This newsletter was sent out on October 2nd 2020. If you’re reading this and you aren’t a subscriber, you can sign up here.
Greetings from Helsinki! This week I went up to Tampere to visit some local developers and did a workshop with one of the companies I’m advising.
Here are some quick updates:
- This week, I was doing the keynote at the IGDA Leadership Day event. The recording is available online; you can watch it over here.
- On October 8th, I’m doing a webinar panel with Anton Gorodetsky and Sergei Evdokimov from InvestGame, Micha Katz from Aream & Co., and Michail Katkoff from Deconstructor of Fun. We’re doing a deep dive into gaming investments and M&A. Register to the webinar by going here.
- I’m trying something new this week: In two weeks, I’m interviewing Vladimir Funtikov, Co-Founder and CEO of Creative Mobile, from Tallinn, Estonia. What kind of questions should I ask Vlad? You can share your ideas here.
On to this week’s news.
🇸🇪 Deep dive into Stillfront Group
This week, I released a deep-dive article on Stillfront Group, written together with Abhimanyu Kumar and Aaron Bush from Master the Meta. In this article, we look at how Stillfront got started, what lead to their model developing, and how they are creating sustainability and growth for the future.
“If there is one business that both gaming industry insiders and outsiders keeping an eye on gaming should understand, it is Stillfront Group. Even though the company is making a larger name for itself — especially in 2020, which has turned into a breakout year — it remains, in our eyes, underrated and underfollowed.”
🎙 Jörgen Larsson, Stillfront Group
This week on the podcast, I have Jörgen Larsson, the founder, and CEO of Stillfront Group. Jörgen has been an entrepreneur in gaming for a few decades. He has seen all the angles and aspects to creating value in gaming, and how to build long-lasting value in the ever-changing market of video games.
🏰 Eino Joas talk on Clash of Clans
Loads of developers are spending months in soft launch to improve their Day-1, Day-7, and Day-30 retention numbers. Some are now going to the range of Day-60, Day-90, and Day-120 to improve numbers. After intense work to better the metrics, they dare to launch a game to a worldwide audience.
In this design talk from Eino Joas, Game lead of Clash of Clans, we hear how a developer can struggle with Day-1800 numbers (5 years), to improve things for a game and make it grow again.
Problems for a five-year-old F2P mid-core game like Clash of Clans
- Exponential economy. “The tedious crawl at the end of the game might stop you from playing”
- Nothing more to do. “New content would immediately be consumed by the top players.”
- Social barriers to upgrading. “Players weren’t upgrading, looked like they didn’t want anything. Clans Wars system was creating barriers for progression.”
- Poor conversion. “It wasn’t bad but it wasn’t good either.”
“At Supercell we believe that retention always trumps monetization. The logic for that is, if you have retention, you can always figure out monetization. If you don’t have retention, well, monetization doesn’t really matter.”
Here’s what Eino and his team decided to do.
- Break the exponential economy. Introduced magic items, runes, potions, and books as new resources to ease player progression. “[As game developers] you can use these as a surgical way to tackle the problems where they come up and not actually have negative effects elsewhere.”
- Fresh things to do. New town hall level 12, which brought in new gameplay. “We created a town hall that fights back.” They added a new kind of dragon, Clan Castle, the deploys in the middle of the village with a Siege Machine, which you can donate to clans mates.
- Clan War Leagues. Clan Wars was a zero-sum game: if you upgrade the town hall, the opposing Clan also goes up in toughness, so the arms race was too true. “Chances of winning went down as you leveled up. Upgrading was screwed up.” As they added Leagues, the players adopted a new exciting competitive activity on a start-stop cycle every month, breaking Clan Wars’ stalemate.
- Gold pass. The Clash of Clans battle pass feature appealed to all players, especially to the maxed out players. “We made sure that the [Gold Pass] tasks are something that you can complete very casually. You don’t need to pay attention that much. You should just make progress automatically as you play the game in your style.”
“[With these changes,] we saw a revenue increase of 75% when we released town hall 13. We actually have way more payers than before. There are four times as many as before.”
Big retention boost: “What’s even cooler is that 70% of our Gold Pass buyers come back every month. So on average, if you bought the gold past one month, there’s a 70% chance to return and buy again in the next month.”
