Global "turbulence", AI and Layoffs: the unbelievable plot twists of mobile game development in 2024
In a recent interview with IT Recruitment company Greenwich IT Solutions, ??Sergey Martinkevich, the Publishing Lead at Azur Interactive Games and Head of the InHouse Studio, unveiled the exciting trajectory awaiting mobile game development in 2024 ?? ?? ???
Azur Games , reigning as the world's top mobile publisher by downloads, achieved a remarkable feat in 2023 by surpassing the 8 billion download milestone. ???
Greenwich IT Solutions - IT recruiting company that has been on the market for 10+ years.? From 2022, the Greenwich team is actively expanding its presence on the international market. Oksana Bila, CEO and Founder of Greenwich IT Solutions comments: “The main reason I've been working on this interview is to assist all participants in the mobile game industry — players, game developers, publishers, and investors — in identifying the right direction for 2024.”
“It's time to accept the fact that the industry won't be as it was before” – Sergey Martinkevich, Publishing Lead at Azur Interactive Games| Head of InHouse Studio
Oksana Bila: “The game development market, like many IT niches, is going through one of the biggest crises in its history.? What are the main reasons and factors that have had an impact on the industry?”
Sergey Martinkevich: “In my opinion, this is the first serious crisis or, as some cautiously call it, "turbulence" in the mobile game development industry. Before this, the audience, eCPM (effective cost per mille), and in-app purchase revenue were continuously growing. We arrived at this "turbulence" through market conditions that are completely understandable and familiar:
As for advertising monetization, a significant drop in eCPM has occurred for quite explainable reasons: the increase in the supply of games (see point 1) and the decrease in demand. Major advertisers are cutting ad spends due to global “turbulence” and the slowing growth of the world economy.”
Oksana Bila: What strategy does Azur Interactive Games choose in 2024?
Sergey Martinkevich: “Considering the competition and diminishing chances for commercial launches, we are successfully emphasizing the iteration of old projects across all genres with the goal of increasing LTV (Lifetime Value). I’ll explain why this strategy is better than creating new games.
The studio experiences a weak or moderate commercial launch, especially in hyper-casual or hybrid-casual games, and the product generates a profit ranging from $20,000 to $80,000 per month. It might not be considered a hit in the traditional sense, thus the developer attempts to explore something new. However, as practice has shown, with six months of diligent work, it's possible to increase LTV by 20-40% or even more. This can positively impact profits or, at the very least, allow the project to generate traffic for several years.
We are also focusing on our mid-core and casual direction, both with external studios and internally. We continue to invest in teams with strong products, seeing significant growth potential in this approach.”
“The gold rush is over; it's time to acknowledge this fact and approach game development as a serious craft, even if you're creating a Skibidi Toilet battle arena” – Sergey Martinkevich
Oksana Bila: “How the World of Hyper-Casual Games Will Change in 2024 for Developers, Publishers, and Players, Considering All Factors and the Development of AI?”
Sergey Martinkevich: ?“In the near and medium term, I don't believe there will be tools for creating games with a "make it good" button. Game development is a highly creative field, and I believe AI will become an excellent assistant but will not replace individuals with taste and that daring sense of "look and feel." AI is already proving to be a valuable aid to mobile developers, including us, in content generation, whether it's working with narratives or 2D art.”
“Currently, I don't see any clear AI markers that can identify game-changers. If anyone has found such markers, please write to me, and we can discuss :)” – Sergey Martinkevich
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Oksana Bila: “What genres players will choose and which ones will stagnate?”
Sergey Martinkevich: “Players will continue to engage with hyper-casual games, which will remain competitive with the short video format. Additionally, they will continue to explore casual games and core genres in roughly the same proportions as now, with a slight shift in focus from hyper-casual towards casual and core. This shift is influenced by the maturation of the audience and possibly a general fatigue from simple repetitive mechanics that, at the moment, cannot offer a qualitatively different experience. I would bet on genres like mergers, idle RPGs, tycoons, and simulators, as well as anything involving sandbox and cooperative gameplay.”
Oksana Bila: “What is Player Psychology in 2024?” Sergey Martinkevich: “There are numerous offerings in the market, but the improvement of the economic situation remains uncertain. Therefore, the trend for players to spend less will persist in 2024. Players might engage in a larger number of games, but with reduced immersion, as economic uncertainties encourage a more cautious approach towards in-game spending.”
Oksana Bila: “Will the world see new games/hits in mobile development this year, what to expect? Or the bets are on already released games and reboots of old ones?”
Sergey Martinkevich: “I know that in 2023, a large number of worthy games were released, and they are still iterating. In 2024, they will start gaining traffic and scaling up. Again, the ship is not sinking yet! New hits will emerge in all genres. It just won't be the way it was before.”
