Playtika CEO Robert Antokol interview — Why participant retention issues now

Robert Antokol, CEO of Playtika, believes we’re in the midst of the revolution. However when he describes what it’s, it will probably sound like previous information. Antokol believes cellular video games and different sorts of video games can profit from methods round retention, or protecting present gamers pleased.

Sport corporations can drive retention larger with stay operations (stay ops), reminiscent of tournaments or vacation occasions or different new content material in present video games. Maintaining your present gamers pleased is healthier than spending some huge cash on buying new gamers, who might or might not stick round and who might or might not spend cash. Antokol stated Playtika — which is valued at round $7 billion as a public firm — by no means grew its enterprise by spending lots on person acquisition.

With Apple’s latest privateness adjustments, it’s more durable to trace customers and so person acquisition spending isn’t as environment friendly. And so the time of retention has come to the forefront. Playtika’s video games like Slotomania develop by retaining their customers for years after which including new customers by neighborhood progress.

“That is our time to shine and develop,” Antokol stated in an interview with me.

Playtika invested closely in AI expertise that may assist it perceive person conduct higher and what particulars result in higher retention. And Playtika cooks new video games for a very long time, altering particulars by smooth launches and finally getting the person retention proper.

That’s what it did with the latest launch of Switchcraft, developed by Playtika’s Wooga division, Antokol stated. On the identical time, Antokol has to persuade sport builders to stay with their present video games, somewhat than rolling over to new ones, by giving the builders the problem of getting customers to come back again daily. I additionally requested Antokol about nonfungible tokens (NFTs) in video games, and he had an fascinating reply.

Right here’s an edited transcript of our interview. (Antokol goes to be one among our audio system at our GamesBeat Summit 2022 occasion on April 26-27, 2022).

Above: Robert Antokol is CEO of Playtika.

Picture Credit score: Playtika

GamesBeat: You consider we’re at a degree in a revolution proper now. Are you able to speak about why you are feeling Playtika’s technique round retention is necessary as part of that?

Robert Antokol: Sure, I do consider we’re in the midst of a revolution, in the midst of one thing large occurring that’s altering the world of video games. In the event you have a look at the final 10 years, the expansion of the sport trade has come from cellular. That is the primary supply of progress. It began on Fb. Playtika began working video games on Fb round 12 years in the past, and we had been one of many first corporations that moved from Fb to cellular. We did with our means in stay ops, our means to retain our gamers.

In the event you look around the globe at what’s occurring with [Apple’s decision to prioritize privacy over targeted ads by making it easier for users to decline being tracked through the Identifier for Advertisers] IDFA proper now, with larger CPIs (prices per set up) and different points round person acquisition, this isn’t a serious change for corporations like Playtika in rising their enterprise. Playtika by no means grew its enterprise by person acquisition actions. Playtika all the time grew the enterprise by retaining gamers, by making gamers pleased and staying with our video games for 10 years. That was all the time our power.

Now now we have new platforms, new applied sciences, new stuff occurring. That is the fitting alternative for corporations like Playtika. It’s going to take time, however I consider that the bottom is shaking proper now. The world of video games is shaking, in a great way. 5 years in the past it was very straightforward to take a cellular sport with a small firm and in two weeks it may very well be within the prime 50 grossing video games within the U.S. Immediately that’s unattainable. Immediately it’s identical to the PC and console sport markets. The worth of person acquisition is simply too excessive. This leaves room for corporations like Playtika that target retaining gamers. That is our time to shine and to develop. That’s why I’m so excited with what’s occurring around the globe. It’s going to be a troublesome time, however for Playtika that is the chance I used to be ready for.

Above: Playtika’s core companies

Picture Credit score: Playtika

GamesBeat: The core a part of the enterprise that loads of different sport corporations don’t appear to have, then, is the flexibility to retain prospects for that lengthy time frame. That’s the inspiration. It helps you make cash now, and in addition regulate the long run. Once you have a look at the long run, what are you planning? What are you on prime of that core job of retaining present prospects?

