Everyone’s a gamer: where does hypercasual go next?

“Hypercasual” is still not a genre that appears on the Play Store or the App Store, and games in this genre usually come under the “Arcade” category. Even without this recognition though, it’s a behemoth of a gaming niche.

Boasting over 5 times more traffic than the next closest genre (167 million sessions a year compared to casual’s 43 million), responsible for almost 80% of game download growth between 2019 and 2020 alone, and being valued at a huge $3 billion a year. Hypercasual is clearly doing something very, very right and has powered publishers like Voodoo, Boombit and Madbox to rise to high valuation is a very short amount if time.

2019, image owned by GameAnalytics

But is everything as peachy as it seems? 

It is true that hypercasual has an immense playerbase, with installs peaking at around 1.8 billion a quarter in 2019. Is growth going to hit a ceiling then? Is this the start of the end of a genre?

It is certainly true that growth rate is falling (even though it’s still incredibly high), so what Is happening?

Image courtesy of Deconstructor Of Fun

To understand the rise and future of this titan of a genre, we need to start at the beginning.

Why are hypercasual games so darn addictive?

The answer to this question is exactly in how the Play Store categorises the genre: Arcade.

The first games created existed only in machines as big as your fridge, they had simple visual design with lots of colour, had an almost flat learning curve, and a gameplay loop that made you say “one more time” every time. They were addictive, and all the design learnings from the arcade generation are being used in mobile gaming today.

In the days of arcades, you had to really commit to playing those games. You had to go somewhere, pay money, sometimes wait in line… You had to go out of your way, so no matter how much mass appeal they could have had, they were inherently limited. Today, these games are free, they’re in your pocket, you can pick them up instantly so there’s no barrier to entry, and they’re so easy to make and generate so much money that there’s always another being made to grab your attention next.

And on top of that, hypercasual games are designed to make you feel good fast. Simple controls, the offer of high scores, the promise of another high score in your near future if you keep playing… They are built to hack into the motivational structure of your brain by making you feel competent, and good, which is why so many people are turning to them when they have a spare five minutes.

Let’s lay out a few core elements of hypercasual games:

• Super simple gameplay. One touch, can be mastered immediately
• Low fidelity / simple graphics not to overwhelm users
• Sense of easy progression.
• Short levels, generally with the same controls but different colors/elements. Looks new, feels familiar.
• Heavy interruptions with interstitial ads, banner ads, and a rewarded video here and there

Hypercasual games, in their psychological addictiveness and vibrant art, appeal to non-gamers and are a core reason that gaming has become so mainstream now. There are over 660 million hypercasual players after all, making up a big chunk of the over 2 billion gamers worldwide.

But now that we’re seeing stagnant growth after publishers have tapped out their addressable market (as we showed up top), what’s next for the genre? How do they recover?

The unit economics of hypercasual games

To better understand where hypercasual is and where it’s going, we need to look at the business model on a per-unit basis.

The average hypercasual session time is about 6 minutes and studios manage to serve 30 – 50 ad impressions per session (banner ad refreshed every 10s + interstitials + maybe rewarded video ads).

Revenue = $0.175 per session

Day 1 retention is around 25%, that’s $0.04 revenue from that user on day 1 ??

Basically this only works if the cost of acquiring that user is less than $0.2, but the average cost per install (CPI) for mobile in general is $2.37! So Hypercasual had to crack cheap acquisition to make their unit economics work. 

This is where the true genius of hypercasual’s business model comes into play. Because their userbase is so broad, their advertising doesn’t need to be heavily targeted. Facebook and Google charges relative to how specific your audiences are, so hypercasual publishers can run cheap advertising campaigns AND still get immense user acquisition.

Finding cheap traffic and incentivising people to download the game through optimised ad creatives and audience retargeting is more important than gameplay and retention. When the user is in, that user is generating profit.

One big tactic for acquiring users in this scene are effective, if borderline fraudulent, adverts where they show completely irrelevant gameplay to entice users. It casts a very wide net and catches a lot of attention.

With a majority of budget going into marketing, and money saved by not spending on development or extending content, as soon as a player us acquired and sees that first load of ads they are already profitable.

