Publisher 2.0 – The Emergence of Mid-Core

Publisher 2.0 is a curious beast.  A series of articles here that began with “Why Publisher 2.0 is M.I.A.” have outlined the shortcomings with those that are publishing on digital platforms.  Follow up pieces have talked about what changes need to be made with the shift from marketing a product to marketing a service, and highlighted a publisher that is doing it right in an interview with Wizards of the Coast.

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In this piece, we enlisted Peter Warman, co-founder of analyst firm Newzoo, to shine the spotlight on one of the most important developments in the digital game space.  It’s the opportunity to re-introduce, and somewhat redefine, the mid-core game.  It’s a category that used to drive innovation in the game industry, especially for hardcore games on console and handheld systems.  Now with consumer behavior and what types of products are successful on digital becoming better understood, mid-core is once again poised to rise.  It could represent the biggest growth category in digital games.

“As a core gamer I’m genuinely excited to see diversity return with new platforms and the fusion of core and casual mechanics.” - Jonas Antonsson, CEO of GoGoGic

There was a time when you could walk into a game retailer and be blown away by the diversity of products.  A variety of games for every genre and even niche products rounded out the AAA and franchise-based mainstream offerings.  That time is gone.  Retail now relies on pallet after pallet of big budget games, mostly sequels and from just a handful of genres.  Traditional publishers have become less and less interested in mid-core games, a category traditionally made up of modestly budgeted games often based on unknown IP that targeted a niche among gamers on a given console or platform.  For big publishers, the highest upside for a these types of games still isn’t lucrative enough to invest in developing them and allocate resources to market them.   At first slowly but now surely, they’ve abandoned the category.

As mid-core neared its abyss at retail, digitally delivered casual and social games hit their stride.  With the viral capabilities of Facebook and the mobility of cell phones and tablets, a new game market was created for a whole new crop of consumers who didn’t even consider themselves gamers.    Millions of new people enjoyed the addictiveness of games like Farmville and Angry Birds, with their experience facilitated by the ease with which they could access these games.  To some extent, these games also drew an audience from former game players.  These are people who at one point looked for their gaming fix on PC, console or handheld systems but eventually found the narrowness of what publishers offer on those platforms unappealing.  For them, casual and social games filled the void that mid-core used to serve.

Redefining mid-core for digital

In digital, mid-core is defining itself as games with a combination of immersive experience and casual gameplay.  As such, it’s positioned between packaged products or hardcore MMO games, whether on console or PC, and the “new gamer” targeted casual titles served up in droves on mobile and social platforms.  It’s a bit of a shift from what made up mid-core in the earlier days of console, where game play could be very hardcore.

The shift comes from new platforms. Tablets and smartphones force game developers to adapt their game to the intuitive interface and typical situations in which these screens are used.  Casual gameplay characteristics are inevitable.  We could therefore consider Grand Theft Auto III on the iPad a mid-core game, whereas it was very much a hardcore title on console.  This is a bit of psychological hurdle that game developers, and especially those whose pedigree is hardcore games, need to overcome.   Those that haven’t yet dared to adapt their games, whether from a game play mechanic or monetization standpoint, to what they see as an inferior experience are sitting out.  Where they’ll miss out is with other developers who are more comfortable with these new platforms piggy backing on their ideas or IP to create titles targeting mid-core.

An example of this is Funzio’s Modern War.  It’s undeniably inspired by Activision’s Call of Duty franchise.  Based on Newzoo data, US and Europe revenues in May of this year for this game on iOS were more than twice that of combined revenues from all iOS games carrying the Call of Duty IP.  Modern War is free-to-play, a model well adapted to by digital gamers, but one that Call of Duty has yet to adopt even on mobile.

From a consumer perspective, the mid-core digital game segment comprises players looking for a more in-depth experience than a casual game.  Yet it’s not as time-consuming as a core game, both in terms of learning curve and game play progression.  That’s partly because of the fundamentals of a platform such as mobile, where cumulative screen time is now substantial but split up between a multitude of functional and recreational uses.

This classification for mid-core is important.  As mentioned, the segment includes former core players whose tastes in gaming are also affected by how much time they can dedicate to them.  For some, it’s a byproduct of age and the responsibilities that come with it.  As much as a gamer of this kind appreciates and seeks game play depth, they’ll likely show little tolerance for steep learning curve, slow startup curve or the inability to play in short bursts and come and go quickly.  For instance, for them an RPG or MMO shouldn’t require tens of hours to build your character before having a great play experience.

The size of the prize

There’s no science to how you draw an exact line between casual and mid-core, nor between mid-core and core.  But it is certain that there is room for a category for game products between casual and core.  The key questions to ask have to do with the size of the opportunity today and its future potential.  Newzoo approaches the questions from these perspectives: 1) how much of the current share of games and game expenditure goes to products defined as mid-core; 2) how many gamers who typically play hardcore games on PC and console also pay for mobile and social games; 3) what’s growth outlook based on ways to prevent core gamers from dropping out of games entirely as they age.

Current share of mid-core on mobile

Analysis of April and May iOS and Google Play Store data in the US shows that of the top 20 grossing games, 45 percent on iPad and 50 percent on iPhone can be considered mid-core.  These games are generating 40 percent and 45 percent of revenues respectively.  Mid-core games seem specifically popular on the iPad in Europe, illustrated by 55 percent of games being mid-core, generating 47 percent of the revenue generated by the top 20 grossing iOS games in the territory.

Kabam’s Kingdom of Camelot is clearly the best performing mid-core game, taking the number two grossing spot in May just behind Ice Age Village, Zynga Poker and DragonVale depending on region and device.  Kingdom of Camelot monthly earnings are currently approximately two and half times that of Infinity Blade II.  Both are considered mid-core, and it’s significant to see how the free-to-play game is beating the paid one when it comes to dollars generated.

Core gamers who also pay for games on social and mobile

Newzoo estimates the current potential market for mid-core games to be at least $1.2 billion a year in the US and another $1.4 billion in key European countries. This is based on 13.1 million American and 15.7 million European gamers aged 30 and up who currently spend money on both core console, PC and MMO titles as well as on casual games on social networks or mobile devices.  The data hints that this audience is not buying PSP Vita or Nintendo 3DS, turning to mobile devices for their gaming on the go.  It’ safe to say a good portion of this audience is exactly who is seeking mid-core type experiences on digital platforms.

Growth outlook: Save the core gamer

When comparing age groups from 10-30 year-olds and then 31-50 year-olds, 54 percent of core gamers stop playing core games while the drop in number of gamers in general is only 30 percent. In EU countries, the drop-off for the segments is less with 43 percent, but dramatically higher than the 22 percent for all gamers.  If mid core games live up to their potential to keep the core-gamer playing immersive games, at least limiting the drop-off to the average share, that could represent an additional $600 million opportunity in US and EU territories combined.  Based on this underserved potential and the possibility to open up new markets, the mid-core gaming segment is certain to boast double digit growth figures for many years to come.

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