This is the introduction to a full deconstruction written for Naavik, a research, consulting, and advisory firm which enables their clients to master the business of gaming.

The Western World Finds its Rhythm

Thursday, 1st of September 2022, 14:36 +02:00

Approximately a year ago, Space Ape released Beatstar worldwide, and (as predicted) it has grown into the world's most lucrative mobile rhythm game. Throughout its first year, the game has significantly evolved in order to achieve this, which means it's a great time for a status update!

Let's begin by putting the whole genre into perspective. There is only one country in the world where Beatstar's numbers are just so-so when compared against its competitors - Japan (to no one's surprise). Over the past 12 months, the rhythm games segment grossed about $825M in Japan alone. As the worldwide gross totaled ~$1B, this means roughly 82.5% of all rhythm game revenue was generated in the land of the rising sun.

Japan's dominance in rhythm game revenue. | Source: Sensor Tower

In fact, the genre is so extremely popular in Japan that, according to Sensor Tower, all-time RPDs for Japan's top 3 rhythm games are an unbelievable $187, $155, and $105. Taking this knowledge into account, with a mere RPD of $1.41, Beatstar still ranks eighth in the world in terms of absolute revenue over the last year as it serves audiences all around the globe.

When looking at IAP earnings over the last year, Beatstar (as you can see below) is the only non-Japanese game in the top 10 rhythm games.

Spot the odd one out; the top 10 most lucrative rhythm games on mobile, worldwide. | Source: Sensor Tower

Additionally, a disclaimer: When it comes to western market-oriented games, the world did see specific 'beat-matching' games similar to Beatstar before its release. Here's a short breakdown of some of its most influential predecessors.

In 2014, the first successful mobile rhythm game, Piano Tiles - Don't Tap The White Tile by Cheetah Mobile, became a sudden hit, as described in this hilariously outdated VentureBeat article. The game pioneered the well-known vertical scrolling trail on mobile, taking inspiration from console hits like Guitar Hero and Rockband. The game was minimalistic and monetized through banners and interstitial ads.

Be sure not to tap the white tile! | Source: YouTube

In January 2016, Cheetah's next game, Piano Tiles 2, raked in an incredible 51M downloads in its first month while also modernizing its monetization by adding IAPs into the mix. It became pretty famous as well, even resulting in some people (successfully) trying to automate its gameplay. The game is still being updated regularly to this day. A year after, as the decline of Piano Tiles 2 officially set in, Singaporean developer Amanotes released and started scaling its game, Magic Tiles 3. It managed to reach 10M monthly downloads and has continued doing so up until this day. Both of these games have by now reached half a billion downloads each in their lifetimes, taking the crown when it comes to the absolute number of downloads for any mobile rhythm game.

By now, Beatstar was downloaded 30M times, only a fraction of its predecessors. | Source: Sensor Tower

All of that said, what is so interesting about Space Ape's Beatstar? It's not performing extraordinarily well in terms of downloads, having already dipped below its two biggest competitors (good ol' Magic Tiles 3 and newcomer Piano Fire: EDM Music), raking in only about 30% of their monthly downloads. Beatstar's special attributes are its masterful execution, its modern monetization strategy, and its outstanding licensing efforts.

Until Beatstar's launch, Magic Tiles 3 and Piano Tiles 2 (for a very short time) have been the only beat-matching games on mobile (outside of Japan) to monetize players using IAPs (in addition to frequent ad placements being the main revenue driver). However, last year at this time, Beatstar literally changed the game by prioritizing immersive, AA-quality gameplay, clearly vying for long-term retention first and foremost. While its competition is riddled with interstitial ads and features mostly karaoke-quality covers of viral songs, Beatstar's (by now 300) songs are purely original, as licensed with the authentic artists, and it has opt-in ads only.

Both Magic Tiles 3 and Piano Tiles 2 were launched by hypercasual publishers, and therefore the in-game ad/IAP monetization strategies were in sync with their UA scaling strategies. Beatstar, on the other hand, hasn't gone the hypercasual UA route (showcased by having opt-in ads only) but instead doubled down on IAPs; it is now able to acquire a higher-quality audience compared to its hypercasual counterparts.

Beatstar stealing the show when it comes to in-app purchases. | Source: Sensor Tower

Last July, confirming the game's success, Supercell announced that it was investing $37M more into Space Ape in order to grow Beatstar. This proves that, even with its relatively low RPD, the game's business case seems very solid, mostly because of a lack of competition and high virality (due to the pick-up-and-play nature of its core gameplay and its music library of popular tracks), resulting in a low CPI. Next to the acquisition of more (expensive) players, the added funding will most likely be used to scale up the team, add more songs to the game's library, and more rapidly expand the live-ops feature set. This is very much needed, as feature variation is currently still the biggest (but certainly not unsolvable) limitation of the game's performance.

Right after its launch, thorough & in-depth deconstructions of the game's relatively lean set of launch features were published, but at the time it didn't have any strong monetization features or any live-ops yet. This is why now is a great time to check in and see what's been added since and how it's influenced Beatstar's course of action. In this essay we will go through the game's new features to project its future trajectory and try to answer the million-dollar-question: Can Beatstar scale and keep its momentum?

In the premium article, we'll shed light on:

This concludes the introduction to this article.
The full article was written for Naavik's Premium subscription service, and will become available for free in the near future. When this happens, the link will be posted here!
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