Antokol: Playtika, once we launch one thing new, we by no means take into consideration monetizing first. We need to make gamers really feel comfy, have enjoyable, and construct a neighborhood. We wish gamers to make pals and preserve a presence within the sport. The monetization will come later. That’s by no means been our focus from day one. That’s why gamers really feel far more safe in staying in our video games for 10 years. That is the primary distinction. Most different corporations, in the event that they’re not monetizing a participant after sooner or later, one week, two weeks, they don’t care about that participant. They’re shifting on to the subsequent participant.

They don’t need to retain that participant, as a result of the main target in the previous couple of years has all the time been to easily develop by person acquisition. You set within the cash, carry in additional gamers, monetize these gamers. That was the mentality. Playtika was all the time completely different, as a result of I’ve all the time believed that constructing a neighborhood round a sport is the true asset. That’s why we’ve all the time centered on making the participant pleased on a regular basis. We’re not simply interested by taking their cash. We wish the participant to be pleased, to remain within the sport.

Our future, first, is just not interested by monetization. It’s about ensuring gamers hold enjoying the sport and convey their pals. That’s the primary distinction.

GamesBeat: The issue as we speak, to repeat a few of that, is that the technique of utilizing person acquisition cash to search out loads of lot of latest customers after which type by them to search out individuals who will spend lots cash–that’s the technique of the previous, however now it’s more durable to search out these individuals who will spend cash. That model of person acquisition doesn’t work so nicely when you could have IDFA deprecation in place.

Antokol: Precisely. Take into consideration the gamers, too. Just a few years in the past, cellular video games had been one thing new, one thing thrilling. Gamers had been downloading and shopping for loads of completely different video games. Immediately, gamers have a look at video games in another way. They don’t need to obtain 20 video games to their gadget. They assume very fastidiously about what number of apps they obtain. They’re extra loyal to what they obtain and what they play. There’s a special strategy to the market. Most corporations don’t perceive that. That’s why hypercasual video games and all this trade round it that’s monetizing by promoting, it’s a short-term enterprise. It’s not long-term.

We’ve all the time had a special strategy. We’ve by no means wished to hurry into doing what’s fashionable proper now. We’re all the time interested by the long run. The platform is altering and maturing. Gamers as we speak are extra mature than they had been a couple of years in the past. To start with they had been very curious. What’s this? What’s that? Immediately, they assume first. Even myself. Each time I have a look at an app, I give it some thought earlier than I obtain. Individuals are extra suspicious.

If a participant downloads my sport now, that’s it. I need to deal with them like the highest participant within the sport. I don’t care in the event that they’re not paying. I would like them to maintain enjoying the sport, to remain in my ecosystem. The participant is the most important worth. After we began within the enterprise, CPIs had been 50 cents. Immediately, if you wish to usher in high quality gamers, you may pay $20, $25, $30. You’ll be able to’t survive on person acquisition in the event you don’t have the expertise, the know-how. In the event you don’t perceive stay ops you’re going to fail. You gained’t have an opportunity to achieve this world. For this reason I’m saying there’s a giant alternative for corporations like Playtika.

GamesBeat: On the identical time, how do you present that additional progress? How do you take care of the innovator’s dilemma downside? It’s all the time simpler to reinvest cash into retaining gamers with an present sport, the tentpole franchise, than it’s to launch one thing model new. How do you steadiness that? Finally these sturdy franchises can decline over time.

Antokol: We have a look at our gamers as a neighborhood that may transfer from one platform to a different platform. It doesn’t matter which platform they’re enjoying on proper now. The brand new expertise, the brand new merchandise–we’ll all the time put money into our present video games, as a result of we have a look at our video games as a platform that may work with every other platform. The neighborhood can transfer to any platform. That’s why our video games have run so nicely during the last 10 years. We’ve completed loads of innovation, constructed loads of expertise round that means.

The key sauce of Playtika is our means to work with AI. We all know precisely when a participant goes to cease enjoying. We all know precisely once they’re going to pay. We all know what number of instances they arrive in every day. I can’t say we are able to predict with one hundred pc accuracy, however we are able to predict, for many of our gamers, their actions in our video games. That’s the true energy behind the operations aspect. When you may predict this, you could find options to issues. If somebody desires to maneuver on out of your sport, to delete your app, you know the way to deal with that participant. We sound the alarm. We all know how one can function and ensure a participant retains within the sport.

