Top grossing mobile game revenue will rise to $10bn, says Neil Young - MCV

Top grossing mobile game revenue will rise to $10bn, says Neil Young

The N3twork CEO and ngmoco founder discusses five ways to increase revenues in a market set to explode
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Revenue for the number one Western mobile game will rise to $10bn a year in revenue, says N3twork CEO and ngmoco founder Neil Young.

Speaking at Develop: Brighton today, Young claimed that the Western mobile market was not completely saturated, but rather was entering a new growth phase. He said the market will grow to ten times the size it is now.

He based his claims on the Japanese mobile market, which has grown rapidly since 2008. Young said Japan's mobile industry then is similar to the West's current market, but average revenue per user then gradually grew dramatically, leading to the runaway success of Puzzle & Dragons, which makes $1bn a year from players in the country.

Young warned however that free-to-play games have a bad reputation in the West, on which he placed some responsibilty on studios and publishers.

"This talk is not about building money hungry games, it's not a sustainable path for our industry," said Young.

He identified five areas companies should focus on to generate their revenues.

We have to see greatness

Youn said developers have to make something worthy of a player's time and money, and said studios need to "stop thinking of making games where you need to pay, and make games where people want to".

He also spoke of how genre-agnostic systems can "supercharge" player engagement, leading to better revenue and retentation, and that studios should actually focus on building for mobile, rather than chasing console quality.

Young said raising the quality bar of assets fights how people want to use their phones. Users want a game that boots up in ten seconds, doesn't drain battery life and can be played multiple times a day.

He also stressed the importance of adding layers of depth to a game, without which a game will soon fade.

Live for life

Secondly, Young stressed the importance of live operations, which a game will be defined by. Continuous development and deployment of content is key, he said.

Another aspect developers often overlook in the West is use of event planners, which many Japanese mobile gaming companies employ.

"If you asked [Japanese mobile gaming analyst] Serkan Toto what's the number one thing that differentiates Western and Japanese developers, he'd say it's inconceviable not to have a member of staff on day one that isn't an event planner," said Young.

He added this requires more than adding new items on Valentine's day, but rather are engaging events that are constantly happening.

"If your game is successful it wil be a three years-plus business," he said.

Patience

Thirdly, he called for patience when releasing games. He said studios should never go live until they have the right key performance indicators (KPIs), as they won't get those customers back if they launch too early and the title isn't up to scratch.

He also advised managing a team's expectations and stamina over the long haul of a mobile game's lifespan, otherwise staff could burn out.

It's also important, said Young, know when to give up on a game, and when not to, while also stating that "hope is not a strategy" - a game needs to be ready to go for launch.

Get World class

To be successful in a mobile industry that's set to grow larger, Young stated companies need to get "world class at every dimension of modern marketing", and think differently to how many publishers do now.

A great game needs to be augmented with launch marketing, a merchandising channel, scaled mobile performance marketing, scaled online performance marketing, social and community marketing, offline marketing and viral features, he said.

As a result, Young expects televised advertising like that seen at the Superbowl by Machine Zone and Supercell to occur more often.

Share the success

Young said it's a unique time in the industry, where a small team of less than 15 people can prove a game has exceptional lifetime value to users and make millions from it.

To this end, he felt companies need to make sure they are looking after their employees by fairly sharing earnings. For example, by offering a fair salary, competitive stock and royalty or bonus schemes for making popular apps.

"What ould you pay someone who created a $1bn game?" he concluded.

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