2020 Predictions #3: How to Get That RPG Loot
To make sure you don’t miss all the following prediction posts, please do subscribe to the Deconstructor of Fun infrequent but powerful newsletter. All predictions can be found here.
Unless otherwise specified, all data is gathered from the one and only App Annie and analysed by the author(s). Please take the numbers presented with a giant grain of salt. They are meant more for trend analysis based on estimations, rather than an exercise in accuracy.
So without further ado…
First, a quick overview of the RPG genre
Role Playing Games (RPGs) have generated nearly $3Bn in in-app purchase revenues year-to-date in the Western markets. This makes RPGs the third largest genre on mobile after Strategy ($5.4Bn) and Puzzle ($4.5Bn) games. What makes RPG a particularly interesting genre is not only the sizeable revenues but also the 18% growth of the market driven largely by new games launching and growing to reach the top of their respective sub-genres in just a few months. And while there are a few new RPG titles that rocketed to the top it didn’t cannibalise the already established titles which largely kept their impressive run rates. To summarise, the RPG genre boasts tough but relatively healthy competition where new titles can climb to the top and grow the size of the genre.
mid-core 2019
In our taxonomy we breakdown RPG genre into 7 sub-genres based on games’ features and core gameplay. At a glance the breakdown shows two things.
Firstly, it’s the red bubbles, which indicate that one or two games reap over 75% of the sub-genre revenues. Nearly all of the sub-genres are dominated by one or two titles. While the red bubble indicates incredibly tough competition, you have to pair it with the growth of the and the history of the sub-genre to truly understand the competitiveness.
For example, entering Fighting games is nearly suicidal effort. The sub-genre is dominated by Marvel and Dragon Ball games and the sub-genres graveyard is filled with high-quality titles like Mortal Kombat X, Injustice and WWE Mayhem. On the other hand, Idle RPG is comprised of two titles, Idle Heroes and AFK Arena, last of which launched last year reaching quickly a $100M a year run-rate with no strong IP to rely upon.
Second element your attention is drawn upon is the growth of the genre as a whole. Now let’s scratch the surface a bit.
As of today, Team RPGs (or turn-based RPGs as we called them last year) are roughly the same size as Match & Decorate games (comprised of hits like Homescapes, Matchington Mansion, Lily’s Garden…) but the growth is quite moderate compared to the puzzle genre. Spiky installs indicate launches of new titles, which are responsible for overall growth.
Idle RPGs (not to be confused with Idle games) and Puzzle RPGs were the biggest growing sub-genres in 2019. Nevertheless, Puzzle RPGs look to be at their peak while Idle RPG revenues have already declined. Installs are supporting the story. Puzzle RPG installs stayed roughly the same, which indicates no new launches but simply existing games monetizing better. Meanwhile Idle RPGs downloads graph shows massive growth followed by decline back to ‘normal’ state during the last couple of months. This speaks of a successful new game launch and growth.
Survival games saw some significant pushes in installs which didn’t materialize in equally significant sub-genre revenue growth as RAFT launched but failed to scale.
Fighting games install trends are spiky as is the revenue rate. The overall revenues are up impressively but the overall installs show a downward trend. The spikiness for both revenue and downloads is driven by the event based nature of the key titles in the sub-genre.
MMOs are mainly popular in the East and until writing of this article MMOs continued steady decline in the West. The reason for the decline seems to be a lack of key titles to draw player’s interest in these games. And it’s not the lack of trying. Lineage and Runescapes have entered the market but failed to gain meaningful traction in the West. Now of course there’s only one MMO that could reverse this trend bigly - and that’s of course World of Warcraft. Oh, and Black Desert looks to have a solid launch raking up $2.5M in Western markets in 10 days. But given its predecessors longevity, this is likely a golden cohort resulting in temporary spike. But we’ll keep an eye on this game.
Action RPGs are holding stable. The key difference between these two sub-genres is that Action RPGs have a Marvel game and MMOs don’t. Lack of flagship title in MMOs is visible in the download graphs as well.
Building and scaling an RPG game
What does it take to be a top grossing RPG game? This is the frequently asked question when looking at the growing sub-genre with multiple new and old titles bringing in excess of $100M every year.
There’s no ‘right way’ to succeed in the RPG genre. Hero Wars and RAID are two games in the same sub-genre, launched roughly at the same time and performing pretty much similarly. Yet on they look totally different and have a massive difference in production values.
