Weekly Business Report: Nexon’s Internal Restructuring, Ninja’s Leaving Twitch, and More

MMOGames Business Weekly Report is back to take a look at mobile gamer preferences for free to play games in China, the latest news from Nexon, Ninja leaving Twitch, and a few other topics relevant to the business side of making online games.


Automaton Games Shuts Down

Mavericks: Proving Grounds

Automaton Games, the folks who were behind the unreleased 1,000 man Battle Royale Mavericks: Proving Grounds, has shut down and in the process the game has died. In the announcement on their website, they cited a lack of funding as the reason for their sudden closure. Thankfully Improbable, the makers of SpatialOS, have said they will be trying to find places for Automaton employees in their company. Mavericks: Proving Grounds is actually the second SpatialOS game to meet its end in recent months leaving some to speculate that SpatialOS falling out with Unity earlier this year may have played a role. If that’s true, this might only be the beginning of SpatialOS related sunsets. MMOGames staff will be watching and will continue to bring updates in our weekly business report.


Source: MMOGames


Chinese Consumer Preferences

According to recently released research, over half of Chinese consumers prefer free to play or ad monetized games over premium titles. In fact, the research found that 61% of people prefer non-premium games. 85% reported they spend money on mobile games with 3% spending more than $50 (¥330) a month. In contrast, the average spending is just $5.80 a month. Those interviewed between the ages of 26 and 30 had the highest average spending at $10 a month.

The research also showed there is a high level of brand loyalty. 92% of respondents said they stick with a game for more than a week and 87% say they’ve played fewer than 5 different games in the previous month.

One challenge that developers face is how well divided the market’s stores are. In China, 30% of the market is using the App Store, 29% are using Tencent’s MyApp, and 26% use the Huawei app store. In the West we really only have Google Play or the App Store for mobile games.

It would be really interesting to see this same research completed in a few different Western countries to see how our views differ. I would personally much prefer to pay for a game or even pay a subscription for a game over being nickel and dimed to death by an in-game shop.


Source: Games Industry


Nexon Internal Merger Incoming

The last few months have been a wild ride for Nexon. First, their founder and CEO was putting the family’s stake in the business up for sale, worth between 9 to 11 billion dollars. After months of speculation that everyone from Disney to EA were interested in buying, it seems Kim Jung-ju may have simply decided not to sell. Of course, I’m sure a decision like that wasn’t made lightly. Following the release of this rumor, Nexon’s stock dropped resulting in a loss of up to 5%. Now we know that Nexon is reorganizing and merging their two core business units. No jobs are going to be lost in this internal restructuring, but the company is looking at getting rid of projects with low commercial value. They also hope that the restructuring will improve the company’s operating profits and increase its stock value. News of this restructuring started out as a rumor but was quickly confirmed by Nexon. It is set to take place sometime in August.


Source: MMOCulture


Ninja Leaves Twitch for Mixer

Ninja Fortnite

Ninja has announced that he will no longer be streaming on Twitch and is instead switching over to Microsoft’s Mixer platform. The specifics on this particular deal haven’t been released but last year he was making $500,000 a month streaming Fortnite on Twitch and a paid promotion deal with EA for Apex Legends got him $1 million, so it is safe to assume he got a pretty sweet deal. This marks a major shift for Twitch which has been seeing its growth slow over the last year.

Mixer has always been playing third fiddle to Twitch and Youtube but has also seen consistent growth. Last quarter it saw 119 million hours watched, an increase of 37% year on year. Ninja’s move to Mixer might be exactly the sort of push the platform needs to catch up to its two bigger competitors. However, Fortnite’s popularity, especially in streaming, has been on the decline. It is also possible that many of Ninja’s fans wont follow him to this different platform because they prefer Twitch. We can see an example of this in the industry already looking at people who refuse to play a game that hasn’t been released on Steam. Only time will tell how this transition actually goes.


Source: Games Industry



Zynga Eyes China

At one point in time just a few years ago Zynga was dominating the games industry. They were all we ever talked about it seemed like. Of course the days of Facebook games are long gone now, but that doesn’t mean Zynga is gone or that they’ve even slowed down. Zynga has been transitioning to a mobile game developer and having great success with it. They recently released Empires and Puzzles in Japan and Korea, the beginning of their strategy for expansion into the Asian market. Now they’re eyeing China.

In a call with GamesIndustry.biz Zynga COO Matt Bromberg said, “We are beginning to look at China for Empires & Puzzles as well, and as our portfolio continues to develop we have both Star Wars and the Harry Potter game on our slate for the future. When there are big global pieces of IP like that, which we think will resonate across Asia, we’re hopeful that will also help us expand there. We’re trying to take a measured approach to it, and learn as we go and make sure we have the right match of game and personnel on the ground and marketing strategy. When you get those lined up it can be terrific, but it is a complicated market and we’re still in learning mode.”

