对于一家只有7岁的公司来说这真的是一次巨大的改变，其首席运营官Kent Wakeford在GamesBeat Summit上与Cnet的执行编辑Ian Sherr谈论了他们旧金山公司最近转向开发高端手机游戏的计划。
Sherr：我经常关注的一个趋势是市场营销。如果追溯回2012年，我们会发现最常见的市场营销是交叉推广。而现在，我们可以看到像Kate Upton在Super Bowl上表演等广告方式。如果未曾看到《部落战争》的广告，我可能便不会去尝试这款游戏。你是如何处理这种情况的？面对拥有较高市场营销预算的动视或艺电，甚至是迪士尼真的是个巨大的挑战。
Wakeford：这是市场中所出现的另一大根本性转变。对于那些顶级游戏，市场营销创造了一种结构性优势。你所看到的今天的市场营销与《使命召唤》发行时所使用的市场营销非常相似。这是一种意外。我们可以在六本木之丘看到《Candy Crush》的广告。《部落战争》的广告更是遍布整个东京的地铁站和广告牌。《海岛骑兵》邀请了一些名人装扮成游戏中的角色出现在电视节目上。在上届Super Bowl上我们还举办了battle royal。这是关于高级游戏如何进行市场营销以及基于同一个生态系统中其它游戏达不到的投资成本进行营销的根本性转变。
Kabam explains its pivot into triple-A mobile and China (interview)
Kabam prides itself on being ahead of the curve in gaming. It zigged when Facebook cracked down on viral social games because they produced too much spam. Then it zagged when free-to-play web games started giving way to mobile. And now it is shifting away from a big portfolio of mobile titles to a select few games based on brands and triple-A quality design.
That’s a lot of change for a company that is just seven years old, and Kent Wakeford, the chief operating officer for Kabam, talked about the San Francisco company’s latest pivot into high-end mobile games in a conversation at our GamesBeat Summit event with Ian Sherr, the executive editor of Cnet.
Here’s an edited transcript of their conversation.
Kent Wakeford: It’s a great time to be a mobile game developer. The market is growing at such a rapid pace. Last year, we were at these conferences talking about the potential for a billion-dollar game. It’s here. It’s not just one billion-dollar game, it’s billions with an S. Clash of Clans will make multiple billions of dollars.
What’s a very big change that we’ll all have to understand is that there is a shift going on, a consolidation. Think about the top of the market, the change over the last three years. Go back to 2012. The number-one top-grossing game did about $300,000 a month. In 2015, the number-one game is doing about $1.2 million.
What’s more interesting, though, is that if you look at the number-one game for all of 2012, which did about $4.6 million altogether—At that point Kabam had that game. It was Kingdoms of Camelot. Fast forward to today, the number one top-grossing game is doing about $80 million. That’s 1,750 percent growth.
It’s more dramatic than just Clash. The top five games in our market are taking a disproportionate share of the entire industry. If you go back to the first quarter of 2012 and look at the top five games in that first quarter, they did $41 million in revenue. They had a 10 percent share of the entire market. We’ve seen a lot more games to market since then, a lot more growth and innovation, but if you look at the top five games in the first quarter of this year, they did $925 million in revenue, 22 percent of the market. Those games haven’t moved. Clash, Candy Crush, Game of War. They’ve all been consistent at the top.
We’re seeing a radical shift in our industry toward the top. Market share and revenue are going to the top games. It’s pretty consistent with other content businesses.
Ian Sherr: Why is that driving you to change the way you do business?
Wakeford: If you think about where the opportunity is right now, the opportunity and growth potential are at the top of the market. How do you create a product that’s at the top of the market? For us we had to radically shift our focus. This started about a year ago. We embarked on a transformation and restructuring of our business in which we focused on fewer products and made some tough decisions.
This is the innovator’s dilemma a lot of us think about. “Fewer products” means only four new games this year. Last year it was 18 and before that it was 20. We’ll still do more revenue than we did last year.
