Zynga Buys Natural Motion for $527 million

Zynga announced they are acquiring Natural Motion, whose top games include CSR Racing, CSR Classics and Clumsy Ninja.

It’s a big deal for Zynga, who is paying up very significantly for Natural. $527 million, which is over a 10X revenue multiple using our estimates, based on where their games are currently performing. That’s much more expensive than similar deals, though the Supercell/SoftBank deal made things frothy.

But Zynga needs hits, and both CSR Racing and Clumsy Ninja look like franchises that could deliver sequels. They’ve also got the benefit of Natural Motion’s technology to power new games. We’re excited to see what the new combination will bring!

Glu Mobile promoting free in-game credits

Glu Mobile is running an interesting promotion with Google Play. They’re offering 20 free in-game credits (roughly $1.00 value) for downloading Deer Hunter 2014, currently #10 on iOS Top Grossing Games.


It’s a great idea to prime user spending by giving them free currency. Players learn the value of the hard currency and it whets their appetite for more.

1) Without playing the game, it’s hard for a player to know the value of 20 Glu Credits. We’d expect the perceived value may be considerably higher than $1.We’re interested in this promo because it will test a few contrasting:

2) It’s hard to convince a player that has never played a game to buy hard currency, so the credits may be worthless for most people.

Anyone with more info on how these perform or the economic split with Google Play should drop us a line….




Meet Think Gaming at Games Beat 2013

The Think Gaming team will be at Games Beat 2013 on October 28 & 29th. Want to connect and talk games, metrics, or just grab a beer? Contact us!

Great opportunity for indie developers

Gaming Insiders launched a great opportunity for indie game developers: passes to their invite-only Summit.

They’re giving away five passes to the most deserving studios. Apply through this link!

Is Candy Crush Cheating? Will it matter?

We heard an unsubstantiated rumor this week about how King.com maximizes revenue for Candy Crush Sage. It’s juicy enough to be a great idea for monetization but we’re not sure how we feel as gamers.

Our source – who is not a King.com employee – claimed that the Random Number Generator (RNG) that determines how candies are distributed within Candy Crush Saga is non-random and is, in fact, rigged to promote better monetization. This either leave the player “just shy” of completing a level, or makes it harder to win when you’re running low on energy.

How does this work? Our source didn’t know, but if we were designing the game, we’d think about one of two strategies:

  1. Re-use the seeds of levels that led to monetization. The seed for a RNG determines how candy will be distributed on the board. By choosing seeds that had preceded monetization in the past, you’d be likely to find levels that left the player with no energy, but only one more move to complete the level. This would juice monetization significantly.
  2. Re-use seeds of levels that are impossible to complete, draining players of energy. This is a similar strategy, but this technique ensures that players will run out of energy faster. It’s unclear whether this would be more or less effective than strategy #1, but easy enough to test.

This wouldn’t be unheard of. Many RNGs are rigged, sometimes in favor of the player. Tetris, for example, uses a semi-random process to ensure the distribution of pieces is more even than chance would allow. Many in-game coin flips are actually rigged in favor of the player, because people complained too loudly about the “bugs” that must exist because the coin would never land on heads 10 time in a row. Slots are similarly programmed to dish out small wins at a frequency that encourages long-time play.

Freemium games are a new animal, with lots of experimentation happening. While we’re not lawyers, this appears a totally legal approach to game design. So if it’s true that this is part of the Candy Crush monetization magic, we expect we’ll see the tactic spread.  The real question will be whether gamers revolt.

Introducing the activity feed

We released a new public feature recently, our activity feed. Publicly, we track price changes and new entrants to the top grossing, top free, and top paid games lists. Clients who have integrated our SDK will see alerts on updated data and our recommendations for better performance.

The public URL is here:

There’s also a link to the feed on the drop-down menu on the top left (make sure you’re logged in).

Check it out and let us know if there are other events you’d like to see or any way we can make it better!

Secrets to Game of War: Fire Age’s monetization

Game of War: Fire Age is a relatively new game from Machine Zone that is quickly moving up the top grossing charts. We’re not in the forecasting business but wouldn’t be surprised if we saw Game of War as a challenger to the #1 top grossing game in the coming months.

So what are the secrets to Game of War’s monetization success? Almost nothing about Game of War is brand new. It borrows heavily from MMOs like Kabam’s Kingdoms of Camelot, but takes that winning formula to new heights. Iterating on a formula ensures a big target audience and reduces the risk that ARPU won’t support support paid user acquisition.

That said, we think there are three things worth noting:

  1. Depth for big spenders. For many freemium games, the largest spenders represent more than 50% of total revenue.  It’s not enough to secure a one-time purchase. Top grossing games need to create demand for larger virtual coin purchases ($99+) and the best of them create demand that continues over time. The two best ways to do this are lots of strategic depth and great multiplayer. Game of War: Fire Age has created a ton of strategic depth that will allow for months of gameplay. This tends to be expensive to develop, but will pay off in spades for Machine Zone.
  2. Great multiplayer. Everyone loves playing games with friends and competing with them. Game of War’s multiplayer is native to the game, and promotes both cooperation and competition. You are placed directly into an alliance, where you’ll cooperate will up to 100 other players to take on the rest of the world. Lone wolves who try to play alone are fat targets, and my alliance has been stuck in a week-long war against another one from the UK. Wars create lots of spending.
  3. Great in-game messaging: Game of War does a great job promoting their in-game currency – see one sample screenshot. They run limited-time sales on their in-game currency, creating a sense of urgency.  And they add lots of small bonuses to their bundles to increase the perceived value.  We’d expect this makes them 25-30% more effective than simply making their currency available for sale.


