MMO Business Report: Q3 Industry Reports

This week we have a few industry reports to take a look at for the end of Q3 2019 as well as Superdata’s monthly revenue charts. Plus Jagex has to come out and explain that it hasn’t been sold…yet again. There are only 9 weeks left in this year so before you know it we’ll be looking at the whole year in a glance. For now though, it’s Q3 and a few random pieces of industry news in this week’s MMOGames Business Report.

 

Jagex Hasn’t Been Sold

Jagex has had to clarify that they have not been sold after a Reddit thread with some regulatory statements that seemed to announce Fukong Interactive had sold Jagex to Platinum Fortune, which was believed to be “basically a shell company” of Fukong. GamesIndustry.biz reached out to Jagex to get clarification.

“As referenced in June, Fukong’s regulatory statements acknowledged that the company was looking to restructure its finances, and that resulted in announcements regarding the potential sale of Jagex,” said director of communications Rich Eddy.

“While the situation continues to progress, Fukong’s most recent statements advise the Chinese market that it has updated its financial information as negotiations continue. This is not a confirmation of a sale, which remains one of various possible outcomes.”

This isn’t the first time this year that this very same situation has come up. It also happened in July and was basically the exact same scenario as this time. If there is anything to take away from this it is that Jagex still might be sold in the future, but that potential has been on the table publicly since January and there hasn’t been any movement yet. So who knows when or even if it will actually happen.

 

Source: GamesIndustry.biz

 

Top Games of September 2019

Superdata has released their monthly game revenue charts for September and it’s bad news for some of the industry’s superstars. World of Warcraft saw a leap from 7th to 3rd in August thanks to the launch of WoW Classic, but in September it was back down to 6th. This isn’t because of the boycott, that won’t have an impact on the charts for another month or two. This was that initial surge of people who tried out WoW Classic going back to the other games they were playing. Fortnite has also dropped, Superdata estimates that the game saw a 43% decline month over month in September making it the worst month for revenue since November 2017. On console Fortnite dropped from first place to seventh in just one month. But, this all happened before Chapter 2 started so it’s really impossible to predict what future reports will look like for the game.

In August Pokemon Go had overtaken Honour of Kings for the number one position on mobile but in September Fate/Grand Order held the top spot, pushing Pokemon Go to number 2. Honour of Kings continued its drop down the charts and finished September in 4th place.

 

Source: Superdata Report

 

Worldwide Q3 Mobile Game Revenue

Global app revenue grew 23% year over year last quarter to $21.9 billion, but that isn’t the part of the new report from SensorTower that we’re interested in. We want to look just at mobile games which grew 20% year on year. Games accounted for 74% of all in-app spending, which is actually down two percent from Q3 2018. App Store users spent the most, having spent $9.8 billion in Q3 2019. That’s up 19% from the previous year. Google Play users spent $6.5 billion in E3 2019.

PUBG Mobile was the top grossing mobile game in the world for the quarter, grossing $496 million just in Q3 2019, a year on year growth of 652%. Pokemon Go was given the distinction of the fastest growing game by revenue quarter on quarter. It was up 63% to $308 million. Summer time is always good for Pokemon Go as kids are out of school giving them more time to run around and catch em all.

 

Source: SensorTower Report

 

Tencent Supercell Takeover

Top MMO News: March 9, 2016

Tencent has been on a roll recently with their investments, most recently having invested in Funcom. Well, now we can add Supercell to their list too. To understand the details of the deal though we have to have a bit of a history lesson.

In 2016 a Luxembourg consortium formed with the sole purpose of acquiring Supercell. They bought 81.4% of the mobile game developer which at the time was valued at $10.2 billion. Tencent had a 50% stake in the consortium which has now been increased to 51.2%. According to details from a filing on the Hong Kong Stock Exchange Tencent acquired $40 million worth of shares as part of a convertible bond. At this rate Tencent will have taken over the entire games industry by 2022, or at least it feels like it.

