In this episode of Mobile Growth & Pancakes, Stan Minasov, the VP of Product at AppMagic, joins Jonathan Fishman to discuss how to balance creativity and the data-driven approach in mobile gaming, the science behind evaluating new mobile game ideas, and tips on how to come up with game ideas and monetize apps.
Check out all the other episodes of Mobile Growth & Pancakes here.
To connect with Stan:
Listen to the full episode:
You can also listen on:
“At the end of the day, we play games because we love them. So when marketing fails, when there is a recession, there is still a need for enjoyment and fun”
Stan Minasov
Key takeaways:
One of the greatest problems game companies face today is finding new game ideas that are fun and have a large enough audience to become profitable, meaning that the game can become profitable in user acquisition economics.
Stan shares that over 10,000 new titles are released monthly, of which two-thirds are well-built, well-produced, and well-developed. Yet only three percent gain more than $100,000 over a lifetime. Stan mentions two approaches to evaluate new game ideas: a marketing approach to understand what is going on in the market and a game design perspective to build a fun game.
When evaluating game ideas from the marketing perspective, you should identify and understand what game type you want to build. You can do that by getting inspired by an existing game or a genre. Either way, it’s critical to check if anyone else has come up with the same idea before. For that, what can be really useful is a categorization system.
Categorizing game ideas comes down to building a team of experts who can check the subgenres and sub-niches. You can automate some processes. But if you rely too much on automation, the chances of failing are high.
When you know the genre or niche in which you want to make a product, the next step is exploring the market by comparing different market segments if you have different options. Then, you should go deeper into one and see where you have more potential.
Regarding collectible card games, be aware of so-called trap markets that are neither growing nor shrinking. The main reason for that usually is that the developers can’t pay traffic with positive ROMI (return on marketing investment). So for every dollar spent, they receive the same dollar, and they can’t scale up in this situation. Taking one step further, publishers from other niches and genres can acquire the same target audience better.
When testing whether the game idea can scale, Stan suggests understanding and working with direct and indirect competitors, as well as checking non-obvious competitors that share the same target audience.Stan suggests companies optimize their marketing budgets and teams to be more precise with their decisions while emphasizing that companies need to take a more data-driven approach to increase the success of their games.
Full transcript:
Jonathan – 00:00:37:
Hey, everybody, and welcome to another episode of Mobile Growth & Pancakes. I’m your host, Jonathan Fishman. I’m VP of Marketing at Mavens, which is owned by Zynga as of two, or three months ago, which is exciting. And I’m really happy to have here with me Stan Minasov, the VP of Product of AppMagic. Hey, Stan, what’s up?
Stan – 00:00:59:
Hey, everyone. It’s a pleasure to be here tonight. Thank you for the invitation, Jonathan.
Jonathan – 00:01:04:
Thank you. Could you tell us a bit about AppMagic and your own path and how long you’ve been with the company?
Stan – 00:01:11:
Sure. So, as you’ve mentioned, my name is Stan. I’m the VP of Product at AppMagic. It’s an analytical tool for analyzing mobile markets and gaining actionable insights. So we have a versatile tool with lots of instruments inside. But basically, there are two reasons to use us. First, understanding what type of game or what type of app to develop. So evaluating game ideas, and app ideas and understanding what to do next. And the second reason is understanding, all right, so I’ve got an already successful app or a game, but what should I do next, how to build it long term, what strategy should I use, how to analyze the markets? So these are the cases when we are the best ones on the market to use. As for my journey, I’ve been working in IT industry for the last ten years, I suppose. Before that, I was actually a teacher, a mathematical teacher. I’ve even worked in a school for a couple of years. Yeah, good old days. But then I moved to Deity as a product manager at first, working for a couple of years in a gaming company called Pixonic as a community producer. And knew everything about the communities, how to build them, and how to hear the feedback from your players. And actually, it helps a lot because now I know both sides. So I know how to use analytics, the data-driven approach, and how to use statistics with your cold mind. But at the same time, I know when I have to hear the feedback from the players or from the users because it’s really important to balance these two. And I’ve worked for a couple of years in different startups and companies of different sizes, health and fitness, gaming, once again, sometimes lifestyle, and finally ended up at AppMagic. So I’ve been working here for I’d say half a year now, though the product itself is more than five years life, and I really love it because it’s the best blend of being creative for finding new tools to analyze the market, finding possibilities to help companies out there. But at the same time you have to work with statistics and data really precisely, I’d say even with a scientific approach. So you have to check your hypothesis. You have to be humble, you have to be as objective as you can, because there are some situations when you’ve got for example a great insight, or you think about it as a great insight and you think, all right, so that’s the thing I want to work with, and I just need data that will resonate with it. And then you end up digging for the data that will help you, not the data that will bring you the realistic version of the events, but rather that will help your own insight, which isn’t the scientific way, it isn’t the way it should be.
