Defining ‘hyper-casual’ as a genre and exploring its long-term viability [Industry Contributor]

Hyper-casual games jumped onto the mobile gaming scene in 2017 as lightweight games with simple mechanics that offered low barrier to entry and instant gameplay – a “tap to play” experience. Due to their fundamental simplicity, hyper-casual games are not only instantly playable, but infinitely replayable.

In just under two years, based on data from IronSource’s platform on user level revenue, it’s estimated that the approximate market for hyper-casual games is in the realm of $2 billion to $2.5 billion in annual revenue.

At the same time, while “Hyper-Casual” is not an official category in the App Store, many developers have taken note on how this particular genre has shaken up the App Store’s Top Free charts consistently, due to its addictive nature and effective cross-promotion model.

It has also raised some controversy among the mobile game development community for concerns about cannibalization of other genres and impact on monetization models – prevalence of ad-focused games, rather than in-app purchases (IAP) and other models. One upset developer has even claimed that “hyper-casual games are the clickbait of mobile games.”

We decided to take a further look at the hyper-casual genre, and ask: is there room for another genre, and does this genre have staying power? Or is it a marketing tactic for acquiring mobile players quickly and efficiently, and will phase out or transition to something new over time?

What Fueled the Growth of Hyper-Casual Games?

Mobile Market Maturity

The way people like to play mobile games today has changed since the launch of the app stores. Consistently, mobile game genres have been broken into casual, mid-core and hardcore. While casual games have mass appeal, like Candy Crush, mid-core games are identified as having more adaptable controls and metagaming (for the slightly more skilled). With hardcore games, this is a smaller category of users, but monetization can be very high through up-front payment or IAP.

Interesting to note is that around the time that mid-core mobile gaming emerged in late 2016/early 2017, user acquisition (UA) managers started using cross-promotion between games and working with mobile advertising companies to acquire players, a trend which we now largely see within hyper-casual games today. Cross-promotion among games in an app portfolio is such an effective acquisition tactic because players are already engaged, and they’re already familiar with the brand and therefore have trust, so they’re more likely to convert as well as drive a higher value.

Compared to its counterparts, hyper-casual games are by far the most lightweight in mechanics and user interface. They’re more minimalistic, but very enticing and reminiscent of simple arcade games from the game industry’s early days.

According to an EEDAR report on mobile and tablet gaming, how and when people play has changed over the years. The most popular time that people play mobile games nowadays is when they’re multitasking at home; followed by when waiting for someone; while traveling, taking a break; and then when in the bathroom. In these scenarios, players want easy-to-access entertainment that they can enjoy in short sprints. Hyper-casual games fit perfectly with this trend.

Appeal and Accessibility

The wide appeal and accessibility of hyper-casual games is another factor in the fast rise of hyper-casual games. It has enabled developers to keep a low cost per install (CPI) for acquiring players. Additionally, the rapid monetization from ads has created a scenario where the lifetime value (LTV) of a player can exceed the CPI and scale.

Top Hyper-Casual Game Mechanics

In the traditional sense of why people play games, the hyper-casual genre fills that need for entertainment or escapism, and all within a very simple framed experience. The following are three of the top hyper-casual game mechanics that players can find in the app stores today, which illustrates how a simple, yet talently designed hyper-casual game can draw millions of users to become repeat players:

• Idle Mechanics: at its core, they don’t require any input from a player in order to progress. Most of the time, idle mechanics form a secondary mechanic attached to a soft currency. This works well because over time players earn more money, which they can spend in their core game experience. Adventure Capitalist by Hyper Hippo made the idle mechanic the core focus of the gameplay and built a game around repeating the mechanic with different growth rates. It became successful because of the interplay between the rates and the addition of ascension mechanics which force a player to lose all of their progress in the current game for increase speed of progress in the next game.