 

Source: GamesIndustry.biz

 

Q3 VR Report

Believe it or not the VR industry is still expanding. It certainly didn’t blow people away like they thought it would a few years ago but they are on track to bring in over one billion dollars in software revenue for the first time this year. Interestingly though it is location-based entertainment like those found in malls that are bringing in half of that revenue. Businesses have also caught on to the potential of VR. Enterprise headset revenue is on track to jump up 69% year on year. Superdata expects consumer spending on VR to more than double in the next 4 years to $2.4 billion.

The report from Superdata mostly looked at VR but it did also talk very briefly about AR, Augmented Reality games. There wasn’t really much data there, though they are expecting the genre to see growth from $1.8 billion in revenue in 2018 to $2.9 billion in 2022. They also pointed out that from June to August Harry Potter: Wizards Unite only earned 1% of the revenue that Pokemon Go brought in during that same period. As the report says, Harry Potter: Wizards Unite isn’t casting a spell on wallets.

Source: Superdata XR Q3 2019 Report

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MMO Business Report: Raph Koster Forms a New MMO Studio and Game Companies Avoid Paying Tax

This was a pretty exciting week for the MMO industry with the announcement of Raph Koster’s new MMO studio and Tencent investing in Funcom. We also have news about the revenue for Pokemon Masters and a report that shows 4 major game companies are using a UK tax policy meant to boost local developers to dodge paying millions in taxes. All of that and more in this week’s MMO Business Report.

 

Tencent Becomes Funcom’s Biggest Shareholder

Funcom Are Expanding With 40 New Jobs To Fill

Perhaps the biggest surprise this week was the announcement that Tencent had invested in Funcom and become its biggest shareholder. The Chinese company now owns a 29% share in Funcom. This is on top of owning or partially owning these others; Grinding Gear Games, Riot Games, Epic Games, Activision Blizzard, Ubisoft, Paradox Interactive, Frontier, and Supercell. As part of the agreement Tencent acquired all the shares that had belonged to the Norway based KGJ Capital AS.

“We are very pleased to see Tencent come in as the largest shareholder of Funcom,” says Funcom CEO Rui Casais. “Tencent has a reputation for being a responsible long-term investor, and for its renowned operational capabilities in online games.The insight, experience, and knowledge that Tencent will bring is of great value to us and we look forward to working closely with them as we continue to develop great games and build a successful future for Funcom.”

Funcom recently announced it had acquired exclusive rights to develop and publish games based on the Dune IP over the next 6 years. They’re already working on an open world sandbox game set in the Dune universe and they’re working closely with Legendary Entertainment who are releasing a new Dune movie next year.

 

Source: Press Release

 

Fortnite Revenue Down Significantly in the US

According to US market tracking firm Edison Trends Fortnite’s US revenue in July was down 52% year on year. That’s a 75% drop from its peak in December 2018. The firm also had a look at what consumers are spending their money on. In Apex Legends and Fortnite the answer was overwhelmingly virtual currency. Apex Coins accounted for 96% of spending on Apex Legends while V-bucks accounted for 83% of the money spend on Fortnite. For PUBG and Call of Duty it was the game itself that accounted for the majority of money brought in. For PUBG the game accounted for 94% of the game’s revenue with G-coins accounting for 4% and Packs accounting for 3%. Black Ops 4 was a slightly different story. The game accounted for 69% of revenue, 19% from CoD Points, 4% from Passes, and 8% from other add-on content.

Finally, the firm tracked loyalty by looking at how many people purchased something in game in June then did it again in July. Apex Legends performed the best with 62% of spenders buying something in June and July. PUBG was at the bottom of the 4 games they were studying at 38%.

