The hype behind hyper casual games
Anyone paying attention to the mobile marketing ecosystem would find it difficult to miss the rise of hyper casual games. But with the wild success of this innovative model, mainstream attention was never going to be far behind. Following a series of blockbuster deals with Adjust clients such as Zynga, Peak Games, and Rollic Games, it’s fair to say that hyper casual gaming is having a moment.
We’ve written about hyper casuals ourselves recently and the story of hyper casual game developer, Voodoo, which saw an exponential increase in downloads back in 2017, making them the third-best performing game developer worldwide – only losing out to Google and Facebook. A year later Goldman Sachs invested over $200 million in Voodoo. The message was clear: hyper casual games are in-demand and can be hugely successful. Hyper casual games have sustained this popularity ever since and now generate between $2 billion and $2.5 billion in annual revenue.
As hyper casual has continued to thrive, the valuations of companies in the space have continued to rise, culminating in the latest deal between Zynga and Rollic Games — and profiles in the business press.
“The cost of building games is dropping, and therefore people can put out games really quickly and cheaply,” Paul Murphy, a partner at venture firm Northzone and the founder of mobile game developer Dots told Tim Bradshaw, Global Tech Correspondent at the Financial Times in a recent article. In the hyper casual space in particular, this is combined with a laser-focus on data-led marketing decisions.
The business news daily also namechecked Adjust’s Hyper Casual Gaming Report to outline the unique monetization strategy that hyper casual games rely on.
“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.”
Hyper casual games rely on quick product timelines and low production costs to release new games incredibly quickly. These games are designed to be as simple — but fun — as possible. They very quickly assess which games are performing well and use smart budget allocation to maximize the number of users inside the app by going after the lowest CPIs they can find. Once the users are there, they show as many ads as possible. The difference between the low CPIs and the marginally higher revenue per user is what the hyper casual developer pockets.
“It’s very clever to be able to have that arbitrage,” the Financial Times quotes Stephane Kurgan, former chief operating officer at Candy Crush makers King, and now an investor at Index Ventures.
At all times, the big hyper casuals are constantly checking every aspect of their product, user acquisition strategies and messaging, using constant A/B testing to ensure that they squeeze every incremental gain they can out of each product.
“Hyper casuals have permanently changed the app marketing playbook and automation is the driving force behind their rise, unlocking the ability to get instant answers to a marketer's most vital question: 'what works, and what doesn't?'” Paul H. Müller, CTO of Adjust has said.
While the Financial Times sound a warning about the viability of the hyper casual model going forward, much of what the big hyper casual developers are doing is simply mobile marketing best practice, taken to an extreme. With no considerations beyond doing what the data tells them, hyper casuals can leverage small inefficiencies across the ecosystem into significant revenues. And even if the margins shrink, they’ll still be at the leading edge of data-driven decision making.
You can read more insights about hyper casual games in the full piece on the Financial Times website.