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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Millennial Gamers Spend Big and Play a Lot of Games

Millennials are all adults now, the youngest of the generation is 22 years old while the oldest is 38. Do you know what we’re still doing? Playing video games, that thing our parents always told us was a waste of time. Well jokes on you Mom! All kidding aside, games and gaming related media are consumed by millennials at an amazing rate and a new report from Superdata dives into the numbers.

Two out of three millennials in the US are gamers and 71% of those gamers are watching gaming video content like livestreams and pre-recorded videos. In comparison, within the same group of gamers, 54% are employed full-time, 46% have children, and 43% have a bachelors degree or higher.

As for gender division between gamers, despite what some may say, it’s very close to being an even split. 48% of all millennial gamers identify as female, 50% as male, and 2% listed other or preferred not to say. Women are the majority when it comes to mobile gaming, 54% of millennial mobile gamers in fact. But, women aren’t far behind on the other platforms, 43% of PC and 41% of console players.

While many gamers complain about mobile games it would seem that we are in fact still playing them. 7 in 10 millennial gamers will play a game on a smartphone at least once a month. Mobile gaming is, in fact, more popular than both PC and console. 60% of millennial gamers are also playing on consoles, though that may not always be their first choice. Meanwhile, PC gamers make up just 30% of the audience.

Millennials who are playing on mobile devices are spending more time each week playing, an average of 9.7 hours a week. Though this playtime is broken up into multiple sessions throughout the week. Millennials spend 9.6 hours a week on average playing console games and just 7 hours a week on PC.

One big trend we’ve seen in millennials is they are playing to hang out with their family and friends online. Let’s be honest with ourselves for a moment, we all know it’s more friends than family. 70% of millennials are playing multiplayer games. That number goes up to 72% for Gen Zers. For Gen X it’s just 43%.

 

Gaming Video Content

Overwatch BCRF Charity Event - QueenE Stream

Chances are if you’re a millennial gamer you watch gaming related video content online. That’s because 71% of us are doing it. For Gen X and older gamers that number is just 43%. Meanwhile, 77% of Gen Z gamers are watching gaming content. 24% of millennial gamers are watching video content at least once a day. 35% watch once a week or less, and 39% watch 2 to 6 times per week. 53% of millennial gamers watching gaming content watch for less than an hour in each session. 26% watch it for 1 to 2 hours while 22% will watch for 3 or more hours in one sitting. Millennial gamers are sitting at 97 minutes on average each session, compared to Gen X and older who are watching for 73 minutes and Gen Z who are watching for 106 minutes. 38% of Twitch viewers say they’re watching their favorite streamers because they can learn strategies from top players while 36% say that they watch streamers because they enjoy the personalities of the creators.

 

Spending

This brings us finally to spending. It should be noted before we get started that these numbers are averages which means that not every millennial gamer is spending this much. In fact, much of the gaming industry is driven by whales, a small select group of people willing and able to drop large amounts of money on games and game-related content. Because we were last looking at gaming video content, lets continue there. Millennial gamers spend more on donations to their favorite creators than they do subscriptions. On average they give $29 a month in donations and $25 in subscriptions. In doing this, they actually outspend Gen Zers and Gen X and older in donations, though we do spend less than both on subscriptions.

On average millennials spend $112 on games every month. That’s $20 more per month than Gen Z and almost twice as much as Gen X who spend a measly $59 a month. It shouldn’t come as a surprise at all that millennials are spending more online than they are on physical games. $72 a month is spent on digital downloads and game subscriptions compared to $39 a month in stores. They also spend $22 every month on in-game content which includes skins and lootboxes.

So, what can we take away from all of this? Well, to quote the conclusion of the Superdata report, “Gaming isn’t an activity Millennials are about to grow out of anytime soon. They are set to be the first generation of lifelong gamers, and media firms and marketers need to take note.” So the next time someone in the office makes fun of you for playing games because “that’s something only children do,” show them this article. Millennials are driving the gaming industry, even if we can’t afford to buy a house. Thank you whales.

