About a year ago, Variety magazine published a paper on giant game publisher Scopely that shed light on the company's vision for the future of the industry.
Investors on the entertainment business A-list
At that time Scopely was valued at roughly 700 millions USD following their successful Series C round of funding (Crunchbase keeps the company in the range of 500M - 1B USD), some fresh liquidity that was already earmarked to further develop the company's catalogue.
Amongst the investors, one can recognise some familiar names such as:
Tom Staggs (former COO of Disney)
Jim Gianopulos (CEO of Paramount)
Peter Chernin (CEO of the Chernin Group)
Peter Guber (CEO of Mandalay Entertainment)
Jon Schappert (former COO of Zynga and Electronic Arts)
Dave Dorman (former CEO of AT&T)
Jimmy Iovine (co-founder of Beats by Dre and Interscope Records)
and Arnold Schwarzenegger...
Walter Driver, one of Scopely's cofounders believes the company has lured Hollywood luminaries as investors because its apps generate a far higher level of engagement — and per-user revenue flow — than traditional movies or TV shows.
Experience, Engagement, (Social) Status
According to Driver, Road To Survival players spend on average 22 hours and 125 USD per month on the game, but experience shows hardcore players can easily exceed those numbers during an event week-end alone. Scopely's co-founder yet insists that their “products are free to play. So we let people decide how much they want to spend on an experience.” However with the changes in the in-game economy that has slowly occurred in RTS since late 2018, including the latest gameplay - Arenas - introduced by Scopely in August 2019 where participation is conditioned to using game currency, one can wonder what is the experience left to free to play...
It is not a surprised that the key-word seems to be engagement. Scopely counts on the desire of players to gain status in Scopely's games to generate the bulk of their revenues. Engaging players so they can spend, sometimes a lot of money (Driver underlines some super-users have paid upwards of 10,000 USD — and more), which acts as a catalyst for more spending. And it goes on... 80% of Scopely's revenue is thus from in-game currency with the rest from advertising.
Experience, Engagement and Social Status... those are to be the pillars upon which Scopely's executives intend to further develop their business. The experience (often) starts with a successful familiar franchise that attracts users looking for more content: The Walking Dead, Start Trek, WWE, Looney Tunes, The Wheel of Fortune, Yahtzee... all were already well established brands before Scopely created their games. The engagement is engineered by the game mechanics, with repetitive simple tasks (that literally force players to regularly log in the game and do the same thing over and over) as well as the game economy (the wider, the better: customers can pay for everything, including changing the name of their crew...). Of course, the more a player spends, the more it is engaged. Last but not least, there is the social status: forging rivalries amongst users, offering very exclusive contents at a premium price, creating specific competitions for the most dedicated customers (with a shiny avatar, rings a bell?)... participate to instilling the idea that there is hierarchy that mimics - or better yet, replaces - the social status in real life. And people are ready to pay the high price for it, much like "a football superfan paying several thousands of dollars to get field-level seats for a Super Bowl" as Driver compared.
Hail to the Netflix of Software-based entertainement
Scopely's cofounder already sees the steps ahead: “We are looked at as a gaming company, [...] but we think of ourselves as an experience company.” Driver argues that this line of business harbors even greater potential than Hollywood: “if you have, say, a Spider-Man movie, there’s no way to let a fan pay you $1,000 to have a really enhanced Spider-Man experience,” whilst a RTS player can currently spend over 2.5k USD to buy the latest S-Class recruit that, past evidence tells, can live no more than a few months before becoming obsolete. Yet, experience being at the epicentre of Scopely's attention, it should probably give hope to RTS users to see some of the long lasted technical stability issues to be eventually addressed...
Walter Driver believes Scopely will become the “Netflix of software-based entertainment", only more expensive. To support that objective, Scopely gathers more than 1 terabyte of user-engagement data daily that is processed by machine-learning algorithms to dynamically optimise player experiences, user acquisition spending, in-game advertising, and other functions. This is probably a new era for RNG-based experience.
Speaking of RNG and Netflix, the streaming platform giant might indeed learn a lesson or two from Scopely: why not have their users pay for a chance at seeing the latest episode of Stranger Things... a 0.2% chance of course, for only 99.99 USD, with a 95% chance of having a re-run of the pilot of Little House on a Prairie instead. Any takers?
Read More:
[+] Variety's full article
[+] Behavioural psychology and mobile gaming
[+] The limitless mobile game economy