If we need to transfer on to new innovation, new platforms, that’s no downside. That’s good for us. We all know how one can transfer gamers. We began making this funding 4 or 5 years in the past with the primary lab we opened in Israel. Then we opened labs in Ukraine and Belarus, and just lately we opened a brand new lab in Switzerland, a tremendous lab. We’ve been investing in AI for a few years. I knew this was going to alter the sport.

I’m not a genius, however I knew that someday there would come a day that person acquisition was going to be an issue. We would have liked to search out methods to keep away from that downside, and this is the reason we are able to continue to grow the enterprise. In any other case we’d be caught. AI, for me, it’s not solely the long run. It’s already the current. However once more, I’m a giant believer in AI and new applied sciences. That is how we are able to retain our gamers and convey in additional leisure in our present video games.

Above: Playtika is driving the IPO bus.

Picture Credit score: Playtika

GamesBeat: You’re nonetheless going to launch new video games, then, however you’re not going to spend like loopy on person acquisition while you launch these video games. Inform me concerning the means of launching a brand new sport like Switchcraft.

Antokol: We’re going to spend like loopy on new video games. However when that’s going to occur, that is how we spend it. Each sport that we launch, we’re going to have very powerful [key performance indicators] KPIs, and we’re not going to spend if we are able to’t get to these KPIs. We’re very cautious with our cash, our income. It’s not that we’re not going to spend, however we’re not going to spend on a sport we don’t consider can preserve and develop. That’s the distinction.

Switchcraft is an efficient instance of a sport that’s working very nicely. It’s rising. Nonetheless, we’re not spending tons of cash there but. We’re not doing any loopy stuff there. We’re ready and fixing the issues we have to repair. That is the place we’re somewhat bit completely different. Switchcraft is the primary sport we’ve launched in a couple of years. We’re utilizing the expertise at our Wooga studio, which I’m certain you realize very nicely. We’re going to launch extra video games. In the long run, I consider we’ll have a giant success there. However we’re doing this very fastidiously.

GamesBeat: It sounds such as you positively hold your gamers pleased. How do you additionally hold your sport builders pleased? One factor that normally occurs is that builders create a sport, after which they transfer on to creating the subsequent sport, their new artistic outlet. If builders want to concentrate to the prevailing sport, perhaps they’re not going to be so pleased.

Antokol: That is the $100 million query. Immediately at Playtika–that is exhausting for me to say, however it’s the reality. In the event you’re engaged on a present sport, you’re a lot prouder than in the event you’re engaged on a brand new sport. There’s a lot innovation within the present video games that no one feels they’re simply doing the identical factor. There’s a lot stuff, so many new issues occurring, all the brand new expertise that’s occurring around the globe in our present video games.

To start with, 12 years in the past, I had the concept that a couple of months after launching a sport, we needed to take the strongest guys from the event workforce and transfer them on to a brand new sport. However in the event you try this, your present video games will fall off. I needed to change that mentality. Playtika developed a special mentality. We all the time grew by M&A, so we by no means had this problem the place we needed to transfer folks to new video games. Our imaginative and prescient isn’t simply to develop video games. Our imaginative and prescient is to take care of and entertain our gamers. I modified the mentality of how our staff are pondering. Immediately, when now we have a sport that we’ve constructed up, everybody’s proud to work on that sport. Everybody’s excited.

After we purchase a brand new studio, like once we acquired Wooga–at Wooga the mentality was like a daily studio. Guys had been all the time shifting on to a brand new sport. They had been all the time rising by person acquisition. To start with I lower the UA price range and I taught them how one can concentrate on how one can develop their revenues. I gave them a number of challenges. “Develop the enterprise to $100,000 a day.” That is the sort of problem that made the builders pleased to stick with their present sport. That’s necessary. In different corporations the most effective guys are all the time shifting to a different sport, all the time climbing. That is the DNA of Playtika. We’re proud to work on our present video games.

Above: Playtika’s prime video games

Picture Credit score: Playtika

GamesBeat: It seems like what’s interesting about that to the sport developer is that they’re not essentially centered on monetizing these present gamers. It’s extra like they’re centered on creating and constructing the neighborhood. As soon as they try this, it’s one thing they’re hooked up to. They need to stick with it.