It’s basically the opposite of mid core games, where retention and lifetime value (LTV) is high. MachineZone is the master of this, with the average paying player of Game of War: Fire Age spending around $550 compared to the industry average of $86.50. These studios can easily afford very expensive user acquisition!

Images used from Game of War: Fire Age’s Play Store listing, and Toon Blast’s Play Store listing. Shows a clear difference in player target.

The true future of hypercasual

Hypercasual isn’t competing with consoles or PCs for our attention. They’re not even competing with the music industry, or film, TV, YouTube…

They’re competing with social media, and any other short form distraction that fills our daily breaks.

Social media is something you dip into when you have some spare time, mindlessly scroll and absorb, then switch off. Hypercasual games target the exact same user behaviour, and yet social media platforms retain users for years upon years while a hypercasual game is lucky to get past a week. 

So, more than ‘a love for the game’, hypercasual success is predicated on ad creative optimisation, audience targeting, and cross promotion. Effectively they have cracked game marketability 10x better than any other genres before (think hypercasual’s average cost per install being ~$0.20 compared to the global average of $2.37) and have done a phenomenal job of acquiring massive userbases.

Where can hypercasual go from here?

To find a new avenue for growth, the hypercasual market has 3 options.

1. Hypercasual can grow their audience by finding an even more casual audience attracted to even more casual gameplay.

What’s more casual than hypercasual? Ultracasual. 

Hypercasual games are still ‘games’. The learning curve isn’t literally a flat line, you often still need to solve puzzles or have good timing, and you can lose. An ultracasual (term coined by Homa Games), or idle game, fixes all of those pitfalls. No ability to lose, even simpler gameplay – like a colouring book app – where timing or problem solving isn’t necessary, and appealing graphics to get users on board.

Think satisfying game-like experiences, like this wood turning game from hypercasual publisher Voodoo:

These games could appeal to an even wider audience, as even lower acquisition costs. But, this is only pushing the problem further. What happens when the ultracasual audience is exhausted? 

That takes us to the second route…

2. Hypercasual could become a user acquisition channel for casual / midcore games.

Currently, most user acquisition in hypercasual games are for other hypercasual games in that the audience is being passed around to games in the same genre. In other words, roughly buying and selling users at the same cost per install. 

What if hypercasual games were able to acquire users cheaply, and resell them at 5x the price to casual game devs? 

There is, after all, a crossover between hypercasual and casual users, and there’s proof that hypercasual games can drive traffic to casual games. By maximizing data insights on their players, hypercasual games could really capitalise on being a user acquisition channel for other genres.

So with this option being a good one for long term survival of the genre, it’s time to discuss the third option:

3. Hypercasual could build games with better retention to increase the LTV of their huge userbase. 

The rising term for this new sub-genre is hybridcasual (term coined by Deconstructor of Fun).

That essentially translates to a game having a hypercasual core game loop and concept (simple controls, reinforcement mechanisms like high scores, appealing graphics, etc.), but a midcore-esque metagame on top of it. In other words, they’ll pull players in with simple gameplay, and hook them with surprising RPG-like mechanics.

Archero is a game that does this extremely well, with the only control being to move a character yet a deep RPG system leading you further into the game. This hybridisation also allows it to earn a chunk of the 12% market revenue of RPG games on mobile by sharing that midcore audience. 

This will enable hypercasual games to keep users longer in one game, and capture more value with in-app purchases from their whales (the smaller percentage of players who spend a lot) while monetising the rest with advertising.

We predict that this trend will continue over the coming years now that the rapid-growth period is ending. Publishers will soon be looking to keep players invested in an eco-system and monetise them through a mix of ads and in-app purchases. After all, if a user is investing long term time into a game, they’re more likely to invest money – or at least that seems to be the case with Fortnite’s incredible 70% conversion rate. It’s time for hypercasual games to shake off their arcade roots and embrace the addictive complexity of modern games.

Where to go from there?

In all likelihood, hypercasual studios will take a best-of-three-worlds approach. Deeper games are harder to develop, so studios will likely keep making hypercasual games with shallow meta games in order to find the one that becomes viral enough to invest larger resources into.

Bottomline, we can expect some exciting M&A in order to merge marketability and cheap acquisition, with game design skills and longer retention!

Header image from this great article on the AppLovin Blog.