We are delighted to announce a one million dollars deal with southeast asian Playlab. We have been in talks since we met in GameFounders in 2015, where the Cupcake team was mentored by Jakob Lykkegaard Pedersen, Playlab’s CEO.
Cupcake has shown impressive growth of 45% a month over the past 18 months, including an impressive 3x growth in revenue since last September by reinvesting its own money in its 3 games, Letters of Gold, Words of Gold and Numbers of Gold.
Playlab’s financing arm is now stepping in to finance user acquisition, to grow the games even further. “We have been following the team closely due to their passion for the community and finally found a good way to help.” Said Jakob Lykkegaard from Playlab.
“We have a pile of credit cards and use all of them to invest more and more in user acquisition. We are aggressive and it pays off.” said Gabriel Stürmer, Cupcake’s CMO, in his talk about UA in PG Connects London 2017.
“Cupcake Entertainment’s goal is to be the #1 casual brain puzzle company in the world and the biggest games company in Brazil. This deal will get us there faster” said João Vítor de Souza, CEO.
Over the past couple of days we interviewed a variety of people for a Full Stack Developer position. Dozens of people have applied and some went to the first interview. They all had potential according to their resumes, but many let us down due to basic stuff.
I’ve decided to put together a list of basic things you should do before applying and going to an interview in a games company in hopes that future candidates will go as far as looking at this blog post or that it will help you get the job you want in other companies. I’ll use Cupcake in examples, but I’m certain this will help anywhere else.
If you are interviewing with us and read this post, make sure you mention it as you will get extra points.
Here you go:
- Read the job description
We’ve had an artist who’s aspiration is to be an artist applying for a programmer’s position for which he doesn’t have any experience.
- Have a decent CV
No pictures, it’s 2016. Decent and well structured information. Careful with typos. Tailor your resume for each position you apply with information you think is the most relevant.
- Research the company
Read the news, learn about what they do and try to gather any information available about the company. Look at the website, social media.
- Make sure there is a cultural fit
The Cupcake Manifesto contains everything you need to know about who we are and our aspirations. We are bold and aspire to be a successful multi-billion dollars company. We do casual and work with women over 35 years old.
If you only want to make hardcore console games, you are nor for us. If you only want to work on a small and cool indie studio making pixel art games, we are not good for you either. There must be a synergy.
- Google the people emailing you
You’ll be less nervous if you know more about the people interviewing you (“He likes The Walking Dead and so do I!”).
- PLAY THE GAMES
Seriously people. This is by far the most important one.
Games are the essence of what a games company does. I play all the games of people who apply to work at Cupcake.
Finding good people is the most important thing when growing a company and we are doing exactly that right now. Also incredibly hard.
Last week João briefly discussed some acronyms that are common among the #gamedev community. Now I’ll dive deeper into two of them: CPI and LTV. These two have a direct impact on the ability games have to make money which is deeply important for any game company.
Let’s start with CPI, or Cost Per Install. It basically is how much you spend to bring one user to your game. Let’s say you pay the average $1 to bring one user directly from your advertisement, so if you spend $10 you will get 10 users. If that one user brings another friend to play your game, you spent $1 for two players, or $0,50 per player. That’s your eCPI (effective CPI), which is actually the best way to look at UA (user acquisition) costs because it considers organic users and virality, the ones you don’t pay for.
LTV means Life Time Value, the average money you make in your game for each user during the time they play it. Some people spend thousands of dollars, some people won’t spend a dime. Some people will play for 800 days straight, some people will abandon on the first day. Usually 20% of the users will bring 80% of your revenue. There are many ways to calculate LTV, but we use LTV = Average Revenue Per Daily Active User x Average Days Played.
In every business, if you can make more money selling your products than you spend on bringing new customers, you have good ROI (Return On Investment). If you get to make a game with a higher LTV than CPI (or eCPI), it means that you can invest money in user acquisition and make more money on top of it, fuelling a money making infinite loop, you made it.
Getting to this level requires a lot of work and there are only a few companies that get to that point at scale, usually the ones with games in the Top Grossing charts. We at Cupcake have a higher LTV than CPI. See you at the Top Grossing!
You must have seen a lot of different acronyms in game analysis and were not sure what each one meant. Not everyone should be a specialist on them, but understanding what they mean is important to improve team communication. Let’s go:
- LTV (lifetime value)
- CPI (cost per install)
- KPI (key performance indicator)
- ROI (return on investment)
- DAU/WAU/MAU (daily/weekly/monthly active users)
- ARPU (average revenue per user)
- ARPPU (average revenue per paying user)
Flappy Bird is a game that became popular with help from a PweDiePie video. The game was live for more than one year. In a certain moment the game was making US$ 50 thousand per day with ads. Many believe that the success of the was pure luck, but the game shows some important lessons as well:
- Simple control: only one finger necessary to play;
- Easy to learn: very clear tutorial and very easy to understand what to do;
- Fast matches: it is very easy to lose on the game, making matches very fast with very high replay;
- Progress: the progress of the player it is very clear and listening to the sound every time you pass a barrier becomes enjoyable;
- Points: the game always incentivize the player to beat his own record.
