Market Wire | Jan 16, 2023
Temu to #1 in Ecommerce via Gamification, Gaming VC Funding Drops Off Cliff, App Store Growth Slows, Data.ai State of Mobile, Game IP TV/Film To Win Emmy This Year
Happy Monday! Who else is gonna kick this week off by ignoring the haters and dancing to your own drum?
Top 10 Charts
Subway Surfers and Free Fire continue to dominate downloads! On mobile, at least, low-end device support drives downloads people.
Game For Peach and Honor of Kings should show you the revenue impact of China on worldwide revenue.
4/10 top 10 revenue from Chinese developers.
Seems like Gardenscapes making a big push last week.
Top 10 Publishers by Rank
Top 5 Trending Downloads
% paid downloads of top trending down a lot last week!
Stay tuned. We’ll include Top 5 revenue trending next week.
Top 5 News
#1. what we’re following 👀 | Temu (Accelerated newsletter)
The Accelerated newsletter pointed out the massive growth of the e-commerce app Temu to the #1 spot on the iOS App Store:
We’re only 15 days into 2023, but one company is dominating the App Store ranks thus far: Temu! The shopping app has held the #1 spot on iOS for 75% of the year, continuing its momentum from 2022. Temu launched in the U.S. in September, and by December saw more than 2x the monthly downloads of apps like Amazon and Shein.
If you haven’t used Temu yet, it’s the U.S. version of Pinduoduo - a publicly traded Chinese social commerce app. Pinduoduo has been a success story in China, with $18B USD in revenue over the past 12 months!
Wait a minute! Isn’t this newsletter supposed to be about gaming?
Here’s where things get interesting.
The core of Pinduoduo is based on a form of group buying and getting a team to join an order to purchase different items at a discount.
In essence, it’s a variation on the old Farmville “crew mechanic.” Even further, Accelerated notes: “Pinduoduo is gamified in other ways as well - such as mini games with real world prizes and vouchers that you earn via daily check-ins.”
There has been a lot of talk about app gamification over the years but without much success. Probably the best examples you can count on one hand such as Duolingo and Prodigy Math Game.
After checking out Temu myself, I believe this app will revive, in a big way, the push toward gamification in non-gaming apps.
Check out this example Accelerated highlighted for a feature in the app called Fishland.
And, of course, how can you not do spin to win or a scratcher?
Will Temu become the TikTok of e-commerce? Will the success of Temu portend a big opportunity for F2P game designers to find new jobs or entrepreneurial opportunities in apps rather than games?
Let’s see what happens!
#2. Gaming Industry Report Q4 2022 (Konvoy Ventures)
Konvoy Ventures just released a gaming industry report highlighting data and trends for venture investments in gaming.
Good news, they are highlighting estimates for continued steady and big growth for gaming throughout 2027:
However, we can see that from the Q4 2021 high, venture investment has since dropped by ~83% in Q4 2022 ($3,193M to $553M):
There’s more cool data and trends analysis in that report, so be sure to check it out!
#3. State of Mobile 2023 (Data.ai)
Data.ai recently published its State of Mobile 2023 report, and there are some great insights on the mobile gaming market included.
First of all, although the big headline repeated constantly is that spending is down, and we should prepare for a mobile gaming apocalypse, downloads continue to increase!
How much has the mobile gaming market economics ACTUALLY changed. I’m not saying it hasn’t changed, and there has been some real impact from Post-IDFA/ATT, COVID hangover, etc.
However, as my buddy Warren Woodward pointed out before, the insider’s word on the street is that there has actually been more of a narrative change than a real economic change.
I’ll speak more about this on a news podcast I’ll be recording later this week, so make sure to check in on YouTube or podcast!
Also, check out the nice summaries of top performers by revenue and downloads in the data.ai report below.
2022 Top Games by Spend:
2022 Top Games by Downloads:
Get the full report here: Data.ai
#4. App Store Growth Slows for Apple in 2022 (Weiming Lu)
In another great post, Weiming looked at app store revenue for iOS and Google Play this week. He also estimates revenue impact from the reduced IAP commissions from both platforms.
In December 2020, Apple introduced a "Small Business Program" which lowered the company's revenue cut for app developers earning less than $1 million per year from 30% to 15%, effective January 1st, 2021.
Google followed suit and dropped commissions to 15% from 30% on July 1st, 2021, with the same revenue threshold. Citing Google’s own estimates, Google said, "99% of developers that sell goods and services with Play would see a 50% reduction in fees, and that 97% of apps globally do not sell digital goods or pay any service fee."
Interestingly: “Companies with a market cap under $250 million saw an improvement in their EBITDA margin when compared to the pre-pandemic levels.”
The release of iOS 14.5, which includes the IDFA and ATT (App Tracking Transparency) changes, has raised concerns about its impact on the industry. While IDFA and ATT are often cited as contributing factors to the current slowdown by CEOs and marketers, it's worth noting that the industry was already showing signs of a potential slowdown prior to the pandemic.
It's worth considering that there isn’t enough statistical evidence to support the argument of the changes in IDFA and ATT being the obvious suspects causing the slowdown in the mobile game industry. Though it came at a less-than-ideal time for sure, other factors like the economy, players returning to pre-pandemic behaviors, and pre-existing problems in the industry could also be playing a big role in the equation.
I agree with his points above.
How much of mobile's current “apocalypse” is narrative vs. reality? Let’s be real here, anyone who’s worked at any sizeable company knows what I mean about playing the “narrative game.”
#5. Tweet on Gaming IP in TV/Films (Troy Kirwin from a16z)
This a16z dude has some interesting points to share about gaming IP to TV and film.
Since all the comic hero IP has been milked dry for TV/film, I guess the wave to gaming IP only makes sense!
Troy notes some of the upcoming game franchises coming:
Interestingly, a lot of folks who talk about gaming IP to TV/film seem to forget about the best example of all time!
Anyway, nice coverage of this topic by Troy, and as he notes about The Last of Us, it seems like we’re off to an excellent start for gaming IP in 2023:
Written by Joseph Kim and Ryan Wilson.