Jonathan – 00:04:07:
Yeah, nice. It’s really fascinating. The journey is fascinating. In the time we live in, it’s kind of crazy that you can be a math teacher and a mathematician and then move to games and mobile. It’s really amazing. And I think what you touched on is a fascinating combination because it is true. And in our journey as a Storemaven, we did a lot of things to add or at least approach the creative problem on the App Store and on the marketing, mobile games, and apps through science and through the scientific approach. I would say it’s really tough to get creative people to adopt it and not do everything they said. For example, when we had a product for A/B testing apps or product pages that is used by UA folks and USA people ASO people, sorry. So when we did that, the challenges of getting an A/B test right are huge. And usually, the reason that it fails is that the person that is running it is looking for a certain result. And then the test is just plagued by a lot of different problems and they just do it and run it until they see the result that they want or stop it. It’s just like it becomes a tool for verifying some idea that you have that you want to verify and folks just disregard the math, the science behind it. So I love it that this is your journey. So let’s talk today we want to talk a bit about how to evaluate mobile game ideas, and new mobile game ideas. I can say that it’s one of the toughest problems that game companies have today to find game ideas that are both fun, have a core fun mechanic, and are fun to play. That goes without saying, but it’s still very hard to do. It’s a creative problem and a game design problem. But even if you do find a game that is really fun. I mean, it works, it’s a fun game. There is a second side to that problem which is making sure that the game has a big enough audience that is willing to engage with this game and that you can reach that audience and scale the game. That means that the game is able to become profitable. And the user acquisition economics, meaning the cost per install that you need to pay in order to get a new install for the game is lower than the lifetime value of that user. And that’s a problem that a lot of games, even if they’re fun, they fail at solving that problem and then the game just can’t scale and whatever studio worked on that game ditches it and starts from scratch. Given that that process takes years, usually depending on the type of the game, I’m not talking about hyper-casual games, but more casual, mid-core or even hardcore games. It’s a very costly problem to solve. So I would love to get your thoughts about how do you view this process of how to evaluate new game ideas and how a more scientific approach can be used in order to do so.
Stan – 00:07:24:
Sure, it’s absolutely true. It is a tough problem and there are two approaches as you’ve just mentioned. The one is the marketing approach. So you want to know what’s going on, you want to check your competitors and we will discuss it right now. Another one is approaching from the game design perspective when you want just to build a fun game. And actually right now, inside AppMagic, we’re building the next tool, the next big thing that’s going to help us not just evaluate game ideas from the marketing perspective, but also from game mechanics, and game aesthetics. So understanding what is fun, how it is decomposed, and how it can be used. It is just still a work in progress, but we know that this is a big part of the process and we’ve never tackled it before. So it was important for us to go out there and try to find ways for helping people as well. But returning to the marketing side, it’s really important to understand what are the numbers behind our choices, because just roughly 10,000 games, new titles, and new games, appear monthly in the stores and they will be ranked at least once during their lifetime. So at least once they will be featured and they will be seen by their target audience. Two-thirds were well-built, well-produced, and well-developed. So they were like a dedicated team of experts who wanted to make a great game. They really believed in it. Yet only 3% gain more than $100,000 over a lifetime. Only 3%. The numbers are just crazy and very crucial, I say. So you really have to know what you are doing.
Jonathan – 00:09:05:
It’s basically like a winner takes all market. I mean, those that succeed are very few. Usually they’re owned. I mean, that’s actually I’m not sure that I agree with the argument that it’s only huge game companies that are able to win the market. Every now and then you see a new and emerging studio that has a success. But anyway, it’s a very tiny percentage of game publishers and games in general that make I would say if you ever change that threshold and you ask which games are making more than $10 million a year, you get very few.
Stan – 00:09:38:
True. And it’s a very rare situation when you’ve got some kind of survivorship bias. When there is a company that made it to the top and they still don’t know what was the main reason. They were just, like, making an interesting game. They didn’t invest in marketing, and suddenly they’re up there. It still happens for consoles and PCs, so they can be indie games. For example, take Dwarf Fortress. The guys were developing it for 20 years they’ve made a very loyal core audience. Now they put it on Steam with the new graphics and boom. As far as I remember, during six days they got like 300,000 downloads, and 300,000 purchases, a big success, but they had a very big way up to the success. A whole 20 years of developing a game, and there are not many games out there, especially in the mobile world, even if we don’t talk about hyper-casual that is like collaborative or butterfly, they live for a month and then they die. Still, you don’t have so much time, so you need to balance your resources. You need to know what is going on. You need to know how to balance the user acquisition and the earnings and the LTVs from each one of the users. So let’s say when we are thinking about evaluating game ideas from the marketing perspective, the first step that you should do is identify, and understand what type of game you want to build. And usually, there are two ways. So either we’re inspired by the already existing game, we download it, we played it and we really loved it, we want to make something of our own or maybe we can be inspired by a genre or for some reason we have an expertise in this genre and we want to dig deeper. Either way, it’s really important to check if anyone else has come up with the same idea before. So for that, what can be really useful is a good categorization system. And I’m not talking about a categorization system in App Store or Google Play. They can be useful, but the problem there is that sometimes it’s too high-level, it’s too abstract. You can’t go deep enough in order to analyze the market. And secondly, marketing is the king right now in the world of mobile gaming. And so some of the games out there, try to pretend to be another niche or another genre. So in the core gameplay, they can be one title but on the outside on the screenshots, in the ads, and even in the categorization itself, they tend to be another game in order to gain more users at a lower price.
