U.S. Economy Shapes Mobile Gaming’s Future

𝗠𝗼𝗯𝗶𝗹𝗲 𝗚𝗮𝗺𝗶𝗻𝗴'𝘀 𝗦𝘂𝗿𝘃𝗶𝘃𝗮𝗹 𝗶𝘀 𝗠𝗮𝗿𝗿𝗶𝗲𝗱 𝘁𝗼 𝘁𝗵𝗲 𝗨.𝗦. 𝗘𝗰𝗼𝗻𝗼𝗺𝘆. 𝗜𝘁 𝗦𝗵𝗼𝘂𝗹𝗱 𝗔𝘀𝗸 𝗙𝗼𝗿 𝗔 𝗗𝗶𝘃𝗼𝗿𝗰𝗲 If you're European, you need the U.S. economy to grow. If you're Canadian, you need the U.S. economy to grow. This sobering reality underscores nearly every Western mobile development hub today: for mobile gaming to grow, the U.S. needs to grow. Although optimistic narratives from developing markets like India and Brazil are abundant, their growth rates still pale compared to the U.S.'s real spending power growth. For the foreseeable future, it's U.S. or bust in mobile gaming, a reality suggesting mobile gaming doesn't control its destiny. Political literature in the early 2000s enthusiastically promoted the BRIC nations (Brazil, Russia, India, and China) as future economic powerhouses. Since then, however, these countries have largely underperformed expectations. Rather than converging with the U.S., the gap has widened, […]

Phillip Black March 19

Highlights

Tripledot’s Big Gamble on nearly $1B Acquisition

𝗗𝗜𝗚𝗘𝗦𝗧 𝗢𝗥 𝗗𝗜𝗘: 𝗧𝗿𝗶𝗽𝗹𝗲𝗱𝗼𝘁’𝘀 𝗕𝗶𝗴 𝗚𝗮𝗺𝗯𝗹𝗲 Tripledot’s nearly $1B acquisition of Applovin's studios is a massive gamble but reflects the shrinking pool in the hyper-to-hybrid publisher game. With this move, Tripledot radically shifts from 1% IAP to majority reliance. Meanwhile, peers like Voodoo and Homa slug through slow hyper-to-hybrid transitions. Rather than incremental growth, Tripledot opted for transformative growth overnight, betting they will learn, grow, and wield a zoo of studios and genres. Tripledot's filings reveal an astounding 98% ad revenue share, which brought in over $300M last year. Yet margins languished at a frustrating 15%, explaining the strategic necessity of shifting toward IAP and hybridcasual for better cost leverage and valuations. This is another reminder that gaming's unique economics differ significantly from traditional subscription models like Netflix or even software more broadly.Eric Seufert’s recent "Economics of Mobile Gaming" highlights […]

Phillip Black March 14

Journal

The Economics of Match Events

Nearly all economic activity in match-based or “saga”-based metas follows the fundamental relationship: Revenuei=Gold Sinki=Attemptsi⋅Gold Sink Per AttemptiRevenuei=Gold Sinki=Attemptsi⋅Gold Sink Per Attempti where, ∙∙ RevenueiRevenuei is the revenue for the iith player.∙∙ AttemptsiAttemptsi is the number of attempts made by the iith player.∙∙ Gold Sink Per AttemptiGold Sink Per Attempti is the average of gold spent per attempt by the iith player. Holding Gold Sink Per AttemptGold Sink Per Attempt constant, an increase in AttemptsAttempts leads to higher RevenueRevenue. Similarly, increasing the Gold Sink Per AttemptGold Sink Per Attempt while holding AttemptsAttempts constant also raises RevenueRevenue. Many innovations in match economies operate within this framework. For instance, a “super light ball” mechanic increases AttemptsAttempts but reduces the Gold Sink Per AttemptGold Sink Per Attempt. Events follow the same structure. Basic Match Model At the aggregate level, revenue across all players is:Revenue=∑i(Attemptsi⋅Gold Sink Per Attempti)Revenue=∑i(Attemptsi⋅Gold Sink Per Attempti) Event Uplift Events affect revenue by shifting the number of attempts or the gold sink […]

Phillip Black February 24

Journal

Fisherian Game Economy Tradition.