“The gold pass actually impacted our economy in a way that we have more payers and everyone’s paying less. [This made] the game more healthy, giving a price point that more people are comfortable paying.”
Takeaways for developers
Understand your game “Clash of Clans is a game about building your village. It’s you might kind of from the outside think that it’s a combat game, a tower defense game. It’s about attacks, it’s about looting. It is. But really, deep down, it’s about the journey of upgrading your village. Making if grow. Investing in it over time. It’s the one thing that people start with and it’s the one thing that people stick with the game for.”
Be generous. “It makes sense from our perspective to search for the sweet spot and give people those great deals that let them spend a little bit and enjoy your content. And then both sides win. Give great value, but protect the economy of the game.”
Focus on the long-term “It’s always worth it to focus on the long term. You need longevity to actually make it this long. And eight years might sound like a long time for a game to run. We can sort of feel that it can be just the beginning.”
Watch the full video here.
🙂 Lean startups, lean teams
A startup lesson I have had to learn over and over again:
Your problems are never one hire or one funding round away from being solved — The best that a new hire or new round can do is amplify solutions that are already in place.
If anything, too much hiring only makes the cracks grow wider.
You have a significant project milestone in four months that you need to meet to raise another funding round for your startup.
You feel that your team of five-game developers isn’t getting the job done in the four months. You decide to bring in two experienced consultants, who will work on a deal that you only pay them 50% of their fee now and 50% once the next fundraising round is completed.
The four months go past, you get the significant milestone completed, but the game metrics are merely above the industry average. You get your existing investors to put in some more money since the numbers didn’t manage to be good enough for a more significant funding round.
What went wrong here? Significant milestones create pressure to execute. “We must reach this milestone at all cost.”
From my experience, adding headcount never creates real solutions.
Eino Joas talks about why Supercell has small teams: “[Small teams let] people have maximum ownership over what they do. And that brings us to the best results.”
Find a way to make results happen with small teams. The fewer headaches you’ll have later.
🗓 Last week
If you missed out on the EGD news last week, I talked about envy and how to deal with envy, and I shared some thoughts on evaluating a startup team as an angel investor.
📃 Articles worth reading
+ Mini Deep Dive: Playco — “The strongest tailwind right now is a globally renewed interest in instant games within social networking / messaging apps. Almost all of these top apps across most markets are working to integrate social gaming experiences within their applications, with the goal of increasing the average time spent per user in-app, increasing ad impressions, improving the chance of driving various service sales, and eventually increasing user lifetime value.”
+ Ultimate Guide to First-Principles Thinking — “First-principles are the Lego building blocks for thinking. These Lego blocks, once carefully assembled with forethought, are reusable. With the right set of first-principles, you can start mixing them in ways you couldn’t before allowing you to think better and faster.”
+ Clayton Christensen’s insights will outlive him — “In a nutshell, Mr. Christensen’s insight was that it is not stupidity that prevents great firms from foreseeing disruption but rather their supreme rationality. They do “the right thing”, focusing on better products for their best and most profitable clients, often to the point of over-engineering. But that is “the wrong thing” if it blinds them to the threat from poorly capitalized upstarts offering cheaper stuff in markets too obscure to worry about. Such threats can swiftly turn existential if the rivals move upmarket and go for the jugular.”
💬 Quote that I’m thinking about
“It is not that we have a short time to live, but that we waste a lot of it” — Seneca
Sponsored by ironSource
We all know that developing a great game is one thing, but developing a great game business can be something else entirely. That’s why some of the top game developers in the industry use ironSource’s game growth platform, which takes care of both sides of the business, helping you monetize to fuel user acquisition, and vice versa.
From their ROAS Optimizer, the only product on the market built to optimize UA campaigns towards ROAS according to both IAP and ad revenue data, to LevelPlay, their in-app bidding solution, they offer everything you need to supercharge your growth. See for yourself at ironsrc.com
Sponsored by Opera Event
Looking for some great new authentic video creative? Try something totally new with Influencer Generated Content (IGC) by Opera Event. Influencers or actors will make specific creative content for your games and Opera Event will deliver you high-quality video ads that highlight the best parts of your game.
Go to www.getigc.com to see some examples and get more information.
That’s all for this week. Take care and stay safe!