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Good news! If you own more than 25,000 games on Valve’s digital games store, your Steam client should stop crashing soon. It would be easy to chuckle at these avid collectors of digital games, but I had the striking realization that this vast library of games makes up approximately half of the more than 51,000 available on the platform. That’s a lot of games, reflecting Steam’s near monopoly over PC games distribution. From monopoly to duopoly, the mobile games ecosystem sees similar domination from the Apple App Store and Google Play Store, with around 1.5 million games available between them.
To date, Steam has been a pretty benevolent ruler, trading on its longevity in the absence of a substantive competitor. CD Projekt’s GOG is perhaps the closest challenger, although unlike Steam, its games are curated, and the majority of its revenues come from CD Projekt’s own IP such as The Witcher and Cyberpunk (which are also available on Steam). Other giant publishers such as Electronic Arts have their own stores but increasingly utilize Steam, too. Cash-rich Epic Games maneuvered to position itself as the Google Play to Steam’s Apple App Store in 2017, targeting developers and publishers by taking a 12% cut instead of 30% — a huge proportion of game makers’ profit margins. With 471 games as of the end of 2020, the Epic Games Store has some way to go to catch Steam, but Epic Games itself has been shaking up video game distribution in the meantime by taking on Apple over App Store fees it charged Fortnite, subpoenaing Valve for sales data in the process.
The dominance of the leading platforms is clear, but it’s increasingly far from the whole picture. Alternative game stores, social media platforms, web portals, and cloud gaming services offer myriad options for developers and publishers to get their games in front of vast, engaged audiences across the world and create multi-channel strategies that reduce their reliance on the big four.
Like investment portfolios, the best video game distribution strategies are balanced. There is risk inherent in banking on one or a small number of platforms to help make your game a critical and financial success. Even PlayStation, perhaps the biggest beneficiary of being a stubbornly closed ecosystem, is opening up. MLB The Show 21, developed by a first-party Sony studio, is now available on Xbox Game Pass, while other PlayStation exclusives are streamable on Xbox via Rainway, and PlayStation is hiring for a role dedicated to taking more of its IPs to mobile and PC. Other big players, such as Ubisoft, are expanding the reach of the IP through initiatives such as Ubisoft Nano which takes advantage of new technologies to target its IP to new platforms such as mobile and PC browsers, social platforms, and more.
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The most important mobile platform, the Apple App Store, has been surprisingly turbulent in recent years. While it recently halved its app store commission for games making less than $1 million annually, its IDFA changes are about to dramatically impact the way most mobile games monetize and market themselves — advertising. Apple is also at loggerheads with cloud gaming providers. Because its guidelines stipulate that all games must be submitted for approval individually, an impossibility for cloud games catalogues, companies including Amazon, Microsoft, and Nvidia’s GeForce have created Progressive Web Application (PWA) strategies to make their games accessible for iOS platform users. Regardless of whether these rules are commercially-driven or designed to protect users (*cough*), moving goalposts is a huge risk and one unexpected change in the Steam algorithm can be disastrous for devs. Game developers who put all their footballs in one, uh, ballbag, are exposing themselves unnecessarily.
In 2018, Steam took the decision to end its curation of games on the platform, resulting in the vast marketplace we see today. The open door policy and end of Steam Greenlight, mirrored by changes made by Facebook to its Instant Games platform in the same year, has meant a rough time in terms of discoverability for indie devs, although Steam Labs has offered some encouragement (and Facebook is about to reverse its decision). Likewise, among 1.5 million games on the App Store and Google Play, how can smaller games hope to stand out without a, well, Google search engine for Google Play? IDFA itself will savage one of the main routes: Targeting driven by third-party data.
Games stores such as Itch.io, Green Man Gaming, and Humble Bundle should be a core part of distribution strategies for smaller PC games, both new and legacy, in addition to Steam. After all, Among Us wasn’t discovered on Steam, but it certainly sold a lot of copies through it, going platinum alongside major IPs such as Doom Eternal, Red Dead Redemption II, and Grand Theft Auto V!
