Jiri Kupiainen interviewing Brian Meidell, CEO of FRVR

4 Key Insights From 8 Weeks Meeting with Games Industry Leaders

We made it to the top, what now? After decades of rocket ship growth, the games industry had its first annual decline, and talk of pulled term sheets and layoffs is everywhere.

After the false starts of VR, blockchain gaming, and the Metaverse, is AI finally the new opportunity that should be taken seriously, or just more hype? And importantly, as the leading media form of the century, what, if anything , are we going to do about climate change?

8 weeks ago, I set out on a 10 week journey to find some answers and share them on YouTube on the 10 Weeks to Save the Games Industry, where I travel together with Maria Wagner, GamesForest.Club’s Co-Founder all around Europe by train and bus to visit its gaming hotspots.

The trip is ending in two weeks, but we have a long backlog of video content to share on the YouTube channel.

Since we’ve already had the privilege of talking with so many incredible founders and execs, I wanted to take a moment to share four key insights and trends that have kept popping up.


The position of app stores as a distribution channel will erode further

Nobody wants to be too critical of Apple or Google on tape, but it’s clear most industry leaders don’t expect their distribution and discovery monopolies to last.

A big reason for this is that app stores are no longer good at serving their core function: discovery

In the early days, app stores served as a wonderful discovery mechanism for new apps and games. This also justified them taking a 30% cut of the profits. But they are not so great at it anymore. 

The app economy has become enormous in the past decade. App stores are now the go-to place for every mobile developer, and more than two million new mobile apps now get published every year. It’s very difficult for players to find great games – apart from the lucky few that get featured or top the charts. 

This lack of discovery, combined with rising user acquisition costs, means it is increasingly difficult for app stores to justify their cost model, and it is also causing developers to look for alternatives. 

Brian Meidell, the co-founder and CEO of FRVR, who publishes games both online and on app stores, pointed out that it’s not really the app stores themselves that are the main discovery mechanism nowadays. Discovery is now done through ads.

The reliance on ads as a discovery mechanism makes the system highly unstable and vulnerable to changes, as the removal of IDFA goes to show. The monopolistic nature of the app stores is also facing increasing scrutiny from regulators. 


This means new discovery mechanisms will become more popular in the future, and it will lead to far more diverse distribution channels. Just think how much digital distribution is fragmenting on the PC side, and you might get an idea of what’s in store for mobile down the line.

As mobile device technology becomes increasingly sophisticated, more complex games can be run on mobile devices and browsers, reducing the need for dedicated app stores. In addition, this development will enable new multiplatform experiences across phones and desktop computers similar to Fortnight.

App stores aren’t going anywhere, but their position as the absolute rulers of mobile app distribution will eventually come to an end. 


Successful studios and publishers need broader portfolios as fastest growing game categories are shifting

For the past few years, hypercasual games have been the most downloaded mobile game category by far. The most successful titles in the space have brought developers massive revenues thanks to effective in-app monetization. 

But will hypercasual be the king of the hill for much longer? It seems nothing is permanent in the world of gaming, and the removal of IDFA is heavily affecting hypercasual developers

In-app revenues from advertising are dropping and eCPMs are falling. As hypercasual games monetize much more heavily through in-app ads compared to other game categories, they often haven’t been designed with in-app purchases in mind, and this is causing problems.

As several interviewees like Annouar Benattia from Quiet and Éric Tournié from Tactile Games pointed out, it seems many of the giants of hyper-casual gaming are now looking to focus on other categories such as casual. 

This goes to show that only developing games in a single category might not be enough to future-proof a studio, especially on the mobile side. 

Developers and publishers will also need a more balanced revenue stream strategy where you don’t put all your eggs in one basket. For example Éric pointed out that they are doing pretty well thanks to having a balanced approach to monetization through both in-app purchases and ad revenue. 


It is still all about the audience, but user acquisition needs a complete overhaul

It’s not just the types of games where diversification is needed. This also applies to user acquisition methods. 

Thanks to the very precise targeting capabilities that were available in the past, channels like social worked really well, even with ad creative that wasn’t necessarily the greatest. 

Social ads still aren’t dead as a user acquisition medium (and most likely never will be), but their effectiveness has weakened as targeting has become less precise. On top of this, global app and game downloads are growing much more slowly than ad budgets, so most of your players will come directly from other games and there are relatively few entirely new players. 

Your only option is to stand out from the competition. You’ll need to be present on many more channels and explore new kinds of acquisition methods and ad creatives that address how your game is different.

But what kind of methods and mediums can you use? Jeferson Valadares from Fortis pointed out that building communities and leveraging online content creators are worth exploring. These thoughts were echoed by Philip Hickey, CMO of SYBO Games (the maker of Subway Surfers), who pointed out that community building and making players brand advocates will be increasingly important going forward.

I see YouTube creators being one of, if not the most, powerful user acquisition medium for gaming advertisers in the future. Genuine creator content is not perceived as advertising, which people are already bombarded with. By nature, most YouTube content is also longer-form than your average video ad, so creator sponsorships can be extremely effective in helping you stand out from competitors. 

While working with creators in sufficient volumes has been a challenge in the past, companies like Matchmade can now solve this scalability challenge for advertisers. 


Advertising asset volume is a challenge, AI can help

As advertising performance is increasingly dependent on a broader set of channels and different kinds of ad creative, it also means that the volume of creative assets required is also growing rapidly

Creators are a great help as they produce unique content, and if you hire them in big volumes and license their content for other channels, you already have a big pool of creative assets to leverage. 

Creators alone won’t be enough though. You also need other kinds of ad creative. But how do you go about producing enough of them cost-effectively?

Trying to tackle the requirements for more ad creative by hiring more designers won’t do the trick. Designers’ time is best spent on new creative concepts for example, not trying to turn them into mindless asset factories. 

To help designers become more productive, better tools are required. This is where generative AI can be extremely useful, especially once the capabilities improve. Both the guys behind Two and a Half Gamers, a gaming industry podcast, and Shanti Bergel of Transcend., a VC fund, saw that these tools hold massive potential, yet are still in their infancy.


Unfortunately, the generative AI space is currently seeing an insane amount of unrealistic hype, so it can be hard to estimate the true potential. I believe a very real outcome of these tools will be that they will boost the output volume of high quality assets, and improve the iteration speed of designers – but questions around copyright and free use still need to be answered.

It is definitely worth it to start experimenting with generative AI, but don’t expect it to be a cure-all for all your woes. Generative AI will help increase your asset output, but it won’t remove the need to test and learn what works, and iterate on the winning strategies. 


In conclusion

So there you have it, four future trends identified by gaming industry thought leaders. When planning your strategy for the future, you will benefit massively from taking these into account. Make sure to follow the YouTube series for more!

If you have thoughts on other industry trends that should receive more attention, or are curious about any of the above, I’d definitely love to hear your thoughts, so don’t hesitate to get in touch!

And if you’re looking to expand your user acquisition by working with creators at scale, Matchmade can definitely help.