A complicated market is putting it lightly. Still, if they are successful in their push into China, they’ll be tapping into a mobile games industry with an estimated 586 million gamers.


Source: Games Industry

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Should Developers Be More Upfront About MMO Costs?

There is a sort of shared common knowledge about the free-to-play market for massively multiplayer games. It is one of those things passed around as “everyone knows”. Specifically, it is the fact that a small core of players in any given free-to-play title are supporting the rest.
There will be no judgment of that fact here. Not of the players who do not spend nor of the players who throw around large amounts on in-game items and stores. There’s enough going on in the microtransaction space to keep various YouTube stars and columnists in business for a while. In a way, those microtransactions, bought or not, are paying for content for you to enjoy.
MMO Costs
We’re going to focus on a recent Twitter thread by a game developer that highlighted the fact that only around 2% of a free-to-play gamers pay for items in the store when looked at en masse. That 2% enables the other 98% to play. Personally, I think that’s amazing. Not to the point where I would myself laud the spenders as somehow above the other players, but I do think it’s fantastic that there is a threshold. A point at which enough players buying the skins or boosts or convenience items ensures that the game continues.

The thing is, I wonder why we haven’t seen an MMO try to make the leap from a “social game” to almost a socialist one. This isn’t politics 101 so we won’t get caught up on which label applies best. Why isn’t there a game out there that is upfront (let’s call it upfront rather than honest as I do not want to imply dishonesty on the part of those games we enjoy) about the costs.
MMOs are not cheap propositions, neither in development nor in execution. The various MMOs that have popped up on Kickstarter all have, as they should for different projects, different funding goals. However, this leaves us, the armchair developers, woefully unable to judge exactly how much it takes to make a game and get it out in front of people. How much of the development of City of Titans is paid for, for example, and how much of it is an ongoing labor of love in spare moments here and there? How can Star Citizen, which has gathered a small mountain of cash, not yet have a game ready and out the door?
MMO Costs
We can’t know ourselves without some experts chiming in because for all the new tools making games development cheaper, easier, more welcoming to indies and hobbyists, we can’t know what figures are needed to get a game off the ground until we try. Nor am I suggesting that fans start a habit of directly funding the development and paychecks of people for a brand new game that may, due to the vagaries of the industry, never see the light of day.
In a way, I suppose I could be accused of slightly, and I do mean slightly, pining for the days of subscription fees. However, we all know from experience that those fees have kept some of our friends out from games before. Sometimes it’s enough of an ordeal to get a buy-to-play game and swallow the box price to test a game that you may not even enjoy.
Free trials and weekends do a lot to mitigate that, and I think the industry has a good handle on how to bring in new players and make the taste test as palatable as possible.
MMO Costs
I would like to see a game though that I could play, enjoy and then know absolutely how they were doing. Have enough of us bought the latest skin pack to keep things afloat? Are we all paid up on server costs? Developers and studios do have bills to pay, and sometimes it is the hit or miss of that new hero skin or silly seasonal weapon that impacts those funds. Maybe I am taking too simple a view of the transaction, the flow from my pocket to theirs. I know that for any given $10 I would spend in a game it will be fractions of a cent to each person in a large studio.
I just wonder if it would help. If it would heal some of the rift between player and developer. Or if it would aid in demystifying marketing and business. Of course, there’s the risk of anyone so honest having a barometer out there to show how well the game isn’t doing, just as it might show how well it is if people are buying and pitching in.
I don’t think that the answer is a return to the days of subscription fees but neither do I think it’s a good idea to have developers relying on the player base like it was a Patreon account. How many people are still throwing in their $5 and how many have gotten bored? Do we have enough to continue developing the next great expansion and/or game, or should we focus on more loot boxes because we need to pay the mounting costs?
MMO Costs
It may all just be a pipe dream or perhaps something that evolves out of public access to free game engines and super cheap computers. Who knows, maybe we will all one day be playing the next Minecraft looking MMO hit that is just too endearing and engaging to complain about how it looks. Maybe we’ll be playing on small servers made of clustered Pi computers: all tiny but greater than the sum of the parts. Maybe one day the tip jar will go on the website for this game, not as an additional thank you, but with a little goalpost. This is what the student needs to keep her little social space going for another month. This is what the weekend developer needs to ensure the lights stay on in his original world.
Maybe we’ll never get there. Maybe we will. I can tell you one thing about that game though, whatever it ends up being or wherever it ends up being hosted. We’ll get back to the spirit of the genre, of what attracted people in. We won’t be competing, we’ll be cooperating.

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