 

Source: Edison Trends

 

Raph Koster Launches a New Studio with $2.7 Million in Funding

MMO icon Raph Koster has announced that he is launching a new studio, Playable Worlds with a starting fund of $2.7 million. The investment is being led by Bitkraft Esports Ventures with 1UP ventures, and multiple angel investors. The first project won’t have an esports emphasis though. The studio has said that they’re creating “an online world where a broad range of players can find a home, whether their preferred playstyle is exploring, adventuring, socializing, crafting, or player versus player combat.”

“I’m incredibly excited to bring a new world to players,” Koster said. “Technology has caught up to the visions we always had of alternate worlds where entire societies can form. It’s time for that dream to be fulfilled.”

Along with Raph Koster the studio has a lot of other big names from the MMO industry that include the following impressive list:

  • Mat Broome, Studio Art Director – H1Z1, Planetside, DC, and Marvel
  • Brian Crowder, Lead Server Engineer – SOE, EA, Zynga
  • Greg Costikyan, Lead Game Designer – Backflip Studios, Boss Fight Entertainment

 

Source: Games Industry

 

4 Major Video Game Companies Avoiding Millions in Taxes in the UK

According to a report from The Guardian, Sony, Sega, WarnerMedia, and Take-Two Interactive have all taken advantage of a UK tax policy that is intended to boost the domestic video games industry. They’ve been using the Video Games Tax Relief to avoid paying tens of millions of pounds in corporation tax.

WarnerMedia has reportedly claimed up to £60 million, Sony £30 million, Sega £20 million, Take-Two Interactive £42 million. Alex Dunnagan, a researcher at TaxWatch UK, said the new findings show the scheme had “become a cash cow for large, tax-dodging multinational corporations who are milking the system to extract hundreds of millions of pounds in subsidies from the British taxpayer. It is clear to me that much of the subsidy is unnecessary, as many of these corporations were producing hugely popular games since long before the introduction of VGTR.”

 

Source: The Guardian

 

Pokemon Masters Brings in $33 Million Globally Its First Month

Pokemon Masters has now had the second highest grossing launch month for a Pokemon mobile game, second only to Pokemon Go. Japanese spenders led the pack, accounting for 58% of the first month’s revenue. Meanwhile players in the United States brought in 19% of the spending, $6.3 million. Hong Kong, Taiwan, and France rounded out the top 5 markets for the game. Total spending during the first week averaged at close to $3.5 million a day, but since then it has been declining. Spending now averages $230,000 per day.

The game has been downloaded by nearly 12 million players globally on the App Store and Google Play. This puts its average revenue per download at $2.80. However, the Japanese playerbase spends an average of $12.90 per download, which matches the spending on Pokemon Go for the country. Players from the United States on the other hand are spending $2.33 per download.

The game isn’t taking the world by storm like Pokemon Go did, but it is performing incredibly well and it looks like it will have a long life, at least in Japan.

 

Source: Sensor Tower

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MMO Business Report: Let’s Hunt Monsters, Mobile Esports, and More

In this week’s MMOGames Business Review we’re going to take a look at Pokemon Go’s biggest competition, Let’s Hunt Monsters. We also have a look at the mobile esports scene, a new location-based mobile game, and PUBG Mobile. What can we say, when it comes to business at the moment mobile gaming is the thing everyone is talking about while the rest of the world is WoW crazy.

 

Let’s Hunt Monsters is Pokemon Go’s Largest Competition

There have been many games that have tried to capture the success that Pokemon Go has had since it released in 2016. Games like Jurassic Park Alive, Ghostbusters World, The Walking Dead Our World, and Harry Potter Wizards Unite have all failed to make any significant move in that direction. But, there is one game that stands out above the others, Let’s Hunt Monsters.

Let’s Hunt Monsters is a monster-hunting AR game from Tencent that has only been released in China. It just recently crossed the $50 million mark in player spending on iOS. This is, of course, only 4% what Pokemon Go has grossed. But, it is more than double the amount of Jurassic Park Alive, the next highest-earning AR game. This is quite a remarkable feat for a game that isn’t based on a pre-existing IP and has only been released in one market while others have seen a global release.

