In episode 2 of LevelUp, Mishka Katkoff, Director of Product Management at Rovio and the founder of gaming blog Deconstructor of Fun , shares his predictions for the gaming industry in 2018 (will AR mature this year?), and discusses whether we’ve hit a peak with hyper casual games.

Read on for edited highlights from Katkoff’s podcast:

Game trends for 2018: where we’ll see growth

“When it comes to revenue, mid-core games will continue to be the most profitable games in 2018, but puzzle games will see the most growth. The puzzle category has been soaring. Candy Crush is still making more and more money every year. The puzzle genre continues to rise with innovation, as games are beginning to include more mid-core and social mechanics. Legendary is a good example of a game that at heart is a puzzle game, but utilizes more mid-core mechanics.”

The puzzle of puzzles: optimizing puzzle games

“While Ad monetization has been a rather useful source of revenue for casual games, the biggest driver in the casual game space is optimization, and with puzzle games, the optimization is on a totally new level. One reason for this is simply because they’re not fundamentally competitive games, leaving room to do a variety of A/B tests. You could perfect levels for different cohorts, and test to see how conversion, retention, ARPDAU perform with minor changes. Then, after several years of development, you know how to launch a perfect game.”

Can anyone beat King?

“So how can other companies compete with King ? Through the implementation of new mechanics into the typical Puzzle game genre. “Games have added elements from simple simulation games – players earn something through the puzzles, then they invest their earnings into something that they’re building such as aquariums, gardens, homes, etc. Additionally there are small competitive features like leagues or collaborative features like guilds. “We have seen all of these additions come into to a simple puzzle game, and the effects have been very strong.”

Paving the way for hyper casual

“As casual games implement deeper, mid-core features they become more engaging, but also more complicated. This, in turn, opens up a segment for hyper casual games to dominate. Games that are easy to start and fun to play. Companies like Voodoo (100 million installs in 2017) and Gram Games (19 million installs) are great examples of this. While the in-app revenue of these games is relatively low, the scale is great, and through video ads and cross-promotional work, the companies are able to operate a massive volume of business. If you’re a publisher like Voodoo, you’re essentially seeing a volume of these different games and taking the best one based on metrics. It’s a high volume, big-scale prototyping process, so it’s fascinating. Additionally, hyper casual and ad monetization are proving to go hand in hand, as video ads are already starting to define an important part of gameplay.”

What to expect from Messenger games

“Messenger games have been growing, especially with Facebook pushing them forward. However, we are still waiting for a breakthrough hit which will serve as the benchmark for others to follow, in terms of understanding monetization and UA within the instant games arena. I do believe that there is something there, especially since instant games are attached to such a growth channel where it’s harder to fail than to succeed. I think somebody will crack the code and everybody else will follow.”

AR/VR games – are we ready?

“I think I think we’re going to see more both AR and VR. It’s clear that the major platforms are investing into the technology, but I don’t think we’re going see another Pokémon Go – that was once in a lifetime. So I wouldn’t hold my breath for another one. I’m not the biggest believer in AR games. I do believe in AR apps, they make a lot of sense, but in terms of games- if you’re adding any technology, the question is always, does the new technology make it better? Can AR make it better? Maybe.”

Mishka Katkoff is the Director of Product Management at Rovio and the founder of gaming blog Deconstructor of Fun. You can listen to the full gaming podcast here .
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