2019 Predictions #5 These Three RPG Categories Will Grow Further
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Before you jump in, let us sum up how we arrived to the predictions.
First we created a taxonomy together with Game Refinery dividing the games market into four different genres: Casual, Mid-Core, Casino and Sports. Then we further broke down the genres into categories based on games and then we further divided each category into a sub-category based.
As as example, Candy Crush Saga is in a) Casual Games genre > Puzzle Games category > Match & Blast sub-category
We pulled the data of top 500 games (excluding China, Japan and Korea) from Sensor Tower and aligned the data with the genres, categories and sub-categories.
Once we had a clear view of what happened, we got together and wrote our predictions.
Please, take the numbers presented with a giant grain of salt. They are there more to show trends and to give rough estimates.
What we predicted last year and how accurate were we
In the last year’s predictions we predicted that: 1) franchises would be the name of the game in 2018, helping to maintain the RPG category as a perennial strength in the grossing rankings. We also predicted that 2) original-IP games like Idle Heroes, Legendary and Empires & Puzzles that have innovated to create new, successful, proven designs in the RPG market will become targets for replication. Due to this direct competition we predicted that the market share of these original-IP games will decrease in 2018.
Well, we ended being right on the first prediction, as games like Marvel: Strikeforce and Dragalia Lost (Meet Nintendo's New Cash Dragon) pushed themselves onto the top of their respective sub-categories while games like Star Wars: Galaxy of Heroes (read: Galaxy of Heroes - Full Deconstruction of EA's Death Star), Contest of Champions (read: How Kabam's Contest of Champions Made $100 Million in Seven Months), Dragon Ball Z (read: How One Event Shot Dokkan Battle into #1 Top Grossing) and Marvel Future Fight held their spot at the top of their respective RPG sub-categories. Not to mention the last years surprise hit, Idle Heroes (How Idle Heroes made $100M in a Year), which flourished into a monster hit in 2018.
When it comes to Legendary (LEGENDARY - a Master Class in Live Operations) or Empires and Puzzles losing market share, we were wrong. In fact the opposite happened as these games became the mainstays of the rapidly growing puzzle-RPG sub-category.
To sum it up, we were 50 percent right on our predictions last year. Not bad, right? Well, please continue reading. I feel like we will get it down ‘almost surely’ right this year.
Overview of the current mobile RPG market
The overall RPG market in the West is still relatively small when compared to both China and Japan, where this genre eats up pretty much half of both markets. Turn-based RPGs and Puzzle RPGs are doing rather well, but especially Action RPGs and MMORPGs have been struggling to gain a foothold in western markets, with no games of either sub-genre currently in the top 100 grossing.
Within each of these top three markets each country favours a different flavour of RPG. In Japan the majority of top grossing RPG are turn-based fighters, whereas in China players prefer to spend their money on social MMORPG experiences. The most popular subtype of RPG in the US are Puzzle RPGs while Action and MMORPGs have not been able to crack the top.
For the purposes of the 2019 RPG predictions, we will mostly focus on the Western market, but we will reference the Asian markets to justify some of the upcoming predictions.
The State of the RPG Category in the West
While RPGs do not enjoy the same success as in China, Korea or Japan, they are still the third biggest grossing category in the Western mobile market right after Strategy and Puzzle games. And there is one number that make developers and publishers alike drool when looking at RPG games. That number is the revenue to download ratio (data: Sensortower):
Idle Heroes 13M installs and $131M in net revenue in 2018
Star Wars: Galaxy of Heroes 8M installs and $166M in net revenue in 2018
Puzzle & Empires 19M installs and $155M in net revenue in 2018
Fate Grand Order 3M installs and $1832M in net revenue in 2018
Puzzle RPG - the exponential growth will taper off
The growth of the puzzle-RPG category in the West has been stunning to the more seasoned mobile game developers. What I mean by this is that just a few years ago everyone from Supercell to Mixi and Gung-Ho threw in their own puzzle-RPG game into the market without getting any meaningful traction. We tried everything! A bit more casual versions like Best Fiends (Seriously), Spooky Pop (Supercell) and Smash Land (Supercell). We also saw Japanese billion dollar puzzle-RPG games fail in the Western market as both Monster Strike (an action puzzle game) and Puzzle & Dragons faded out without making a dent.