It is important to note that Pokemon Go hasn’t been released in China yet, though there are plans for it to go forward. When it happens though it is expected to be done with Tencent’s rival NetEase. One of the complications Pokemon Go is facing in China is that Google Maps is banned in the country. Pokemon Go relies on Google Maps to function so as you can see, there’s a bit of a problem for Niantic.

 

Source: SensorTower

 

Mobile Esports Games Poised to Overtake PC Competitors

arena of valor switch

According to a new report from Niko Partners, mobile esports games generated $15.3 billion last year compared to PC’s $16.1 billion. The report also states that China is overwhelmingly the largest market for both mobile and PC esports accounting for $5.6 billion and $6.4 billion respectively. It also points to League of Legends as the biggest PC esports game, having grossed $1.9 billion last year. This is down from $2.1 billion last year. On the mobile side of esports, it is Tencent’s Arena of Valor which is taking the lead. It grossed $2.5 billion last year, up from $2.4 billion in 2017. But, while mobile esports games are set to overtake PC there were 4 PC esports titles which generated over $1 billion last year in comparison to mobile which only had 2.

The report also suggests that there is going to be a shift from spectator focused tournaments towards more open regional tournaments. “Mobile esports tournaments will engage consumers not only as spectators but as participants,” said Niko Partners managing partner Lisa Hanson. “This will create mass market participation and engagement, growing a far larger audience for esports and generating new opportunities for revenue. We will see esports transition from fewer large tournaments to the addition of large numbers of smaller tournaments that are open to everyone who wants to compete.”

 

Source: Games Industry

 

$1.75 Million Raised by Cerberus Interactive for Location-Based Games

Cerberus Interactive is working on a location-based strategy game which is said to be the first of its kind. It has grabbed the attention, and finances of the CEO of Reddit Steve Huffman and CBO of TikTok Blake Chandlee who were some of the lead investors in this round.

“We believe our marketing-driven approach to game design is a new way forward for mobile game development that has double fold benefits – players get features which are important to them, and studios are able to mitigate financial losses,” said Khan. “Premiere mobile titles require a great deal of capital, and with the funds raised thus far, we hope to not only pioneer a method that greatly reduces the risk involved, but also reshapes the mobile game development industry as a whole. We expect ‘Atlas Empires’ will be our proof of concept.”

Atlas Empires being developed in collaboration with fans and players. It democratizes the process to ensure they have a strong fanbase from development and going forward which is certainly a novel way to develop a game. Should it prove to be successful though it would be interesting to see it attempted in other games going forward.

 

Source: Games Industry

 

PUBG Mobile Now Highest Grossing Mobile Battle Royale in the World

Revenue for PUBG mobile is up an amazing 748% year on year thanks to its release in China. After just 60 days China has become PUBG mobile’s highest-grossing market, accounting for 28% of everything the game has grossed to date. But, it isn’t just China that is contributing to PUBG Mobile’s success, in the United States revenue for the game rose 565% year on year from 4.8 million to 32 million monthly. It is important to note that these numbers for China only take into account the iOS version of the game, Android isn’t included, which means that in reality, the numbers are much higher.

Revenue for PUBG Mobile last month was 5 times higher than its closest competition in the genre, Fortnite and Knives Out. The game has spent 3 months now at number one globally amongst all mobile games according to SensorTower. Superdata however, who release a list of the top 10 grossing games for PC, Console, and Mobile, didn’t list PUBG Mobile in their recent list for July 2019. It’s always interesting to see how two different companies can come to different conclusions about a game’s revenue. It is possible that Superdata simply doesn’t have the information about PUBG Mobile to include them on the list, though this seems unlikely considering PUBG is on their list for PC. It may also be that because SensorTower’s data only includes iOS that they have come to completely different conclusions than Superdata who includes Android and iOS.

 

Source: SensorTower

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