We continue to summarize the results of 2023 with the game teams. Next up is an interview with Alexander Pavlov, co-founder of Playkot.
What was the year like for the company? What have you done that I would like to highlight in terms of achievements?
First, I'll share our goals. Now the horizon of our strategy is quite long — three to four years. We aim to grow three to six times over this period, and this is quite a big challenge.
This year, everything is according to plan, we even exceeded the revenue figures: we aimed for growth by 30%, but grew by 40%. And this is only due to our current portfolio — Age of Magic, SuperCity and Spring Valley.
We expect that half of this three- to six—fold growth target, which I mentioned above, will be achieved through our existing portfolio, and the other half through new games that we plan to release in 2024-2025.
To make all this work, we have been working hard to strengthen the teams and attract more of the strongest specialists in the industry. This year we have made significant progress, and, in fact, the figures confirm this.
We have noted several important achievements this year.
Our Spring Valley became one of the 98 foreign games that were allowed to be published in China, and this is a great success. Pixonic, Nekki and Belka have also received licenses, and I am happy for my colleagues. The Spring Valley team is waiting for the results of the review right now (update from Playkot: On December 28, Spring Valley successfully launched in China. — Ed.).
Spring Valley
Spring Valley has set the bar at one million installations per month and noted $1 million in revenue per month — and this is just over a year after the launch. A million is just the beginning. Spring Valley is rapidly gaining momentum and growing: in six months we have doubled revenue.
At the same time, Spring Valley is a very young project that is actively developing. At this stage, it is necessary to periodically review the approaches to work, because a team of 10 people and a team of 70 people have fundamentally different approaches. It's expensive, but we try to maintain a balance between the environmental friendliness of the changes and the speed that is needed to keep up the pace.
SuperCity has marked $80 million in total revenue over the lifetime of the game. Such venerable games are characterized by a gradual decline in revenue and activity, but the SuperCity team is still growing the project 12 years after launch, and I am very happy about this. This year we moved to the Instant Games platform on Facebook, took the third place in the top grossing Instant Games there and became the first in the ranking of bodybuilders.
SuperCity
Age of Magic is also growing in revenue: in 2023 it earned 50% more compared to 2022.
In general, the market situation is not easy, and it seems that a 40% growth in such conditions is very cool. As for new games, we launched the development of a new project this year and are preparing to expand our portfolio next year.
How has the situation in the gaming market changed?
You ask what has changed. I would say that, in general, the trends of 2022 continue. Some studies say that the market is falling, others — that it is worth it, others — that maybe there is a slight rise, but the period of rapid growth is definitely over. At this stage, classical processes are taking place: the market has slowed down, so there is less and less investment.
The capacity of the gaming industry has remained at the same level.
Companies are starting to take more care of efficiency, so the trend of last year's reduction and optimization continues. Every month we hear that another company has either closed down or cut some people.
Now is the time for innovation. The strategies that worked four or five years ago no longer work. Previously, you could just follow the trends — if you packed the gaming experience already familiar to the audience well into another wrapper, you could earn money. That time is over.
Now, to make a successful game, you need to offer a new gaming experience. You need to be different and look interesting. Those who do it grow up. And those who continue to follow the same strategy, rather, things are not very good.
As I said, this year we launched the development of a new game, and we are changing the approach to launching new games in general, rethinking the product discovery stage, making production pipelines more flexible and faster.
What was the year like for the genres in which you work?
The expedition genre is still an interesting market, it feels good. New games continue to be released here, and they are succeeding. But the competition is getting stronger. We are still new here and strive to take a significant market share — for this we need to run faster than everyone else and catch up with competitors who have been shaping their approaches for years. To catch up with them in terms of volume, quality of content, and the quality of how we work with the game and with marketing for it. It seems to be working so far.
The downloads of expedition games are growing, but revenues have reached a plateau (the ocean is turning red and the growth of the market is replaced by its redistribution)
The market is difficult for battlers right now, especially in the west. There is very fierce competition, especially from Asian/anime battlers - they dominate the world as a whole, and in the West, and, of course, in Asia. In terms of revenue, the market is rather stagnating (we see a drawdown on the charts of analytical platforms, but it is partially or completely compensated by the withdrawal of payments to external stores).
In terms of volume, the buttler market is still an Asian market. Asian countries — primarily, of course, China, Korea, and Japan — account for twice as much income as Western ones.
The notable releases in the West that we are following are, first of all, Honkai Star Rail, a new game from miHoYo — a huge release! The game has already taken up to 15% of the Western battler market. SOULS, Watcher of Realms, Dragonheir — interestingly, the last two are visually much more "Western", that is, now not only anime battlers can successfully enter the West.
A huge growth point now is external stores, which became possible due to forced easing from the platforms. Now developers can avoid paying commission to platforms. How long this opportunity will still be open is a question, but already many battlers have transferred a significant part of their payments to external stores. These are usually either stand-up sites or services like Xsolla.
Total money by genre
Money in the genre in the West
What are the company's plans for next year?
In a nutshell, we need to launch the development of all the games that we have planned and get progress on projects that have already been launched. Double Spring Valley's revenue, transform the Age of Magic strategy, and complete a major technological transformation phase at SuperCity.
We see that Age of Magic can grow several times more due to the influx of new audiences. At the same time, for a long time we have concentrated 90% of our efforts on retaining the existing audience. Now we are shifting the focus to attracting new players and scaling through purchases.
Age of Magic
If earlier we evaluated features through the prism of current activity and revenue at the moment, for example, for a month, now we primarily evaluate changes from a long—term perspective — how they will affect the LTV of a new player - and give preference to those changes that will have a greater impact on this indicator.
We are also reviewing our marketing approaches. Marketing is currently working very closely with the product team — and sometimes changes in the game may depend on what is needed now from a marketing point of view.
As for SuperCity, the game, as we say, is venerable, and it has been transformed technically several times over the years. Since we expect SuperCity to develop for at least another five years, it is important for us that the project uses modern technologies that will not become a thing of the past in the near future — so now we are switching to TS.
A year ago, we launched a major technological transformation project, and now it is coming to an end. At the beginning of 2024, the game will already work on a new technical filling. This will help the team to further develop the game.
Next year is crucial for our three—year strategy. "Product expertise" and "conscious consumption" are our two main mantras for next year. We will do things that significantly affect the product metrics that are important to us, and not do things that do not affect them. Consciously, take care of your own energy and resources: do not be sprayed and keep the focus on the most important thing. With these two superpowers, we will make the next year a success.