These aren’t easy times for all mobile game developers. But Space Ape Games is one of the exceptions that has begun to rise above the pack.
From January 2015 to today, Space Ape Games grew from 10 million players to 35 million players, said John Earner, CEO of the London-based game studio, during Unity’s press event at the Game Developers Conference (GDC). During that time, revenues grew from $25 million to $92 million. And in the fourth quarter of 2016, the company had $5 million in profit, Earner said.
A big part of the change was the launch of Space Ape’s first licensed title, Transformers: Earth Wars. But, the company has also honed its skills in live operations — or keeping users coming back through events, such as tournaments or special offers. And the financial cushion now allows the company to further refine its organization. Game teams have now gone from 20 developers to eight, and the company prototypes many more ideas in a month than it did in the past.
Earner said that creates a funnel — or an ability to reject some of the prototypes in favor of focusing on the best ideas. And that will lead to fewer but perhaps higher-quality games. I spoke with Earner and chief operating officer Simon Hade for an interview at the Game Developers Conference in San Francisco this week.
Here’s an edited transcript of our conversation.
GamesBeat: What were the stats you ran down?
John Earner: Over the last two years, from January 2015 to today, we went from 10 million to 35 million players, 60 to 100 employees, from $25 million in sales up to $92 million. A bit of that was just trying to keep everybody happy with regard to talking about certain numbers the right way. The most important stats to know are that we had $5 million in profit in Q4. We’ve been profitable for 10 months running. We just got the 10th in February.
We’re doing that on hundreds of thousands of dailies. Samurai Siege is alive and well three and a half years later. Rival Kingdoms is the same. Transformers is growing every month. It’s been a great year.
GamesBeat: Samurai Siege is still the biggest overall?
Earner: It’s the smallest. Transformers is by far the largest. Rival Kingdoms is about half that and Siege about half of Kingdoms. But, each game has been better than the last. That’s the direction we want to have. It’s a layer cake. We can maintain Samurai Siege for years, add to it with Rival Kingdoms, and add to that with Transformers.
GamesBeat: You’re happy with the licensed route?
Earner: We are. It really worked. If we look at Rival Kingdoms, one of the biggest problems it had was it was difficult for players to discover. We got editor’s choice from Apple, which we were grateful for, but that art style and that genre were tough. We knew we had a great game. We just felt like it would be awesome to surface it to more people via a brand that we love. It’s done its job.
It’s a lot easier to acquire users for Transformers. I’m happy to say it’s the best Transformers game out there. Forged to Fight looks awesome. I look forward to it coming out. It will be good. But, it’s been a long time without good video games based on the Transformers. That’s what you get when you play that game. You really feel like you’re playing with the toys you had as a kid. It’s that nostalgia that let the game pop.
GamesBeat: That seems to be the usual approach for companies now, to have multiple games out at the same time. Star Wars, Marvel, these have a different game for every genre.
Earner: They have more saturation. There are a lot of Marvel games. There are not many Transformers games. That means when the movie launches late spring, we expect to get a huge lift. Our game’s not directly associated with Paramount, but it’s going to drive a lot of interest in the brand.
Simon Hade: People searching for it. Also, these big brands are so broad. They can work across multiple genres simultaneously with very little overlap between some of these games, even though the mechanics may be similar. They all scratch a different itch.
GamesBeat: What’s your specialty, then, as you’d describe it?
Earner: If you were to talk about this a year ago, we’d say our specialty is live ops. We think we’re the best in the West at running a live game. The true masters of the craft are in China. We learn a lot from them. But, we’re fantastic at events, at interaction with our community, working with our players. We have dialogue with our alliances. We’re all about taking a game and making it a living, breathing service. I’d say that’s thing one. Thing two is execution. People a year ago regarded Space Ape as a company that could get a game live quickly and well. High quality. Transformers is a beacon there.
The message we’ve spent the week spreading at GDC, which has been true for a year now — it’s just that only now we have the fruits of our labor to prove it — is that we realized a year ago that we could incrementally grow our business 30 or 50 percent for many years and never get to where we want to go. We set out our mission to make the best and most commercially successful games in mobile. We’re not going to get there doing build and battle games. Innovation was the word we’ve spent the last year adding to the list of things we’re great at.
We inverted our approach from a slate to a funnel, from telling the company what games to make to the company telling us what they want to make. We administered a process to vet those ideas and identify the best of them. We shrank our team sizes down. The average is eight today. It was 20 a year ago. Because of our profitability, we were able to start making the decisions we always wanted to make but couldn’t.
This is a thing that plagues most of the game industry, except for the very top. You have an ambition to do something creative, but you don’t want to run out of money and not be able to pay your employees after six months. Now, we don’t have to make that trade-off. We have four games in development, two of which we can talk about here. They’re all very different from what we’ve done before. What they have in common is our goal to own new categories in the Western mobile market. I’d like to think, going forward, people will talk about our innovation and our willingness to take risks to create new stuff that delights players.