𝗙𝗜𝗦𝗛𝗘𝗥𝗜𝗔𝗡 𝗚𝗔𝗠𝗘 𝗘𝗖𝗢𝗡𝗢𝗠𝗬 𝗧𝗥𝗔𝗗𝗜𝗧𝗜𝗢𝗡. Game economy designers have inadvertently revived the economic traditions of famed economist Irving Fisher. In Fisher's world, the economy is a hydraulic machine, with refinement or "productive process" occurring as resources flow. The impact of major institutions takes on a literal effect, where a tariff might slow the flow of liquid or capital from one chamber or country to another. It's a surreal approach and the early attempt at modeling game economies. Irving Fisher studied monetary theory and price levels at Yale, where his obsession with equilibrium led to an extraordinary invention. In 1891, he unveiled his hydraulic-mechanical computer—a contraption of water, pulleys, and floats that physically demonstrated how prices find their level. The machine, described in his paper "Mathematical Investigations in the Theory of Value and Prices," became the first working economic model, translating abstract […]

Phillip Black February 17

Journal

AI in Gaming Has Flopped

𝗔𝗜 𝗜𝗡 𝗚𝗔𝗠𝗜𝗡𝗚 𝗛𝗔𝗦 𝗙𝗟𝗢𝗣𝗣𝗘𝗗. Humanity may be on a colossal technology frontier, but gaming is being dragged along with AI. Instead of surfing atop the wave, it's retreated to the wake. Gaming has historically been the first-best use case for new technology, so where did it all go so wrong? In the 26 months since ChatGPT launched, Web3 has made more tangible progress than AI gaming applications. Any technology outpaced by Web3's progress is in danger of irrelevance. And it's for good reason: so far, AI's visible footprint in games has been limited to a series of Cosmic Lounge press releases (I want my match-3 levels!) and a sixth finger in Call of Duty key art. Everything else appears to be cheap VC slideware or corporate investor day fantasies. It's true that gaming effectively subsidized the AI revolution by […]

Phillip Black February 3

Journal

Q5 Steam Stakes

𝗣𝗹𝗮𝘆𝗶𝗻𝗴 𝗳𝗼𝗿 𝗞𝗲𝗲𝗽𝘀: 𝗧𝗵𝗲 𝗤𝟱 𝗦𝘁𝗲𝗮𝗺 𝗦𝘁𝗮𝗸𝗲𝘀 The fate of PC & Console's (HD) live-service model hangs on Q5's ambitious lineup: Strinova, Infinity Nikki, Path of Exile 2, Supervive, Marvel Rivals, and Delta Force. Should these titles fail to gain traction, the industry faces a cascade of down rounds, studio closures, and layoffs—not to mention a wholesale reassessment of the HD live-service paradigm. Eric Seufert's meditation on "The last social media platform" may prove prescient; we might witness the same in HD live service.The warning signs are already apparent. Mountaintop Studios' venture-backed Spectre Divide has become a cautionary tale, with peak simultaneous users (PSU) dropping below 100. Supervive's trajectory is similar, maintaining 4,000 PSU despite years of development, encouraging playtests, and the backing of the former League of Legends leadership team. Its salvation may lie in the East, given that […]

Phillip Black January 1

Journal

Arcane was a disaster and a function of IP narcissism

Yes, Arcane was a disaster and a function of IP narcissism. It's transmedia bingo 18 different ways. From the Bloomberg exposé:• Riot spent about $250 million on two seasons of the series• Four people with knowledge of Arcane’s production said the company didn’t have a robust plan to recoup the cost of the show before it launched.• Riot believed the show would be the first of many produced by its new entertainment division, which would transform the Los Angeles-based company into the next Walt Disney Co.• Netflix paid Riot $3 million an episode and Tencent an additional $3 million for the rights to show it in China.• Those payments amounted to less than half the total cost. • The company scaled back its Hollywood ambitions recently, ending Arcane and pausing development on other adaptations. • The pricey passion project, backed […]

Phillip Black December 23

Journal

Riot can afford it??