You don’t need to have your game completely done to know how it is going to behave. After validating the idea of the game through the MPV, you can also do a soft-launch.
Soft-launch means launching your games to a limited audience to gather information before doing the official and/or global launch. Usually game developers choose a specific country. Many choose Canada for having a similar profile than United States or choose their own country because of the proximity.
The most important metric in a soft-launch is retention. Some games stayed in soft-launch for more than a year before reaching the numbers desired by the team. It’s also important to measure how the monetization of the game is doing to make sure that is worth the investment with the official launch.
Cupcake games are always launched first on Facebook as a soft-launch, because measuring the information on web is much faster than mobile. In mobile you need the user to update the game in his device, which won’t always happen, as well as a longer review time. Updates on web are immediate and it is possible to have numbers the next day. We develop for mobile when the game reach the quality that the team desires. Nowadays we are doing this with Numbers of Gold, that was launched in the end of March on Facebook.
We talked before about the importance of validating your game through MVP. You can lose a lot of time discussing ideas that can be tested directly with final users and validated through metrics. If you are not sure if something is gonna work, it’s not up to you to guess what the user is gonna think. Put the game in front of your users and use metrics to be able to measure if things are working or not. This also works for improvements to your game. You’ll notice that what you think is gonna work doesn’t, and what you think it is not gonna work actually does. Seeing the impact in retention of the changes made is a good way to check how things are going.
Before launching Numbers of Gold, we had a lot of doubts about things that could work or not. We decided not to waste time with philosophic discussions and launched the game with these doubts. After a few days we had enough data to see what was working and not working. This saved us a lot of time and allowed us to work in other important stuff.
Target audience of your game is one of the first things you should define. Games should be developer with a target audience in mind.
However, I’ve noticed that many game developers lack focus on a target audience for their business. First game is a Mario clone for males under 25 yo (Marcio Broz); second is a puzzle for women over 35; third is a shooter for males over 25; and forth is an adventure for males over 25 who don’t shooters. That’s a problem! Why?
To clarify the issue, let me talk about the benefits of working with a specific target audience:
- Creates a community of people who play all of your games;
- Reusing knowledge acquired in previous games;
- Cross promotion among your games, lowering UA costs;
- Keeps high quality players circling around your games and spending in all of them (71% of Installs and 78% of Numbers of Gold’s revenue comes from our other two games);
- People playing all of your games makes revenue grow for all of them;
- Increases retention of your games.
The three larger mobile games companies all have very specific target audiences. King is casual, Supercell is midcore and Machine Zone is Hardcore. Cupcake is focused on Casual Brain Puzzles, where all of our current and future games fit. Not as casual as King, as all of the games of Gold demand higher brain effort than it’s necessary to shuffle candy.
If you think Candy Crush has lives to push you into spend money on the game, you are wrong. Having lives in a game is a strategy that influences the retetion of a game.
Imagine that you have a whole cake to eat and you can eat as much as you want. If you eat half of the cake right away today, you are not gonna want eat more tomorrow. However, if you eat just a slice today, you will want to eat more tomorrow. After a few days you ate the whole cake.
This metaphor is a good example of the use of lives/energy system in a game. Running out of lives makes you stop playing making you want to play more. This has a great positive impact on retention. Work balancing your game so that the player don’t play continuously without stopping. That’s right! Make the player go away, but with a good reason to come back.
Having lives is something that works very well on Cupcake games. Spending money to recover lives is a very small piece of our revenue. And it shouldn’t be different.
This article will give you a high level strategy about how games make money, including ours. I’ll touch base in some key aspects that impact your game’s ability to make money.
Defining your demographic:
No game can make money without users. Also, no game can make money without the RIGHT users, so get to know your target demographics upfront as it will impact many key points of your gameplay and art. Are they casual or hardcore players? Male or female? Age?
Now you must let them know about your game. There are several ways to acquire users, both paid and free. Advertisement, app store organic and featuring, cross promotion and PR (not very effective) through blogs and youtubers. Free users are free, which is good, but high quality users are more escarce. Games that depend on purchases also depend on high quality users, usually from ads.
The good $tuff. There are three major ways to monetize nowadays. Ads, in app purchases and premium. Crossy Road developer Hipster Whale made $10M from ads in 90 days, which is a lot of money. Or is it? When you compare to Supercell’s whopping $6.3M a day, it doesn’t look that way. And that’s before Clash Royale.
It is clear that IAPs are the way to make big money in mobile, but they are indeed more difficult than making money from ads, as IAPs need to make sense in the overall game design and offer true value to the user. Premium model is dying in mobile, as you can see in the app store’s top grossing charts. Minecraft is the only game to show up in the top grossing charts and it is only 43rd. It is still a thing in PC and console for now.
What about Cupcake?
Our demographic is women over 35 years old who like to play games that keep their brains active. Most of our users come from organic, but the top users come from profitable Facebook Ads campaigns. Just like Supercell, we make money from In App Purchases in a model that has proven to be successful, very similar to Candy Crush.
How does your strategy compares to this? Let us know!