|To: gypsees who wrote (351)||6/1/2020 8:30:34 AM|
|From: Glenn Petersen|
|Zynga acquires mobile gaming company Peak for $1.8 billion|
Chris O'Brien @obrien
June 1, 2020 5:19 AM
Zynga will purchase Istanbul-based game developer Peak for $1.8 billion marking the largest acquisition in the company’s history.
In a press release, Zynga officials said the deal would be financed by $900 million in cash and $900 million in stock. Zynga had previously bought Peak’s casual card game studio in 2017 for $100 million.
The deal is the latest sign of Zynga’s resurgence. After several shaky years following its 2011 IPO, the company has reversed its fortunes thanks to a combination of inhouse game development and strategic acquisitions.
Peak is best known for mobile games such as Toon Blast and Toy Blast. The press release noted that Peak’s titles have ranked in the top 10 and top 20 highest grossing games for the iPhone for the past two years. With 12 million daily active users, executives project that the deal will increase Zynga’s DAUs more than 60% while also helping the company expand its international reach.
In a message posted on Peak’s website, founder Sidar Sahin said he was immensely proud of his company’s 100 employees and what they have accomplished since the company’s founding.
“Ten years ago we set out on an amazing journey to make our dreams come true,” he wrote. “Touching millions of peoples’ lives with our technology was just one of those dreams. Today we are one of the largest companies in the global mobile gaming industry. Our games are played daily by millions of people in 193 countries.”
Investors seemed to applaud the deal, sending Zynga’s stock up $.65 per share or 7.10% to $9.80 in pre-market trading. That’s also up from $2.86 per share five years ago.
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|From: Glenn Petersen||8/9/2020 10:39:25 AM|
|How ‘hyper-casual’ games are winning the mobile market |
Games makers are scoring hundreds of millions of downloads by churning out cheaply made titles
Tim Bradshaw, Global Technology Correspondent
AUGUST 6 2020
Hyper-casual games are made and released quickly and cheaply, often by teams of just two or three people © FT Montage
The company responsible for more mobile-game downloads last year than any other publisher around the world has no identifiable mascot like Super Mario or Lara Croft. None of its titles has the brand recognition of Candy Crush Saga, Call of Duty or Fortnite. Even the format it pioneered — so-called “hyper casual” gaming — is obscure to most people outside the mobile industry.
Yet according to market researchers App Annie, French start-up Voodoo outpaced far larger rivals including Tencent, Activision Blizzard and Nintendo by app install volumes in 2019. Voodoo says more than 1bn players to date have downloaded more than 3.7bn of its games, which include Helix Jump, Crowd City and Paper.io.
Hyper-casual’s position as one of the games industry’s hottest new trends was confirmed this week by Zynga’s $168m acquisition of Istanbul-based Rollic Games. Zynga chief executive Frank Gibeau called hyper-casual “the fastest-growing category on mobile” — making it the biggest new thing in the most lucrative part of the games business.
The hyper-casual concept is a reaction against the standard formula for creating games. Instead of an expensive and lengthy process of testing, polishing and refining a title, in the hopes that gamers will spend years playing, hyper-casual publishers work by volume, often pushing out a new title every week in the hope that something takes off.
Each app is built cheaply, often by teams of just two or three people, using crude graphics and super-simple gameplay. If a game starts to show promise, the publisher buys up audiences through cheap online ads, then churns them into revenues by showing yet more ads inside the game itself.
Helix Jump produced by French start-up Voodoo Aqua Park also by Voodoo “
They have done to Candy Crush what Candy Crush did to traditional PC games,” said Stephane Kurgan, former chief operating officer at Candy Crush makers King, and now an investor at Index Ventures. Whereas hundreds of people might work on traditional PC and console games such as Call of Duty or Grand Theft Auto, Candy Crush was initially created in six months by just a handful of people.
“The barrier to entry is very low and it’s highly capital-efficient” to push out dozens of hyper-casual games and “see what sticks”, Mr Kurgan said. Hyper-casual publishers such as Voodoo, Rollic and Ubisoft-owned Ketchapp draw on thousands of small development studios all over the world which are constantly pumping out new ideas.
“The cost of building games is dropping and therefore people can put out games really quickly and cheaply,” said Paul Murphy, a partner at venture firm Northzone and the founder of mobile game developer Dots. But he added: “Because you can get something out there for little to no effort, in hyper-casual there is a lot of crap, and a lot of clones, and a lot of clones of crap.”
Another games company founder lamented that the industry’s creativity had been reduced to an “Excel exercise” by the trend.
In Helix Jump, one of Voodoo’s most popular games, players must swipe left and right to spin a wheel, allowing a bouncing ball to fall as far as possible. Each attempt is interspersed with a full-screen ad, often for other games, while two more ads are layered on top of the gameplay. This density of ads, combined with hundreds of millions of downloads a month across the category, is what makes hyper-casual gaming so lucrative.
A typical user’s average play session on a hyper-casual game lasts just two and a half minutes a day, according to a joint report on the market by Adjust and Unity, two providers of tools for app makers, compared to nearly 20 minutes per session per user per day for other kinds of games. That means the average income from each user is also small, at a median of just $0.13, Adjust and Unity found.
However, hyper-casual publishers do not spend extra money targeting particular audiences — after all, who knows to whom games Flappy Dunk, Voodoo’s odd mash-up of Flappy Bird and basketball, might appeal?
“You have to be super appealing to the widest audience possible,” said Andrei Dubinin, who runs the new hyper-casual division of Russian publisher My.Games. “You have to appeal to billions, not millions.”
That means the companies’ distribution costs are also far lower than traditional games, often running automated ads on social media that simply show the app’s gameplay.
“It’s very clever to be able to have that arbitrage,” said Mr Kurgan, “but it only works as long as some platforms are inefficient. At some point the arbitrage shouldn’t fully be there.”
Tangle Master 3D by Rollic Games Baseball Heroes also made by Rollic
That leaves Voodoo, Rollic and their rivals racing to build a network large enough to be self-sustaining, using ads in their own games to drive downloads of new titles. The more games in the network, the more data publishers can gather on what players want, to inform the next wave of apps.
Still, some in the games industry are sceptical that any hyper-casual publisher can build a sustainable business longer term.
“It’s not a business in itself,” said the head of one leading mobile games developer, despite being a significant advertiser within hyper-casual games for his own titles. “New companies pop up all the time, it changes very fast.”
Alexis Bonte, group chief operating officer at Stillfront, a Stockholm-based games publisher, believes there is a “bit of a bubble” in the market. “There are a lot of hyper-casual studios openly on sale right now, trying to cash in,” he said, “which is always a sign.”
Nonetheless, Voodoo is hoping to become the hyper-casual industry’s first unicorn, according to people familiar with the matter. After raising $200m from Goldman Sachs two years ago, the company has been talking with prospective investors about selling another stake at a valuation of about $1.5bn and hopes to close the deal in the coming weeks.
Voodoo declined to comment on the negotiations, which had been previously reported by Bloomberg.
But even if hyper-casual does prove to be a fad, Mr Bonte said there are lessons for the rest of the industry in moving faster and using data to test new titles, accelerating an end to the practice of spending years developing a single game.
\I look at hyper-casual for inspiration,” he said. “I think there is something there.”
Additional reporting by Patrick McGeE
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