Jonathan – 00:12:23:
Yeah, that’s a really interesting point and I really connected to it because we tackled that problem in the past of actually creating a good game taxonomy. I mean, I think most of the industry, I mean, App Annie is trying to do a – DAI, Sorry – I can’t get used to their new name. They have the same thing. Think I it’s called Game IQ yeah, GameRefinery has the same thing. Sensor Tower has something because everybody understands that the categories in the App Store aren’t that useful for these purposes. I mean, to think about marketing assets or to understand who’s your true competitors. And there are two reasons why folks, as you said, they pretend to be in a different category. One of them is because that category is easier to rank in. So the ranking in the App Store is mostly based on new install velocity or new download velocity, and some categories are less popular. Like if the games above you in the chart are, I don’t know, hyper-casual games that are based on acquiring millions of users for a very low CPI, it’s going to be very hard to get more installs in them. So your ability to rank high is lower. It’s not as easy, but you can choose to be in a different category where the number of downloads is less. So, I don’t know, imagine really hardcore games, RPG games, stuff like that, and then it’s easier to rank. Your user acquisition budgets would actually create more organic exposures by ranking you higher in the App Store. So that’s one. The second reason that I think is also very fascinating is folks that use their marketing assets to basically reach a new audience. I think one of the most creative but controversial examples of that was I think it was started by Playrix, but I’m not sure, a few years ago with fake ads. So folks just showed on their UA ads and on the marketing assets on the App Store a different type of game. Usually, it was like a minigame that didn’t even exist within the game that you downloaded. And then when you got that ad and sent it to different ad networks, their algorithms were trained to find users that like that type of game. So they served it to that audience and you were able to target that audience with those fake creatives, but it was very controversial because it’s like false advertisement and there’s a ton of other problems that creates but really interesting point. All right, so back to you.
Stan – 00:15:02:
Yeah, one thing to add here, actually, that is one of the trends that are going on right now in the industry, fake ads, and fake gameplay. And I was really stunned and shocked to settle it because I was sure this trend will be there maybe for half a year, maybe a year or max. But right now there are a lot of fake ads in different genres, in different gameplays. So you can have a game and then ten other games that are shown in the ads. But it revolutionized, it developed. So then we’ve seen fake screenshots. So you’ve got the page of your app and there are screenshots of the real gameplay, screenshots from the fake ad, screenshots of the real gameplay, and so on and so on. But go in one step further. There are onboardings that include gameplay from fake ads and fake screenshots. So it’s absolute craziness. You download a game, you begin playing it, and then you’ve got like two different games inside in your onboarding, and then suddenly from, I don’t know, from level ten, part of it just drops. I mean, the fake ads and then there is the real game and it absolute craziness. I don’t really know why it works, but it does.
Jonathan – 00:16:18:
Apparently, it works because of the ad networks. I mean, there are a lot of ad networks. First of all, when it started, it was mostly used on self-attributing networks such as Facebook, and their algorithms are really, really good and efficient in finding an audience. It responds positively to an ad creative. So let’s say you have a match 3 game I don’t know, I won’t use any names, but a match 3 game with a certain theme but using your ad creatives I’m trying just to find an example that doesn’t exist because I don’t want to name anyone. But let’s say you have a match 3 game with a character of a queen.
Stan – 00:17:08:
A queen? Yeah, that’s what I thought. A good example.
Jonathan – 00:17:12:
Yeah, you have a character of a queen and it’s not that prominent in the game. The game is a pretty classic match of Three games, really fun to play. But in the ad creatives, what they use are different minigames featuring that queen. It almost doesn’t exist in the game, but that really helps them find folks that are attracted to more casual or even hyper-casual games or different puzzle games. Like it’s solving different challenges. All those ads with you need to pull that pin and save that queen and all of those things. So the ad serves that ad to a different audience than it would if you would just uploaded an ad creative of classic match 3 gameplay. So that’s why it really works. And then it reduces the CPI because it attracts a more casual or even a hyper-casual audience. But then, as you said, eventually the game caught up because it was so popular, they added those minigames, and some games actually made it part of their core mechanics. So that’s why it works.
Stan – 00:18:21:
Thank you. Thank you for the technical aspects. It’s really true. I’m still wondering why it works from the user’s perspective. Because just to think about it, you come to the market and there is this guy saying, hey everybody, fresh fish, fresh fish here. And you come to him and he’s saying, hey friend, do you want some apples? And you’re like what? I came here for the fresh fish. But it apparently works because some of the folks, want both the apples and the fish. And if they come to him, they say, yeah, all right, maybe I should look for the apple as well. It will work. But when you think about it, especially on a grander scale, and we are talking about like millions and millions, billions of users even, it’s funny to see these trends in such a big picture.
Jonathan – 00:19:08:
Yeah. Let’s get back to the taxonomy like the categorization. How would you approach that problem or how do you approach it differently than other folks in the industry?
