Mobile gaming growth is breaking records. The real action is at the intersection of mobile gaming and esports—an interactive gaming genre that allows multiplayer competitions and powers stadium-packing tournaments—and developers, players and investors are paying attention.
Remarkably, mobile now rules as the largest and fastest-growing segment of the global gaming market. In 2019 app market intelligence provider App Annie reckons mobile accounted for 60% of all gaming consumer spend. In 2020 mobile gaming revenues are pegged to cross the $100 billion mark, according to research firm Newzoo. Already mobile is well on course to reach the size of today’s entire video gaming industry, a sector with an eye-watering $116 billion in revenue that dwarfs music and movies combined.
Esports is also hitting some impressive milestones. This year the esports economy will exceed $1 billion for the first time. The esports industry is still taking shape, but if last year’s record-breaking competitions are any indication, the combination of esports with mobile will result in more than a massive market. It lays the groundwork for a new kind of mobile-first marketplace.
The numbers (and the audiences) add up. Today, mobile gaming counts 2.6 billion players globally. The advance of esports gaming (already accelerating the convergence of sports in both the digital realm and the physical world) combined with the might of mobile produces a force sure to drive the future of entertainment. Streaming companies, including Netflix, can read the writing on the wall—and it’s ominous. In its Q1 2019 letter to shareholders, Netflix wrote: “We compete with (and lose to) Fortnite more than HBO.” Games like Fortnite, which chalked up a massive $2.4 billion in digital revenue last year, have evolved into marketplaces where gamers spend lots of time and loads of money.
Esports companies are raking in the revenues (and fellow Forbes writer Christina Settimi lists the most valuable esports companies here), but most are focused on hard-core and mid-core gaming genres that typically draw a majority-male player community. What about female players and audiences who aren’t pros, but have the potential?
Appealing to underrepresented groups and architecting inclusive user acquisition
That largely untapped market is the starting point for a much bigger vision pursued by Skillz, a company shifting the paradigm to make esports inclusive and profitable for players and developers. “We’re leading the next wave of entertainment by empowering mobile game developers and players with democratized access to fun, fair competition for real prizes,” Skillz CEO and founder Andrew Paradise said in a statement. It’s a mission that has earned Skillz distinction as a Top 50 Industry Disruptor by CNBC. (The business news company vets Disruptors based on sales, user growth, company developments and the strength of their tech.) Skillz has also grown its user community to over 30 million players who have competed in over a billion tournaments in 2018.
“Any game can be an esport, and any player can be a champion,” Paradise says. It’s more than his favorite business mantra. It’s the mindset that powers user acquisition and retention strategies developed by Skillz and deployed by Justin Sampson, Skillz User Acquisition Manager and a Mobile Hero recognized for his app marketing expertise. “Today’s mobile players are extremely diverse,” Sampson tells me in an interview. “That’s why Skillz invests a lot of time creating experiences that resonate with all kinds of players and skill levels.”
Another focus is on dynamic creatives. “It’s important to customize ad creative campaigns based on networks, countries, platforms and more,” Sampson explains. It’s a smart strategy that has helped Skillz “expand our portfolio matrix and better understand the variance for our growing audience.”
Understanding and engaging different types of users based on different sets of lifestyle characteristics is an approach that helps Skillz develop higher performing ad creatives. It’s also essential to discovering and delighting new audiences. Sampson’s team recognized the tremendous potential of appealing to young mothers who love to participate in esports and acted on it quickly, developing “hit ads in a matter of weeks that were highly efficient.” Sampson says of the approach, “It’s all about understanding your players and having the right data to provide insights that support your efforts.”
In 2018 Skillz set a new record, paying out $8 million in total cash prizes to its top 10 players. Of the 10 players, seven were women. One of the players, Jennifer “jpark87” Park, has honed real skills with tangible benefits. “When I first started competing on the Skillz platform, I never realized this was something I could do professionally,” she said in a statement. The $627,191 she netted in prizes in 2018 has helped put the engineering student from Westland, Michigan, through college.
It’s a win for female players who engage with Skillz games, but it’s also a big boost to the company, which is no doubt eyeing the tremendous and untapped female market.
Indeed, women’s interest in esports is soaring. The HitmarkerJobs.com’s 2018 study of the market reports 20% of jobs in the industry are held by women. As to playing the games, not just making them, females have overtaken their male counterparts. Newzoo estimates women already make up 46% of the global gaming population and pegs the number of female gaming enthusiasts at a cool one billion. Meanwhile, a recent report from Kids Insights, a market intelligence company focused on children, parents and family sectors, reveals that females dominate esports. A whopping 75% of female gamers prefer playing on mobile devices, and the demographic contributes 68% of all revenue generated through mobile gaming.
Disrupting and democratizing esports with a platform play
Skillz is rewriting the playbook on how games are consumed, developed and monetized. The approach has its roots in Paradise’s own frustration with gaming monetization models after an accidental click opened a browser page that took him out of play and caused him to lose the game. “I was determined to find a better way for game developers to monetize without detracting from the player experience,” he would later recall in an interview.
The company has achieved this with what Paradise calls a “marketplace platform that enables developers to easily integrate a layer of competition into their games.” Skillz company doesn’t create its own titles or franchises. Instead, it enables a growing community of 20,000+ developers to turn mobile games from solitaire and mahjong to sports-related mobile genres such as bowling and golf into competitive esports.
Its ranks are sure to swell as more companies and organizations get on board to leverage the platform, the player community and other benefits. In September, International Game Developers Association (IGDA) joined with Skillz in a move that IGDA Executive Director Renee Gittins said in a press statement empowers the organization’s network of 10,000 chapters of game developer studios “with the tools and connection they need to make their games successful.”
The motor is a solid tech stack that Trip Hawkins, the digital gaming veteran who founded Electronic Arts and now sits on the Skillz advisory board, says gives the company a “head start” on competitors. “A whole tech stack for esports had not been built or standardized,” he said in an interview with Techcrunch. “But there has to be a set of platform features to let players have accounts and set up the way they need [to] be able to communicate and broadcast, or be broadcast, make payments, manage transactions and receive prizes.”
Currently, Skillz, which provides developers with capabilities that go beyond the competitive tournament component to include security, player matchmaking, payment and customer service, tells me it also holds 20+ esports-related patents, including a fair-play algorithm. The company hosts over four million tournament entries a day and distributes $60 million in prizes each month.
More recently, Skillz announced a strategic investment from 32 Equity, the investment arm of the National Football League (NFL). The decision, Kevin LaForce, VP of 32 Equity, said in a press statement is linked with the “belief that the [Skillz] platform is “driving the future of mobile entertainment, which is an area the NFL believes is critical to engage our fans in an increasingly connected world.”
The flexibility that licensing the Skillz platform provides game creators is vital, Paradise said in an interview with Pocket Gamer. With it, developers can focus on designing a competitive game that attracts players and then scale up elements to build out their audience. The alternative to this bottom-up approach—namely, spending to create a successful esports game out of the gate —can be both risky and incredibly expensive.
The “field” for mobile esports gameplay may be a virtual one, but the challenges faced by developers in the rapidly expanding space are real. Women gamers, too, will welcome a less gendered spirit of play. With its innovative strategies and platform, Skillz levels up the action for all.