All of these numbers came from a survey that was conducted in February 2019 by Superdata.

Now I’m curious! Are you a millennial? How do you stack up against the average? Let me know down in the comments. For me, as someone who mostly plays MMOs, I spend more on in-game items than I do on new games. I also don’t watch streaming, it just doesn’t connect with me. I do enjoy watching Youtubers talk about gaming but I wouldn’t say I’m a regular in that department. As for how many hours spent gaming a week…. let’s just say that 20 hours would be a slow week for me. Yeah, I play a lot of games, but my husband is right there with me while I do it. Couples who slay together stay together.

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MMO Money: 6 Percent Drop in Spending Already This Year

If we’re being honest right out of the gate, the news this week isn’t great. The industry is shrinking a bit as was previously predicted and of course, we have to talk about all the layoffs going on in the games industry. There is a little bit of good news in the middle there though so be sure to read the whole way through for your weekly look at the MMO games industry.

 

SuperData Reviews January

While we may be about to enter the third month of 2019 we are now getting our first look at the first month of the year for the business side of gaming and it isn’t looking good so far. We started 2019 with a 6% drop in spending on all platforms year over year. Premium PC gaming had the biggest drop with a 29% decline.

Fortnite revenue dropped 48% month over month in January, but sales are still up year over year. Of course, a drop from December to January is somewhat unsurprising since December would have had the added benefit of the holiday season when people have more time off to play games.

Finally, a game we don’t get to talk about much anymore these days, CSGO, was in the Superdata report. You may recall that the game went free to play in December. While this transition has been great at bringing in new players, 8% growth year over year in January, this hasn’t translated into more revenue. Digital revenue is said to have fallen considerably year over year but exactly how much isn’t stated.

Taking a look at the top 10 grossing titles what is immediately obvious is the drop for Fortnite both in PC and Console. In the December report, Fortnite was in third for PC and first for console. In just one month it has dropped 2 places on PC and one on console. In both cases it isn’t being replaced by a newer game, FIFA 19 is the newest of the games above Fortnite and it came out in September. Meanwhile, what would have previously been considered Fortnite’s biggest competition, PUBG held steady on PC and dropped off the chart entirely for console. It’s also interesting to see DOTA 2 back on the list, having replaced Hearthstone (West) in the tenth position.

These charts will be very interesting to follow throughout 2019 to see if Fortnite continues to drop and if any newer game can climb its way to the top. The way things are looking right now we may well see those predictions of a shrinking gaming industry come to pass.

Source: Superdata

 

 

Tencent and NetEase Non-China Mobile Revenue Up 505%

Knives Out

Right, so bear with us on this one. Tencent and NetEase, two big players in the mobile gaming world saw their combined revenue last year go up 505% outside of China. This is important because it went a long way to helping the two companies get through a period that lasted most of the year when no new games could be released in China. Much of this was driven by one game, NetEase’s Knives Out, a game that has enjoyed massive popularity in Japan. Tencent’s biggest hits were Arena of Valor and PUBG mobile. So, while things looked very concerning for Tencent in 2018 with the 9-month freeze on new games it would appear that the two companies weathered the storm pretty well. With that crisis behind us, we’re sure that Tencent and NetEase will go on to have an amazing year this year. Assuming China keeps approving new games (more on this later).

All of this data came from a report from IHS Markit who also reported that mobile game revenue from Google Play and the App Store grew 5% year over year to $34.3 billion. While this growth is great, it is actually less than we’ve been seeing in previous years. The trouble with China certainly played a role in this but it wasn’t the only factor. The mobile gaming market in established areas has generally reached maturity, as has the adoption of smartphones. Plus, we’ve seen a decline across the industry that has had an impact on every aspect of the gaming industry.

The report also goes in depth about Battle Royale games but that’s something that is better suited for our Battle Royale column. So, expect to see more on this later in the week.

