Continuing with top managers and experts from the gaming industry (and related fields) to summarize the year 2024. Up next is an interview with Alexander Lyubchenko, CMO of Kosmos Games.
How did the year turn out for the company? What achievements would you like to highlight?
The year 2024 was particularly successful for our company. We developed a strategy that allowed us to grow during these challenging times for the industry. As a result, we reached new heights in several directions.
Firstly, we launched two new games that quickly took leading positions on the Facebook Gaming platform*. Yes, yes, on social networks that many have forgotten and buried. They are alive, well, and developing. Now our portfolio on Facebook Gaming* contains three top-grossing leaders in their genres — Solitaire Social, Mahjong Social, and Yatzy Social. All three games occupy the 8th, 19th, and 49th positions in the platform's grossing top. Remarkably, the last two only launched this year and have surpassed long-standing competitors in terms of revenue.
Secondly, our product teams significantly enhanced our advertising monetization layer. The high retention of our products enabled us to significantly boost ad revenue and overall LTV.
Yatzy Social
The launch of our publishing division on Facebook Gaming* opened new opportunities for collaboration with other developers and expanded our product portfolio, while also providing our partners with opportunities for additional monetization of their products. Having worked on this market for a long time, we have developed unique technologies and processes that allow us to strategically launch products to become genre leaders. We are currently publishing three new third-party games, refreshing our game catalog with new quality products.
For the first time, as a strategic development point, we included well-being across the entire company. And this isn’t about virtual and hyped-up work-life balance, and so on, but real actions. We understand that achieving ambitious goals requires sustaining productivity and team spirit. We succeeded in achieving two very cool results.
Firstly, we increased planning accuracy by 73%.
Secondly, the number of overtimes decreased almost 20 times!
And all this while increasing team productivity throughout the year!
By the way, there used to be an issue with vacation accruals; part of the team would not take their vacations. Ultimately, we managed to reduce unused vacations and their accrual by 1.5 times, thanks to improved planning and conveying the importance of timely rest for the physical and psychological well-being of the entire team.
Mahjong Social
How has the situation on the gaming market changed, in your opinion?
In 2024, a certain growth was expected from the global gaming market.
Newzoo forecasts revenues of $189.3 billion, which is 2.9% higher than the previous year. This is much more positive than 0.6% the year before. However, the factors behind this increase are not strongly connected to our usual growth driver — the mobile market. It is expected to only grow to $78 billion (+1.6%). The growth is mainly driven by the following factors:
- an increase in console and PC game sales;
- continued post-COVID recovery;
- further development of the Game-as-a-Service direction and a stronger emphasis on developing LiveOps for existing games;
- the expansion of the gaming audience, especially in developing regions (this contributed more to the overall market growth than to revenue growth).
Additionally, there's been a notable increase in interest in the iGaming niche, which has turned into a separate, prominent segment of the market.
Mahjong Social
Many companies faced challenges related to declining marketing efficiency. To me, it looks like a practically horizontal revenue line, but with a continuously increasing marketing spend line. This has led to a decrease in interest in M&A deals since companies in weak positions have become less interested in selling, with many still remembering the multipliers from the COVID times.
It's clear that even large studios are choosing safer strategies, avoiding the release of new games and preferring to develop sequels of titles that have already succeeded in the market. Franchises are also accommodating this, as it expands their points of engagement with their audience and attracts new gamers.
At the same time, there were also major deals in 2024. Besides the acquisition of Scopely for $4.9 billion, there's also Microsoft's purchase of Activision Blizzard. The deal, worth $68.7 billion, which began in 2022, was finally completed in 2024, becoming the largest in the history of the gaming industry. Additionally, Sony Interactive Entertainment's acquisition of Bungie for $3.6 billion is notable.
These events indicate the ongoing consolidation of the market, where large companies aim to strengthen their positions. Unfortunately, such events will inevitably involve restructuring and layoffs.
Mahjong Social
How has the year been for the genre you work in?
We work in very popular and established casual game genres, yet we have intentionally delved into instant and web games, where the competition is not as fierce as in mobile. We observe other developers also expanding their products beyond mobile and broadening their distribution channels. This is generally good as it enhances the attractiveness of catalogs with new quality products, which in turn grows the audience outside of classic mobile. This is also facilitated by the recent emergence of iOS payments on Facebook Gaming*.
However, if you look at solitaire and mahjong genres in the Google Play and App Store, nothing new has happened; quite the opposite. Many, even large companies, couldn't stand the competition from long-standing genre leaders and froze projects. For example, popular and well-earning solitaire games like Tri Peaks succumbed to the long-time leader Solitaire Grand Harvest by Playtika. This is clearly visible in the numbers and the sharp transition from growth to decline in other solitaire games.
Solitaire Grand Harvest, even back in 2020, earned $168 million out of $238 million in IAP revenue for solitaires, i.e., 70%. Similarly, for the first 11 months of 2024, out of a total gross of $280 million, it took $197 million, i.e., again 70%, although the remainder was split among many more games than in 2020. We observe a similar situation in all established genres with clearly defined leaders. This is generally not bad as it forces other developers to come up with new hybrid genres, thereby advancing the industry.
Solitaire Social
What trends in your niche do you expect to strengthen or emerge in 2025?
We expect the strengthening of several key trends that will shape the gaming industry.
Continued growth of cross-platform games
Players continue to venture beyond a single platform and value the ability to play on different devices without losing progress. This positively impacts web games and social network games.
Increased focus on content personalization
Games will offer deeper customization and adaptation options tailored to individual preferences and user behavior, including visual elements and adaptive game mechanics that suit each player’s style. The development of AI and intensified competition are propelling developers in this direction.
Growth in cloud gaming popularity
Cloud technologies will allow players to access games without the need for powerful equipment, further expanding the audience and simplifying access to quality products from anywhere in the world. Given the market's growth, primarily from console and PC games, this is a crucial lever for further development, enabling escape from the limitations of having specific consoles at home.
Mahjong Social
What are the company's plans for the coming year?
The plans for next year are ambitious. They aim at further strengthening our position in the web and social games market:
Expanding the game portfolio
We plan to release several new projects.
Development of the publishing direction
We will attract even more new partners and developers with great quality games to offer diverse and quality games to our users.
Investment in technology
Developing our technological solutions will allow us to create more innovative and competitive products and be less reliant on potentially unpredictable external solutions. We continually integrate AI to enhance the gaming experience and increase the efficiency of all our teams, from back-office to marketing.
Increasing revenues
Working with our existing game portfolio and expanding it is yielding results. We will continue to actively pursue this in the new year, including developing the publishing direction.
Conclusion
The year 2024 was one of significant changes, achievements, and growth for our company. We are grateful to our wonderful team, partners, and users for their support and trust. May the force be with us.
Solitaire Social
*The social network is banned in the Russian Federation.