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October 2013 US Digital Games Market Update and Rankings
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October 2013 US Digital Games Market Update and Rankings


SUMMARY: “Mobile and social game earnings flat in lead-up to holiday season, as digital sales break another $1 billion in October.”
 

October 2013 US Digital Game Sales | ★ SuperData

11/14/13, 1:00 pm EST

Analysis from SuperData CEO, Joost van Dreunen, follows:

OVERALL

“The digital games category reached $1,032 million in total sales in October, up 11% from last year. Main drivers this month were the improvement of both the free-to-play MMO category, which reached $261 million, and the subscription-based MMOs, which were up 5% at $86 million in sales. Both mobile games and the social category were flat, and offset the seasonal uptick in DLC on both PC and console. We anticipate an increase in user acquisition cost unlike we’ve seen before, with publishers aggressively buying users to claim a top market position during the holiday season.”


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SOCIAL GAMES

  • “The social games category remained steady in October, with total spending at $173 million, an increase of 12% compared to the same month last year. We anticipate a slight decline in the weeks to come as the mobile segment claims a bigger overall wallet share among the casual gamer audience. Based on seasonal patterns and the recent strengthening of the social gaming segment suggests that total spending in December may break the $200 million threshold.
  • “October saw several updates and releases in the social gaming segment with a clear brand-based strategy. Disney launched Pirates of the Caribbean: Isles of War, which is based on the narrative universe around Jack Sparrow and a prequel to the events portrayed in Curse of the Black Pearl. Disruptor Beam release a major update on Game of Thrones Ascent, based on the HBO television series. This growing emphasis on brands is consistent with the rising cost of user acquisition for social games.
     
  • “Mid-core social games continue to be a growing category, as more casual games seem to be in decline. Kobojo released Mutants: Genetic Gladiators, which offers more complex game play, at the same as Disney shuttered its hidden-object game Blackwood & Bell Mysteries. Similarly, the social casino segment saw a flurry of releases, including Black Pearl Casino (Novogoma), Heart of Vegas (Product Madness, owned by Aristocrat), Praia Bingo (Pipa Studios) Club Casino (Flowplay) and Governor of Poker: Texas Tycoon (a partnership between Youdagames and Mytopia). We expect the growing inventory of mid-core social games to ultimately decrease the average earnings per title as players spend the same amount among more games.”
FREE-TO-PLAY MMO
  • “After several months of modest growth, the overall free-to-play category reached $261 million in total sales in October, up 15% from the same month last year. The overall addressable market showed a decline, with 1.7 million fewer players in October compared to the month before. We expect this decline of the free-to-play segment to continue for the remainder of the year, as attention increasingly shifts toward the traditional console market during the holiday season.”

  • “In October a host of companies announced new titles, which we believe refreshes existing inventory. Grinding Gear Games released Path of Exile on October 23rd, after the closed beta reached over 2 million players within its first month. After the closure of City of Heroes, Missing Worlds Media (a group of 100 fans and volunteers) announced its development of City of Titans to continue the superhero MMORPG. The company managed to raise almost $700,000 via KickStarter, more than double their funding goal. Crytek launched Warface in an attempt to break into the free-to-play shooter market. Sony released both a major optimization patch for its PlanetSide 2 and announced the closed beta for EverQuest Next Landmark. Finally, Paradox Interactive revealed that Magicka: Wizards Wars, a PvP spell casting game, is in early alpha.”

PAY-TO-PLAY MMO

  • “The subscription-based MMO market recovered as spending was up 5% month-over-month, reaching $86 million in total sales. However, the overall segment continues to trend downwards as revenue declined 12% compared to the same month last year. The US audience base for subscription-based MMOs was 5.6 million in October."
  • “Where many subscription-based titles have abandoned their revenue model in favor of a free-to-play monetization scheme, some titles choose to buck the trend. Allods Online (Webzen Dublin) announced it will be offering a subscription-only server shortly, titled Smuggler’s Paradise. Meanwhile, Activision/Blizzard revealed that its player exodus had halted, pointing at a relatively modest loss of 100,000 subscribers since last quarter.”

MOBILE

  • “The mobile games category was largely flat in October, with revenues declining a slight 1% month-over-month. Compared to October last year, mobile gaming revenues were up 27%, at $264 million.

  • “With the lead-up to the holiday season underway, we anticipate an increase in the cost of user acquisition that outpaces mobile gamer spending. For October we recorded an average spend per mobile gamer of $1.96, compared to an average cost per install of $2.73, up from $0.97 in the same month last year.”

  • “Two major partnerships characterize the mobile gaming market in October. First there was the acquisition of Korean mobile gaming company Com2us by Gamevil and, second, Softbank and Gungho Online Entertainment teaming up to purchase 51% of Supercell for $1.5 billion USD. The two deals further validate the mobile games market, and indicate an expectation of growth for the segment.”

  • “In October, two of the top five grossing mobile games in the US market were social casino titles, indicating the persistence of this category. Newcomer in the top three was Game of War - Fire Age (Machine Zone), which generated an estimated $420,000 in daily revenues, and, more importantly, is the only credible contender to Clash of Clans’s dominance we’ve seen so far.”

DOWNLOADABLE (PC + CONSOLE)

  • Led by a predominantly seasonal pattern, spending on DLC was up 25%, month-over-month, reaching $247 million in October. Both categories showed an increase in total spending, but the average monthly spend among PC DLC gamers broke the $31 threshold, up 22% from the same month last year. For the remainder of the year we predict continued growth for both segments, as early projections suggest the category (PC and console DLC) will reach over $400 million in sales in December.
  • “Take-Two Interactive dominated the full boxed downloads on console with GTA V (Rockstar) and WWE 2K14 (2K Sports). On PC, Steam announced it now has 65 million active users on its platform (worldwide), an increase of 30% compared to last year. Here, too, Take-Two’s subsidiary did well as Firaxis’s release of map pack The Scrambled Continents for Sid Meier’s Civilization V reversed the recent decline in concurrent users, post-summer sale.”

About this monthly release

In an effort to help create greater transparency in the digital games space, SuperData provides a high-level overview of the U.S. market every month. Our methodology builds on digital point-of-sale data collected directly from publishers and developers.

PLEASE NOTE: We continue to build our dataset and improve our ability to read the market. As such all of the numbers presented here are subject to change, and readers are advised to consider additional sources for information. For any questions regarding our methodology, don’t hesitate to contact us.

Learn more about our digital games research here

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About SuperData

SuperData is the leading market intelligence firm on the online, digital and mobile games industry. We collect digital point-of-sale data directly from publishers and developers to give our customers unparalleled monthly insights into the unboxed games market. This allows us to identify key trends, evaluate marketing spend, establish accurate revenue estimates and analyze market changes for popular digital games, including MMO, FPS, casino, digital console, virtual world, mobile and social games.

SuperData publishes industry-relevant key performance indicators. Using our proprietary data set on over 2.85 million paying online gamers, we establish monthly benchmarks such as monthly active users, conversion rates, ARPPU and revenue estimates for markets, genres, and titles. Customers use our data to evaluate their performance, identify key growth opportunities, assess revenue potential, optimize their efforts, and better understand their audience’s wants and needs. Clients include Activision/Blizzard, EA, Konami, Namco Bandai, Zynga, Wargaming and major Wall Street firms.

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