GamesBeat: What are those two?
Hade: This is Fast Lane: Road to Revenge. It’s a top-down shooter. The genesis of the game was a team that had been working really well for about six months straight on a different game, which they decided not to take forward. They wanted to stick together and work on something else, and they looked to Asia — specifically China, Korea, and Japan — and saw this category. There’s a bunch of games that look very casual but have very deep metas. We Fly and Thunder Fighter in China, DragonFlight in Korea, various bullet hell games in Japan.
Usually, when you take a concept that’s working in one of those markets, it doesn’t correlate at all with success in the West. They’re all so different. But when you see something that works across all three — China and Korea are as alike as China and the West, really. When something works across those markets but not yet in the West, then that’s a sign that it should work.
We looked at this top-down arcade genre and asked why it hasn’t worked in the West. There’s two reasons. All of the attempts so far have been quite nerdy in theme — dragons and spaceships — so grounding the game in a car, something people could relate to, was thing one. Thing two is adding a very deep meta, taking the live ops and the social elements and all those systems seriously. That’s the angle.
GamesBeat: Are you guys interested at all in these instant games?
Hade: We are, yeah.
Earner: There’s a pretty rich meta to this beyond the instant gameplay. But certainly, we’re looking at it.
Hade: The HTML5 version has playable ads, which is a big opportunity. It opens up a lot more scope for raising the profile of the game compared to a genre like build and battle.
It’s an endless runner type of mechanic. You keep driving until you die. You can spend to continue, and then every time you do one of these races, you get some currency that you can use to unlock new cars, unlock different weapon variations, upgrade your gear, that kind of thing. The core gameplay has a very frenetic style, but on the back of that, there’s a very deep meta. I can unlock different variations of these cars, which all play differently. Every time I spend money, I get better. You always feel like you’re progressing.
This is a league of other real people. I’m at the top at the moment, but as I’m moving up here and come across these guys on the road, there’s a little boss battle. When I move up the leader board to this point, I’ll have a boss battle against this character. If I beat her, I’ll move up in the league. Each league has subtle variations in the types of obstacles and cars. It’s all wrapped around a story. I don’t think I’ve seen many games weave this kind of PvE and asynchronous social together like this.
One thing we’re very proud of — we talk about live ops being a strong suit of the studio. Each game we’ve made, we’ve brought the thinking about live ops earlier into it. Samurai Siege, we started doing live ops three months after. Rival Kingdoms, we designed live ops from the beginning, but we didn’t start cranking until later. Transformers, we brought the design into the pre-launch phase, so we really built the economy and systems specifically for live ops. We’re getting the dividends from that now.
With this game, we’re in beta, and we’ve already run a couple of events. They work very well. They add another set of objectives on top of the core game loop, and they do it in a way that makes it easy for us to bring in characters and do collaborations. In our launch week, we’ll have a handful of big YouTube influencers come in as bosses. There’ll be light stories around them that will be very relevant and interesting for their fans. We’re working with them to write the stories of these quests and make the content interesting for their fans, but even if you’ve never heard of these influencers, the content still fits in the game world.
Stats-wise, we’re live in Australia at the moment. We’re seeing good casual-level retention stats. The sorts of stats you might expect from a casual game — we’ll get a lot of installs, but because of the live ops systems and the deep meta, we’re seeing mid-core monetization. We’re seeing north of 50 percent day one and rising, something like 20 cents average revenue per paying user (ARPPU), seven of them coming from the rewarded ad product.
GamesBeat: And you had a second one as well?
Earner: We do. While he loads it up, the thesis of the second project — the working title of the game is Super Karts — we take Kartrider from Korea, the Super Mario Kart genre — which is one of the biggest genres in gaming history for casual audiences, and we make it work on a mobile phone.
It’s tough to do. We didn’t have the ability or the appetite to pursue it risk-wise a year and a half ago, and now, we can. We’ve been working on this for about a year with a team of 12 people. It’s starting to come together. We have no dates to announce. Being a part of our funnel system, this is a game we’ll launch when it’s ready.
There are some crazy challenges to making a kart game. This is six-player synchronous multiplayer around the world, so there’s a technical challenge. Maybe most important, though, is the control challenge. How do you make a kart game my mom can play? One of the big breakthroughs you’ll see is that it’s portrait view, single touch. Really easy to play. We think it’s very innovative. Third thing is the brand. How do you create something that can be the beginning of a franchise? Fourth, what we’re working on now is the metagame. You download a kart game, and you have fun playing with your friends for a week. Why do you keep playing this game for years?
This is a testament to Space Ape’s willingness to take chances and try innovative new things. We’ve tried all sorts of stuff to make this genre work on a mobile phone and with a lot of success, I think.
GamesBeat: Is this mode multiplayer?