Antokol: For this reason we’ve all the time been profitable by M&A. In the event you have a look at our acquisitions over the previous couple of years, we’ve all the time acquired a superb product with a superb neighborhood. It’s not essentially simply monetization or stay ops. That’s how we’ve been on the lookout for the fitting alternatives. It’s a robust product with a giant neighborhood round it. Then we are able to usher in our AI and our platform, bringing all of the know-how from Playtika. For the builders which have a couple of million gamers a day and so they’re instantly beginning to make cash, that is the problem. It adjustments the whole lot for them. I need to work with a sport that’s making $100 million a yr, not a sport that’s making $5,000 a day. It adjustments the mentality. Folks need to work on a giant venture that may attain many various sorts of individuals.

You’re proper {that a} large a part of it’s neighborhood. The mentality of growing video games for a few years was all the time to maneuver on to the brand new problem. We’ve modified this mentality. For this reason our video games are working so nicely. It was very exhausting.

GamesBeat: Speaking a few revolution and the way it is a particular time, we even have the pandemic, which has had an impact on game-playing. We have now a historic growth in sport funding due to that. Video games have completed nicely and buyers have paid consideration to that. They’ve poured cash into present corporations by public choices, but additionally backed sport startups with funding. What do you consider the aggressive surroundings within the face of those historic adjustments?

Antokol: All the things began in Q1 and Q2 of 2020, when the pandemic began and all the sport corporations began to make cash like loopy. Each developer began rising their enterprise. The hype round startups in video games turned loopy. Everyone raised tons of cash. In 2021, at first of the yr, the cash that flowed into sport startups–I can’t consider one thing even near it.

However the problem is, all of those startups discovered themselves–after they raised all this cash, they nonetheless discovered it exhausting to get to their targets. The cash they raised nonetheless isn’t sufficient to get to the extent of progress anticipated by their buyers, as a result of CPIs doubled. In the event you’re not engaged on stay ops and also you don’t perceive how one can retain your gamers, you’re going to have an issue. In the event you ask me, from my expertise, subsequent yr goes to be a tough yr for startups on this space. Costs are simply going to get larger. Startups are going to endure, as a result of they don’t have the fitting instruments to retain and monetize their gamers, as a result of they’re constructed round rising by UA. You’ll be able to’t develop by UA now. I’ll say this time and again. You’ll be able to’t do it. Subsequent yr is just not going to be a tremendous yr for startups, for my part.

To the second half of your query, sure, there’s nonetheless loads of competitors. There’s competitors for workers, competitors available in the market, competitors between video games. However that’s made us a greater firm. When you could have actual competitors, you’re interested by how one can retain your staff. You’re focusing far more than you probably did two years in the past or 12 years in the past. In the event you’re an organization that is aware of how one can make adjustments, that is the fitting time so that you can develop.

Above: Surroundings artwork in Switchcraft.

Picture Credit score: Wooga/Playtika

GamesBeat: Lots of people are speaking about what the subsequent alternatives are. Blockchain and NFTs come up lots. What’s your present interested by these applied sciences? Are there different alternatives you see as the massive ones sooner or later?

Antokol: We are able to’t keep away from what’s occurring around the globe. We’re trying very fastidiously. Personally, I’m very on this world. We’re in the midst of a revolution, as I stated. I consider one thing large goes to occur. However I nonetheless can’t inform you precisely what’s going to occur. We’re nonetheless very removed from regulation. The barrier to entry for taking part in NFT video games continues to be very excessive. You might want to be half genius to play these video games. It’s not a straightforward world. It’s a pleasant world to promote to buyers with all these buzzwords, with the metaverse and blockchain making all people loopy.

Playtika has all the time been a sensible firm. We’re all the time centered on ourselves. If there’s going to be a brand new platform, an actual platform, we’ll be part of it. But it surely’s not one thing that’s going to occur tomorrow.

It is a time for corporations, and never solely within the video games enterprise, which have the DNA of specializing in their customers and gamers. Concentrate on sustaining them. That is the time for that sort of firm. The subsequent few years are going to get more durable. The businesses with a bonus in expertise, in understanding the gamers and customers, are going to win on this journey. Playtika is in a superb place for this race.