Then in 2014 we saw first glimpse of light as Marvel Puzzle Quest launched with decent sustained performance. Just like with card battler a couple of years before, Marvel made the complex games more accessible with their giant recognisable roster of heroes. A year later Best Fiends came out with their original IP targeting female first audience with a lot more accessible core and meta-game. Then WWE Champions and Legendary launched. These two quickly tripled the market size in 2017. But the true Cinderella story has been Empires & Puzzles from Small Giant Games, which turned rapidly growing sub-category into a hockey stick.
So what the hell happened?
Well, firstly, Western audience matured. Just a few years ago gacha was an unheard of mechanic. Now it’s just as normal as crossing the street looking into your iPhone instead of left and right.
Secondly, the complexity ramp-up was perfectly timed and targeted. Supercell failed because they were too early to the game and lacked the content and the live operations to define the category in the West. We needed a game like Marvel Puzzle Quest, which had the perfect IP, match-3 gameplay and a team big enough to crank out the content for players to collect and retain.
Now the question you’re asking is “how the hell is Empires & Puzzles raking in all this cash?” Well, let me oversimplify this for you (please take it as my opinion):
Firstly, the game is extremely accessible. Generic art-style. Match-3 core game with a meaningful twist and meta-game that your mom can understand. Accessibility means that you can shoot with a shotgun with user acquisition instead of targeting expensive whales. Accessibility also means that your game is playable for the majority of match-3 audience. And that’s a big pool to pull from rather than trying to get the core RPG and strategy game players to play your game.
Secondly, Empires & Puzzles is filled with easy to produce content. This allows them to run sales on sales on sales. I mean, the game is nasty with sales.
Thirdly, the game has great community. Honestly, one of the most nicest communities in the World where players celebrate each others’ fat gacha loot and advice on best strategies.
Fourthly it’s the deep and extremely tightly controlled meta game. Rewards don’t come easy and players are always looking for something they need. Which in order drives community and sales...
Learnings: What does it take to be a top grossing puzzle-RPG game
Be either highly accessible or extremely core
Go for accessibility via IPs or simplified art style. Make sure core gameplay is not skill based.
Go for complexity via core art style. Gameplay should have skill mechanic.
Live operations is your livelihood
Events, sales, more events and more sales
Have infinite content
A metagame that is deep enough to take infinite progression
A content pipeline easy enough to produce infinite content.
Sub-category growth will slow down after Empires & Puzzles’s growth tapers down. This will be due to an increase in user acquisition costs surpassing the increase of monetization. Legendary experienced the same as its almost two year long month-over-month growth came to halt last year.
On the other-hand, if Zynga extends the payback times for user acquisition for Empires & Puzzles, we’ll (hopefully) see the game getting closer to the numbers of its Asian rivals.
New games with an IP will enter the sub-category but won’t be able to compete for the top positions.
With the competition being as red hot as it is and with Marvel IP already on the market, entering this sub-category with an IP is doomed. The minimum guarantee for a great license combined with a revenue cut and delays from supervision of ad creatives will make the developer slow and unprofitable.
Profitable niches on the more casual side will remain.
At the moment, Best Fiends, a simple line-match game from a small developer equipped with an arguably less appealing art style in the form of bugs has no competitors and is making $100M a year. We expect the company being bought and/or outplayed by a more robust competitor in a year or two.
Turn Based RPG - Nowhere near the true potential
Turn-based RPG was the only RPG sub-genre with all of its top 5 titles in the overall top 100 grossing. It is still the most accessible RPG game type in the West and Japan and second most popular RPG game type in China.
Given the popularity and incredible monetisation of the top games, entering the top in this sub-category is nearly impossible. But only nearly, as Marvel Strike Force proved launching in the first half of 2018 and quickly climbing to the top. At one point the game appeared to be taking a good chunk of Star Wars Galaxy of Heroes and Summoners Wars monthly revenues (see the graph below).However, as the months passed, the game found its own audience and the whole pie actually grew towards the end of the year.
