Party poppers: actress Molly Sims at the launch of King’s 'Candy Crush Soda Saga' on Broadway last November

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When King Digital Entertainment launched its eagerly awaited follow-up to the popular mobile game Candy Crush Saga, it looked far beyond Apple’s App Store to promote it.

Videos heralding the arrival of the Candy Crush Soda Saga blitzed 100m Facebook newsfeeds in a single day. TV spots aired in 20 countries and digital billboards were flooded with fizzy bubbles around the globe.

The multimillion-dollar launch illustrates that mobile gaming is no longer a poor relation of video games. Newzoo, a research company, forecasts that the mobile games industry, which it says has predicted global revenues of $30.3bn in 2015, is poised to overtake console games sales for the first time.

Underlining the transition, Newzoo said in a report that Apple’s forecast $4bn in gaming revenues — made from just hosting and selling other developers’ games, for which it takes a 30 per cent cut — is likely to be almost double Nintendo’s sales this year.

As mobile games have increased in sophistication, growing numbers of players spend many hours — and dollars — on addictive titles such as Clash of Clans, Minecraft and Game of War: Fire Age.

“The first wave of mobile games was simplistic — the gameplay was there but the polish wasn’t,” says Julian Farrior, chief executive of Backflip Studios, the mobile gaming company behind DragonVale and Seabeard, which is now majority owned by toymaker Hasbro.

But, Mr Farrior adds: “Over time, the polish has increased, the budget has increased and revenue expectations have increased.”

In the App Store’s early days, barriers to entry were low. But, as it has become harder to be noticed in an overcrowded market, promoting and distributing a hit game has become an expensive but important part of the marketing mix.

“It’s a very competitive market,” says Riccardo Zacconi, King Digital’s chief executive. “The ‘top grossing’ charts are very stable. It’s a handful of developers there and the conditions for succeeding are very hard.”

Despite this, King’s marketing drove Soda Saga to the top of Apple and Google’s app download charts globally for November. In its earnings report, King said it set a new quarterly record of 1.5bn average daily game plays in the three months to December.

But King has an advantage other games makers do not. As well as the external advertising, many people downloading Soda Saga did so because they saw an ad in the original Candy Crush game, which has been downloaded hundreds of millions of times.

Electronic Arts, a veteran console games maker, has franchises that are just as well known as King’s, including John Madden NFL football and Fifa Soccer. Even so, EA is only just starting to find its feet in mobile.

Andrew Wilson, EA’s chief executive, says the company had a “breakout performance” in mobile over Christmas, generating a “record” $121m in sales, up 25 per cent over the prior year.

Its rival, Activision Blizzard, whose Call of Duty and World of Warcraft franchises have dominated console and PC gaming, has been even slower to mobile.

In late 2013, Bobby Kotick, Activision’s chief executive, said there was nothing that had driven any sizeable amount of operating profit in mobile gaming. But in its recent earnings call, Activision’s chiefs admitted mobile and tablet gaming had “moved up on our priority list” after finding success with a Warcraft spin-off, Hearthstone.

Activision’s chiefs now say mobile gaming has ‘moved up’ their priority list

In the console world, developers create games and leave it to publishers, such as EA and Activision, to work with Sony, Microsoft and Nintendo on distribution. Mobile games are usually free, with revenue generated from ads or in-app sales.

“When you’re thinking about that transition, it isn’t wholly intuitive to console developers who are reliant on publishers for distribution,” says Mr Farrior. “In mobile, you own the distribution and the development of the piece. That’s . . . outside the comfort zone for traditional publishers.”

Another challenge for console developers is that mobile games are created and updated very differently. Console games are typically left unchanged, but mobile games, once on a device, can be updated almost constantly.

King, for example, adjusts the difficulty of Soda Saga’s levels every few weeks. The first “cohort” of players was looking for something more difficult than the original Candy Crush, Mr Zacconi says, while newer players want something easier.

Despite the different dynamics, Mr Farrior says mobile studios such as Backflip are hiring console games developers in much greater numbers. “We’ve had to hire truly talented experience, and the bulk of that experience was in shifting from console to mobile.”

Backflip is planning to use Hasbro’s brands and characters to help its games stand out. But even names that could include My Little Pony and Transformers are not enough to guarantee a hit in the mobile gaming world, Mr Farrior says.

“A brand is important, but a brand alone won’t get you there,” he says.

To succeed, he says, you need an “absolutely killer game”, with high retention and conversion from free downloads to paying customers. “You need to marry the good math with the good brand and have a really talented, aggressive user acquisition team.”

Copyright The Financial Times Limited 2017. All rights reserved.
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