The round table: What is going on in the hyper casual games market?

1. What is the hyper-casual games market today?

Evgeny Sidorov, expert

The market is transforming from quantity to quality. The decline in advertising revenue is affecting. Moreover, attracting new users does not become cheaper.

Gleb Durnovo, Head of Everplay Studio

The current situation in the hyper casual games market can be compared to the times of the gold rush: the Klondike ran out of gold, which until recently could have been easily mined, and after that the whole region was immediately emptied.

In other words, this whole hypercausal carousel, which had been spinning for a long time, stopped spinning for certain reasons. Accordingly, all those who were drawn into this orbit (we are talking about a lot of teams, since, on the one hand, the niche was the entrance to the game dev for solo developers and indie teams, on the other, it was interesting to established studios) are now desperately trying to figure out what to do next.

Pavel Karabanov, Head of the hypercausal department of Highcore Games

As the hypercage business model continues to degrade, ROAS is far from impressive here.

Today, in a niche, developers are faced with the task of searching for and implementing in such games those mechanics that will significantly increase retention (they focus on ensuring that there is a high retention on the 15th-30th day of the game).

Moreover, everything is fine with the CPI on the tests. After global growth last year, we are now seeing a plateau. However, CPI as a metric does not play a key role, it is not a revealing factor for the success of the future game.

Nikita Matylevich, lead Boost Team 1 in Highcore Games

If you look at the charts of the most downloaded mobile games over the past month, you can see that in the first places are either titles released a long time ago, or new items that are reworkings of old gameplay concepts.

Important: as a rule, processing goes towards complication. Hypercausal runners are a good example. Previously, such games were limited to one core mechanics. In modern hypercausal runners, there are at least two core mechanics, and in some there is an idle component.

The example of runners today is extrapolated to the entire hypercausal niche.

A lot of people are moving towards hybrid monetization, wanting to achieve greater profitability. Its implementation just requires the complication of the gameplay. There will be no complex exciting gameplay, there will be no willing player to pay.

At the same time, we continue to observe a large number of new titles that live exclusively on advertising monetization, bypassing the general trend of switching to hybrid. They earn much less, but they still have the opportunity to go global (global release).

Alexey, founder of Icupgame Studio

The format of "pure" hypercage is becoming obsolete. There are mainly large players in the niche who earn money from old hits and previously attracted traffic. Beginners in 90% of cases try to copy other people's hits, which rarely leads to success.

Yes, web platforms are now trying to extend the life of the format for some time.

2. What problems are faced by developers of hyper-casual games today?

Evgeny Sidorov, expert

• Micro-teams of 3-5 people can no longer compete in the market for the attention of users.
• The bar for the quality of projects has become much higher, and accordingly, the development time has increased.
• Publishers are less willing to provide funding.

Gleb Durnovo, Head of Everplay Studio

The main feature of the hypercausal niche was that it was possible for a very small team (sometimes even alone) to create a box office hit in a short time with relatively little effort. This was possible, among other things, due to the small requirements for the quality of the project.

The situation is completely different now. The market has narrowed significantly. The competition has grown. In this regard, all teams that want to stay in the niche must ensure a high level of development quality.

However, with the increase in the cost of production, revenue did not increase. That is, the quality requirements have changed significantly, but publishers were not ready to pay for this quality. As a result, many small teams began to leave the market: they were unable to pay for the crutches on their own.

Pavel Karabanov, Head of the hypercausal department of Highcore Games

• Today, teams often lack the experience and expertise to competently implement mechanics aimed at increasing retention.
• Some teams do not understand well enough how their own games work, what a modern player wants from games and, in general, current market demands.
• Without access to big data, relying solely on market analysis and competitors' games, it is difficult to make effective decisions. Since it is unclear before the tests how each specific feature can affect the metrics, the team will implement each new feature without fully understanding what to expect as a result.

Nikita Matylevich, lead Boost Team 1 in Highcore Games

In my opinion, the main problem is false expectations. The market has been rebuilding for a long time. Unfortunately, many developers still do not understand this or simply do not want to accept the changes that are taking place, that the rules are changing, the market is becoming more difficult.