Only time will tell how Game of War trends, but we expect the best game developers are taking notes and we’ll see new iterations on a great formula. We’re excited to see what it brings.


Jelly Splash vs Candy Crush: it’s all about virality

Jelly Splash is a very fun new puzzle game from Wooga that’s rocketing up the charts. It’s a cross between Candy Crush Saga and Dots, both known for their insanely addictive gameplay, and Jelly Splash doesn’t disappoint on that front. You’ll be hooked – we promise!


Michail Katkoff has a good post highlighting the monetization improvements Jelly Splash implemented vs Candy Crush’s implementation. Michail highlights Jelly Splash’s use of virtual currency as a major reason they’ll see better monetization. This is spot-on, and explains why 85% of the top grossing games use virtual currency to monetize, and you should too.

But monetization isn’t the full story, which is what will make the Jelly Splash / Candy Crush battle (Skirmish of Sweets? Clash of Confections?) worth watching. Freemium success is a combination of Retention, Monetization, and Virality, and there’s a very complex balance.

Candy Crush doesn’t monetize particularly well on a per user basis. It has a below average ARPU index, Think Gaming’s measure of how well the game retains & monetizes players versus an average top grossing game. There’s lots of opportunity for improvement, and they wouldn’t dominate the top grossing games without something else.

Their success comes from the fact that they are a regular chart topper on the top free games list, which we estimate as 150,000-200,000 new installs daily (US/iOS). While some of this paid user acquisition, we think the more distinctive factor is the strong virality built into the game.

Candy Crush has smartly baked viral engagement into the core of their game, allowing non-paying gamers to avoid paying by sharing the game with their friends. Put differently, viral sharing and monetization are fungible. So while King takes a monetization hit, they are able to get tons of new users through viral means. In a world with steadily rising user acquisition costs, that can be a very smart formula.

Note that there’s lots of speculation here, and Jelly Splash has some great virality baked in too, which is what will make the Skirmish of Sweets so interesting. The results should provide some good data on the right balance of monetization and virality. Stay tuned….we’ll post updates as data flows through.

The myth of mobile gaming consolidation

Talk to smart people about mobile games for long enough, and a common refrain is that the days of the small mobile game developer are numbered. Gameplay standards are rising, which means it costs more to develop artwork, sound, and game play. Discoverability is a crapshoot, which means most games need to buy distribution.  And there is a long-list of post-launch tasks to tune retention and monetization that require both technology and in-house experts.

All of this is true, and logic would tell you that giant publishers with big budgets and armies of analysts should be steam-rollering the market. Cue evil laughs in fancy glass skyscrapers.

The problem with all this smart logic? It’s not happening.

The 300 top grossing games are made by 161 different publishers, and only one of them has more than 10% share. Supercell has ~11% of US daily revenue between Hay Day and Clash of Clans. King.com has 9% with Candy Crush Saga. EA has lots of titles that add up to a measly 5% share of revenue. 158 publishers split the remainder. Not only is that a ton of fragmentation, but it’s fast turnover: the top two players weren’t around 2 years ago.

So what’s really happening? Our guess is that it’s a combination of a few things:

1) Google & Apple promote fragmentation. The app store providers have a big economic incentive to ensure that no one publisher gains too much leverage. We’d expect that there’s some bias towards promoting diversity in both publishers and game play styles. As gamers, we like this too. Keeps everybody honest.

2) Authoring & monetization tools are cheap and improving fast. Unity provides authoring tools to build high-fidelity games in less time. Think Gaming provides a monetization platform to turn that can quickly turn developers into sophisticated self-publishers. As e-commerce platforms and web frameworks drastically lowered the cost of building a website, so too these tools will allow great games to get built faster & cheaper.

3) The freemium and mobile waves are changing the publisher playbook faster than anyone expected. Everything is happening fast, with 82% of the top grossing games using virtual currency to monetize, and 93% using a freemium model

Our prediction: none of these factors are going to change fast. Instead of the relentless consolidation of the giant publisher, we’ll see several years where smaller development shops look like web startups, deploying great new games at a breakneck pace. A new publishing model may emerge, but it will happen over time.

Long live the indie developer! Cue a nerdy giggle in someone’s garage…


Math: The Soul of the New Games Publisher

Eric Seufert has a great blog post in which he provides advice for the typical indie game developer he meets. The post is solid gold for an aspiring game developer, outlining the necessary steps required to get a great game to the top grossing charts.

Eric’s central point is that while making a great game is essential to success, it’s no longer enough. Developers also need to tune their game for both retention and monetization, then use that information to launch intelligent acquisition campaigns that acquire users profitably.

This is time-consuming and expensive, requiring both a technology platform and experts who know how to interpret the huge volumes of data you can create. Eric also outlines a few alternatives, such as working with a publisher or emerging development partners like Tilting Point.

Think Gaming’s take: we’re seeing the emergence of a new type of publisher, one that uses math to create value. Finance and advertising have seem dramatic shifts to quantitative approaches in the last decade. Expect to see the same in free-to-play gaming.