Stan – 00:19:19:
Actually, we do approach it, and our decision is that we understood that in order to create a real precise taxonomy, in order to be, on the one hand, deep enough with all the subgenres and sub-niches, but at the same time, in order to be accurate, you need a dedicated team of experts. You should do it manually. Some things can be automated, but if you try to automate them as a whole, then you will fail, or at least your precision won’t be enough. So that’s one of the reasons why for the last five years, we had a dedicated team of experts who daily were looking for a game. So we’ve got thresholds. Of course, we don’t work with games and apps that are like trash apps out there. There are lots of them, of course, but for every game released, that is just worth attention. We categorize it, of course. We look at it. We sometimes download it, we check the screenshots we played and we categorize it. Thanks to this approach, we’ve got the biggest base right now out on the market and the deepest. For example, our partners from Google, they’ve mentioned that even compared to them, our categorization system is deeper and better, especially when you want to analyze the market. And that’s one of the crucial steps when you want to evaluate game ideas. Say we’ve got, I don’t know, we want to create a game and we’re inspired by an already existing one. And for example, say there is a mobile title based on a very famous IP, a collectible card game that suddenly blew up the market. I’m not really sure whether we can name the games or not.
Jonathan – 00:21:01:
Try not to.
Stan – 00:21:03:
Okay, sure. Then we’ve got some kind of very famous IP with superheroes, for example. And then there’s a collectible card game that performs really well, and we are saying, all right, this is a good example. We really love the gameplay, the mechanics, and the aesthetics. We want to build one of our own. So the first thing you should try to do is understand what type of niche this game takes. For example, when you go to AppMagic, you will see that it probably will be a card game. But going deeper, it is a collectible card game, which is different from other types of card games. You also can check the setting and the art style and it can be especially important when we are talking about developing a variation on an already existing successful game with a successful core gameplay. But it doesn’t work always you have to be careful about it and I will give some tips and tricks in order on how to be careful about it, a rational step afterward. So you now know the category, you know the genre, is checking what is going on there. So who are the competitors, what is the revenue distribution? What is the average profitability? Just in order to understand, okay, is it the market I want to try to go in? Do I have enough resources, do I have enough expertise there, on a high level, but still it will give you some information, especially when you are choosing between different market segments. Though there is an important piece of advice I want to give: do not try to fight with the giants unless you’re a giant yourself. So usually when people are trying to explore different genres and look at the top-performing games, they think all right, so I should know the best practices, and then I will be good. But that’s not true. First of all, as I’ve already mentioned, there is survivorship bias. So there are some games and some publishers out there that are not really sure what were the key reasons for their success. They might know, for example, we’ve got a dedicated a great marketing team and they do really well, but we don’t really understand what is the core reason for the success of our gameplay. And it isn’t the best idea to follow someone who doesn’t know the reasons for their success. The second problem is unequal conditions. So usually guys at the top, they’ve got bigger marketing budgets, they’ve got bigger teams, they’ve got bigger expertise, so there is no way you can compete with them. And it’s a better idea to see what is going on with your peers with the tail of revenue because either way you will begin there and you have to build your way up to the top. So it’s better to understand what type of marketing strategies are used, what type of things and best practices are used there and what type of things to avoid. And last but not least, it’s really useful to pay attention to the underdogs because everyone is looking at the best practices, everyone is looking at the top crossing, but not everyone is looking at hidden jabs. And that is where you can really find something that will take you to the next level. For example, for that at AppMagic we’ve got a tool called Advanced Search and basically what it does is as I usually say, it’s a very powerful tool, but you need really to learn how to use it. It is easy to learn how to master, and using specific criteria you can make a very precise search. For example, talking once again about collectible card games. You can try to find all the collectible card games that were released last year. They were quite profitable. For example, they’ve made 100k dollars or less during their lifetime and more than 20k. So they’ve earned some money. They were not very successful, but still, they’ve gained an audience and they were monetized. So maybe there are some things out there, gameplay features, and monetization systems, that you should try to research and maybe use in your app as well.
Jonathan – 00:25:03:
Nice, really solid advice there. Let’s say that you picked, all right, a game team that researched the market. Either they were oriented towards a certain genre because they have expertise in that genre, or they found a hidden gem or an idea for an interesting combination or an interesting subgenre. What’s the next step?
