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Mobile games thriving as Scopely raises $340M, Activision sees “biggest opportunity”

Mobile games thriving as Scopely raises $340M, Activision sees “biggest opportunity”

Throughout this holiday season, all eyes have been on the next-gen consoles from Sony and Microsoft. The new gaming systems will provide plenty of entertainment to a few hundred million gamers during their lifecycles, but it can be easy to lose the forest for the trees in this industry. The number of smartphone users across the globe is approaching 4 billion, and gaming remains one of the most popular uses of mobile devices. Between consoles and mobile, for game publishers the difference in potential addressable audiences is vast.

Tencent’s mobile phenomenon, Honor of Kings, is recording 100 million daily active users. PUBG Mobile publisher Krafton is looking to go public next year and could be valued at a staggering $26 billion. Over 300 million players have downloaded Call of Duty: Mobile, and Activision Blizzard has been stressing to investors that mobile gaming now represents its “biggest opportunity by far” – it’s planning on bringing all its major franchises to mobile in the coming years. Mobile publisher Scopely, which operates popular games like Marvel Strike Force and Star Trek: Fleet Command, also just raised $340 million (in a pandemic, no less) at a $3.3 billion valuation.

There are no signs of mobile gaming’s ascension slowing down. We may see a blurring of platform lines in part due to cross-platform franchises like Fortnite and PUBG, as well as technological advances like cloud gaming, but the biggest share of gaming revenues will continue to come from mobile devices. This has been especially true during the pandemic, as Interpret’s GameByte® reveals that households with children ages 3-12 are spending more on mobile gaming. Among those who purchased a mobile game app, 47% spent more during the pandemic, and among those who purchased mobile in-game microtransactions, 40% spent more on that content as well.

Women are watching more esports and launching women’s teams

Women are watching more esports and launching women’s teams

Global lockdowns due to COVID have put an emphasis on entertainment in general this year, with gaming and esports both seeing significant boosts. The games industry is still predominantly male, but the number of women playing games and participating in esports continues to grow. In fact, Interpret’s most recent data from NMM: Global Profiles® indicates that female viewership worldwide climbed several percentage points during the pandemic and is approaching 40% of total esports viewers. Women in the UK and South Korea have shown especially strong interest in esports.

Not only is this a positive sign for diversity in the esports business, but professional teams now have an opportunity to appeal to more women in a sector that’s been catering mostly to men. Gen G, for example, is expanding its partnership with female-focused social app Bumble and will be launching an all-female squad, under Team Bumble, to compete in Valorant (Gen G previously launched Team Bumble in 2019 to compete with an all-women’s team in Fortnite). Gen G’s news came hot on the heels of Cloud9’s decision to launch its own all-women’s Valorant team, Cloud9 White (the male team is being renamed Cloud9 Blue).

These are the kinds of moves that will have a direct impact on the long-term health of the esports ecosystem. As more women play and watch esports, a variety of non-endemic brands are likely to enter the space (or return with a new approach) and help expand the sponsorship market. Cloud9 White has already gained the support of AT&T which is invested in “contributing to real, meaningful change in the industry by giving this powerhouse team and other talented women what they need to succeed.” AT&T first got into esports by partnering with ESL Mobile in 2018.

Traditional female athletes are recognizing business opportunities as well, just like their male counterparts. WNBA star Aerial Powers recently launched a “Powerz Up All 2K Female Tournament,” which enjoyed over 26K views on the first day of NBA 2K competition. Powers, who was signed to Ford Models’ Esports and Gaming division, intends to use Twitch streams and esports to promote diversity in gaming. Interpret fully expects the trend of women in esports to gain more traction, especially as key stakeholders realize that a broader audience will be vital to their business.

Nest discontinues DIY home security system

Nest discontinues DIY home security system

Last month, Nest confirmed the discontinuation of its Nest Secure DIY home security system in a box. The kit, released in 2017, sold most recently for $399. Parent company Google is far from out of the home security business, however. The decision to shut down the product comes just a few months after Google invested $450 million in professional security leader ADT. Google also continues to sell a wide variety of home security products, including video doorbells, security cameras, and more.

The penetration of smart home products continues to rise, especially security devices – making Google’s investment into ADT all the wiser. Interpret’s Smart Home Matrix® pegs “smart” (interactive) home security ownership at 13% of US consumers, and standalone networked security camera penetration at 9%. Despite the increase in smart home offerings from big tech companies and their subsidiaries, corporate giants have yet to displace the traditional pro-installed home security providers, such as ADT, in which Google now has a 7% stake.

