Playkot co-founder Alexander Pavlov spoke about what his company has achieved this year.
Alexander PavlovHow was 2018 for you personally?
Well, thank you. A lot of work, personal challenges, the need to go to a different level of thinking. I don’t really like to talk about myself. Let’s move on.
How was the year for your company?
I will not exaggerate if I say that this year is comparable in importance for Playkot with the year of the company’s foundation.
Here’s the thing.
In the gaming industry, tectonic changes occur every few years, associated with the change of gaming platforms. 15 years ago, downloadable casual games were a huge market. 10 years ago, games appeared on social networks, the audience of casual games quickly flowed there, the frituplay model became dominant. Then the mobile games market emerged, the audience began to flow there. Four years ago, social games were no longer mentioned at the GDC in the USA.
So, watching the industry, you can see that a very small percentage of companies manage to successfully survive the change of gaming platforms. An even smaller proportion of companies, being successful on one platform, becomes even more successful on a new one.
Playkot started in the social games market nine years ago. In 2015, we decided to focus our main efforts on the transition to mobile and no longer launch new social games. It may seem to someone that it’s a little late for us to decide this. All right. Until now, Playkot has not been distinguished by an operational response to market changes, has not won in short-distance races. We are rather “stayers” — we run a long distance, we play for a long time. The company now has a goal for the next five to six years, although to some of its colleagues in the industry this seems to be complete nonsense.
So, for the last three years, the company has been plowing to successfully enter the mobile market. And now, based on concrete facts, we can proudly show that this entry into mobile has occurred. According to the results of the last two months, Playkot’s income from mobile exceeded the income from social. And this is despite the fact that the company is still growing in social, even in a falling market.
This happened due to the launch of our Age of Magic in May of this year, which was worth the superhuman efforts of the team. I will not tell you in detail about the game. Usually, instead of telling about the game, we prefer to give a person a smartphone with a running build so that the game speaks for itself. You can download and watch. The results after the launch are already good. But regarding the goals that the team sets for itself, the game is still at the beginning of the road.
Which event of 2018 do you consider the most important for the industry?
Launching Fortnite on Android bypassing Google Play. In mobile, such a large-scale act of disagreement with the terms of the platforms is happening for the first time. It will be interesting to find out how Epic themselves will evaluate this decision in a year or two.
In general, I like to watch how Epic affects the industry. The launch of Fortnite bypassing Google Play, the first place in grossing on iOS in the USA on battle passes, the launch of its competitor store Steam — with a commission of 12%. The company gained momentum with the launch of Fortnite and, apparently, is not going to rest on its laurels, but plans to seriously change the market.
What trends of the outgoing year would you note?
Hyper-casual and generally a low CPI strategy. Previously, companies mainly fought for an increase in LTV. Those who have more LTV can pay more for attracting a player, which means they can buy more players.
Hyper-casual companies decided that they would not compete with others in terms of LTV size and fight for a small percentage of paying players. We chose a low CPI as the main metric for ourselves. If you can buy a player, conditionally, for 30 cents, then the size of the LTV is not so important. Such a player can be recouped even only through advertising monetization.
This trend appeared earlier, but this year it became clear that hyper-casual companies can successfully compete in terms of revenue with those who work according to the usual strategy of maximizing LTV. There are companies that have made tens of millions of dollars in revenue in a year or two of existence. At the same time, they may not be visible in the grossing tops, since the main revenue is made on advertising.
Another trend is the rise of the subscription model in iOS games. A couple of years ago, most companies were skeptical about it, there were few successful cases. This year, some games and applications have shown that it is possible to be very successful already on the subscription model alone.
Often, when a new business model arises, companies appear that exploit the imperfection of the platform. So it happened in subscriptions. Apple is gradually regulating the market, taking care of the health of the platform and the interests of users.
What are the third-party projects of this year that you liked the most?
I was impressed by the success of the “Klondike” from Vizor. There have been no noticeable movements in the mobile farm market for a long time. It seemed that it would be very difficult to oust the old-timers of the genre. But the Klondike started very well. I am happy for Vizor and I am watching with interest how high the project can rise.
Great impressed with its atmospheric Sdorica. There are problems with gameplay and monetization. But music, art, style, and the game world are at the highest level.