This analysis is a part of Deconstructor of Fun’s Digest newsletter. You can sign up to the newsletter at the bottom of this text.

Games services providers have evolved along with the games industry. Today, especially on the mobile gaming side, the market has matured over the past 10 years with many of the key vendor categories having well entrenched and well capitalized players.

However, we operate in a dynamic and rapidly changing industry with extreme competition. Therefore, we should continue to see new types of service providers pop up offering ever elusive “alpha” to game studios.

Key Question: So what does the current industry landscape look like and where do we expect to see new players and services emerge?

Games Infrastructure Services Provider Landscape

The diagram above depicts a simplified industry framework to conceptualize the key categories of games infrastructure services providers. Further, we include 1. the stage of maturity of each sub-category and 2. the game studio functional roles that typically utilize those service providers.

With respect to the above industry landscape, we believe the biggest area of opportunity and innovation will emerge within Live Ops.

Why?

Growth Area: Console and PC games are increasingly shifting to free to play monetization and therefore a live operating model. Hence, a big new market of games developers will need to quickly gain live ops capabilities which will be expensive, take a long time, and require the right people to be able to hire in order to develop.
Information Leakage: Many of the best practices and live ops processes that took years to figure out were once locked away within the companies that operated top grossing games internally. However, as employees from those companies have left and joined other companies and as communication and shared functional communities have increasingly shared information, those practices have leaked out enabling others to figure out what kinds of infrastructure to build (e.g., Jeff Howell on “Regulars”, Joseph Kim on “F2P Sales”).
New Capabilities: The advance of technologies such as machine learning are opening up new possibilities in terms of what live ops and optimization infrastructure can do. These technologies are rapidly being deployed against major live ops applications.

In addition to what we’re currently seeing, we believe there will be additional innovation and new applications that open up in the live ops category. Examples of these applications include:

Live Ops Automation
Events Management
Battle Pass Optimization
Multi-Arm Bandit Optimization (over AB Testing)
360 Degree CRM
VIP/Regulars Optimization (as per Jeff Howell video)
Advanced Segmentation and Sales/Monetization Capabilities

One of the newest players to enter this space is Beamable (http://beamable.com), a new company that pivoted from former mobile F2P games studio Disruptor Beam. They are taking a lot of their learnings from live operating the hit F2P mobile game Star Trek Timelines and adapting those tools as a service offering within their new company.

Star Trek Timelines was sold to Tilting Point but has seen good success! According to Sensor Tower, the game achieved 5.7M downloads and over $55.6M in net revenue on mobile.

Even further, they achieved — approximated by Sensor Tower for mobile — $17.57 in revenue per download (RPD also called ARPI) in the US and $9.65 revenue per download on a worldwide blended basis.

Today we have the opportunity to talk to Jon Radoff, the CEO of Beamable (and former CEO of Disruptor Beam) about his new company and the opportunity that exists in services that optimize live ops.

Interview with Jon Radoff, CEO of Beamable:

JK: Hi Jon, thanks for joining us. I wanted to first start by saying that Timelines was very impressive in terms of monetization performance on a per user basis. What were some of the key tools that were used to help optimize monetization from a live ops perspective for that game?

Jon: We originally built a live ops platform to support our first game, Game of Thrones Ascent, for doing things like managing the store and shopping experience, limited-time offers, CRM, and social features. This evolved into something we called Disruptor Engine around Star Trek Timelines; I think where it really shined, and drove the unit economics you’re referring to, was in the careful matching of supply-side and demand-side of the economy. Supply-side means things like bundled and limited-time offers, merchandising, pricing optimization via AI, etc. Demand-side — which is the part people often don’t pay enough attention to — is the social factors such as effective events, tournaments and leaderboards, which are carefully tied back to the supply-side. We’ve taken a lot of this this technology into Beamable, and most of our Early Access customers are driving towards a similar structure.

JK: In terms of the framework I laid out above, would you agree with the framework overall and what are your thoughts as far as the opportunity for new services within live ops?

Jon: I agree with the way you’re framing the market — the 3D engines, ad networks, data systems and marketing tools are fairly mature categories. We will continue to see enormous innovation there, but what people lack is actual platforms they can trust for operating their games as businesses on a day-to-day basis. There are some middleware or “back end as a service” vendors out there. However, all the customers we talk to aren’t excited about stitching together UI and components and figuring it all out themselves. That’s the classic middleware problem. We need to get live ops to more of a “Shopify” level of simplicity, where it just works, and it plugs into your existing workflows.

JK: Can you tell us a little bit more about Beamable in terms of the initial services you’re offering, what kind of value that represents for game studios, and why you chose those specific services?

Jon: The three legs of the stool are content management, commerce management and social systems. We attacked it as a holistic set of services because the more we spoke to game studios — and looked back at our own experiences — these elements are the major areas of live ops that people waste their energy building and updating on their own, and these components have too many interdependencies to stand alone. We’ve made it easy to drag-and-drop these features into a game built on Unity, so that you can put the power in the hands of designers and product managers, which means that we embrace the way most people are already developing their games.

JK: Where do you think the market in terms of live ops services is headed? What are emerging and future trends in this space?

Jon: Our vision is for live ops to become accessible to every game-maker, even the indie working solo on their dream, so that everyone willing to put in the hard work of creating a great game can aspire to earn a living at it. This requires a major paradigm shift towards making live ops a no-code/low-code service stack, just as we’ve seen in other categories you’ve identified such as ad monetization and data analysis. Once we get there, we’ll have opened up the market to a vastly expanded number of creators. Live ops will be the thing that levels the playing field, enabling highly creative people and studios to compete with incumbents that have survived to this point due to access to large pools of capital and aging homegrown technologies.

JK: What about players? How will broader access to live ops improve their experience?

Jon: Having run games for years, I know viscerally that players have an insatiable desire for new content and new things to do in the games they like. This means that far more games are going to be able to deliver more fun things to do on a more consistent basis. We’ll also be in a position to proactively help game-makers avoid some of the pitfalls in terms of bad monetization decisions that have backfired on several publishers over the last couple years. Players don’t mind paying for games with great content and interesting things to buy. They despise being tricked or coerced. What we do is important for raising the bar on the total entertainment value delivered to players.