First of all, you have to enter the sub-genre after thorough consideration. While the sub-genre doesn’t have one two games thoroughly dominating the revenue distribution, it is nevertheless a very saturated and highly competitive arena to compete in. Making a 3D team RPG like RAID Shadow Legends is very expensive both in terms of team size as well as the man months needed.
In it’s not only the price to make a competitive team RPG that creates a barrier to entry. It is also the incredibly high-quality and high price creatives that you’ll need to produce to scale your game. Not to mention the CPIs you’ll be forking.
To summarise it, failing to make and scale a high-quality RPG will likely doom a studio. To avoid this unnecessary scenario a studio should consider two elements:
Trap 1: Watch out for over-extending your production costs.
While games like Plarium’s RAID Shadow Legends boast a lineup of AAA quality 3D champions, you can get away with less. Just look at Hero Wars from a Playrix associated studio. This game significantly cheaper production budget with assets being done in relatively low-quality 2D.
Both, RAID and Hero Wars have scaled extremely quickly at the same time reaching $16M a month run-rate at the time of writing this analysis.
I’m not trying to make a point for making your game look cheap. In fact, a 2D game can look great – just like AFK Arena and LEGENDARY. The point I’m making is that high-quality asset production is not the only way to go. Unless you’re making a game with a renown IP (and controlled by a strict asset approval process).
Trap 2: Choose your IP carefully.
Standing out in the RPG market is challenging. There is a finite appetite for the variations of a paladin, a warlock and an orc player are interested in collecting. But when it comes to collecting baby Yodas and Avengers, the appetite seems infinite.
Marvel vs. Star Wars vs. Disney vs. Looney Tunes
But an IP is not a sure shot. Approval process will slow you down. Minimum guarantee will dig your budget into a hole and the licensing fee will handicap your user acquisition. With a right IP and a solid deal, you’ll rise to the top. With a wrong IP, your fall will just hurt much much more.
So here are general principles to follow whether you’re making a RPG with or without an IP in 3D or 2D:
Depth over gameplay. In fact, you can ditch the gameplay altogether like in AFK Arena. Afterall, most of the games in the category automate it anyways. Innovating too heavily on core gameplay is an unnecessary risk in RPGs and there are several cautionary titles in the RPG graveyard to prove this point.
Live operations are your livelihood. This goes with all the RPGs. New characters introduced through events that end in sales. New dungeons, multiplayer raids, guild wars all leading to players levelling up and ascending heroes in their roster. A well oiled production team that hits dates with quality while drawing data from analytics, community and good ol’ gut feeling is a must!
Straightforward content production. All those beautiful Sith Lords and Spidermans are expensive to model, rig, animate and integrate. The only way to go is to perfect the art production and art outsourcing. Always look to decrease production cost by simplifying the art style. Re-use hero rigs, limit the amount of bones or simplify animation or just go full Small Giant (a Zynga studio) and treat your art merely a functional piece of game design.
From 2D to 3D, from IP to no IP, from core gameplay innovation to no core gameplay at all. There are multiple ways to reach the top of an RPG genre, as long as you follow the three principles - and execute flawlessly.
To summarise it, there is more than one way to succeed in the RPG genre - as long as the depth, the appeal is there and the live operations are perfected. And by more than one way I don’t mean having a broad appeal versus being niched down to a smaller audience. Multiple ways to succeed refers to gameplay, art style and IP - or lack of it.
On the other hand, failure to succeed in the RPG genre looks nearly always the same. It usually starts with a kiddish IP, has a ‘new and exciting battle mechanic’ and ends with a more shallow metagame - which often is the result of that fresh core battle mechanic.
#1 Idle RPGs will drive the genre growth
AFK Arena, together with Idle Heroes, has been leading the charge of the emerging Idle RPG sub-genre. This sub-genre can be described as RPG games for those who have played RPGs before and are simply tired of watching their teams auto-battle dungeons several minutes on-end.
Last year we predicted that the turn-based RPG sub-genre will continue to grow. We based our prediction on the fact that compared to the East, Western market is nowhere near its peak despite seeing that Marvel was cannibalizing the market.
Top 5 Team RPGs in the Western markets. While Summoners Wars has declined to a half of its peak, the game is still monetising as well as other top rivals in the sub-genre.
Well, we were on the money with this prediction. Two Soviet born games, RAID and Hero Wars, launched nearly at the same time and grew the market by connecting with different audiences. Meanwhile Marvel and Star Wars ate each other’s lunches - after all, these two are nearly identical games aimed at significantly overlapping audiences. Summoners Wars was the biggest “loser” in 2019 in RPGs. It’s still a top game but the influx of new competitors combined with age of the title is taking its toll.