Unwillingness to look at reality soberly affects planning. It becomes impossible. This immediately condemns the studio to failure.

What expectations are realistic? What is important to understand about the market?

According to our data (there is a separate discovery team inside Highcore Games, which we call the Boost Team, one of its most important tasks is to find ideas with the best marketability on the market):

• In 2021, an average of 1,705 hyper-casual games were released per month;
• In 2022, an average of 2,285 hyper casual games were released per month;
• In 2023, an average of 1994 hyper-casual games are released per month.

Despite the difference in the number of releases, the number of high-quality projects that can be called good in accordance with our benchmarks remained approximately at the same level from year to year.

However, if in 2022 a game characterized as good according to our benchmarks had a 56% chance of going global, then a good game in 2023 had a 17% chance. At the same time, we did not change the benchmarks.

What conclusion can be drawn from this?

With a reduction in the number of games coming out and with the same number of games with good potential, games became much less likely to reach the global release stage.

The stumbling block is in—game metrics.

What's wrong with them?

The fact is that the ads shown in 2023 bring in less money than the same ads shown in 2022. eCPM has dropped significantly.

The lower the eCPM, the more ads you have to show in the game and, accordingly, the longer you need to keep the user (you need to show a high retention level for 15, 30, or better — 60 days).

The problem is that most teams in the niche have no experience in creating games that can show a high level of retention over time.

There is a turning point ahead for all developers of hyper—casual games. They will either be able to learn how to make such games, or they will disappear.

Also, the complexity of the products has led to an increase in development time.

Previously, as a rule, it took up to a month to develop a prototype of a hyper-casual game. After that, he went to softlonch, and then to global.

Now it can take from six months to a year to develop. Plus, the development began to require a larger and more professional team, which could not but affect the growth of the cost.

These are the modern realities that every hyper-casual team must accept.

Alexey, founder of Icupgame Studio

The main problem of hyper-casual games has always been to find a balance between the cost of attraction and profitability.

What's going on now?

Traffic is getting more expensive, monetization is becoming more aggressive (hi, ads every 30 seconds).

But at the same time, the effectiveness of advertising decreases, and mislides do not save.

This forces us to look for more exciting projects that will be able to keep users longer.

As a result, we need to make more test prototypes.

If previously a good team came across a profitable project every 30-40 prototypes, now even experienced developers have one worthwhile project per 100-120 prototypes.

3. Can we say that the tightening of the privacy policy has seriously affected the hyper-casual games market? If so, how exactly?

Evgeny Sidorov, expert

No. Rather, it has made its own adjustments to monetization and UA. But because of this, the market has not changed dramatically.

Gleb Durnovo, Head of Everplay Studio

At one time, this contributed to the fact that many developers just paid attention to the hyper-casual market. If you're making an app for the widest possible audience (i.e., a hyper-casual game), you don't need sophisticated targeting.

It seems to me that the tightening of policy played an even plus role for the niche at a certain stage.

If we talk about money, the revenue from hyper-casual games was much more strongly influenced by the decrease in eCPM than the story concerning innovations in the privacy policy.

Pavel Karabanov, Head of the hyper-casual department of Highcore Games

At the moment, we have a vinaigrette of factors that complicate the life of hyper-casual teams. The privacy policy is just one of many.

Nikita Matylevich, lead Boost Team 1 in Highcore Games

Here we come to one of the important problems that affects advertising revenue – a decrease in traffic quality. This happens for several reasons, one of which is the tightening of the privacy policy.

Advertising networks can no longer receive the same amount of user data as before, which leads to a deterioration in the quality of targeting. In other words, they cannot determine as accurately as before which advertisement will be most attractive to a particular user, and therefore it is more likely that the advertisement will not arouse the user's interest.

This, in turn, leads to a decrease in eCPM, which determines the profitability of advertising.

Alexey, founder of Icupgame Studio

Probably not, rather than yes. The audience of hyper casual games is as wide as possible, you do not need to have 100,500 targeting to find a player.