We’ve let go of a lot of things we did in the past, like Facebook strategy games. We divested that entire business. We had a third-party publishing business that grew from zero to $30 million in one year, $30 million to $60 million in another year, but it didn’t have the potential to create a billion-dollar product. We divested and got out of that business. The opportunity is there in focusing and getting the best people on the best teams and aligning all these resources together.
Sherr: Do you think that doing this will allow you to get into that top five and be able to break that grip? I’ve listened to a lot of other game companies say that, realistically, there’s no way to get in there.
Wakeford: Capturing the hearts and minds of consumers at the top of the market is a challenge. It’s lightning in a bottle. But I believe that if you get the best people in the industry and allow them to focus on the single vision of creating that product – eliminate all other distractions – you have a much better shot at achieving it.
The results are amazing within Kabam. The last three games we launched all received Editor’s Choice from Apple. The quality bar has never been higher. We have a game that’s been consistently in the top 10 over the last three months. We’ve been doing a pretty good job and we’re staying focused.
Sherr: One trend I’ve seen a lot is marketing. If I look back to 2012, a lot of the marketing was cross-promotion. Nowadays, we have Kate Upton at the Super Bowl. I can’t turn anywhere without seeing a Clash advertisement. How do you deal with that? Going up against the marketing budgets of Activision or Electronic Arts or even Disney, that’s quite a challenge.
Wakeford: It’s another fundamental shift in the market. For those top games, marketing creates a structural advantage. The marketing you see today is very similar to the marketing you see at the launch of a Call of Duty. It’s happening. Candy Crush is wrapping buildings in Roppongi Hills. Clash is taking over subways and billboards in Tokyo. Boom Beach has celebrities in TV shows dressing as characters from their game in China. We have the battle royal at the last Super Bowl. It’s a fundamental shift in how the top games are able to market and spend capital at a rate that others in the ecosystem can’t.
Sherr: Does that mean smaller players are forced out? Does it become the console world, where Activision, EA, and Ubisoft run the industry?
Wakeford: You’re already seeing that, a rapid divergence between the top of the market and the rest of the market. That will perpetuate itself. It’s a simple spreadsheet exercise. The number 100 game, if it spends 20 percent of its revenue on marketing, that’s $240,000 a month. That’s an okay game. But if you’re making $80 million a month and spending $16 million of it every month to bring new users in, the divergence will keep taking you above the rest of the market. It allows you, at that size and scale, to take risks and open up different areas – Super Bowl ads, subway takeovers, buildings wrapped in brands created within our ecosystem.
That type of top-level marketing and the expertise that’s coming into this industry is going to further push the top of the market up. That’s great, but it creates more challenge for other parts of the industry.
Sherr: Let’s look at the character that began all of this – Angry Birds, which I guess is now the Pets.com of the mobile-game industry. They practically invented mobile-game marketing and branding and selling plush toys. What do you think of that sudden fall and how it applies to the model we’re developing?
Wakeford: What Rovio did with Angry Birds is phenomenal. They had huge brand recognition. But it’s a similar issue to what we’re facing now, with so many rapid shifts in our business. Rovio came out with a paid game in 2009. That game was phenomenal. It’s been installed more than 2 billion times. It’s second in brand recognition only to Disney characters. But it didn’t adapt.
They owned the paid download space when paid games were the dominant part of the market, 2009 and 2010. But between 2011 and 2013, the market shifted and free-to-play became the dominant business model. The ability to run a game as a service, to think about consistent design and live operations and performance marketing, these were all skills that grew and flourish within companies, whether it’s Kabam or others. If you look at what Rovio ended up doing, though, in 2011 they launched another paid game. In 2012, another paid game. In 2013 it was Star Wars. They didn’t launch a free-to-play game until the end of 2013. They kept doing what they were doing before instead of innovating.