Stan – 00:25:28:
That’s a good question. I say that when you know the genre or niche you want to make a product in, oh, you’ve got, for example, two different options. The next step is exploring the market. So comparing different market segments, if you have different options and then going deeper into one, you see more potential. So usually when we’re talking about comparing market segments, we are talking about a high-level look at the revenue, at the downloads, and sometimes at the so-called metric RPD revenue per download. So it’s useful to understand in general what is going on in this market. Is it growing? Is it shrinking? Is there a status quo? Who are the main competitors? What is the revenue distribution in order to understand, yeah, all right, we’ve got expertise. For example, we’ve got our interests, and we know what is going on, but we should be sure about going there. We need enough resources to compete with others. So for that, for example, once again, there are some situations when you’ve got collectible card games and survival arenas and other genres. Actually, we’ve introduced this category this summer because of another game that was very, very successful. And now you’ve got these two niches and you are not really sure what type of niche should you choose. And looking at the graphs, for example, the revenue graph, you will see that collectible card games are a very stable niche. So it is mature. It’s been there for a decade almost. There are lots of money, but lots of competitors as well. And it doesn’t change. So it is fluctuating around the same numbers of revenue for the whole market, while the survival arena, it is on the rise. It is going crazy. And actually, if you look at the precise numbers, the September survival arena as a niche, although it was developed only in June and July, it reached the revenue of the whole collectible card games niche and exceeded it. So it is growing like crazy. There is no status quo. Maybe there are lots of competitors and this is the next step we will talk about. So you need to check it for sure. But it seems that from the perspective of opportunities, we should really look at it. And by the way, talking about collectible card games, there is another piece of advice that I can give. Be aware of so-called trap markets. Is it trap markets? Yeah, let me explain. So at AppMagic, we call trap markets that are neither growing nor shrinking. They are very stable for a long period of time. And actually, that is what is going on with the collectible card games. The main reason for that usually is that the developers out there, can’t pay traffic with positive ROMI return on marketing investment, so for every dollar spent, they receive the same dollar back. This is quite all right, but you can’t scale up in this situation, and scaling up is crucial in the mobile gaming world, taking one step further, usually, it means that publishers from other niches and from other genres can acquire the same target audience better. So even yes, well, the traffic is usually somewhere if it isn’t here, then it is somewhere else and someone else acquiring it better than you. So it means that this is a trap market. You will go there and you will be sucked in. Usually, there are some situations when you can try to compete in such a market, but you should have very strong arguments. It can be either a very strong IP, and by the way, looking at collectible card games, revenue perspective of the market, it was very stable for the last couple of years, except of September, the last year, when there was a big IP-based game released in China as the market, like, doubled for half a year and then it went back again on a plateau, returned to just the same numbers.
Jonathan – 00:29:47:
It’s really interesting because it’s an IP-based game. It could be that the addition to that IP allowed them to scale a bit until they basically realized the value of that audience and that’s it. And they scaled up until the point that they couldn’t achieve a positive ROACE or ROI or whatever.
Stan – 00:30:07:
Yeah, exactly. Secondly, you might want to try it when you’ve got a very unique and deep expertise in a very unique niche. So if you have a dedicated team of experts and you know that they’ve been working in this niche, I don’t know match 3 or collectible card games, so vehicle shooters for the last ten years, you can be pretty sure that they have a great understanding of the gameplay, of your core audience, of their triggers. And it will definitely help. And the third situation usually is when you don’t have a unique expertise in one niche or genre, but you have a very deep and broad expertise of the industry as and whole. And this is the situation when a new subgenre can emerge. When you try, for example, to take core gameplay from one game or from one niche, you try to take meta from another niche, you combine them like some kind of a little monster and in some situations, it might work but you have to experiment a lot, you have to be humble about your numbers. So if it doesn’t work, if you have some kind of benchmarks, don’t try to push it. And you have to know the industry really well in order to understand, okay, so we’ve got like ten hypotheses, five of them, they will not work. We just know from the industry. Another five maybe there is a chance. We should try and then prioritize them and then check them out. So, there can be a chance out there for someone to enter the trap market but it’s really difficult and you have to be sure about your reasons for doing that.
Jonathan – 00:31:45:
Yeah, I think also like anything in the world or investing, if you think about it, high risk comes with a high reward. I will use their name because I can’t explain the game without it but the Coin Master, for example, combined two different genres like a social casino and a slot machine, basically, specifically within the social casino, that’s the core mechanic of the game, but it has different types of mechanics layered on top of that. So building a village, protecting that village, stealing resources from other players, attacking other folks’ villages but the core mechanic is a social casino game and I don’t need to tell the audience how successful that game is I think they published recently that they passed like a billion dollars a year in revenue. Something insane. So to me, that’s a hidden gem because it won’t show anywhere, I mean in the data because it didn’t exist yet. I think that’s really where huge opportunities exist but again, it’s a very high-risk effort. I mean, for every Coin Master there are probably tens of thousands of games that tried and you never heard about them. So that’s really interesting. I’m interested in the step after that. So once you actually analyze the data and you have a few hypotheses, how would you approach testing whether the game idea can reach scale beside the data that you see that is based on the past, for example, with Storemaven in the past used to run concept tests or prelaunch tests using an ad creative and a replicated product page on restoring the system to run basically a test for an app that doesn’t exist yet but you create the marketing assets for it and then you can test the user acquisition economics. The one thing you can’t know is what the lifetime value of users is going to be and how well your game would be monetized because you didn’t develop it yet. But you can get a good idea of how attractive your idea is based on different art styles, maybe compare different mechanics, and maybe even compare different hypotheses. For example, something that is pretty common in the industry is that there is a certain IP available for a mobile game. Usually, those IP licenses are limited to certain types of games. You can’t do anything you want with them. So I don’t know if you have something from Disney, I don’t know, Mickey Mouse, and there’s an opportunity to license it for a racing game, it can’t be an RPG game, but you want to compare it to a different IP opportunity that exists for, I don’t know, a collectible card game. So that’s really useful in understanding the economics of the user acquisition side, at least. Are there other ways that folks should approach testing? Because up until that point, basically still, if you look at the world and the industry, folks are using whatever data they can. I’m sure that they can benefit from more and more data. But the vast majority of attempts to develop a new game fail, like most game ideas, at some point along the way in their development journey, and that can take a year, two years, or even more, the studio stops developing the game because they decided it’s not good enough. Or although they thought when they started that journey that there is a big audience and there is a good opportunity, they determined that there isn’t. The most painful point in time to discover that is within the soft launch when a studio spent, I don’t know, millions of dollars, $5 million, $10 million dollars in user acquisition. Sometimes if it’s a huge game company and then discovered that it doesn’t monetize well, the second they’ll try to scale it to other countries, it would become a losing business and would burn a lot of cash. So they just ditched that game at that stage, even after sometimes it has some LiveOps elements. We talked about community in the past for a journey. There’s some community to the game already in certain countries where it was a soft launch, so it’s extremely painful. So do you have any tips or advice on how to approach, like after you chose an idea, testing that idea along the way, and when or at which points in time you should reach that decision point where it’s like these go-no-go points, basically? And based on what?