4. Today, it is often talked about the migration of publishers and developers of hyper-casual games to other niches. Is this really the case and why is this happening?

Evgeny Sidorov, expert

Yes, there is such a trend. Projects made on the knee no longer pay off. Larger projects with IAP monetization feel more confident

Gleb Durnovo, Head of Everplay Studio

There is definitely another migration — from the casual and midcore niches to the hybrid one. Teams are trying to produce projects that, on the one hand, do not require fine-tuning of UA campaigns, as is the case with games with a long cycle of beating off the cost of attraction, and, on the other hand, earn both advertising and IAP at once.

As for the developers of hyper-casual games, those who survived, who have a contract with the publisher (specifically, this has now become much less) or more or less stable sources of income that allow them to maintain an experienced team capable of providing a high level of production, and number at least 10 people (preferably 15-20), then they Indeed, they are migrating to a hybrid niche.

Accordingly, those studios that do not have stable sources of income, which cannot support a team of a dozen professionals, will most likely not fall into this niche.

Pavel Karabanov, Head of the hyper-casual department of Highcore Games

Migration is forced. Players in the market, which formally remains hyper-casual, tend to go where ROAS is higher, where there is hybrid purchasing and hybrid monetization, and the behavior and involvement of players are at a qualitatively different level.

Nikita Matylevich, lead Boost Team 1 in Highcore Games

Yes, this is really happening.

Hyper-casual games have a ceiling today. And, unfortunately, its height is not enough to confidently develop and expand the business. It follows that the views and plans of large gaming companies are aimed at other, more complex genres that can potentially provide a larger and/or more predictable ROAS.

Alexey, founder of Icupgame Studio

There has always been migration. This is a natural process.

Now another issue has become more acute — distribution.

Previously, it was possible to have a successful project by purchasing traffic to it from one or two relevant sources. Now traffic is being mined everywhere, including web portals and niche social networks.

5. There is also an opinion that hyper-casual games in their usual form are becoming a thing of the past. They say that they are being replaced by hybrid-casual ones. What do you think about it?

Evgeny Sidorov, expert

That's right, the games are getting deeper. There is a natural evolution of the genre.

Gleb Durnovo, Head of Everplay Studio

Hyper-casual games are not going anywhere. Games that match the attributes of the hypercausal direction will remain. The only question is how many new products in this niche will be able to earn.

In one of the streams on this topic, I came across an estimate that the average conversion from a released prototype to a hit in each hyper-casual subgenre is less than one percent.

Accordingly, those who remain in the niche should understand that the conversion rate is unlikely to increase. Most likely, he will remain at this level.

They should also keep in mind that if during the gold rush the search for a successful prototype was often sponsored by publishing, now this burden falls on the shoulders of developers.

Publishers have abandoned (or are in the process of abandoning) this practice due to a severe decrease in margins. I know that some publishers used to spend under a million dollars a month to finance prototype development until recently. At the same time, they also observed a quarterly drop in "exhaust". For example, they used to have 10 successful titles from this amount, then five, then two, and then descending.

I think all publishers have faced this situation. And at some point, many of them decided to cut the crutches for development.

As for the reasons for the decrease in marginality, there are two of them. The first is that there is now an excess of such projects on the market. The second reason is the cumulative effect: each subsequent hyper—casual project is forced to compete not only with those prototypes that came out with it, but also with those that came out two or three months, six months or even a year ago. They are not abandoned, they continue to actively buy traffic for them.

Pavel Karabanov, Head of the hyper-casual department of Highcore Games

I answered this question above and can only add: the market situation requires it. Putting the squeeze on all aspects is especially important now. If you look at the game as a business project, then many levers immediately appear (game metrics, traffic, monetization, the team and its focus, partnerships, communications, resources, funds), and it is important to put the squeeze on each of them. The requirements of the market have increased many times.

Nikita Matylevich, lead Boost Team 1 in Highcore Games

As I mentioned earlier, hyper-casual games as a business model continue to evolve and may still be profitable. But this genre is mainly focused on advertising monetization, which has its limits. We see that the cost of traffic is increasing, while revenues for us, as developers, are not increasing.