Arguments justifying Arcane on the grounds that "Riot can afford it" are already lost. This framing positions Arcane as a cost center. Marketing heads are commonly called "Heads of Growth" because marketing isn't supposed to be a cost center; instead, it ought to be a profit center. It's a beautiful show (I loved it! Thank you for your subsidy!), and if Riot wants to spend $250M on IP narcissism, they can and should (they're also a private company), but that's different from justifying it within a cost-benefit framework.It's a common misconception that this framework requires easily observable evidence to be useful. Instead, it asks for higher rigor and a direct answer to "How could Arcane deliver over $250M of ROI relative to the best use of investment?" The higher the investment, the more intense the scrutiny level. Another way to […]

Phillip Black November 25

Journal

Royal Kingdom to Grow Match-3 GDP

𝗥𝗢𝗬𝗔𝗟 𝗞𝗜𝗡𝗚𝗗𝗢𝗠 𝗧𝗢 𝗚𝗥𝗢𝗪 𝗠𝗔𝗧𝗖𝗛𝟯 𝗚𝗗𝗣• Royal Kingdom launching Nov 22; today!• Royal Match has run away with it, but Candy Crush has grown over the long haul!• Some of its best quarters over the last two years.• Royal explosive growth didn’t come at anyone’s expense; Bezos and Paul Graham are right.• 𝗠𝗼𝘀𝘁 𝗰𝗼𝗺𝗽𝗮𝗻𝗶𝗲𝘀 𝗱𝗶𝗲 𝗯𝘆 𝘀𝘂𝗶𝗰𝗶𝗱𝗲, 𝗻𝗼𝘁 𝗵𝗼𝗺𝗶𝗰𝗶𝗱𝗲.• Of the big three—Candy, Scapes, and Royal—only Royal lacks the 2nd and 3rd+ spin-offs.• “2nd flagship” games do well, but that seems like the ceiling (Familyscape and additional Candy spin-offs struggled) 𝗣𝗢𝗞𝗘𝗠𝗢𝗡 𝗣𝗢𝗖𝗞𝗘𝗧: 𝗦𝗛𝗔𝗥𝗞𝗙𝗜𝗡 𝗢𝗥 𝗥𝗨𝗡-𝗥𝗔𝗧𝗘?• 𝗖𝗼𝗿𝗿𝗲𝗰𝘁𝗶𝗼𝗻: Downloads were falling fast last time we checked (steady revenue pulled: Nov 5; Updated: Nov 14)• 𝗨.𝗦. 𝗱𝗼𝘄𝗻𝗹𝗼𝗮𝗱𝘀 𝗳𝗲𝗹𝗹 𝘁𝗼 𝗲𝗾𝘂𝗶𝗹𝗶𝗯𝗿𝗶𝘂𝗺, 𝗯𝘂𝘁 𝗝𝗮𝗽𝗮𝗻, 𝘄𝗶𝘁𝗵 𝗮 𝟮𝟭-𝗱𝗮𝘆 $𝟮𝟰 𝗥𝗣𝗗, 𝗵𝗮𝘀 𝗺𝗮𝗶𝗻𝘁𝗮𝗶𝗻𝗲𝗱 𝘀𝘁𝗲𝗮𝗱𝘆 𝗱𝗼𝘄𝗻𝗹𝗼𝗮𝗱𝘀 𝗳𝗿𝗼𝗺 𝘁𝗵𝗲 𝘀𝘁𝗮𝗿𝘁. Actual UA reinvestment? With high RPD, should this be […]

Phillip Black November 23

Journal

WTF Are These 3 Battle Pass Things

When I wrote, Economics of Battle Pass Are Broken. Let’s Fix It in 2o21, I argued that designers needed to play with ADMC (average daily monetization cap) to transform the pass from an engagement to a monetization vertical. Since then, every subsequent “innovation” has been a creative exercise in price increases. Fortnite realized this long ago, which is why the direct store has ballooned in content and uses “the vault” to sell past pass-specific content; the 67% direct store, 33% battle pass revenue split leaked from the 2012 Epic v. Apple trial likely skews harder direct store since. Two Options: d or fc In the original model, increasing spend depth may be achieved by decreasing dd or the pass length, thereby shipping more passes over a given period. averagedailymonetizationcap=N∑i=1(yi)+fcdaveragedailymonetizationcap=∑i=1N(yi)+fcd Mobile games mastered this in months, using low marginal cost, fractionalized, and storable content (currencies! resources!). For example, this was the exact strategy Marvel Snap […]