Stan – 00:36:44:
That’s a very good question, and that’s a very important question for the industry right now. I’d say you have at least one additional step before you come out there and test the hypothesis, and it’s working with your competitors. So we already know the market, we know the game and the genre. The next step is understanding who is our direct and indirect competitors. And with direct competitors, it’s pretty obvious. You check them, you check the market, you check the top crossing or top three. You check the revenue distribution, though, even there, there can be interesting things. For example, for survival arena or you mentioned it, Coin Master, you can see that there might be a lot of apps or a lot of games in this category, but the majority of the revenue is made by the top one or top two positions. There are some cases where you can see that more than 95% of the revenue is made by the leader. And usually, it means that there was a very successful surprise in this successful game that was developed, maybe even a hidden gem, and it made it to the top. And then there were lots of other folks in the industry who were looking at this game and thinking, all right, so maybe we can have a piece of that pie as well. We can gather a small team, we can take some store assets, can check our hypothesis, and can develop, for example, a variation of the same game, but with another setting or another aesthetics. It can be tricky, it can work in some cases, but it’s really tricky. And I will just in a minute give out advice on how to approach it in order to increase your chances. If you want to make a copycat of an already existing solution. Another thing you should really think about is checking your nonobvious competitors but with the same target audience. So for that at AppMagic, for example, we have a special tool called Similarity Graph. And what it basically does, it tries to build connections between different games based not on the niche and genre, but rather on understanding what type of target audience they share. So of course, in this graph, usually it looks like several dots with the games in size and lines between them. In some situations, of course, you will see direct competitors. Well, it’s preparation because they share the majority of the same target audience. But at the same time, you will see other games and other genres that you in some situations wouldn’t even think about that attract the same audience. And this is a good starting place for game designers and for game developers in order to understand, okay, what are the main triggers that happen in this target audience that help them to be interested in both of these projects or both of these niches. Maybe I can check these games as well, understand what type of decisions or what type of features I can introduce in my game as well that will work there. And they are not usually introduced in this genre.
Jonathan – 00:39:46:
Yeah, I think that’s like on the Coin Master example, I’m unfamiliar with the game design processor and how it was. But I would say that we call it affinity, basically audience affinity between genres. And it all goes back down to the reasons to play, as we call it. Why do they play games? And then what he said can be really useful, is also for scaling the game and user acquisition and marketing because you can introduce a certain mechanic that is kind of the hook. I mean, that’s the thing that if you show the audience while they’re playing the different genre of game, that’s what would make them interested and attracted to the new genre, even though it’s slightly different because that hook is I don’t know, it really connects to the core of the reasons they play. For example, a certain type of puzzle, even though in your genre the puzzle is a minigame within a grander storyline. So that’s really, really useful and important.
Stan – 00:40:49:
And there is another tip I can give right away. You’ve mentioned the situations when you’ve got a successful game and you’ve got lots of variations on that game, and it’s a very typical, actually, situation, especially for a surprisingly successful game. I really advise working with trends and with hype from an analytical point of view. So do not just copycat. Can be successful variations of an already existing game. It works, and we can see it on the market going strong. But at the same time, if there is a big hype, you should know it. You should know the trend for sure. It is important, but it is also important to address it with a cold mind and your hands in the analytics. One example, there was a very famous game released a couple of years ago in the summer of 2019, and it was absolutely booming. It began a subgenre of its own and it grew from zero up to, I’d say $30, $40 million in revenue monthly in a month. So it was absolutely big. And this was the big point when everybody else was looking at the company and thinking, all right, I can try it and make it one of my own because the company itself back in the day was really small.
Jonathan – 00:42:11:
Let’s try to name it. But I hope that you can.
Stan – 00:42:15:
Can try to guess.
Jonathan – 00:42:16:
I would say that you’re talking about the Mongos.
Stan – 00:42:18:
Actually, I’m talking about Archero.
Jonathan – 00:42:20:
Oh, nice. That was my second guess. But the Mongos had the same thing. It was like three people, and that’s the kind of growth they had. It was just tied to COVID.