Source: IHS Markit

 

China Stops Game Approvals to Work Through Backlog…Maybe

There have been reports that China has stopped accepting games to be approved while it works through a backlog of games awaiting approval, according to an anonymous gaming executive in China. However, according to statements made by NetEase’s CEO William Ding, this may not actually be the case. During the Q4 2018 earnings call the following was said, “There were market news and rumors yesterday talking about alleged game suspensions. We would like to say that we do not see that. Some provisional and local regulators have modified the format of material submissions, but we do not interpret that as a shut-down of new game approvals.”

So, has there been a stop? The only way to know for sure is to wait and see if any new games are released in China or not.

Source: Games Industry

 

The Layoffs

Finally, we need to talk about the layoffs. Blizzard, Activision, GOG, Razer, ArenaNet…just a few of the names to have big profile layoffs in the last few weeks. Many of these layoffs are happening because of canceled projects, but we here at MMOGames wonder if the projections of decline this year are also having an influence. Are these projects being canceled because it has been projected that the games industry will shrink this year and as a result companies are bracing for the impact? As a result, is that prediction, in fact, a self-fulfilling prophecy? Will the industry shrink because companies that are otherwise very healthy and performing well are holding back? Or is there something more going on behind the scenes that we haven’t seen yet? I’m not saying a government conspiracy…but…something something Area 51, Flat Earth, Illuminati.

For all those who have lost their jobs recently, we hope you find yourself landing on your feet quickly and wish you all the best. We can’t wait to see what projects you get attached to next, but if you do decide to leave the games industry it is completely understandable.

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MMO Money: Analyst Predicts First Video Game Decline in 24 Years

It looks as though Runescape creator Jagex may be for sale in the near future. Facebook released documents that are VERY anti-consumer. We also got a look at the December 2018 revenue chart for games, but the biggest news this week was an analyst who predicts the game industry will actually decline in 2019, the first time since the 90s. Find all of this below in this week’s MMO Money.

 

Jagex Possibly For Sale

Just a few years after acquiring Jagex, Fukong Interactive may be getting ready to put it up for sale. This comes at a time when Jagex is posting its best financial results ever, so the problem isn’t Jagex. In fact, it is Fukong Interactive that is the focus as they’ll be undergoing some restructuring. In a statement issued to GamesIndustry.biz Jagex Director of Communications, Rich Eddy, had the following to say.

“Fukong Interactive has issued a regulatory statement to advise the Chinese financial market that it is planning a major reorganisation and is considering sale of assets, with the partial or full sale of Jagex as a potential option. A sale of assets is one of multiple routes Fukong Interactive has available as it restructures and, by making this initial statement to the market, Fukong can now begin exploring such options.

“Whatever the outcome of Fukong’s restructure, Jagex continues to execute on our short-term and long-term strategies for the RuneScape franchise, which has seen five years of consistent growth, delivered lifetime revenues of $1 billion, and now has player membership at an all-time high driven by our living games approach and a successful first move to mobile with Old School RuneScape.

“Jagex has never been in better shape and the year ahead will see further investment in the organisation as we expand our talent base to create and deliver significant new content for our players, build on our Jagex Partners third-party publishing initiative, in addition to increasing our presence in mobile sector with RuneScape itself.”

Source: GamesIndustry

 

December Charts

SuperData is back with the final monthly game chart report for 2018, and it looks like December was a good month for Blizzard as they once again entered the charts. However, worldwide digital spending dropped 2% to $9 billion. In the mobile chart Pokemon Go continues to hold strong, now second only to the massive Eastern hit Honour of Kings. World of Tanks makes it on the charts for PC. Grand Theft Auto V continues its slow decline on console in the number six position on the chart. While PUBG and Fortnite had massive successes that can’t be ignored CS:GO is worth talking about. It’s now in its second month as a free-to-play game and has hit a new high for monthly active users. SuperData also estimates that the game, as a free to play title, made $49 million between November and December.

