2020 in video games: Sensor Tower's Craig Chapple on ramifications of Epic vs Apple showdown, rise of mobile-first AAA games, and key M&A deals

With the holiday season just days away, Craig Chapple, Mobile Insights Strategist, EMEA at Sensor Tower, looks back at 2020. We join him to discuss what the passing year meant for mobile and the industry at large.

Craig Chapple, Mobile Insights Strategist, EMEA at Sensor Tower

How did 2020 treat the company?

2020 has been an excellent year for Sensor Tower. We’ve raised $45 million in funding from Riverwood Capital, and our team has grown exponentially as we continue to expand globally. We’ve also released an array of new tools, including our Game Taxonomy, which enables users to break down the games market by genre in a much more accurate and standardised way than with generic app store classifications. Our market leading platform continues to improve and we won’t be letting up in 2021.

What new trends in the mobile world would you say deserve attention?

One of the big stories this year is of course Epic’s battle with Apple. By pulling Fortnite from the App Store and Google Play, Epic appears to have set in motion events that led to Apple somewhat relenting to pressure and implementing a 15% revenue share for developers that make under $1 million. It was a clever move for Apple — as it doesn’t have much noticeable impact on their bottom line — and it’s good news for small developers and start-ups. Such a move will surely have to be followed up by Google. But the broader story of how much revenue share platform holders take, and whether they hold too much power in the market, will rumble on in 2021.

Meanwhile, Genshin Impact from miHoYo reflected two trends that have emerged: China’s increasing influence on the international mobile games market, and a new era of mobile-first ‘triple-A’ games production. Everyone knows China is a huge mobile games market in and of itself, and now Chinese publishers have really started to crack the code for successful international releases. PUBG Mobile from Tencent has generated $4.3 billion in revenue to date from the App Store and Google Play, Lilith Games has found international success with Rise of Kingdoms and AFK Arena, and Activision worked with Tencent to develop Call of Duty: Mobile for a global audience. Now miHoYo has joined the party with Genshin Impact. I don’t think we’ll see China’s global success relent in 2021.

MiHoYo’s reported $100 million investment in Genshin Impact has paid off handsomely. I think other publishers around the world will take notice and we’ll start seeing bigger up-front bets in mobile in future.

Next year the big thing to look out for early on will be the IDFA changes on the App Store, which looks set to really shake the market in a way it hasn’t really seen before.

Any general trends across the video games industry that stand out to you?

There are lots of trends I could highlight for the games industry. What’s really interesting is the rate of M&A that has occurred across the sector, particularly in the mobile space. It feels as though things have really gone into overdrive this year as the market consolidates. Key deals include Zynga’s acquisition of Peak Games, AppLovin’s purchase of Machine Zone, Scopely’s takeover of FoxNext Games and MTG’s Hutch acquisition. Then of course you have the myriad of deals from the likes of Stillfront and Embracer. Looking more broadly, you of course have Microsoft’s purchase of ZeniMax Media, Tencent buying Leyou, and the current battle between Take-Two and EA for Codemasters. It’s a hugely exciting time in the industry and the size and rate of deals speaks volumes about the sector’s size and opportunities.

It’d be remiss of me not to talk about the impact of the global COVID-19 pandemic and lockdowns on the industry as a whole. While discussing the effect on games seems insignificant in such a context, I think gaming’s outsized success this year is reflective of the joy this industry can bring to so many people. In such tough times, I think that’s something everyone working in this sector can be proud of: bringing smiles to people’s faces.

What third-party game releases got your attention this year?

On mobile, Genshin Impact was perhaps the biggest game this year. While the debate around gacha rages on, I think the title has proven to even the most ardent naysayers how much fun can be had in free-to-play mobile games and the quality they can offer. Then of course there’s Among Us, a game which has never ceased to make me laugh when playing with friends. I can’t believe it wasn’t an instant hit back in 2018. Sorry, InnerSloth! Then there’s the imminent launch of Marvel Realm of Champions, which I’m pretty excited for given just how good Contest of Champions is.

Outside of mobile, one of my favourite games this year has to be Spider-Man: Miles Morales. It packs the same exhilarating gameplay of the previous title and combines it with another gripping story. A shoutout also goes to God Of War, which I finally got around to playing recently, instantly becoming one of my favourite games of the entire generation.