Hey there! Hope you’re having a productive week. This week’s Market Wire is a bit delayed, but a lot is happening.

Quick Announcement:

Next week, I will be moderating a discussion about liveops best practices for the #7 top-grossing game in the US: Jackpot Party. You can see this game in US Top 10 Charts below!

• How do some of the best in the business manage a top-10-grossing game? Sign up and find out!

• Read more about the unfortunate cancellation of Apex Legends Mobile below (one of my favorite shooters on mobile). You’ll understand how critical liveops is for success, so check out the webinar.

• Sign up: HERE

Poll Results:

Also, below are the results from last week’s poll on stack ranking. Lol, it looks like most people don’t like stack ranking.

I’ll be hosting a discussion/debate on stack ranking from industry experts on both sides of this debate later on. Stay tuned!

Market Data

Top 10 Charts

• Where did Apex Legends go wrong? Game for Peace (PUBG) and Call of Duty Mobile both top 10 worldwide revenue.

• Shoutout to Cameron and Dafna from SciPlay for Jackpot Party Casino at #7!

• CrossFire consistently top 10 in China. Smilegate should put more effort into a CrossFire game for the global market.

Top 10 Publishers by Rank

Top 5 Trending Downloads & Revenue

Top News

This week we’ll cover just one news item, but it’s a big one. One advantage I have is that I work in this genre and have access to a lot of industry information that is not typically accessible to those outside the games industry. And from both East and West perspectives.

EA cancels mobile Apex Legends and Battlefield games, shutters Industrial Toys studio (GamesBeat)

I’m sure many of you are already familiar with this story, but just to summarize:

• “Electronic Arts announced it is canceling its Apex Legends Mobile and Battlefield Mobile games. And as a result, it is shutting down its Industrial Toys game studio.”

• Further, if you remember Apex Legends Mobile “won Apple’s Game of the Year for 2022 as well as the same for Google Play. Now the game will shut down in 90 days.”

• “Battlefield Mobile was in soft launch, but it will also end.”

• “In a blog post, Respawn Entertainment cited slipping quality for Apex Legends Mobile’s updates as a reason for shutting down the title. EA made the announcement as it released earnings for the third fiscal quarter ended December 31.”

Battlefield Mobile

If I’m being honest, Battlefield Mobile wasn’t a huge surprise. The game didn’t look great from the soft launch, and it’s increasingly difficult to make high-quality games in the West. This will be an ongoing trend unless costs and labor in Western game development studios change dramatically.

Back in November, I checked out the Battlefield Mobile soft launch and was concerned. In my private slack group, I posted the following:

The Chinese big dogs of mobile (Timi/Lightspeed/Netease/MiHoYo, etc.) make super high-quality games. Don’t get me wrong; I’m not claiming my own company is better, and my intention is not to try to cast stones. Just to be clear: If anyone saw the quality of the build of my company’s game, it wouldn’t even be close to Battlefield, and we got a super long way to go.

However, there is a big difference in quality between the Chinese big dogs and other companies outside of China. China today has very experienced, lower cost (relative to the West), and much harder working employees who are very difficult to compete with.

See: On Rooster Cages and Rise of The White Tiger

In recent history, it’s generally not been publicly discussed, but many of the big companies working on big games with big budgets have been shifting to co-dev or hybrid team models between China and the West. These companies include Respawn, Activision/Blizzard, and Riot.

The West will bring IP and Western game design sensibilities, and China will do almost all of the development.

Apex Legends Mobile

So what happened to Apex Legends Mobile?

Let’s take a look at the data.

Revenue:

Over the past 3 months, Apex Legends Mobile's net revenue has been declining, and especially after a Christmas spike, the game has now declined to make less than $20K per day based on data.ai estimates:

Paid UA:

We can also see from data.ai estimates that it seems that the revenue decline naturally corresponded to a pullback in paid marketing right before Christmas:

That’s likely around the time the team decided to pull the plug on the game.

RPD (revenue per download):

From data.ai estimates, we can see that Apex Legends Mobile couldn’t gain further uplift in ARPU growth. The game flatlines, as depicted below:

Compare $1.47 iOS and $0.40 Google Play to Call of Duty Mobile, a top ten worldwide grossing game that makes considerably more per player:

Hence monetization seems to have been a major problem for the game.

Well, geez. Who could have predicted this?

Here is an excerpt from a post about Apex Legends Mobile I did with data.ai last year:

Drilling down, I clarified the above two points in that same post which I show below:

Myke Hoff from Respawn posted some additional color regarding the shutdown on LinkedIn, which I share below:

Here’s Myke Hoff’s LinkedIn. Maybe you can reach out if you can help place folks on his team. I only know Myke casually, but from my conversations with him, I think he’s a really good dude.

The Future

The future meta for winning in game development is still emerging. Co-dev and hybrid West + China teams have worked very well, but the word on the street is that these relationships are starting to turn extremely adversarial.

From every company I mentioned above on every major game project doing co-dev or hybrid with one of the Chinese big dogs, I’ve heard industry rumors of MAJOR issues and relationship challenges between the two sides.

As someone who led the overall King of Avalon team at FunPlus in China, we also had major problems between the West and China. Multiple offices and this split did not work well for us, which is why I eventually pushed the full team to build out of China.

The kinds of rumors, politics, and misinformation I’m hearing about from both sides on almost all of these game projects make me believe we may see less of these co-dev/hybrid relationships. But what is the alternative? I don’t think building out of the West alone makes sense economically, at least not currently.

The world is dynamic and changing everybody.

The winners in this space will be determined by those who can figure this out and develop a long-term sustainable model that is more effective than what others do.

We’re in one of the world's most complicated, difficult, dynamic, and interesting industries there is. Watch this space and stay tuned.

Good luck!