If you look at Disney’s Tsum Tsum, that’s a phenomenal game and it could have been theirs. It should have been theirs. But it’s this concept of not adapting to the market and the industry as it changes.
Sherr: The collapse, from the outside, seemed sudden. How can we tell that things are going wrong?
Wakeford: What’s interesting about our industry is that we can know what’s going on by the hour. You can pick up your phone and see the charts, see who’s moving up and down. App Annie is a tremendous resource. You can look at the data and see whether a game is going to be successful based on the revenue per install. People are able to predict, today, what’s going to happen in six months.
Sherr: One big thing you’ve been doing is aiming your business toward Asia. We’ve seen Asian companies try to bring their games to the West and not succeed, as well as the other way around. There are a couple of examples that disprove the rule, but generally speaking, it’s a hard thing to do. Why do you think that is, and how do you break through?
Wakeford: The first thing about Asia is that we have to recognize it’s the dominant market. Any company that isn’t strategically thinking about Asia isn’t thinking strategically. App Annie came out three weeks ago reporting that installs in China now exceed the number of installs in the U.S. We saw the report from Digi-Capital showing that the value of an iOS install is eight times greater than an install in China. So maybe we can ignore it for a moment? But the next report comes out showing that the Android market, including China, is now bigger in terms of revenue than iOS. Just spread out over more people.
If there were still any doubters – if we still believe the world is flat – Newzoo came out showing that revenue from the mobile game space in China next year will surpass the U.S. Next year China will generate $7.7 billion in mobile revenue. The U.S. will generate $7.4 billion. The year after that, in 2017, China will be up to $9.3 billion and the U.S. $8.2 billion. China continues to grow faster than the U.S. market. That gap will continue to expand. If any of us are thinking about greenlighting a game with a production schedule maybe 18 months from now, once we’re done the market in China will be more than a billion dollars greater than North America.
Sherr: How do you not have the kind of troubles that Puzzle & Dragons did, going from the top in Japan to not the top here? How do you make those jumps?
Wakeford: We’ve been spending a lot of time in China. People talk about China being hard, and I want to emphasize that not only is China hard, it’s harder than people even guess. The market is growing faster than anywhere else. We’re seeing games that are now doing $40 to $50 million a month in revenue – including Boom Beach, which has been a great success. But it’s hard. We see a great deal of fragmentation. We all know about the 200 Android stores. Carrier billing plays a much more prominent role. There are tech issues are firewalls and file size and devices we’ve never heard of.
Sherr: Do you think it’s more the technical problems than the design issues?
Wakeford: The technical issues and the fragmentation are easier to overcome than the cultural issues. Culture is the hardest part. To be successful, you have to tap into the culture and build a game that resonates with consumers there. So far there have been very few western game companies that have done that. Supercell has gotten close. Call of Duty is trying.
Boom Beach is a good example. 25 percent of their revenue comes from China. The other interesting example is EA. EA truly culturalized Plants Vs. Zombies 2. Completely new SKU. The gameplay, system design, balance, economy, UI, UX—The result was that Plants Vs. Zombies generated more than 33 percent of its revenue in Asia. It’s generating more revenue in Asia than in North America. If you really try, there’s a great deal of potential success to unlock.
Sherr: And the difference is taking Americans and having them make the game for China, versus having people in China make it?
Wakeford: There are different approaches. There are publishing partners. We’ve reoriented our entire Beijing office to focus on culturalized games for China. These are people in China who know gaming in China. We’re having them build product for a Chinese audience. The roots of our company are Chinese-American. We have cultural ties to China. We’re refocusing everything to try and open the way there.
Sherr: Is there anything else you’d like to bring up?
Wakeford: We’re looking at two tectonic shifts in the business. One is the consolidation of market share at the top and what that means from a marketing perspective, game quality, game budgets, production schedules. The other shift is Asia. It’s the dominant market. We all need to be aware of it. The companies who are able to open up that market will see significant growth at a faster rate than the rest.(source:venturebeat)