Mobile gaming is predicted to be a $100bn industry in 2016, with the bulk of those revenues coming from “freemium” games that make their money from in-app purchases.
It’s no surprise to see the music industry hoping to capitalise, then. Mobile games firm Glu Mobile has signed licensing deals with Katy Perry, Britney Spears, Nicki Minaj and Taylor Swift, while Iron Maiden recently released their own freemium mobile game too.
Leaving metal aside for a moment, can the biggest pop stars be lucrative mobile-game hits? Glu’s latest financial results are a warning against getting too carried away with the idea.
The US firm released Britney Spears: American Dream for iOS and Android in mid-April, following in the footsteps of Katy Perry Pop and – outside music – of Kim Kardashian: Hollywood, which has been a decent-ish hit for Glu.
In the company’s earnings call for Q2, however, Glu’s chief financial officer Eric Ludwig told analysts that the Britney game’s performance had been “muted” on the app stores. The accompanying investor presentation puts a figure to that: Spears’ game made $1.1m in its first month and a half on the app stores.
Compare that to the $7.8m that Glu made from its Kim Kardashian game in the last quarter: admittedly it had a full three months of revenues, but the game originally came out in June 2014, so is getting on a bit.
A more direct comparison is Glu’s Kendall and Kylie game – based on two other members of the Kardashian clan. It launched in mid-February this year, at a comparable point in the first quarter to Spears’ game in Q2.
In its first month and a half, Kendall and Kylie made $8.6m according to Glu’s investor presentation for Q1:
That means the Kendall and Kylie game was nearly 8x more lucrative than Britney Spears: American Dream in its first month and a half. And given Kendall and Kylie dropped to $3.7m of revenues in Q2 (the first image above), Spears’ game seems likely to experience a decline in the current full quarter too.
So what went wrong for Britney? And, indeed, before that what went wrong for Katy Perry Pop?
Glu hasn’t published figures for the latter game, although it launched in mid-December 2015. The second image above reveals that games launched that quarter made $0.9m in the first quarter of 2016 – $0.6m of which came from a game called Sniper X, meaning $300k at best for Katy Perry Pop’s first full quarter of revenues.
Glu CEO Niccolo de Masi was blunt in his appraisal of its success in Glu’s earnings call for Q4. “In Katy Perry Pop, poor technical decisions coupled with the newly hired team led to all key metrics being below thresholds required for an ROI positive title,” he told analysts. “Additional development time was not provided due to contractual restrictions as well as the team’s mediocre trajectory.” Oof.
The Britney Spears game corrected some of the flaws that Glu saw in Katy Perry Pop: the lack of actual music from its star, for example. Yet fans unwillingness to part with their cash for in-app purchases in both games is a stark contrast to behaviour in the games featuring the Kardashian/Jenner family.
Glu has a section in its investor presentation highlighting the “social power” of its licensing partners, noting that Perry has a “reach” of 235m people across Facebook, Twitter, Instagram and Vevo, compared to 196m for Kylie and Kendall Jenner, 154m for Kim Kardashian West and 102m for Britney Spears (yes, there is overlap between the platforms):
The performance of the Katy Perry and Britney Spears games shows that there is no simple relationship between social followings and mobile game spending by those fans. The worrying thing for the music industry is that the monetisation appears skewed towards other kinds of stars. To an extent that you wonder if even Nicki Minaj or Taylor Swift can buck that trend.
If that wasn’t gloomy enough, there’s another mobile gaming comparison to make. Pokémon Go, the location-based AR game that the world and its aunt is currently playing, has reportedly generated $200m of player spending in its first month – and this without a full global release.
Given the month to month-and-a-half comparison, it’s fair to say Pokémon Go has been at least 200x more lucrative than Britney Spears: American Dream in its early life. The dream of musicians capitalising on the booming freemium-gaming world remains exactly that: a dream.