Source: SuperData Report

 

Analyst Predicts First Video Game Decline in 24 Years

Notable analyst Pelham Smithers has predicted that the video games industry will see its revenue decline in 2019. While speaking to Bloomberg he stated that his firm has predicted the games industry would decline 1% this year. That may not seem like a lot, but it is certainly noteworthy because it is the first time there has been any decline in the industry since 1995.

While a number of factors will contribute to this decline, Smithers specifically mentioned the ongoing effects of the 9-month freeze on new game approvals in China, which only recently ended. While approvals have started again the pace is slow which will continue the financial woes for the industry.

The mobile games industry is also being impacted by its inability to expand quickly and easily into China. This comes at a time when the industry has plateaued in Japan and the United States. Stagnation in one area means that declines hit even harder.

Declines like those being seen in Fortnite and PUBG. Both games saw the number of active users decline year-over-year as players grow tired of the format. Smithers predicts that this will trigger a slump in PC game revenue in 2019.

Talking about consoles, Smithers predicts that they will be unable to improve on the record-breaking year they had in 2018. Part due to it not being clear what games will be released this year but also that we’re near the end of the current console generation. Smithers observed that if the Playstation 5 doesn’t launch until the end of 2020 the console sector will continue to feel the effects until 2021.

Finally, Smithers warns that this decline could stretch into 2020. However, Bloomberg points out that rival analysts at Goldman Sachs, Nomura Holdings and Morgan Stanley disagree with Smithers and maintain that the video games industry will continue to grow.

Source: Bloomberg

 

Facebook Friendly Fraud Tactics

Farmville Screenshot Epic

Thanks to a recent class-action lawsuit, internal Facebook documents have come out that show Facebook encouraged what they called “friendly fraud” at the height of Facebook gaming’s popularity. Friendly fraud was what they called it when a child would overspend on games using their parent’s bank details. During this time they often refused refund requests and even ignored their own ideas on how to curb the behavior. Their internal documents even show that most often kids didn’t even know they were being charged real money. Facebook did change their stance…in 2016 when the era of Facebook games was all but dead.

Source: MMOGames

 

Keep an eye out later in the week for a special edition of MMO Money that looks back at 2018 with reports from across the games industry.

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MMOMoney: THQ Nordic Acquired Project Copernicus, Jagex Breaks Records

This week we’ve had some interesting and surprising acquisitions in the gaming world that are shaking things up. THQ Nordic acquired Project Copernicus, Pearl Abyss grabbed CCP, and Superdata was bought be Nielsen. Find out the details of all of those stories and more in this week’s MMO Money.

 

Jagex Has Another Record-Breaking Year

Runescape, a 17-year-old MMORPG continues to be the major driving force behind its parent company’s record-breaking profits. Jagex posted revenues of £84.9 million in its last financial year, which is an increase of 14.2% year on year. Profit is also up this year to £43.5 million, making it the best year in the company’s history. Jagex CEO Phil Mansell spoke with GamesIndustry.biz about the success the company has had this year. “2017’s growth came from focusing on nurturing our RuneScape communities and finding innovations that keep long-established games fresh and exciting for all types of players.” He went on further to say, “We’ve talked about our living games vision that’s driving Jagex’s future. The heart of that vision, and where we focus the most, is creating deep engagement between our millions of players and our games. The financials are the consequence of our players enjoying and valuing that engagement.”

With Old School Runescape about to launch on mobile, it looks like Jagex has a solid future and millions of fans to help keep them going.

 

Source: GamesIndustry.biz

 

Nantworks Invests in Daybreak Games, Creates New Joint Publishing Division

Nantworks, a holding company run by LA Times owner Dr. Patrick Soon-Shiong has invested in Daybreak and together they’re creating a new publishing division being called NantG Mobile. Projects that NantG Mobile will work on include mobile versions of H1Z1 and Everquest. It will also be taking over H1Z1’s Battle Royale mode on PC. As if this weren’t all enough Nantworks is also in the planning stages of a new LA Times Center space that will serve as a venue for esports events headed by NantG Mobile.

