Why Isn't Apple Arcade Looking East?
Level 23: Why isn't Apple Arcade Looking East?
This Week's TLDR
TwitchCon: the imporant takeaways
Minecraft Earth will lead gaming into a new form or socialization and community
Apple Arcade and why it won't be entering the China market
What The Golf? a game that's not really about golfing
Apple in China
How will Apple localize content to other regions of the world like Asia, which already champions a mobile-first gaming culture? As Asia (China in specific) begins to market to Western audiences, Apple will need to reverse penetrate into the Asian market, amid tighter games regulations and mobile games competition.
After Fawzi posed this question in his Apple Arcade article, we decided to do some digging on Apple Arcade’s go-to-market strategy in China. Turns out there isn’t a strategy or plan to enter China. Could it be the cost-benefit economics? That they’re taking their sweet time to get there? The clincher: there’s a deep thematic divide in what content resonates with each specific market - China vs. West - so much so that reinvesting hundreds of millions of dollars into another, China-specific Apple Arcade doesn’t make sense.
Localizing content for a completely different user persona is hard. Even if the services are allowed in China as they exist today, there’s no guarantee to success. A large percentage of game are already free on the App Store. “There’s some concern that there’s just not enough incentive to get people to pay a monthly fee when there are already so many free games available on iOS.”
As the trade war intensifies, Chinese mobile phone users are jumping ship to their national gem, Huawei. It remains that Apple’s iPhones are luxury items. Mounting trade tensions and internal political protests have helped to actually galvanize Chinese citizens to purchase Huawei alternatives. What implications could this have for Google’s subscription service?
Regulations make it difficult to create and localize games. This would involve coordinating with hundreds of other Chinese studios to create new games. Why not just woo Chinese creators into the American app store instead? The plan of attack here is to showcase the powerful A13 chip and the ability to create Premium games featured, to draw studios into their lucrative value proposition. Interestingly, Apple featured Chinese studio, TipsWork on their mainstage keynote.
China remains the largest largest market for mobile gaming, and it feels like Apple is flailing on this missed opportunity. The last 30 minutes of their Keynote was spent elaborating on the power of the A13 chip in comparison to key competitors like Huawei. Which says to us there’s no comparison except for performance. Longer battery life and more complicated games may not be enough of a tipping point to switch mobile phones, but it may get Chinese developers to publish games for Western audiences on the Iphone rather than through local publishers NetEase and Tencent.
“The available evidence strongly suggests that iPhone demand in China is very elastic: if the iPhone is cheaper, Apple sells more; if it is more expensive, Apple sells less. This is, of course, unsurprising, at least for a commodity, and right there is Apple’s issue in China: the iPhone is simply less differentiated in China than it is elsewhere, leaving it more sensitive to factors like new designs and price than it is elsewhere.” - A fun nugget of wisdom from Ben Thompson's Statechery
China remains the largest largest market for mobile gaming, and it feels like Apple is flailing on this missed opportunity. The last 30 minutes of their Keynote was spent elaborating on the power of the A13 chip in comparison to key competitors like Huawei. Which says to us there’s no comparison except for performance. Longer battery life and more complicated games may not be enough of a tipping point to switch mobile phones, but it may get Chinese developers to publish games for Western audiences on the Iphone rather than through local publishers NetEase and Tencent.
TwitchCon in Review
Last week Twitch had their annual conference down in Southern California. It seems that every year the platform finds ways to announce/host valuable content. This year was no exception. A few of our favorite highlights include:
A rebrand of the entire site.This includes a new logo, UX, everything. We LOVE the concept. It’s not often that media giants rebrand, and Twitch has done a standout job on encapsulating inclusivity and vision with theirs. The idea stems from the streaming platform’s nature as a content creator and brand builder. Streamers go to Twitch to make a name for themselves, in the process molding their own persona and identity within the platform; that is, Twitch is a brand of all brands and thus necessitates an icon that welcomes anyone, from amateurs to media giants. In other words, the three tone dynamic gradient logo equates to “you’re already one of us”, a gamer at heart. Twitch Studio goes hand in hand with their strategy to welcome people from all backgrounds.
Twitch Rivals (Twitch’s esports division) tournament. A convention is the perfect place to get eyes (both via streaming and in person) on competitive play. It was smart for Twitch not to overshadow the event by being overly ambitious with a big tournament. Rather, they drove solid engagement with a well-run, medium sized event. Twitch Rivals will ultimately solve the issue of viewership during the offseasons (when there aren’t big tournaments happening), giving more visibility/structure to rising stars.
While not the most sexy change, Twitch made fundamental edits to the way they handle ads. Now affiliates (the level below partnered streamer) can run ads and generate revenue for their channel. This, combined with a few tweaks and edits to the ads system, make it easier for more people to make money streaming.
A few comments on content moderation, which has been a massive issue with the platform recently. While there was plenty of discussion, there is no doubt the platform is going to continue to see the same scrutiny Facebook and Twitter have regarding appropriate content guidelines. If Twitch is proactive, they’ll nip one of the internet’s most toxic communities in the bud ASAP.