We also saw Disney and Looney Tunes come out with their respective turn-based RPG games. One could argue that these powerful IPs don’t carry the same kind of depth and appeal as Marvel or Star Wars. After all, we’re talking about a male-first core audience that appreciates depth and often skips the gameplay altogether. Given the very high development cost of a turn-based RPG and the minimum guarantees as well as the revenues shares demanded by a license holder, Disney Heroes doesn’t look like a major success case. The jury is still out on Scopely’s Looney Tunes. Whether these games are successful as a business case or not, they are both well executed and highly polished games.
Learnings: What does it take to be a top grossing turn-based RPG game
Enter carefully. The sub-category is very saturated and highly competitive. Making a 3D character collection RPG like Strike Force is very expensive both in terms of team size as well as the man months needed. Failing can sink your company or doom your studio.
Mitigate the risk with a strong IP you own (FoxNext) and/or shortcuts in asset production. Such as 2D over 3D as in the case of Idle Heroes and the Walking Dead by Scopely.
Depth over gameplay. In fact, you can ditch the gameplay altogether like in Idle Heroes or automate it like in the rest of the games in the category. Innovating on core gameplay is an unnecessary risk. It seems like only Nintendo's games benefit by having a different core that actually fits players' expectations.
Live operations is your livelihood. This goes with all the RPGs.
Events, sales, more events and more sales
Have an infinite and straightforward process to produce content
All those beautiful Sith Lords and Spidermans are expensive to model, rig, animate and integrate. Either simplify the art style or perfect the art production and art outsourcing.
Some would even argue that the upside of going high poly 3D is vastly outweighed by the content costs, super high quality 2D is more than enough to compete
There is more than one way to succeed - as long as the depth and appeal is there
All 2D, like Walking Dead: Road to Survival. All 3D, like Marvel Strike Force. With an IP, like Star Wars or without an IP like Summoners Wars. With a strong core game like Fire Emblem or without a core game, like Idle Heroes.
We’re just getting started in the West. The revenue growth in turn-based RPG continues,
It seems we’ve reached the pinnacle with games like Galaxy of Heroes making $13M in Net Revenue despite only having a meager 600k installs. But the fact is we’re nowhere near the top. Fate/Grand Order makes $91M in Net Revenue with a meager 300k in installs. That should put things into perspective.
No new games will enter the top 10 in 2019.
All the top IPs have made their shots
The only few with true potential to devastate the sub-category are licenses like League of Legends, DOTA and Blizzard (characters from Heroes of the Storm)
Just to underline it to the powerful people at Activision/Blizzard: Whatever you make with Diablo is peanuts compared to what you could make with a turn-based RPG featuring all your amazing characters.
Action RPG - the year of Diablo
Within the Action RPG sub-category the single most significant event was the launch of Nintendo’s Dragalia Lost. Right after its release, Dragalia Lost jumped to the top 20 grossing in USA, Japan, Hong Kong and Taiwan (the only areas where it was launched), and for a moment it looked like an Action RPG title could become a big hit in the US. However, despite its early success, by the end of Q4 2018 Dragalia Lost had slipped quite a bit.
Another new entrant was Honkai Impact 3rd, a game that had been very successful in Asian markets. During Q4 of 2018 it managed to claim the third place in the US Action RPG market, but this isn’t quite as big of an accomplishment as it might sound, because in the US it means that it’s not even in top 200 grossing games.
These two new titles made a big dent in the revenue share of Legacy of Discord, one of 2017’s biggest Action RPG titles, as its revenue share of the whole genre plummeted from 23% to below 9%.
Nevertheless, the bottom line in 2018 remained the same: action RPG games are mainly monetising in the Far East. When looking at the top 10 action RPG games only three games generate a majority of their revenue from Western markets. Those three are Marvel Future Fight (surprised to see yet another Marvel RPG game?), Legacy of Discord and Darkness Rises.
Learnings: What does it take to be a top grossing action-RPG game?
Have an IP that fits the Western audience
These games are very complicated. A familiar IP, like in the case of Marvel, can make it more accessible.