Hade: This one isn’t. We only have a couple thousand users in alpha testing. The chances of you getting matched with a real person are pretty low. There’s a nice party mode, though, so if the four of us want to play together, we can create a room and go in together, and we’re guaranteed to match with each other.
We have all the usual kart-racing combat options. You’ve got rockets. You’ve got traps to lay. You’ve got speed boosts.
Earner: It’s interesting that you put your finger above the steering wheel. We find most people put their finger on the steering wheel, but it doesn’t really matter either way.
The way we envision people discovering this game for the first time is something along the lines of — Simon shows you the game, encourages you to download it, and then, the four of us play in the room together. It’s a fun casual session, just like how we played Mario Kart when we were younger. Our hope is that then you go back home and continue to play the game. You get more serious about it, go through the progression aspect. But any time, if you want to just have fun with your friends, this is a great way to do it.
Hade: Super Karts is the working title, by the way. I kind of like it, but either way, it’s not the highest priority to nail that right now. We’re still figuring out the gameplay.
GamesBeat: How far would you say this is from launch?
Earner: I think we’ll be in beta this summer. We need to nail the metagame. That’s what we’re in the middle of right now. We’ve got a system, simply put, of karts and parts. You can unlock different karts, unlock different parts, and then, in the early days of the game, every new kart and every new part you get is strictly better. But, as you progress and get experienced, you start to realize that certain tournaments, certain races are better if you’re drifting, or if you’re geared to climb hills. It becomes both a collection game to get the coolest stuff and a competitive game for the older player that gets into tournaments and seasons. If you play this game for a year, I imagine you’re playing it because you want to be the best.
Hade: There’s a nice skill progression that comes from the synergies between the karts and the parts and the tracks. If you have a kart with the water tires, you’re going to be better off on the water tracks. If you have a boost that sends you into the air, you’ll be better at jumps. Making decisions about how you equip the kart and build out your roster of karts gives you a better chance of going forward in tournaments. That’s the gist of the meta.
The party mode, as we said, is a nice viral feature. It’s very easy to create a room and play together or run a tournament with a group of people.
Earner: A theory we have around both of these games is that players are tired of the same old stuff. We learned that firsthand. We made build and battle games for the first couple years of our company’s existence. We don’t see so much an issue with the market consolidating and everything being locked up by the winners, but there’s a massive issue with players being tired of the same old thing.
The biggest sign we’ve seen of that is when we first started testing the kart game, seeing how easy it was to get players to download this game. They’re looking for a kart game, and they have been for quite some time. There have been previous attempts, good attempts, but it’s a very difficult challenge. People are looking for a game, and they haven’t found it.
I think that’s true in many genres. If you look at what’s going on in China, and in Asia in general, you see a much wider spread in the top-grossing charts when it comes to different play patterns. Our goal is to bring some new play patterns to audiences we think are exhausted of three or four games that dominate the charts today.
GamesBeat: If Nintendo does a kart game, is that competition?
Earner: It’s Nintendo, and they’re awesome, so I guess it is, but I think I’d rather speak to what we’re doing than what Nintendo might do. It reminds me of an adage in the San Francisco startup world, outside of gaming. When you’re trying to do something new, your worst enemy is adoption, not competition. We’re trying to do something that, to date, nobody has been successful with. The idea of it being a race versus another party feels like a high-class problem.
I think Nintendo will have great success with Animal Crossing, with Fire Emblem. This is very challenging. And I think that’s a company that will be focused on the Switch for at least the next 12 months. I’m hoping to get one on Monday, by the way. It sounds great.
GamesBeat: You could publish a lot more games per year, given how many people you have and how those teams are set up.
Earner: I’d say there’s generally two models. There’s the velocity model, and then, there’s the fewer and better model. We’ve always been adherents of fewer and better. The markets have always rewarded quality over quantity. If there’s going to be a successful mobile publisher, it’s going to be on the back of a company that becomes a successful first-party developer. We’re taking it one step at a time.
Hade: There are games we abandoned last year — or that the teams abandoned last year — that we would have been proud to ship two years ago. We think that because we’re profitable, the play for us is to make that next massive hit, not to eke out a living growing 20, 30, 50 percent a year, which is what we’d be signing up for with that publishing model. The big hit is our future.
Earner: To close that out, going back to your earlier question, I think the superpower of any great gaming company is the team. We’re only as good as our team. We’ve now spent four and a half years cultivating the best talent in the U.K., which has this storied 25-year history of making games. We’ve become the nexus for the mobile gaming community there. We’re the desirable place to work. It’s on the basis of those teams that we’ll be successful.
If we were to chase every opportunity available to us, we’d probably hire a lot more people, spread ourselves a lot thinner. As managers ourselves, we’d probably think about a lot more problems. I’m not sure that’s what makes our culture special. What makes our culture special is this handful of great teams working on awesome games, not chasing every opportunity to become a publisher of other people’s mediocre games.
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