Phillip Black November 18

Journal

𝗡𝗘𝗪 𝗣𝗢𝗞𝗘𝗠𝗢𝗡 𝗧𝗖𝗚 𝗪𝗜𝗟𝗟 𝗚𝗢 𝗡𝗢𝗪𝗛𝗘𝗥𝗘

𝗡𝗘𝗪 𝗣𝗢𝗞𝗘𝗠𝗢𝗡 𝗧𝗖𝗚 𝗪𝗜𝗟𝗟 𝗚𝗢 𝗡𝗢𝗪𝗛𝗘𝗥𝗘• Prior mobile Pokemon CCG 𝘥𝘪𝘥𝘯’𝘵 𝘩𝘢𝘷𝘦 𝘐𝘈𝘗. Yes, that’s right.• The new game is polished but revolves around timer-based pack openings.• 𝗬𝗼𝘂 𝗱𝗼𝗻’𝘁 𝗯𝘂𝘆 𝗽𝗮𝗰𝗸𝘀 𝘆𝗼𝘂 𝗯𝘂𝘆 𝘁𝗶𝗺𝗲𝗿𝘀 𝘁𝗼 𝘂𝗻𝗹𝗼𝗰𝗸 𝘁𝗵𝗲𝗺.• Over $20M so far, but downloads 𝗳𝗮𝗹𝗹𝗶𝗻𝗴 𝗳𝗮𝘀𝘁.• Japan dominates ($26/download; U.S.: $4.36).• Strong collection loops with Codex moments at pack openings but a weaker version of physical CCG.• And yes, 𝘁𝗵𝗲𝗿𝗲’𝘀 𝗮𝘂𝘁𝗼𝗽𝗹𝗮𝘆.• 𝗠𝗼𝗯𝗶𝗹𝗲 𝗖𝗖𝗚𝘀 𝗵𝗮𝘃𝗲 𝗹𝗶𝗺𝗶𝘁𝗲𝗱 𝗰𝗲𝗶𝗹𝗶𝗻𝗴𝘀, far from Pokemon Go’s $800M annual revenue.• Failure to evolve beyond Snap’s lukewarm success, weak meta, or UGC adoption. Markets failed, too (Artifact).• Inability to build strong meta loops or explore UGC. 𝗦𝗣𝗔𝗖𝗘 𝗔𝗣𝗘 𝗚𝗔𝗠𝗘𝗦 𝗗𝗘𝗖𝗟𝗜𝗡𝗘𝗗; 𝗠𝗢𝗩𝗘 𝗧𝗢 𝗦𝗨𝗣𝗘𝗥𝗖𝗘𝗟𝗟 𝗧𝗜𝗧𝗟𝗘𝗦?• Turning into 𝗦𝘂𝗽𝗲𝗿𝗰𝗲𝗹𝗹 𝗟𝗼𝗻𝗱𝗼𝗻 (Space Ape brand dead), but games have declined the last year.• They’ve been working on Boom Beach and Hayday, so they […]

Phillip Black November 8

Journal

Pocket Pair, the creator of Palworld, cited the patents Nintendo is suing them under.

Pocket Pair, the creator of Palworld, cited the patents Nintendo is suing them under. And boy, is it Japanese patent law nuts. It's enough to radicalize me against patent protection of any type in games (I'm looking at you, Shadow of War). While something might be lost in translation, the breath is insane.𝗣𝗮𝘁𝗲𝗻𝘁 𝗡𝗼. 𝗝𝗣𝟳𝟱𝟰𝟱𝟭𝟵𝟭𝗕𝟭It tries to patent, among other things, how players capture and train virtual creatures over time, including evolution mechanics.— It specifically discussed how multiple evolution paths change stats based on player input (e.g., a creature gets more health because you pet it).𝗣𝗮𝘁𝗲𝗻𝘁 𝗡𝗼. 𝗝𝗣𝟳𝟱𝟮𝟴𝟯𝟵𝟬𝗕𝟮This one is sore nuts, trying to patent how players interact in biomes, like altering terrain or weather conditions. It includes progression systems like resource points based on in-game gathering activities!𝗣𝗮𝘁𝗲𝗻𝘁 𝗡𝗼. 𝗝𝗣𝟳𝟰𝟵𝟯𝟭𝟭𝟳𝗕𝟮This one is more technical, and I'm unsure how to read […]

Phillip Black November 8

Phillip Black

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