In early 2019 we didn’t have a specific sub-genre for Idle RPG because quite honestly, apart from Idle Heroes there was no-one significant to talk about. This changed quickly with the launch of AFK Arena by Lilith followed by scaling up of Ulala in Q4. Together these three have started a new growing sub-genre.
The rise of idle RPG games during last 24 months. While the growth rate of the individual games is declining, we predict new Idle RPGs to drive overall sub-genre growth. Whats interesting to notice is that in terms of revenue, Idle RPGs are on par with the best of Team RPGs.
Personally, I find these Idle RPGs fascinating. In a way I see a connection between Idle RPGs and Clash Royale. Clash Royale resonated with millions of players who had lapsed from Clash of Clans by offering them just the battle without the grindy building and troop training timers. Idle RPGs do the same for RPG players. It’s an RPG but without the need to play (or watch) the repetitive auto-play battles for hours on end.
In 2020 we predict that:
Team RPGs will continue to grow moderately driven by mainly existing titles and one or maximum two new games.
Idle RPGs will drive overall genre growth. The high accessibility and focus on the most important part of RPGs (character collection + deep metagame) make these games stand out. We’ll see several new games enter the sub-genre.
We predict that GLU’s Disney Sorcerer’s Arena will make between $30M to $50M falling significantly below target. The reason for this high-profile well polished game’s lack of success is the combination of an unfitting IP and misplaced focus on core gameplay instead of metagame. The high production values combined with an external IP will unfortunately make the stumble more costly.
No other Team or Idle RPGs with an IP will break into the top in 2020. We already have Marvel and Star Wars. It’s just too big of a risk to work with an expensive IP when games without one are succeeding just as well if not better. But hey, if DC wants to have another crack at the category, who wouldn’t love an Idle RPG with Superman, Joker, Batman, Atom...
Get deeper with our comprehensive RPG deconstructions:
#2 Puzzle RPGs will grow, but at a significantly slower pace
Small Giant’s Empires & Puzzles has seen amazing growth. But lack of new entrants and slowing pace of growth of the key titles indicate saturation of the sub-genre. At least saturation with the Empires & Puzzles look-a-likes.
Last year we predicted that the sub-genre growth will slow down after Empires & Puzzles’ growth tapers down. We also predicted that new games with an IP will enter the sub-category but won’t be able to compete for the top positions. And finally, we made a super bold prediction that someone will acquire Best Fiend’s maker Seriously.
Empires & Puzzles is in a league of its own with revenues constantly reaching $25M and more a month. But while Empires & Puzzles has peaks, Best Fiends is still, five years post launch, inching its way to the top.
Fun fact, we were again on the money with our predictions for the sub-genre. The growth continued to be impressive last year, yet still less rocket-like compared to the year before. Empires & Puzzles seem to have found its peak after almost two years of super impressive quarter of quarter revenue growth. Same as Best Fiends, which grew gradually for about five years before getting acquired by Playtika. Last year Best Fiends grew revenues by 86%, which has likely something to do with the team going all-in on monetization during the acquisition negotiations. And when it comes to new games with IP that failed? Do you remember SEGA Heroes, Pokemon Shuffle and Dragons: Titan Uprising?
In 2020 we predict that:
Puzzle RPGs will continue to grow moderately driven by new titles entering the market.
Empires & Puzzles will come down a bit as Zynga releases its follow up title Combat & Puzzle. We expect Combat & Puzzle to reach a run-rate between $5M to $7M a month. It will be a significantly smaller title but still a successful (and an easy) addition in Zynga’s portfolio.
We expect LEGENDARY to continue to decline as the game looks to have tapped out its small hardcore audience. We hope that N3TWORK comes quickly with a game to stop the decline as this is the only live title in the company’s portfolio. If N3TWORK fails to launch anything new in 2020 it is likely that the company will be acquired by a larger publisher. Out bet is EA or Activision, who both could benefit on N3TWORKS publishing tools and experience significantly.
Get deeper:
#3 Diablo will make a (moderate) splash
For the longest time the Action RPG sub-genre in the West has been led by a single game: Marvel Future Fight. There have been several entrants with and without and without and IP (Dragalia Lost, DC Unchained, Legacy of Discord, Darkness Rises, Taichi Panda to name a few) which have all failed to get any long-lasting traction in the Western markets despite being made by extremely successful Asian based action RPG studios.
These are the two top Action RPG games in the West. Marvel is declining with giant spikes reaching up to $15M a month during movie launch campaigns. Not too of an inviting market with a sizeable graveyard of high-quality games. This is also the market that Diablo Immortal is about to enter.