To stay afloat, we need to create games that can earn more. Here we approach the idea of making games more complicated in order to keep the player as long as possible and, accordingly, so that he views more ads. More complex and deeper games also create value for the player by encouraging them to spend money. This opens up the possibility of hybrid monetization for us as developers.

Therefore, the transition to a hybrid monetization model is necessary for those who care about their future in the gaming industry.

Alexey, founder of Icupgame Studio

Uniquely. Although it is too early to say that everyone has switched to the development of hybrid casual games.

At the same time, the lack of super hits from large hyper-casual publishers last year, among other things, indicates a crisis of ideas in the niche.

Plus, of course, all this is also due to the increase in the cost of traffic and the need to earn even more from the user. Having a good basic mechanics with a meta that provides a high level of retention is exactly what will increase monetization.

6. What exactly is going on with the traffic for hyper-casual games?

Evgeny Sidorov, expert

There are no special changes happening now. All changes are mainly on the side of advertising monetization.

Gleb Durnovo, Head of Everplay Studio

There are two points here.

Firstly, competition has started to grow faster than traffic.

Secondly, eCPM has dropped.

The reason for the decrease in earnings of hyper—casual games is the non-working economy.

When you play a hyper-casual game, 80% of the time you are shown an advertisement for another hyper-casual game. We got an enchanted circle when hyper-casuals advertise each other in a circle.

In turn, in order for the economy to "converge", it is necessary that banners and videos have advertisements from advertisers of real goods, goods for which people pay real money (including games monetized through IAP).

When hyper-casuals began to essentially advertise themselves, they actually excluded advertising of real goods. There is very little of it left.

It couldn't go on forever. The market reacted with a drop in eCPM

Pavel Karabanov, Head of the hypercausal department of Highcore Games

I can't say that anything special happened. The traffic situation changes with the market from time to time.

One of the important things to note is the low eCPM. However, I personally consider it the result of a worldwide hybrid financial crisis.

Nikita Matylevich, lead Boost Team 1 in Highcore Games

In my opinion, nothing is happening with traffic as such. What the developers of hyper-casual games are actively talking about now (the transition to hybrid monetization) was before. It's just that now this transition has become a necessity for further development.

Advertising networks and the mobile market are not in a vacuum. We are all connected to the global economy. She is now suffering because of the hybrid financial crisis.

Alexey, founder of Icupgame Studio

There is traffic, it's just getting more expensive.

Growth points, if we are not talking about hybrid casual games, are only on web platforms where you can still get traffic with good metrics for free. The only question is the volume. From my experience, Yandex Games has a good amount of traffic now.

7. Is the average level of profitability changing for the hyper-casual gaming niche? Which one is considered good?

Evgeny Sidorov, expert

Rather, yes, it is changing. It is decreasing. But a lot depends on the company's strategy. In some cases, even zero profitability is considered good.

Gleb Durnovo, Head of Everplay Studio

Around 2018, it was necessary to make 40-50 prototypes so that you would have one hit. With the required level of quality at that time, it took you, say, $2 thousand for one prototype. Accordingly, you needed to spend around $100,000 on a hit.

By a hit, I don't mean a game with 50-100 million installs. We are talking about a title that has achieved at least 10 million installations in Western Tier-1 countries. We do not take into account installations in other countries, since advertising from them brought little (but at that time it brought at least something in these countries).

Accordingly, earlier you had to spend, say, six months and $100,000 to release a game that, on average, could bring you $700-800 thousand as a hit. Now the story is different. It is necessary to make about 200 prototypes, each of which already costs not two or three thousand dollars, but four or five thousand dollars. The math stopped beating.

Now you need to spend about a million dollars to "dig" to a hit. At the same time, publishers no longer reimburse money for development.

And against all this background, the development of hyper-casual games suddenly turned out to be a very high-risk business.

