Rumble Entertainment chief on the agony and ecstasy of making hardcore mobile games (interview)

Above: KingsRoad

Image Credit: Rumble Entertainment

GamesBeat: Ucool launched their Heroes Charge mobile game in August, but they’re doing TV ads already. They mentioned was that the cost per install (CPI) had risen so much with targeted mobile advertising that TV isn’t all that crazy as an expense anymore.

Richardson: When you live in a world where your entrenched competitors can afford to outbid you on direct advertising by two to one, you have to find alternative means. Those can be brands. Those can be, as I said, cross-platform. It doesn’t surprise me that those guys are thinking that way. But if you want to win in mobile, you’d better be designing a game that you think can get to high LTVs, that you think is going to have very strong retention, and that’s going to have some outsized advantage from a user acquisition perspective. The gameplay has to be great, or it has to be cross-platform, or something else.

This isn’t for the faint of heart. Just building a fun, good-looking game is not enough. As we see the shift to companies building games that look more like console and PC games, and as we see that synchronous multiplayer can have an impact – like with Vainglory and KingsRoad – that’s exciting, but it’s insufficient. You still have to build a game that can keep people around for a year or two and give them opportunities to spend money. That’s not easy.

GamesBeat: I heard both John Riccitiello and Bobby Kotick talking about mobile before, predicting that at some point the brands were going to come to rule the top-grossing charts. Activision didn’t necessarily understand mobile. It couldn’t make a game like Call of Duty number one every year in a row, the way it can on console where it understands that business so well. The interesting thing is, we got there, but with Clash of Clans and Game of War and Candy Crush Saga. That prediction has unfolded in a different way, but we still have that static leaderboard.

Richardson: The thesis that John and Bobby had, that brands are going to land and make a difference, I would agree, but it’s only half the battle. Whether it’s Battlefield and Call of Duty or Star Wars and Marvel, brands matter. They help on the user acquisition side. Not only do you get to leverage a known brand, but you have a big audience you can reach out to.

GamesBeat: The difference is that it turned out to be homegrown mobile gaming brands that have won so far, not established console brands.

Richardson: You and I have talked about this going back three years now. Those guys were still very focused on the business where they were making the most money and that they understand. The innovator’s dilemma applied for all the console and PC guys. That’s why it was companies like Machine Zone and Supercell and Gung Ho and King that took the early lead.

Here’s the problem for EA and Activision and people going out to get the big licensed IPs. They still have to figure out how to drive $30, $40, $50 LTVs over a couple of years. Brands are going to help to lower the CPI, but that LTV requires understanding free-to-play design, running games as a service, live operations and events. That will be hard-earned knowledge for the EAs and Activisions. They’ll have a tough time competing with people who’ve been doing that in a very focused way. While they’ve been dividing their focus, in EA’s case, or putting all their focus on console, like Activision, companies like Rumble and Machine Zone and Supercell and Gung Ho are focused on designing games that retain people for years and drive really high lifetime value.

GamesBeat: What do developers need to do to crack the top 10 top-grossing games list now?

Richardson: You’d better be designing good games. You’d better have the talent and the ambition to want to be a top 10 game. To do that, you’re going to have to invent new genres or establish genres on mobile. You’re going to have to take technical risks against things like synchronous multiplayer. You’re going to have to be patient, iterate on your game, and make sure it’s great. Only a handful of companies are going to be able to do that.

It’s also going to take a lot of marketing money. Capital is going to matter. It matters more than it did in the console business at a similar point in its life cycle. When someone was spending $40 on a packaged game, they would ask their friend what they thought before they bought it. They’d read your review of the game before they bought it. When it’s free, in the world we live in, there’s less of that natural word of mouth, and less value from critical reviews. That means there’s a premium on advertising.

By the way, I don’t want you to misconstrue this. There’s still a lot of value in word of mouth and a lot of value in the press. We’re counting on both with KingsRoad. We’ve seen the value on the web. It’s just muted relative to what we saw in the packaged-goods business.

Above: KingsRoad

Image Credit: Rumble Entertainment

GamesBeat: I thought it was interesting, when I visited Supercell in Helsinki recently, that they stayed small. They have 150 employees. 110 are in Helsinki. They only have 15 people working on Clash of Clans. Yet they may push $1.4 billion in revenue this year. I guess they’re just leaving that money in the bank.

Richardson: I think they may do better than that. I don’t know if they talk publicly about their numbers, but I would guess Clash of Clans is approaching $7 million or $8 million a day. I think having small, focused teams allows for creativity. It allows for great communication, which leads to innovation. It’s been a really successful recipe for them. They also have a game where the kind of content they’re producing doesn’t require a large art staff. KingsRoad is a bit bigger than their teams. We have more than 20 people. But we have a deeper, more content-driven game than Clash.

I’d guess that a large portion of Supercell’s revenue goes into marketing. I don’t know what percentage they spend on it, but given the number of television ads you see and the amount of direct advertising you see, it’s probably a material part of their budget. It’s global.

GamesBeat: How many people do you employ overall now?

Richardson: We’re 60. We feel bigger than that, I think. We outsource quite a bit of art and we work with third-party developers. We’ve announced one game coming from a third party, a first-person shooter called Ballistic.

GamesBeat: Any other observations you’d like to leave us with?

Richardson: As a natural evolution of the space, because of all the things we mentioned, you’re going to see fewer, bigger, better games. When I say “better” I mean higher quality gameplay, more polished experiences, but also just getting more refined as far as how you engage users over a long period of time. That’s going to cost more money to build and take more time to build. That’s where the business is headed.

The great new for all of us that love to play games is we’re going to see a lot more innovation. We’re going to see full-blown action-RPGs like KingsRoad and MOBAs like Vainglory. Hopefully soon we’ll see a world-class first-person shooter that’s been completely redefined for mobile. We’re going to see some new genres that didn’t exist on a console or PC. The next League of Legends or the next Minecraft, something that invents a category, I think there’s a bunch of those waiting in the wings. That’s an exciting time. Hopefully it’ll change the dynamics of the business.

Again, don’t sleep on the billions of people who have PCs and still like playing games on PCs. Not only will cross-platform be a big deal from a standpoint of lowering acquisition costs, but it’ll also allow you to stay more engaged with your player. They can play throughout the day across a lot of devices. The more engaged they are, the more valuable they are.