Last year we predicted that the sub-genre would grow significantly in the West driven by the success of the new Diablo on mobile - or more accurately - the Diablo re-skin of Legacy of Discord. We saw this game as a hit in the West and the East alike. Even though the original unveil of the game was extremely underwhelming for the core audience.
Our prediction was off simply because Blizzard failed to release the game. The fact that the game hasn’t been even soft-launched yet is very worrying. While we do have the full confidence in the Asian team crafting the game, Blizzards abilities on mobile are unproven (Hearthstone does not count).
In 2020 we predict that:
Blizzard will finally release Diablo and the game will settle at a modest $50M a year run rate in the Western markets. The slow-to-market bundled with Blizzard’s unproven mobile organization makes us worry that the team in California will slow down their counterpart (NetEase) in Asia. But as life-long Blizzard fans we naturally hope to be wrong on this one.
Diablo in the Eastern markets on the other hand is a bit of a mystery. Having NetEase publish and develop the game unlocks infinite potential. On the other hand, regulation of the Chinese market and Western IPs not resonating with Japanese players cut two of the three most important markets. Diablo Immortal, by the look of it, likely requires a high end device, which cuts off South-East Asia - unless a special low-end version with custom monetisation is made. So that leaves us with the South Korean market. If Diablo succeeds there, it will double its run rate.
#4 A billion dollar fighting franchise will launch in 2020
Marvel Realm of Champions is the game from the studio that brought us Marvel Contest of Champions. Same IP. Same Studio. More depth. Better graphics. Sounds like a winning formula.
Fighting games used to be the same as the Marvel Contest of Champions. No one was able to carve a spot in the sub-genre. Mortal Kombat, DC Comics, WWE Champions and Power Rangers were all knocked out cold by the powerful Marvel fighting game. Not even a game by the same studio (TRANSFORMERS: Forged to Fight - A Game Worth Paying $750M For?) could repeat the success. Not until Dragon Ball Legends was released in early 2018. Since then these two games have co-existed in harmony clearly catering to different audiences and skewing to different geographic areas.
But there’s once again a new game on the horizon set to enter the market in 2020. This game is of course Marvel Realm of Champions from Kabam. From the sneak peeks that we’ve seen this game follows the proven formula and seems to skew more towards player-vs-player realm rather than build-and-battle focus that the infamous Transformers Forged to Fight game took.
In 2020 we predict that:
Marvel Realm of Champions will launch quickly reaching a $200M a year run rate. We base this on the fact that the IP is proven on mobile as is the team behind the game. We like the fact that the studio has botched their previous fighting game - it just makes a studio mind their P’s and Q’s instead of pushing forward with indefinite confidence.
Marvel Contest of Champions will rapidly decline to a roughly $60M a year run rate from the current $165M a year run-rate as the bulk of the audience will move to the new game.
Get deeper:
To sum it up
RPGs revenue shares of all mid-core games declined significantly in 2019. It was 40% in 2017 and 39% in 2018 and got down to 30% in 2019. But this is not due to the RPG genre shrinking. Instead the diminishing share is due to Mid-core revenues as a whole growing faster (+25% Year-on-Year) than those of the RPG genre (+18% Year-on-Year). Growth of RPGs was mostly because of the rapid growth of Puzzle and Idle RPGs and the steady growth of Team RPGs.
The RPG market is mature. Breaking into the top requires (often) massive development investments, an unrivalled content pipeline and superb live operations. A studio working on an RPG has to focus on depth over core gameplay, have incredibly robust live operation capabilities and nearly impeccable production processes that keep the content fresh for the players.
A strong IP can be a massive boost while a wrong IP will dig the studio into a deep grave. A good comparison is Marvel Strikeforce, which topped $150M in revenues during its first year and Scopley’s Looney Tunes World of Mayhem, which has almost 80% lower revenue per install and a declining run rate pretty much since the launch.
There are two ways to win in the market. Either by bundling accessibility with depth or by embracing hardcore looks and bundling them with depth. Just look at RAID and Hero Wars. One looks as hardcore of an RPG you will find while the other embraces simple art style. Both offer plenty of depth resulting in pretty much an identical run rate.-
RPG used to be the frontrunner of meta game design. I’m saying used to, because Strategy games, and especially 4X games, have bundled RPG designs with MMO gameplay. Nevertheless, If you work in games, you simply have to be playing at least one of the top grossing RPG games. And as always, we here at Deconstructor of Fun are there for you offering the latest and most detailed breakdowns of the top RPG titles.