Stan – 00:42:27:
And That’s usually the situation when all the other folks out there thinking, all right, they’ve managed to build an extremely successful game with a small number of resources, I can try to do it as well. The problem was that in this big point of like $30 $40 million a month, everybody began developing copycats, the same core gameplay, but they didn’t look at the analytics. And looking at it like right now, three years later, you can see two important things. First of all, our share itself, from this point, after a couple of months, it began shrinking, and it was decreasing, decreasing, and decreasing. And for the last couple of years, it was on a plateau and the plateau was like four times less than the peak. So it was it wasn’t like the point when you continue growing and you think, all right, so maybe I should go all in and this is the best time because I know the market is growing. It was the highest point, but no one thought about it at the moment. Everybody was thinking, oh, wow, look at this game. We’ll look at what they have achieved, we should try it as well. And secondly, out of more than 60 copies that were developed during this time, and I’m talking about copies that were introduced to the stores, I’m pretty sure they’re much more out there that were not developed to this point, but they were still in the development process. Only three had a slight chance to compete with Archero. So when looking at the graphs, you can see that you can at least see these games, though they were not very successful as well. They didn’t earn much money. I’d say three out of 60. So like 95% of the copycats were not successful. And you should really keep it in mind when you see a new high piece and you try and then you’re thinking, oh my, I should be there, guys, let’s do it.
Jonathan – 00:44:28:
When I think about it, it goes back to, I don’t know, basic or advanced, but it’s business. I don’t know. Even like I’m just going to give an example from nongames and just the actual physical world. You go on your street, there’s like a really great coffee shop that is now being set up. It’s extremely successful. There’s a huge line, of folks waiting for coffee, anything. It’s very clear and it’s kind of basic knowledge that if you open a new coffee shop next to it, it’s not going to reach the same success. First of all, it chairs the same audience. They need to split somehow. And second of all, the copycat didn’t do anything new. And the reason why I think at least that first one, or Archero or Coin Master and Aura, all of these games are really successful is that what was their decision based on is basically more connected to reality. Like what the audience really wants, which other genres do they play? What is my ability to advertise in those genres? Is it cost-effective? And how can I create a game that has some kind of hook to these genres to reach those audiences? And they thought about it from an audience perspective and started there instead of looking because as you said, that survivorship bias is really interesting because if you just look at Coin Master, you just look at Archero, you don’t exactly know why it works, but they had a hypothesis, just don’t know it. So you can easily miss that part of the game that was the key for his success while developing the copycat, and it would just not work. I really like the survivorship bias point. So anyway, I think the idea of going the copycat way or just looking at really successful games and doing one more of those is maybe the worst way to think about game design these days. At least when the market is that competitive, like just the data that you have, the data you told us that, I mean, it just doesn’t exist. There’s suddenly a huge game that dominates the market and then hundreds of copycats and the pie somehow gets shared equally. It doesn’t work like that.
Stan – 00:46:55:
Never.
Jonathan – 00:46:57:
So that’s my thought on that. We need to finish in a few minutes, but this is one of the most interesting episodes that we had that’s really fun and I have so many other questions. Maybe we’ll do a follow-up episode, by the way.
Stan – 00:47:10:
That’s a great idea. Yeah, maybe we should.
Jonathan – 00:47:12:
Yeah, because I think that the way that you think about game design, you and the folks at the AppMagic, and that scientific approach are really innovative and it’s really connected to a huge problem that exists these days in the game industry. I just want to ask you one last question. Given that you see that data every day, how do you think the current economic landscape would affect game design? How should folks think about it? What are your thoughts about it? Because the word is interest rates are really high, inflation is not sure it’s still being attained and there are unemployment concerns. A lot of companies are firing folks, and recession concerns. Consumer spending is down in the mobile gaming market as a whole, even though I think a lot of the reason why that exists, that consumer spending is down is because of the tough comparable that existed a year ago, which was still influenced by the unusually high market revenues during COVID because of lockdowns and everything. But still, consumer spending is down this year based on data AI and Sensor Tower, all of those folks. So do you think that folks with the approach can design differently, and be more risk averse? How can somebody be more risk averse? What do you think?
Stan – 00:48:40:
Actually, that’s a very good question and one of those lots of our clients ask. I think it will work and it already works in several directions. First of all, the companies optimize their marketing budgets, and their teams, they try to be more precise and know better what they’re doing. So before that, especially during the COVID, they’ve got a lot of budgets coming in and they had enough opportunity to be not so sure about some of the decisions, to be not so data-driven in some situations to be all right, we can try to test it, it will work less. Secondly, and actually, that’s an interesting one, I think the industry will go in opposite directions. So some of the companies out there, especially ones that are relying on marketing trends, will try to ran even faster. So you’ve got some kind of a marketing trend, you use it for two weeks, and then it’s gone. And you have to rapidly look for something else that will work and it’s very exhausting. So you’re like running all the time, trying to be ahead of the market and I don’t think it’s a successful strategy. So you might be able to do it for a couple of months, for half a year, maybe even for a year. But when we are talking about long-term strategies, when we are talking about games that will be played and monetized for years to come is definitely not the best way. Another way is trying to experiment more in-house. So trying to work with the target groups, with the audience because we’ve seen it actually even before the recession and the trend is still going on. There are fewer and fewer companies out there that are doing big soft launches. Like there are still some giants that can, because of the money they earn, make a game and soft launch for two years, for three years by traffic, and for like middle-sized companies. This game will be successful. It’s a good brand, it’s a good game. But for the giant company, it is not successful, it doesn’t reach the benchmarks it should. And so they can close it and they can say all right, they can say to the community all right, sorry guys, we didn’t make it. But for smaller companies with fewer resources, it will be more difficult to soft launch. And it usually means that you have to come up with more interesting game design ideas. And that’s one of the reasons, for example, we are right now developing an instrument to approach the market from a game design idea because we see the reason need for just liquified goals with liquified information about what are the trends, are and types of implementing different features. Not just the fact that they are there in the game or not, but rather how you can work with them, how you can combine them and how you can gain success with your players, how you can come up with a new niche or new subgenre because it will work every time. At the end of the day, we play games because we love the core gameplay, we’ll love the process. So when marketing fails, when there is a recession, there is a still need for enjoyment and fun and we can go back to the roots, back to the gameplay, back to understanding what is clicking inside the heads of our users and what we can make about it.