But IP may not be the solution. DC Unchained has failed despite the Justice League characters and absolutely gorgeous gameplay. Sadly, this was yet another DC RPG game to flop on small screens just like the movies have done on the large screens.
Live operations is your livelihood. As in all RPG games.
Events, sales, more events and more sales
Have infinite progression
Adding more characters like in other RPG games is as important as allowing more customization and progression inside each individual character.
Sub-category will grow significantly in the West driven by the success of the new Diablo on mobile - or more accurately - the Diablo reskin of Legacy of Discord. This game will be a hit in West and East alike. Even though the original unveil of the game was a shit show.
MMORPG, Fighting and Survival Games
Massive multiplayer Online RPGs are still a small niche of the mobile landscape within the West but giant in both China and Korea. As of writing, only Old School Runescape has experienced sustained success since launch largely because it caters to an existing audience. On the other hand, Lineage II, which is a monster hit in Korea, has not had any meaningful impact in the West despite a massive marketing push and even streamers like Chief Pat.
Prediction: When Blizzard releases their World of Warcraft on mobile, the category will look very different. Till then MMORPG is simply a curiosity in the West.
Fighting games used to be the same as Marvel Contest of Champions. No one was able to carve a spot in the category. Mortal Kombat, Injustice, Power Rangers, Transformers and even C.A.T.S were all knocked out cold by the powerful Marvel fighting game. Not even a game by the same team (TRANSFORMERS: Forged to Fight - A Game Worth Paying $750M For?).
Last year a surprise happened. Dragon Ball Legends entered the fighting category with a totally new core gameplay and meta game and was able to double the size of the pie. Granted, the majority of the revenue (59%) came from Japan.
Prediction: We already have Marvel. We don’t need any other fighting games. Unless they can be synchronous and have a powerful IP like Super Smash Bros...
Survival Games is the newest RPG category and by far the smallest and most insignificant one. It got kicked off in May of 2017 by a total surprise hit Last Day on Earth.
Less than a year later the developer, Kefir, attempted to duplicate their success by reskinning the game with a fantasy theme. The market was not impressed. It seems like the demand for survival games at the moment is very low. Unless we’re talking about surviving an ever decreasing area filled with other players eager to murder you. But then we’re talking about something left for the final prediction of 2019...
To sum it up
RPGs revenue shares of all mid-core games has stayed roughly the same 40% in 2017 and 39% in 2018. The RPG genre, however grew (revenues) by 3% and that was mostly because of the Puzzle RPG sub-category. To be more precise, the category grew because of two key games: Empires & Puzzles, which grew its revenues from $24M in 2017 to whooping $129M in 2018 and Idle Heroes, which grew its revenues from $56M to $146M.
The RPG market is mature. Breaking into the top requires massive development investments, strong IP, an unrivalled content pipeline and superb live operations. Just look at Marvel Strikeforce, which brought in $60M in net revenues with only 16M installs. But as always, there are outliers. Empires & Puzzles sneaked in fueled by amazing product positioning and a good amount of luck, as it is the case with most of the genre defining games. Same thing with Idle Heroes and Last Day on Earth. But these are exceptions that defy the general rule.
There are two ways to win in the market. Either by being accessible with depth or by being core with depth. Just compare Empires and Puzzles against Legendary. Or Idle Heroes against Summoners Wars.
The right IP helps. The wrong IP sinks. We’ve seen pretty much all IPs from Disney to Angry Birds and from Star Wars to Marvel and DC enter the ultra lucrative RPG realm. The right IP for RPG is the one that has depth of familiar characters and a large male adult fanbase.
RPG is the frontrunner of meta game design. If you work in games, you simply have to be playing at least one of the top grossing RPG games. But we at Deconstructor of Fun are here for you in case you slip with the latest and most detailed breakdowns of top RPG titles. Just make sure you sign up to our newsletter and no-one will ever catch you slipping.
Final Prediction for 2019. This is going to be bold. And it’s saying that RPG will be the second largest category in the West surpassing strategy games. I may be wrong in a year, but it will happen. All the Asian markets are dominated by RPGs and it's just a matter of time before the Western market catches up.