Queue Minecraft Earth
Minecraft Earth will release worldwide for its early access this month; with it comes the slew of technical, geographical, and social challenges of bringing a game into the real world. The phone has truly become the camera and the mouse for a diverse array of gamers, where no one is no longer limited by the technology they can afford. As this is a free-to-play title, anybody anywhere with an internet connection can play this game on any phone. It’s an outlet to express creativity, to explore alternate worlds, to play, to chat, to build. It’s incredible the potential for this technology in already limitless game.
"There have been so many advances in the capabilities of mobile phones and cloud computing and visual computing that [Minecraft Earth] just became possible" - Torfi Olafsson
When we think about community games, Minecraft is the first to come to mind. It has pioneered the way we interact anonymously online, entertain ourselves (both in terms of passing time and location playing the game), and express ourselves: Minecraft has become a bastion of creativity for all ages. Perhaps most importantly it has arguably become the first, true digital place in gaming where people can go outside of the house or work/school to “hang out”.
Ever since the popular success of Pokemon Go, companies like Apple, Google and Facebook have invested heavily into augmented reality due to its propensity to bridge digital and real boundaries. People are now more than ever using this technology to bring the digital world into their day-to-day activities: Pokemon Go leveraged geolocations and adventure to tie in catching Pokemon. Exercise, adventure, and Pokemon. Perhaps what nobody anticipated was that it also turned into a communal game more than an individualistic one. People adventuring together. Community events. Gym Battles. Showcasing levels. Layered on top of games is a new form of socialization where people meet to play and collaborate.
The core strategy of Minecraft Earth remains the same. Give people a way to interact in communities, to contribute their own user generated content, and share their creations, then success and engagement will follow. Set aside the technical innovations built on the cloud, location-based activities and AR (developed from the HoloLens), we’re particularly excited that the Minecraft team has iterated and designed an inclusive ecosystem for its communities.
You Should Play This: What the Golf?
Available on Epic Games Store, Apple Arcade, and coming to Nintendo Switch
If our coverage (or lack thereof) for traditional sports games hasn’t made it clear, we’re not big fans of sports video games. Traditionally, the genre has pumped out titles on an annual basis devoid of any innovation. Rather than touting a new game mechanics, modes, or features, the recent FIFA20 release has consumers buzzing about spending money on the title’s microtransactions (again). There’s nothing inherently wrong with sports games, but shady monetization practices, a hyper focus on realism, and a lack of unique mechanics ensure that the genre won’t pave the way for the next big thing in gaming.
Similarly to lack week’s game, What the Golf? is great because it takes the mundane and completely flips it on head. In this case, it's the sports genre. The game is at its core about playing golf, but made by people who don’t have the slightest clue on how to play golf (and who very well may have never played a round of golf in their lives). The result is a title that has you driving cars, fighting bosses, and doing just about everything besides getting balls into holes.
While the game certainly will not make you better at golf, there are a few valuable takeaways as to what makes this title so good. Similarly to Untitled Goose Game, What the Golf? is designed with the philosophy of less is more. We’re seeing this approach more and more with indie devs who are resource constrained, and don’t necessarily have the budget to go up against the AAA graphics of major studios. Instead, games like What the Golf? double down on uniqueness; colorful art styles, iconic imagery, and imaginative expansion on existing visual design trends. From a gameplay perspective, What the Golf? captures one of the most important aspects of a good game: novelty. After playing through the first handful of levels, it was absurd to see how far developers could take such a simple concept. We literally never expected to be putting a horse across a speeding train in the desert (no joke, that is a level in this game). On the whole, What the Golf? is an indie title that doesn’t take itself too seriously, and in a world where people are spending $10K on coins in FIFA, we could use a bit more levity.
Facebook Horizon: Feels like an episode of Black Mirror, indeed. Facebook announced a multiplayer VR experience, it’s first true foray into augmented worlds as a form of socialization. Long time coming with their Oculus acquisition. We’ll be seeing (and talking) more about games as the future social platform.
TFT is winning: Somehow Riot Games toppled Valve in the autochess format… again. Team Fight Tactics (Riot’s entry into the genre) has over 33 million MAUs and counting, propelled by a successful Twitch Rivals showcase at TwitchCon and China’s ardent fan base. Interesting to see TFT beating out Dota Underlords in China as Asia constitutes Dota’s power base.
Party Games Get Expensive: Nintendo continues their foray into mobile with their latest, Mario Kart; though, with Apple Arcade’s debut, the subscription $4.99 price makes it feel lackluster, out of touch. Compare it to Switch Online’s $3.99 a month fee, there’s a profound disconnect with reality. Why is Nintendo tainting its considerable brand reputation with cheap loot boxes, safe mobile strategies, and fees?
Direct Investments into China: Direct investments into China by the US are on the decline. We’re big proponents of foreign investments as a means to stimulate growth across global communities i.e partnerships between gaming companies to incentivize global leagues or multiplayer games. Politics getting in the way of our playing games.
Ninja, brought to you by Harvard? Harvard’s Graduate Business school recently released a case study on Ninja’s decision to forgo streaming on Twitch in place of Mixer. Throwback to Level 15 of The Pause Button. We had to do a ton of HBS case studies in college, why couldn’t this have been out when we were in school?!
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