LKWD’S MD-LF CRSS: Halli Thor Bjornsson on turning things around at Lockwood

The creator of Avakin Life has been having a difficult twelve months. Richie Shoemaker spoke to CEO Halli Thor Bjornsson about it.

Lockwood Publishing, often stylised as LKWD (pesky vowels, always getting in the way), is known for two things: It’s flagship mobile title Avakin Life, seen as the successor to PlayStation Home, and in recent months getting a bad rap whenever it has had to let some of its staff go. It has done so twice in the space of a year. Last December 10% of staff were made redundant, then in September it was announced that another 15% of staff would be cut loose. Not a good look, especially when the first round was claimed to be unlawful by the Independent Workers’ Union of Great Britain (IWGB). Whatever the legality, it was inevitable that the headlines were recalled when the second round was reported.

Not a good look either that Avakin Life is considered a successful game. The company boasts more than 200 million accounts. There are eight to ten million users per month, we’re told, which can rise to a million in a day during special events like Halloween. According to SensorTower, Lockwood brought in over a million dollars of mobile app store revenue in September alone (which doesn’t seem like an awful lot in the grand scheme of things), just as the news was circulating that people would be losing their jobs ahead of record rises in living costs. Then there is the fact that Lockwood received a 25 million dollar investment from moneybags Tencent two years ago. By all rights Lockwood should be loaded, right?

LOCKWOOD AND LOADED

Well, not really. LKWD posted a small loss last year (so that’s where those OOO’s went), which suggests either Avakin is having a mid-life crisis, or the company is investing in new technologies to stave it off. Possibly both, given that when announcing a second wave of redundancies to staff in September, CEO Halli Thor Bjornsson spoke of “worsening economic conditions” necessitating Lockwood “adjust and adapt” to meet them.

The restructuring that is currently underway, into which Tencent has invested, makes sense when you consider that over the course of nine years, 30,000 items of clothing and other in-game objects have been introduced to Avakin Life, all of them created in-house. They have all directly contributed to Lockwood’s revenues to some extent, but in an age where the volume and consistency of user generated content directly impacts a game’s longevity and is very much the basis of many in-game economies (and very likely, for better or worse, to become the future of them), it was perhaps inevitable that Lockwood would have to one day remodel Avakin’s boutique department store into something more akin to a marketplace.

“That’s the direction we’re going.” confirms Bjornsson, saying that Avakin will over the coming years be a platform to create content. “We always wanted to do that, right from the beginning. We’ve been investing in tools and technology that would allow players to customise and create their own clothing items, their own interactivity and spaces. That’s really the future.”

ROBLOCK AND LOADED

Bjornsson cites Roblox as inspiration, both in how the ecosystem has thrived on mobile, and as a place for content creators and developers to establish themselves. “A lot of people are tuned into that.” (More than 50 million a day.) “Especially as it’s getting harder and harder for small developers to get started. The business model creates a space for small teams to start experimenting at low cost in a free-to-play social environment where you have some of the biggest problems already solved. You have users, you have a store set up, you have moderation, safety, you’ve got the whole infrastructure there.”

Web3 is another technology area that Lockwood is looking to capitalise on, with Jon Goddard, Lockwood’s senior director of corporate brand and communications referring to Avakin Life as a ‘proto-metaverse’ in the sense that the aim is to embrace community, digital ownership and interoperability. To a degree it already does, suggests Goddard: “We feel that Avakin has all those ingredients, but not on a Web3 kind of infrastructure.”

Although there are unknowns around licensing and questions around managing game economies, Bjornsson seems fairly confident that Web3 will become established, on the basis it offers many scale advantages. “The main thing for me is that the technology and stuff around Web3 helps facilitate the UGC economy. That’s a really, really big thing; empowering the people who are adding value on the player side.” More specifically, by using blockchain technology, Bjornsson says that it’s much cheaper to manage large volumes of micro payments. “The players do a lot of our marketing for us,” adds Bjornsson. “I’d much rather pay them than an advert, for example. Also the players create a lot of value, like retention. I would love to reward them for that. So when we look at Web3, we’re first and foremost looking at how is it going to add value to our players. And how it is really going to matter to our players.”

LOCKCHAIN AND LOADED

It’s easy to assume that Lockwood is simply jumping on the Web3 bandwagon, which, perhaps it is, but in the same way that the landscape is changing around games, the ground on which Lockwood had been standing is also starting to shift. This is specifically because of the recent IDFA changes (Identifier for Advertisers), which has essentially meant that ad tracking on mobile devices has become limited by default. “Organic discoverability on mobile is more or less disappearing.” says Bjornsson, “It’s switched to paid discovery and everyone has to adjust to that. To be an expert in paid user acquisition is quite an undertaking. You need scale. That kind of landscape tends to favour the bigger companies.” Bjorrnson says that by investing in expertise in data and analytics, there are less resources to develop the game. “But the reality is that we have to become much better at that, which is part of the transition.”

Getting a handle on paid marketing, while facilitating a change to allow user generated content is something Lockwood is hoping to transition towards within the next twelve months. It’s a process that has provoked a number of other changes and challenges, including launching a successful in-game chat system, TikTok integration (which happily has opened up new avenues for organic growth) and new in-game systems that I was given a sneak peek of on the understanding I not mention what they are. It’s an exciting time for fans of Avakin Life, especially for those fans looking for more creative ways to express themselves. However, whether there’s a heavier price to pay above and beyond that recently paid by departing staff members remains to be seen, because as much as letting staff go is not a good look, in the current hostile climate neither is the prospect of another game embracing play-to-earn. But, if that’s what’s necessary for Avakin to live it’s best life, who are we to deny it?

About Richie Shoemaker

Prior to taking the editorial helm of MCV/DEVELOP Richie spent 20 years shovelling word-coal into the engines of numerous gaming magazines and websites, many of which are now lost beneath the churning waves of progress. If not already obvious, he is partial to the odd nautical metaphor.

Check Also

Final Boss: DI4D’s Colin Urquhart

Every month an industry leader wraps up MCV/DEVELOP with their unique insight. This month, we speak to Colin Urquhart, CEO and co-founder of DI4D