Oksana Bila: “Which strategy will developers, investors, and publishers choose for 2024?” Sergey Martinkevich: “Developers will focus more on iterating their existing products and exploring new, more complex genres. Publishers, on the other hand, will actively support these development endeavors, investing more time and financial resources into exploring new genres. They may engage more in investments and reduce spending on pay-to-prototype or burn rate models, showing a strategic shift towards long-term genre diversification. Investors, noticing a trend, will increasingly move away from investing solely "in an idea." There will be a growing focus on unit economics, where investors will place more emphasis on understanding and investing in the sustainable profitability of game projects, shifting away from purely speculative investments in conceptual ideas.”?
Oksana Bila: “Recommendations from a publisher to game development studios?”
Sergey Martinkevich: “Game development studios with existing released games/hits should pause all other activities and spend the next six months focused on iterating current projects, provided the cash flow allows. Studios that are still in the development stage, dependent on investments and lacking released games in their portfolio should continue their projects to not come to a standstill. If there is an opportunity to continue development now, it should be pursued. The advice is simple – optimize the development process as much as possible. Founders of studios may find themselves giving a higher percentage to their employees more often but offering lower fixed salaries, or even finding strong candidates for part-time roles with performance-based incentives. Also, before approaching investors, consult with industry colleagues, prepare unit economics, and have a clear understanding not only of your dream game but also of how it should scale.”
“Don’t wait, it won't get easier from now on” – Sergey Martinkevich
Oksana Bila: “In most IT industries in 2024, there is no hiring plan or scaling strategy, will hiring be optional, or will there be small team expansions?”
Sergey Martinkevich: “Will game project teams expand and how? - Teams of already successful launches may expand to continue working on longer LTV and maintaining their positions. Which specialists in the industry will be most in demand without concerns and which ones will be downsized? Everyone should be concerned! People with passionate eyes and bold ideas will always be in demand. Whether you are a developer, artist, game designer, or tester - learn and master new technologies, propose ideas. We've seen scenarios when hiring was lively, weak-minded, and brave! But it won't be the same. You need to live with this idea and accept it. Some may find my takes cynical, but in 2024, bitter truth is better.”?
“Employers, whether a publisher or a studio, used to compete in the market. Now employees need to compete as well.” – Sergey Martinkevich
Sergey Martinkevich: “Which specialists should consider changing direction, building skills in other areas to reduce the risks of downsizing? I cannot say for all professionals but producers and game designers should definitely explore fundamentally new areas and truly create, not just adapt what already exists. Will there be new positions related to operating AI in mobile game development this year, as in other niches? Absolutely! But if the global market situation doesn't change, the competitive advantage will be with linear professionals who learn to enhance their core craft with AI - artists, developers, game designers. Recommendations for professionals from the game industry in 2024 who have faced downsizing: what to focus on when looking for a new job, what employers will focus on when choosing candidates in 2024? I can say on the side of employers, probably a focus will be on the ability to think out of the box. People with a negative motivation who can flourish during stress and create something cool will win. Exclusive experience will certainly be more valued. If you've worked in puzzle games for 3-4 years, it's better to look for a job in the same genre if possible and build experience in that domain.”
“There were wonderful times when a developer could "get tired" of a genre and move from project to project. In 2024, I see that people who work in one domain and accumulate experience in it will be increasingly valued.” – Sergey Martinkevich
Oksana Bila: “Explore emerging genres and projects that are currently in development and are likely to attract players. Focus on enhancing your existing skills, particularly those where you can showcase your expertise. I agree with Sergey on this point. If you possess in-depth knowledge of your industry or niche, dedicate effort to further improve and deepen that knowledge. This applies especially to roles such as artists, quality assurance professionals, game developers, and designers. Even if you are actively seeking employment, consider this period as an opportunity for self-development and improvement. When selecting a project, take into account not only the popularity of genres but also key metrics, whether the project has been released, and, in the case of startups, industry trends, monetization models, and artistic styles. As Sergey pointed out, the primary focus should be on released projects and strategies to maintain their position in the top charts. Moreover, every professional should acquire knowledge in artificial intelligence relevant to their industry and niche. Even if you haven't secured a job yet, upgrading your skills and preparing for new technologies, including AI, is crucial. The game industry is already witnessing job vacancies for AI operators. In summary, embrace new technologies if you haven't already, refine your existing skills, aim to become a cross-functional specialist, and carefully assess the prospects of projects. If you're a junior specialist, your strategy should revolve around gaining your first commercial experience. This is a time for mutual loyalty and respect, particularly loyalty towards your employers, businesses, and projects that are resilient during these challenging times.”