The hyper-casual game: Opportunities and Challenges in Asia-Pacific Amidst An Evolving Landscape

With over 1.5 billion gamers in Asia-Pacific, the region is widely recognised as one of the world’s leading gaming powerhouses, and growth is set to continue, especially on mobile – with 62% of the region’s population expected to subscribe to mobile services by 2025.

On mobile platforms, hyper-casual games have experienced a spike in popularity throughout much of the pandemic, with installation rates growing by 49% in 2021. Often touted for its simple gameplay and straightforward objectives, hyper-casual games are typically free-to-play and easy to pick up, making it accessible to gamers of all ages.

The hyper-casual gaming segment represents an exciting opportunity due to its wide audience appeal, and the ability to break into the mainstream and access consumers who do not typically identify as gamers. Although the hyper-casual gaming landscape is ripe with opportunities, breaking into the scene will also come with its own unique obstacles.

Challenges for hyper-casual game developers

Hyper-casual games may experience comparatively low retention rates, as casual or first-time users may not stay engaged for long, and their attention may wander. Despite the vertical’s ability to scale quickly and the potential to reach impressive download rates, hyper-casual games tend to experience a plunge in retention rates within the first week of installation. Of note is the fact that only 7.5% of users will continue to play the same game by the end of the first week, while other app verticals boast median rates of 15.2%. In light of these user habits, developers may encounter some difficulty in maintaining hyper-casual gamer numbers and building a sizable user base in the long run.

Next, unlike non-casual games in the market, hyper-casual games function on a unique monetisation model. These games do not rely on in-app purchases to bring in revenue; rather, developers leverage their extensive user bases to generate revenue through in-app ads from third-party brands. As the user base of a hyper-casual game grows, a developer can take advantage of the economies of scale to enjoy a steady, albeit lower, stream of revenue.

Since hyper-casual gamers tend to have low lifetime value (LTV) and are not expected to become long-term players, in-app ads have proven effective as the primary model for revenue generation. However, over-reliance on the same set of in-app ads may lead to new challenges, such as ad fatigue during in the user journey – thus diversification of both ad types and revenue streams is advised for developers to sustain successful monetisation.

Lastly, oversaturation of the hyper-casual gaming vertical may be a concern for developers looking to break into the market. The simple gameplay mechanics and plotlines, infinite replay ability and more straightforward development has led to low barriers of entry for developers. However, this also means stiffer competition due to the high volume of market players and entrants. With many competing titles in the market, developers will struggle to stand out in the hyper-casual gaming market and appeal to potential gamers.

Opportunities in hyper-casual gaming

Despite these challenges, game developers stand a greater chance of successful market entry if they take advantage of the following unique opportunities.

Build success through tailored creative strategies

Beyond game mechanics, developers should customise their creative strategies to appeal to specific target groups, and avoid a one-size-fits-all approach when launching advertising campaigns. Creative ads should be tailored to audience preference and behaviour – developers should gain a holistic understanding of their audience profile, and how each target segment responds to different creative strategies.

Developers should also cater their creative strategies by renewing their creatives frequently, on a weekly or biweekly basis. By regularly introducing new creatives, developers can minimise the risk of ad fatigue and prevent gamers from being inundated with the same set of creatives. Localisation is another factor for consideration – apart from adapting the language to suit the target market, developers should customise the tone, style and format of their creatives to relate to their desired audience. For example, consumers in countries like China have proven to be more receptive to localised ads. This helps build stronger connections between game and gamer, and thus increases the potential of conversion and acquisition.

Innovate to reach a broader audience

The term ‘gaming’ has evolved over the years to encompass a wider spectrum, including video games, PC games and mobile games. Gaming is no longer a niche hobby, and now appeals to a broad audience base, with vastly different demographic profiles. Industry trends include the continued rise of the female gamer, and an increasing number of older adults playing games that were once targeted at teenagers. For example, a YouGov survey revealed that 65% of those aged over 55 in the Philippines play mobile or video games.

While there is no fool-proof strategy to sustained user acquisition, developers can innovate new game formats and strategies to provide users with novel gameplay experiences. This can be done by looking beyond pre-existing sub-genres in the vertical and experimenting with cross-genre gameplays by tapping on multiple mechanics.

Another way developers can take their games to the next level is by introducing multiplayer and social elements, to facilitate social interaction and hence appeal to a wider audience base. Such elements of innovation enable games to stand out from a homogenous market landscape and better capture the attention of potential players.

Leverage popular culture to connect with the masses

Since hyper-casual games typically only require a short runway from development to launch, this enables game developers to be highly flexible and adaptable in their approach. In ideating advertising campaigns, or even while conceptualising in-game elements, developers can easily weave in the latest pop culture references and trends in the market, to be aligned with the latest trends. These can include trending serials, movies, music and even social media elements and fads. They can also leverage existing games as platforms to cross-promote and direct users to upcoming and recently-launched games, and drive conversions and acquisitions from existing captive audiences.

While the hyper-casual gaming landscape is filled with opportunities for developers, those keen to break into the market will find that it is not without its unique set of challenges as well. Developers who wish to reach this market will need to begin with an understanding of the end user, and leverage user insights as a springboard for creative development and execution.