For some who have been following the news recently all of this may come as a bit of a surprise. It previously looked as though Everquest was winding down and may be coming to an end. But with a new mobile version of the game coming out, there may be new life for the 19-year-old game.

 

Source: Press Release

 

CCP Acquired by Pearl Abyss

The makers of Black Desert Online have purchased the makers of EVE Online, CCP. The acquisition is being made for $425 million and it is expected to close around October 12th. CCP will continue to operate independently from Iceland with offices in London and Shanghai.

It was just a few months ago that CCP announced a mobile game and the possibility of a TV series while teaming up with NetEase. Last month the deal with NetEase was expanded even more to include the expansion of EVE Online’s reach in China.

CCP appears to be doubling down on their MMO since they abandoned their virtual reality aspirations when the technology didn’t take off like so many thought it would.

 

Source: Press Release

 

Roblox Raises $150 million for Global Expansion

ROBLOX

Roblox is looking to expand internationally and thanks to a recent funding round they’ve got $150 million to do it with. The funding round was led by Greylock Partners and Tiger Global Management. Altos Ventures, Index Ventures, and Meritch Capital Partners who are already existing Roblox investors. With the money, Roblox will be able to support more languages and currencies while hiring new talent from around the world.

 

Source: Gamesindustry.biz

 

Superdata Bought By Nielsen

For the last few years, Superdata has been the gaming industry’s go to market research company for information on game sales and performances. Now they’re going to be part of Nielsen Holdings. Nielsen currently operates in more than 100 countries and employs somewhere around 44,000 people globally.

Chris Morley, Nielsen Global President of Games and Esports said this, “We recognize the growing importance of the digital gaming ecosystem, and the combined strength and expertise of our businesses will deliver best-in-class solutions and services to games and esports clients around the world.”

It’s nice to see the rest of the world catching up with what games have known for a long time, games r srs bznz.

 

Source: Press Release

 

UK Charts This Week

What will come as a surprise to absolutely no one who has spent 5 minutes online this week, the new Spider-Man game is at the top of the charts this week. In fact, in the top 10, there are 3 new entries this week, including Destiny 2: Forsaken. Check out the top 10 UK gaming charts for this week below.

This Week Game Last Week
1 Spider-Man New Entry
2 Dragon Quest XI: Echoes of an Elusive Age New Entry
3 Grand Theft Auto V 3
4 F1 2018 1
5 Crash Bandicoot: N.Sane Trilogy 4
6 Pro Evolution Soccer 2019 2
7 Mario Kart 8: Deluxe 6
8 Destiny 2: Forsaken New Entry
9 PlayerUnknown’s Battlegrounds 7
10 LEGO The Incredibles 12

 

Source: Press Release

 

THQ Nordic Acquires IP Rights to Kingdoms of Amalur

THQ Nordic has finalized the deal to get the right to the Kingdoms of Amalur games, which includes 38 Studio’s MMORPG Project Copernicus. The exact details of the acquisition weren’t published unfortunately so we don’t know how much was paid for the rights. Does this mean we’ll see Project Copernicus after all? That actually seems a bit unlikely. The MMORPG genre as a whole is on the decline. It seems much more likely that THQ Nordic will create other games with the IP.

 

Source: Press Release

 

EA May Take Belgium To Court Over Lootboxes

EA is currently under investigation for their failure to remove lootboxes from Fifa 18 and it looks as though they won’t be removing them for 19 either. Based on previous statements from those in charge of EA it looks as though the company is getting ready to take the Belgian Gaming Commission to court rather than caving in and removing lootboxes. The other companies that were found to be in violation of Belgium’s anti-gambling laws, Blizzard and Valve have both taken steps to remove lootboxes from their games for Belgian players. If they did go to court, there is the possibility that the court sides with EA, which would allow lootboxes to make a return.

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