If you want to make it really appeal to the fans of the IP, then you need to have an action RPG where you’re aiming for these different weaknesses of these robot dinosaurs and doing these stealth missions.

It just needs to have the same feeling, and the same storytelling. The more you can bring the source material, the better. Because if you look at Final Fantasy: Brave Exvius War of the Visions, it pretty much is Final Fantasy Tactics, but with free-to-play mechanics, and it resonated really well when it was launched. They knew what they were aiming for because they launched it with the Final Fantasy Tactics collaboration. This really highlights for the fans of that IP that there is a similar game, and you should be excited about this because we have seen these oversimplified games. There are a couple of these endless runners about Crash Bandicoot or Sackboy. Sure, there is a little bit of overlap there, but those were more like platformers instead of endless runners. You need to have full control of the character for it to feel exciting for fans of the IP.

[00:30:50] Jon: I guess on a broad level, that may be why a Final Fantasy Battle Royale doesn’t work because that’s clearly just about the shooting. The characters are there. Obviously, you’re running around with the characters. Whereas, as I remember from the 4X game, okay, 4X isn’t about characters, but it was a very heavy use of the characters popping up on the screen, and you felt they were playing into that in a way and making the most of the fact that Final Fantasy is about the characters. [crosstalk]

[00:31:23] Teemu: Yes. Then throwing is another one. Mobile gamers nowadays, even the more casual ones, are used to more complex mechanics. Oftentimes we might think that, okay, simple mobile game touchscreen, maybe keep it as simple as possible. People are looking for entertainment, and they are used to handling their mobile phones and doing stuff with them. You can be more brave with the mechanics. You don’t have to oversimplify it for them necessarily.

Experimentation and mini-games

[00:32:06] Jon: I guess not everyone has the resources of a Square, but clearly, at that level, Square have been very good at experimenting with their IP and seeing what works. I guess, mobile still is that place where the cost of experimenting, while it’s risen a lot in the last few years, it’s still a good place to experiment with finding audiences and doing new things.

[00:32:33] Teemu: Yes. We’re always talking about the hybridization and mini-games popping up in games. If we think of the most memorable Final Fantasy games, there are those mini-games that you remember. It’s not just purely that you make the same progress in the story and you fight the battles, but there are these moments where you play the game differently. For Final Fantasy VII, you have the bike chase, you have the submarine hunt, you have snowboarding. For some reason, after a very tragic moment, you’re happily snowboarding.

For Final Fantasy X, you have blitz ball that you play, and in Final Fantasy VIII, you play card games, also in 9. Those are the things that really resonate. Maybe they take that as learning for your mobile games as well, that you can have these different moments to balance the game experience because people like different things. It’s fun to have a break from the grind, do something completely different. If you manage to keep the player within the game during those break moments, that helps them to build connection with the game more.

[00:34:01] Jon: Cool. good. Well, I covered a lot of stuff there. Do you feel like you’re emptied of Final Fantasy now? You’ve dumped your expertise into the podcast.

[00:34:11] Teemu: Yes. Maybe.

[00:34:16] Jon: There’s always some more.

[00:34:16] Teemu: Now I’m just itching to play all these Final Fantasy games that I mentioned. I want to go back and maybe boot up my PlayStation 5 and continue a little bit more on Final Fantasy VI.

[00:34:27] Jon: That’s it. Always good to fire up the appetite for more gaming. That’s what we want to do on the podcast. Thank you very much, Teemu. That was great.

[00:34:36] Teemu: Thank you.

[00:34:37] Jon: Thank you to you for listening, watching, to the podcast, however, you are consuming it. In every episode, we are digging into the world of mobile gaming, which is ever-dynamic and ever-changing. We’ve got some good episodes coming up soon, so don’t forget to subscribe. Thanks for watching this one, and see you next time. Goodbye.