Even if you, as a developer, spend a million dollars searching for a hit, there is no guarantee that you will find it. In addition, even if you manage to find it, several stars must converge for its successful launch. For example, the publisher should have professional producers and UA managers who will match the product level. Plus, there are things that are impossible to predict. For example, at the initial stage, the purchase looks very profitable, but the game quickly "eats up" traffic, after which the CPI increases sharply and the developer finds himself in a broken trough.

Pavel Karabanov, Head of the hyper-casual department of Highcore Games

It's changing. The level of profitability is decreasing. I can't say the market figures specifically, and I would be glad to hear them from publishers. With reservations, I think I won't be mistaken if I say that no one will refuse any positive ROI now.

Alexey, founder of Icupgame Studio

It is changing, and quite quickly.

Previously, some studios paid off projects in days. It was considered a good result to pay off the project in a week.

Now a successful project is considered the one that was able to pay off in 14-30+ days.

8. Is the cost of production increasing? How much does it cost to develop one hyper-casual game on average today?

Evgeny Sidorov, expert

Yes, projects are becoming more difficult to develop. On average, it began to take six months to a year to develop. If we are not talking about prototypes, then the average price of a project that has had a global release is $ 50-100 thousand.

Gleb Durnovo, Head of Everplay Studio

Previously, it was enough for you to spend $2,000 to get a prototype. Usually it was a game with 10-15 unique levels, endlessly repeating one after another. The graphics were primitive. As a rule, all objects were taken from asset stores and crammed into the project with minimal modifications.

This approach won't work anymore. In order for the project to look competitive, it is necessary to make graphics yourself, work painstakingly on the picture, think about effects, light, and high-quality animations.

In this regard, the cost has risen at least one and a half times. The cost level of each prototype today ranges from $ 4-5 thousand. If we are talking about hybrids, then today it takes 2-3 months for a team of 10-15 people to work on them.

Pavel Karabanov, Head of the hypercausal department of Highcore Games

It grows in multiples. The figure can be multiplied by three compared to previous years. Not only do we need more experienced and strong specialists, but now we need more of them, and they will take longer to make the game.

If the game is going to be made by a team of six specialists for six months, then we are talking about investments under $200 thousand in ideal conditions. I'm talking, of course, about a hybrid-casual project.

Alexey, founder of Icupgame Studio

It is important to understand that the cost of producing a hyper-casual game is still much lower than the cost of a regular project. It is still possible to earn money in a niche, the question is — how much?

According to my estimate, today for $10-50 thousand it is possible to make a primary hypercausal project sufficient for tests.

9. In the early years of the genre's development, a hyper-casual hit could be made by a team of two people. How real is this today?

Evgeny Sidorov, expert

As I pointed out above, this is almost impossible. Unless, of course, you take into account the super talented guys.

Gleb Durnovo, Head of Everplay Studio

Practically not.

An accidental hit may occur. But this is possible in any market. On Steam, a game from a solo developer can also get infected and earn its millions.

However, as a business process, this approach no longer works.

It used to be different, of course. There were teams of two people who riveted prototypes like a conveyor belt. As a rule, they consisted of people of mixed competencies: for example, both the programmer and the game designer drew something themselves in parallel, prepared art.

However, to ensure the level of production required today, a different level of immersion and professionalism is required.

Pavel Karabanov, Head of the hypercausal department of Highcore Games

Today, making a hit with a team of two people is beyond reality.

Important: one person can make a cool playable core gameplay with super initial marketability in a week.

But in order to prepare the game for a global release (for example, by ensuring its high retention), a large team is needed. It is also necessary when working with a publisher.

We often see situations now when the studio (and even some small publishers) do not have enough resources to "wrap" the project with everything necessary.

Nikita Matylevich, lead Boost Team 1 in Highcore Games

Unlikely.

Over the past two years, we have never come across games that, on the one hand, were developed by a small team, and on the other, could provide LTV that pays off CPI.

Alexey, founder of Icupgame Studio

It's gotten harder, but it's still real.

In three to five years, we will be reading interviews of those who do it today.

