Last year, Hammer & Chisel brought its interpretation of the MOBA genre to tablets with Fates Forever on the iPad. With the mobile marketplace saturated with casual titles, the plan was to target an underserved niche of hardcore gamers.
"In a world where you have so much content that is being targeted at the mass market gamer, how do you bring a product to market that differentiates itself in a meaningful way," Hammer & Chisel founder and CEO Jason Citron asked GamesIndustry.biz at the Game Developers Conference earlier this month. "Because if you don't do something fundamentally different, then you're going to be having these problems. How do I make my game stand out from Candy Crush? You have to think about the market fundamentally differently and have a unique perspective that allows you to go at this problem in a way that gives you a fundamental advantage with some group of consumers. For us, user acquisition, monetization and retention are tricky if you're building a mass market game. So let's not do that. Let's build the game for a segment we think is underserved, that stands out in a very stark way from all the rest of the stuff."
"The tablet market has kind of crashed. Or at least, growth has declined. And as a start-up, high-growth markets are really important."
That was the plan, at least. Nearly a year after launch, Citron said he's happy with Fates Forever's performance, but it's "obviously not a hit" given its absence from the App Store's top 50 charts. However, he believes it's not too late to change that. Hammer & Chisel recently received additional funding from Tencent and Benchmark Capital, part of which will go toward identifying new markets that might be more interested in a game like Fates Forever. And even though it's been three years (and one Hearthstone) since the studio made that first observation about core gamers in the tablet market, Citron brushed aside questions about whether that niche's needs have since been filled.
"I think a broader, more fundamental question is, 'Are there enough core gamers with iPads that it's worth focusing on?' Three years ago, tablets were still growing tremendously, and that was a bet we made," Citron said. "Today, I'm not so sure that's the case. The tablet market has kind of crashed. Or at least, growth has declined. And as a start-up, high-growth markets are really important. If you have a high-growth market, a lot of those problems become less of an issue."
Citron said the problems developers face these days with user acquisition, retention, and monetization all stem from, or are exacerbated by, the maturing marketplace.
"So naturally, user acquisition from a developer standpoint gets more expensive because there are more people competing for the same amount of attention," Citron said. "And they're also competing with the games that are already successful, who are also paying into the same channels to get access to users. So I think when a marketplace becomes more saturated and consumers have more choice, it becomes harder to acquire them."
"A great user acquisition trick is to make the game look fucking amazing, and then people can't ignore it. But the problem is everyone else will do that for the next round, and the bar goes up again."
The flood of new developers are chasing a very real demand from consumers for new games. Combine that demand with ever-improving hardware to run the games and you have another problem introduced to the mix.
"What tends to happen is the fidelity of the games will go up because they want to stand out," Citron said. "A great user acquisition trick is to make the game look fucking amazing, and then people can't ignore it. But the problem is everyone else will do that for the next round, and the bar goes up again."
Citron said these market forces are common anytime you have a very saturated and highly competitive market. After all, they're the same forces that pushed the industry from the Nintendo Entertainment System to the Xbox One in just a few decades. While he doesn't think the budgets for mobile games will ever catch up to those of consoles, that's more due to the continuing upward march of console development costs than any hard cap on what people could spend making mobile games.
"That's just how it goes," Citron said. "New technology comes out. It's a new way to play. Expectations of content quality are lower because it's just novel, so people get away with making cheaper stuff. It sells well. Other producers notice that marketplace is doing well and start making more stuff. The market gets bigger, more people come in and have to make higher quality content to stand out and make money. 15 years later, you have the Xbox One, or the 3DS, or the iPhone 14. It's just going to happen."
There are also other factors clearly impacting these trends, altering the market conditions in differing ways. For instance, development tools are cheaper than ever, a fact underscored at GDC with Unity and Epic seemingly fighting to bring the phrase "free-to-make" into the developer's lexicon. Combine that with distribution channels like the App Store that make releasing a game easy, and anyone can create and release a game. That means more games exacerbating a host of problems, but it also makes it more likely for a wild card title like Minecraft to hit it big.
"[I]t's sad because all this great talent is going toward things that are essentially copies of each other, but because it's so accessible you get random people who just show up and do something interesting."
"As a gamer, it's really exciting," Citron said. "For developers, it's scary because of all these issues so the herd mentality thing starts to happen and you get a lot of Candy Crush clones, FarmVille clones, Clash of Clans clones. On the one hand, it's sad because all this great talent is going toward things that are essentially copies of each other, but because it's so accessible you get random people who just show up and do something interesting."
That situation is preferable for consumers, but Citron candidly admitted that the minimal barriers to entry when it comes to developing and distributing mobile games these days might not be working in Hammer & Chisel's favor.
"This might be a controversial thing to say, but as a content creator making a business, it would be better if we had unfair access to customers, because then we are more likely to be able to build content that enables us to keep making new content," Citron said. "But that's not how the world works, and that's fine. As a consumer, it's better for that not to be true. Capitalism works best when monopolies get destroyed."
Fortunately, Hammer & Chisel's business plan doesn't rely on exclusive access to the audience. As one would expect, it's a plan that takes Citron's assessment of today's market and identifies where the opportunity is among all those complicating factors and hostile conditions. Part of that plan involves targeting niche markets, as even a niche can be pretty lucrative when you're talking about a mobile market with multiple billions of users, many of whom are seeing games through fresh eyes.
"Most people who play smartphone games never played console games growing up," Citron said. "Over the next 15 years, there will be people whose first computer will be a smartphone, and it will be their only computer. There's such a massive opportunity to build a gaming company that is impactful and meaningful in these people's lives much like the companies that we think about [like Nintendo or Atari]. Everyone has their own shortlist of games that really touched them, that are part of who you are. That's what we're on a mission to do."