Mobile developers and publishers, too, must now look beyond Apple and Google. With the likes of Huawei’s AppGallery, Facebook, web portals such as Crazy Games (17 million unique monthly users and 2.5 billion total plays), and game streaming apps like Hago (over 100 million users), there’s a pretty unlimited tasting menu of distribution and monetization options.
In 2020, gaming market revenue in Asia Pacific reached at least $84.3 billion, about half of the global total. China accounts for nearly 40% of global mobile app spend. Japan generates over $19 million a year, while South Korea and Taiwan also produce over $2 billion per year. Mobile gaming ad campaign spend reached $40 billion in APAC last year, more than double that in North America. South Korea and Japan saw the highest average revenue per app user. Forty-five percent of Indians play mobile games on their smartphones.
You get the picture. Western developers can no longer afford not to be part of the massive revenue and growth opportunities outside Europe and North America. But remember Steam’s over 51,000 games? Its Chinese version has 53. Fifty-three. Google Play doesn’t operate in China and since early in 2021, it doesn’t operate on any of Huawei’s more than 600 million devices. The Apple App Store barely has a market share. The biggest mobile games in China are made by Chinese companies Tencent, miHoYo, and Happy Elements. Most of us have never heard of China’s most popular PC games.
My point is that, in our globalized society, it’s easy to assume homogeneity across what’s popular and what’s permitted in terms of gaming. This is patently not the case. There are of course notable examples of successful pan-regional games, such as Dublin-based Playrix’s Township and miHoYo’s Genshin Impact. Yet it’s clear we haven’t yet codified stable, scalable distribution routes for more developers and publishers to take advantage of. Is this because of geopolitics? Language and culture? A fragmented games ecosystem? Uncertainty about monetization? It’s probably a yes to all, but the game-distribution ecosystem is getting the resources to deal with cross-market licensing, localization, translation, and networking (whether this is in-house in the case of large publishers, or indie developers utilizing third-party expertise).
Setting up for successful distribution
The key to a successful long-term distribution strategy is to bake it into your thinking from the very start. Too often, I speak to creators who have developed amazing games but haven’t actually considered what to do with the finished product. They push them out into the dominant but crowded channels, hoping they gain traction organically, or just look for a publisher and hope their game makes the grade out of the many thousands being tested monthly. Distribution and monetization permeate everything down to the game engine you work with. Many developers are unaware that their choice of engine can expand or contract the distribution options available to their finished IP. Likewise, not all platforms and stores offer every monetization method. Being able to swap out in-app purchases for incentivized advertising on certain platforms, for example, will greatly increase a game’s earning potential.
It’s important to combine this long-term vision with timely actions. If you aren’t agile enough to seize opportunities as they arise, others will. The earlier you act to distribute your game widely, the greater chance it will have of gaining significant market share. Great games that don’t distribute well and act to protect their name and idea are unfortunately a target for opportunistic developers who are happy to piggyback on others’ work. In the massive noncurated game stores we have today, it’s not a given that your game is what will be downloaded when users search for it! Strategic thinking and speedy response times are vital in making sure it is.
Steam, Epic, Google, and Apple: Game distribution strategies are highly unlikely to succeed without being anchored by at least one of them. But the diversity and quality of markets, platforms, and stores beyond the big four continues to grow. As a result, we’ll see greater demand for them and increased equilibrium in the flow of games content between East and West. Rapid improvements in the infrastructure and relationships required to publish beyond the big four mean we’re fast approaching a point where publishers that don’t consider wider distribution options can be considered blinkered rather than just unaware.
Ultimately, they are doing a disservice to their game and millions of potential fans.
As CEO, Michael Hudson drives GameBake’s vision and builds relationships with world class mobile game publishers, app stores and advertisers.
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