• Puzzle Mechanics: while a genre in itself, hyper-casual puzzle games focus on simplicity rather than complexity. A good hyper-casual puzzle game usually has no end. Good examples are 1010! from Gram Games or 2048 from Ketchapp. In both cases, the puzzle rules are set at the beginning and the board develops as you play. Unlike other board games such as Chess or Chequers which have clear end goals, hyper-casual puzzle games usually have no clear end and it’s simply a case of lasting as long as you can.

• Dexterity Mechanics: these games typically have players continue a very simple and repeatable action that they must perform quickly and hundreds of times. Timberman from Digital Melody is a great example of taking a player’s full attention, timing and dexterity to create a challenging points based challenge.

Undoubtedly, we find that hyper-casual games include a variety of mechanics that challenge and entertain players, and thus, can be considered “real games”.

The Controversy Over Monetization

Today, hyper-casual games primarily monetize through advertising (interstitials shown between levels, rewarded videos and more). Occasionally, some hyper-casual games will include IAP, but it’s uncommon. Much of the hyper-casual advertising inventory is sold to other hyper-casual games, or to cross-promo campaigns from the same publisher, with some rising interest among brand marketers. That said, it is mainly hyper-casual advertisers running campaigns on hyper-casual supply.

With the rise of hyper-casual games in the app stores, the cross-promotion advertising model has further popularized, causing concern to other game developers about potential monopolization in the stores. Publishers that bring a lot of hyper-casual games to market and cross-promote are weeding out competition and rising in the rankings. 

The growing concern is that it’s becoming harder for other developers to create games that don’t rely on this ad monetization model with cross-promotion. However, there is potential in IAP (in-app-purchase).

Referring back to the IronSource data, of all players analyzed, 660 million play hyper-casual games, with 520 million out of that 660 million playing both hyper-casual and IAP games. Interestingly though, 101 million out of that 520 million played a hyper-casual game first. This effectively means that 20% of new gamers who play both IAP and hyper-casual games first played a hyper-casual game and only then moved to IAP games. This data suggests that hyper-casual games potentially “warm up” new gamers for IAP-based games.

Taking a look at data from Sensor Tower in 2018, the Arcade category only accounts for 5% of the total IAP revenue for all casual games, yet it brought in half of all the downloads for the genre that year. In fact, 2018 was the year of growth for the category as the year-on-year downloads during 2018 went from 1.8 billion to a whopping 3.5 billion. This growth was found to be mostly driven by hyper-casual games.

The potential here is for IAP games to dig deeper into the data to learn how to effectively buy on hyper-casual inventory and continue to increase budgets. IAP buyers must be data-driven and learn optimization techniques to improve creatives, better understand hyper-casual users and how to monetize them after install.

Conclusion

While downloads are still growing quarter-over-quarter since 2017, the leaps in growth have slowed over the past year, indicating that perhaps the hyper-casual market has matured at a rapid pace and both market entry and staying power is now harder.

Does it mean that the genre is going away? I’d say no. But it will evolve.

Hyper-casual games have brought new players to the market that have proven to monetize with IAP. Just a few years ago, Facebook and Google were the only real viable options for UA, since triple-A, midcore, and casual publishers focused on IAP, rather than ads, as their main source of monetization. This meant that there wasn’t a huge amount of in-game inventory to market on and that the introduction of hyper-casual games has brought a mass of impressions into the market, which has expanded the overall amount of available inventory. It has also created inventory ideally suited for hyper-casual UA campaigns.

Based on the trend, we can expect to see the growth of hybrid monetization models in hyper-casual genre to support ad revenues, and gameplay evolution with light meta system additions, to further boost LTVs.

Additionally, brands are increasingly understanding the value of in-game advertising that results in high-quality and engaged users, and high viewability. So, as brands increase their spend in hyper-casual inventory and as IAP games learn to buy more effectively on hyper-casual, we expect this genre to continue to grow within the casual sub-genre, carving out its own place for the long haul.