Quantity vs Quality – Which Model Works Best for Mobile Gaming?

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As mobile gaming continues its impressive march toward becoming a $200 billion-dollar industry, companies playing in this space are launching products that aim to maximize profit and capitalize on new opportunities while also striving to meet consumer demand. This has led to the emergence of three distinct genres in mobile gaming; two at polar opposites, and one flirting with building a niche in the middle, but which is the best revenue model? Let’s take a look.

Three genres of mobile gaming: Hardcore, Midcore and Casual

In terms of game design, Hardcore games can be considered the highest benchmark on the quality vs quantity scale. These are immersive games that design studios usually pump millions of dollars into developing and marketing. They are often ports from PC or console titles (think Grand Theft Auto or Diablo), and compel continued gamer engagement through competitive multi-player challenges (like Fortnite and PUBG). Monetization primarily comes through in-app-purchases (IAP).

On the opposite end we have Casual games which are extremely lightweight files in comparison to their Hardcore counterparts. These apps download quickly and don’t require much from the user other than install and play. The interface for these games is usually graphically minimalistic with interactions dependant on existing gamer instinct rather than challenging the player to learn anything new (good examples are classic titles like Candy Crush or Angry Birds). The most common revenue model for this genre is in-game-ads.

In between these two we have Midcore, which as you’ve probably guessed, is a blend of characteristics from the previously mentioned genres. Quality-wise, Midcore is much closer to Hardcore providing better graphics and more immersive game play than a typical Casual game. Like Hardcore, it includes categories like RPG (Role Playing Game) and MOBA (Multiplayer Online Battle Arena), as well simpler categories from Casual like puzzles and card games. Like Hardcore, it also engages in competitive eSports tournaments and provides attractive player prize pools. However, it shows its influence from Casual by providing slightly less challenging game play and shorter paths to gamer reward. Continuing with the theme of blended models, Midcore uses a combination of in-game-ads and IAPs to generate revenue.

So which is the best business model? Pros and cons…

For game development companies, Hardcore and Casual offer two distinctly different approaches to the market: Quality vs Quantity. With the Casual genre, game release cycles focus on pumping out low-grade products with minimal investment as quickly as possible. Most of these games are developed in less than 2 months and are scrapped within weeks if they fail to reach a Day-1 retention rate of over 20% ^[1].

The Casual business model allows a company to rapidly test and validate gaming apps, picking the winners and quickly killing the losers before they become a drag on the company’s bottom line. The pro about this business model is that it maximizes efficiency for the primary purpose of extracting profit. However this business model does not allow much room for nurturing a valuable long-term relationship with players. LTV (long-term-value) is extremely low for Casual games and its source of revenue is limited to in-game-advertisements, which players tend to find disruptive. Combine this with a gaming app in which a user has little to no vested interest  (downloaded for free, no accumulated in-game assets, no real time invested in accomplishing level-up tasks, etc.) and you have a recipe for abysmal retention rates^[2]. Further, the relatively low cost to entry for Casual, combined with the sheer number of Casual releases being pushed into the market make it a super competitive space in which it’s increasingly difficult to carve out and defend a market position.

For a company interested in building long-term brand recognition and gamer loyalty, the Hardcore path seems the obvious choice. It’s perhaps a genre that can also more easily attract high-caliber developer and designer talent since there is a greater emphasis on crafting a high-end gamer experience. For obvious reasons, upfront cost for developing Hardcore games is more than in the Casual genre, but over time that cost is mitigated by the LTV of each loyal gamer a company is able to retain. Some aspects of Hardcore that may give a company pause before adopting this business model:

• Hardcore has a closer relationship with PC and consol and for that reason (and others) it sometimes struggles to make the transition to mobile.
• As mentioned, upfront cost can pose a substantial barrier to start-up for new companies.
• The mobile platform typically attracts a different type of player than PC or consol, and this player exhibits a greater desire for convenience and less patience to wait for large downloads.
• The limited storage space of mobile devices means that smaller apps are more likely to be retained.

Midcore plus Casual for the win

It seems Midcore is a natural path to future opportunity. Market saturation is driving developers of Casual games to seek more qualitative features in order to stay competitive ^[3]. Conversely, as the Mobile Gaming market rapidly expands to eat up PC and Console market share ^[4], Hardcore is being challenged to stay abreast of this trend by adapting its offerings to meet new consumer demand.

Midcore allows mobile gamers to have a quality experience while also retaining attractive aspects of Casual (speed and efficiency). Developers targeting Midcore can invest in building LTV from a dedicated player base which isn’t just made up of casual users of their products, but actual fans. However, Midcore games, like Hardcore, cost more upfront and take longer to develop. In my opinion, the perfect Mobile Gaming business model embraces Midcore games while also including a portfolio of Casual games in its stock. The quick-to-market benefits of Casual provide useful ballast to the rest of the business while allowing space, time and financial support for the creation of higher quality Midcore offerings.

My startup MEGAFANS successfully follows this hybrid approach, and I’m finding it’s a perfect way to attract and retain both Casual and Midcore players. MEGAFANS offers a best-of-both-worlds experience: bragging rights, a kick-ass experience and huge prizes for eSports level players, and quick, satisfying on-the-go games for players that just need to scratch the gaming itch. You can learn more about my hybrid approach by clicking here.

RESOURCES

1. https://www.gamesindustry.biz/articles/2018-09-19-how-do-you-evaluate-a-mobile-games-profit-potential
2. http://www.businessofapps.com/retention-is-still-a-major-issue-for-app-developers/
3. https://www.ironsrc.com/news/mishka-katkoff-shares-2019-predictions-mobile-gaming/
4. https://newzoo.com/insights/articles/global-games-market-reaches-137-9-billion-in-2018-mobile-games-take-half/