Smart Home Matrix® indicates that 19% of all security system owners are using ADT as their home monitoring provider, and 16% report that they self-monitor their system. Traditional pro-monitoring providers are reluctant to disrupt their profitable monthly monitoring revenue structure by providing self-monitored solutions, and device makers are reluctant to build the installing dealer channels required to provide integrated security solutions.

“Nest’s retreat from the systems business signals the difficulty of selling a complete home solution without the assistance of an installing dealer and further explains the company’s decision to invest in ADT, the largest security dealer in the US,” explains Stuart Sikes, Senior Vice President at Interpret.  “That said, it does open the door for competitors to gain some business for customers who do prefer DIY solutions.”

Netflix increasing price as it continues to invest heavily in content

Netflix increasing price as it continues to invest heavily in content

Netflix recently announced that it is increasing the cost of its standard plan by $1 (to $14 per month) and its premium tier by $2 (to $18 per month). The service’s most basic tier, however, is remaining just $9 per month. A price hike during a pandemic, and right before the holidays, could be viewed as less than ideal timing, but the leading streaming platform hasn’t raised prices since January 2019 and continues to invest in original, exclusive content – it’s been estimated that Netflix has allocated more than $17 billion in 2020 alone to secure more content.

Last year, Netflix acknowledged that video games like Fortnite could be a bigger long-term threat to the company than competitors like Hulu or HBO Max. To that end, the platform has invested more in interactive content like Bandersnatch and game-based content, including the documentary High Score and series like Castlevania, The Witcher and Assassin’s Creed. CEO Reed Hastings has also said that entering the video game space directly is not out of the question.

For the immediate future, Netflix is taking a chance by raising prices, potentially risking its position as a staple for streaming households. Not only is the streaming service under more pressure from newcomers like Disney+, Peacock, HBO Max, and Apple TV+, among others, but Interpret’s New Media Measure® indicates that increases in price are one of the main reasons for cancellation, just behind watching it less. When you combine that data point with the fact that over a third of Netflix’s subscriber base in the US is spending less on entertainment overall because of COVID, the likelihood of Netflix having reduced user growth or losing some customers in the months ahead goes up.

Some amount of churn is natural for any streaming platform, especially one as big as Netflix – it expects to have around 200 million subscribers globally by the end of the year. Netflix enjoyed back-to-back quarters of higher growth earlier this year during the pandemic but recently saw a slowdown. Nonetheless, investors believe that Netflix’s decision to raise pricing was a prudent one, as shares rose 5% the day after the announcement.

Verizon launching a $50 Yahoo!-branded smartphone

Verizon launching a $50 Yahoo!-branded smartphone

In a market that is now pushing costly 5G service and regularly sees smartphones from leading brands Apple and Samsung retailing for upwards of $1,000, there’s a real opportunity to offer customers something more budget-friendly. At just $50, Verizon’s brand-new Yahoo!-branded smartphone is the epitome of budget-friendly – needless to say, a price that low comes with some caveats.

The new phone is essentially a re-skinned ZTE Blade A3Y model that only offers 720p resolution in a 5.4-inch display, 2GB of RAM, 32GB of memory, and Yahoo!’s apps are all pre-installed. There’s no support for 5G, as you might expect, but what Verizon is aiming to do is drive customers towards its Yahoo! Mobile service, which launched in March and offers unlimited talk, text and data on Verizon’s 4G LTE network for $40 per month. Verizon bought Yahoo! in 2017 for $4.8 billion and has been exploring the best ways to use the once mighty Internet empire.

The trojan horse-like approach that Verizon is taking with its new Yahoo! smartphone could work with the older demographic that’s still regularly visiting Yahoo!’s various portals and using its email service. The device doesn’t have any of the bells and whistles of far more expensive smartphones, but it doesn’t have to at the $50 price point. Moreover, customers get an optimized Yahoo! experience as the apps have been fine-tuned for the smartphone while owners also receive free access to Yahoo! Mail Pro for ad-free email.

Interpret’s New Media Measure® indicates that Yahoo! services are regularly used by almost 40% of individuals over age 45 in the US, and nearly half of Verizon customers in the US use Yahoo! websites, with one third using the brand’s email client.