There are a lot of developers, successful projects appear on the market every day. Along with the advent of simpler development environments, the probability of having just a new hypercausal hit increases.

10. What about subgenres and mechanics in the hyper-casual niche? Which ones are a thing of the past, which ones are still relevant, and which ones do you recommend looking at?

Evgeny Sidorov, expert

Puzzles are very popular among developers now, because their development can still be called quite simple, not requiring a lot of content.

I am also sure that the runners will remain in demand for a long time, of course, changing.

Gleb Durnovo, Head of Everplay Studio

If we talk about recommendations, then for studios that have accumulated a fairly large number of good hyper-casual projects that, for one reason or another, did not take off in mobile, I advise them to start porting and running them on web platforms like Yandex Games. This will help you start earning at least something from these games, at least maintain a team.

As for hyper-casual genres/subgenres, those that did not imply long-term retention and lived solely at the expense of ultra-low CPI are now practically dead. For example, this applies to ASMR games, in which, for example, something had to be cut. They are very sticky. Their economy was based on the principle: you buy a user for five cents, who brings you 15-20 cents on viewings.

Now this scheme, as a rule, does not work. Firstly, it is extremely difficult to achieve an ultra-low CPI today. Secondly, eCPM has dropped.

The situation is similar with runners. They never showed high retention and took mostly by topic. The developer's task was to entice the user and make him run 15-20 levels. When the CPI was low, it was enough to pay for its acquisition.

On the contrary, hyper-casual puzzles feel good because they have a good retention rate. Even with a CPI of 50-70 cents, they pay off, because they can be played throughout the month, not for a day or two. Plus, they are well monetized using IAP. There is also a minus of puzzles as a genre — an interesting and new puzzle mechanics is a very serious challenge for game designers, and not every game designer is able to create such mechanics.

The main recommendation from me is the following: you do not need to look closely at genres, but make games that are interesting to play for a long time. If this condition is met, then you can make money on it.

Pavel Karabanov, Head of the hypercausal department of Highcore Games

Now you can make a game in any of the subgenres. I think it should be done in the subgenre in which there is experience. Then just update the game in accordance with the requirements of the market.

That is, if a game can provide a good level of retention on day 15, if it includes social mechanics, offers hybrid mechanics and has a publisher who believes in it, then it is more likely that it will come in.

As for genres, I personally love puzzles

Nikita Matylevich, lead Boost Team 1 in Highcore Games

In the context of hyper-casual games, I see that today it is more profitable to maintain an old hit than to create and market a new one.

In other words, in the current conditions, starting to make hyper—casual games is not the best idea.

From our point of view, the best subgenre in the hyper-casual niche today is puzzles. In terms of retention and the content required for that retention, this is the optimal genre.

However, within the framework of puzzles, it is very difficult to find a core that would provide good metrics and immediately help in marketing terms. In two years we have found only a couple of them.

It is also worth paying attention to games like Eatventure (this is a mix of a time manager and idle). They work well in gameplay. The main thing is to find a working marketability setting.

Our Boost Team sees a perspective in the development of real online, especially in sandboxes, where the user is provided with many modes for playing online. Realistic shooters continue to work on marketing, but they have a problem with in-game metrics, which is solved by real online. Sandboxes based on trash chores (Nextbots In Backrooms: Shooter) also represent a potentially niche with low competition so far.

To keep up with the trend and understand the market, we recommend using Storeglide (it is absolutely free). Also keep an eye on Roblox, which introduces interesting mechanics that can be adapted into a separate game. Fortnite may soon become an analogue of Roblox (the game has a new toolkit for creating user-generated content). Pay more attention to the Steam games that are gaining popularity. Don't forget to follow the trends on social media.

To become a successful developer, it is not enough to track only the mobile games market.

Alexey, founder of Icupgame Studio

I would like to note that now it is worth keeping an eye not even on the mechanics, but on the settings. Over the past year, we have been watching with interest how familiar mechanics have acquired new settings for themselves.

And it gave the result!

This year, I am sure, this story will continue — there will be more reinterpretations not in mechanics, but in settings.