Jonathan – 00:52:01:
Yeah, I’m sure the really positive trend for the mobile gaming industry would continue. Again, the other day, I just released something pretty cool, let me put it up. The number of hours spent on mobile for games. And I think now it’s I’m not sure it’s just games, it could be all of the apps, but now it’s like three and a half trillion hours a year, almost four.
Stan – 00:52:32:
Wow.
Jonathan – 00:52:32:
And they would say it would grow until 2028 to more than six. So it’s still really like, the market will grow. And the need for entertainment is something that would always exist in my mind. But I agree with you. I think that in a time when companies want to basically tighten the belt and be more careful with extremely big launches or running soft launches for a very long time and taking more risks, companies and studios have to increase the probability their games would be successful. And the only way that I can think about doing that is taking a more data-driven approach, which is still I think it still has, like, game teams around the world still have light years to progress with all the technological evolution that exists now. Because doing all that data analysis, as you said, was impossible a few years ago. There was no access to that kind of data. It existed, but there was no technology or at least expertise in methodologies to easily access it while the game teams thought about games, and you said user groups and said surveys and a lot of consumer insights methodologies existed for decades. But there’s a better way to do it, and there’s a better understanding that teams can achieve in-game affinities, mechanics, the right subgenre categorization, who are my true competitors and what the market for that subgenre. All of that was impossible years ago. So leveraging that data would, in my view, definitely increase the probability of game success for new game ideas. And that’s a way basically to work in an environment that has fewer resources because basically minimizes huge amounts of loss. So, yeah, we have to finish here because I think we’re almost talking for an hour. But you’re a fascinating person and it’s a fascinating technology we’re working on. I can talk at least an hour or more. I have a question on math for you, as a math teacher, but it was really, really fun. I just have two last questions before we wrap up. First of all, if folks want to reach out to you and talk, I’m sure that some folks would want to talk about this with you. Where can folks find you?
Stan – 00:55:10:
Sure. I think the easiest way is to find me on LinkedIn, so Stanislav Minasov, you can just drop it there and send me a letter, or either you can check the tool as well, it’s AppMagic.rocks, I really love the name. It’s the website. AppMagic.rocks. And you can check the functionality as well. Actually, there are a lot of things that are free, so even if you’re a small company, you can try to use them for your own advantage. And I really advise you to do it with any type of tool, at least one.
Jonathan – 00:55:42:
Awesome. And the last question is what’s your favorite flavor of pancake? You recently moved to Holland, right? Maybe that affected your…
Stan – 00:55:55:
Yeah, not yet, but I think that I’m quite a traditional guy. So I like my pancakes in a traditional way, but I play with the toppings a lot. I really love sour cream, maybe some salted caramel and that’s maybe one of the things I took from the phone because they’ve got like salted caramel waffles, all this stuff, and of course berries because I really love fresh fruits, bananas, all of this stuff. So go traditional but with some spicing up with toppings.
Jonathan – 00:56:19:
Nice. I think I almost have enough data to create an intelligence company about like, flavors of pancakes. What’s the affinity between like different people with different preferences and different titles in the game industry to different flavors of pancakes? There is some statistical significance there. UA people like different things.
Stan – 00:56:40:
Maybe just an idea. You might want to make some kind of an episode or an article on the 1st of April with all the statistics you’ve gathered throughout the episodes, from the position in the company and the taste or the way they like their pancakes.
Jonathan – 00:56:56:
You would be surprised what the UA people like to eat. It’s not tasty. Anyway, because I eat pretty much and it’s really bad for my health, I eat pretty much every new unique idea for a pancake I get here. So I tasted them all.
Stan – 00:57:14:
That’s nice.
Jonathan – 00:57:15:
All right, so thank you very much and we’ll definitely talk soon. Thank you for joining us today.
Stan – 00:57:21:
Thank you for being here.
Esther – 00:57:24:
And that was mobile growth and pancakes. To find out more about Storemaven and how we can improve App Store performance, visit Storemaven.com and then make sure to search for Mobile Growth & Pancakes in Apple Podcasts, Spotify, Google Podcasts, or anywhere else podcasts are found and click subscribe so you don’t miss any future episodes. On behalf of the team here at Storemaven, thanks for listening.
