This is the third episode in our Emerging Markets mini-series, co-hosted with Tom Wijman, Senior Games Market Analyst at Newzoo. Founded in 2007, Newzoo is an intelligence provider for the games and eSports industries, providing data across both global and local markets.
Our guest this episode is Emre Tas, CEO of Alictus, a top hyper-casual gaming company in Turkey. Listen to the podcast or skim the edited highlights.
Hardly an emerging market anymore
5:12 - Tom: “Turkey is the odd one out in this series because it can hardly be classified as an emerging market. It was already quite sizable before the mobile gaming revolution happened, and mobile gaming is still growing fast. It started with PC and console gaming like some nearby countries in Europe. Right now, there’s about 30 million gamers in Turkey - that’s quite a lot, and still going to grow a little more than 8% every year for the next 3 years, with much of that growth coming into the mobile segment. The same is true in terms of revenue. Most of that growth is coming to mobile, but PC and console gaming is very healthy as well.”
The factors behind Turkey’s growth
7:10 - Tom: “There is already a local development scene that’s had acquisitions of $100 million and $250 million. Part of the reason that this is happening is because Turkey was already quite a big country in terms of gaming and many people were playing games, which led to people wanting to work in games and develop their own games.”
8:10 - Emre: “Maybe we can add on top of that, the success of the technical universities in Turkey. There are many good technical universities in Turkey which eventually helped the Turkish game development scene to get solid and strong game developers. The talent wasn’t an issue for Turkish game development companies in the last decade. Today, some of those talents have now started their own gigs - which is enabling a lot more developers to dive into this industry. Now, these people are more inclined to say the gaming industry is an option for a career.”
Top game genres in Turkey
9:46 - Tom: “I think what’s happening in Turkey is a reflection of what’s happening in the broader world. Last year, shooter games on mobile - if you can forgive me - exploded a bit. PUBG Mobile grew very fast in 2018 and 2019, and now Call of Duty as well, the mobile edition. At the same time that we see mobile gaming move towards these core experiences, hyper-casual is moving really fast as well. We’re seeing these two diverging paths that both can be very successful.”
10:29 - Emre: “From the player perspective, casual puzzle and board games are particularly strong genres in Turkey, most likely due to cultural reasons. In my opinion, the market has already hit its peak for these genres. PUBG, more midcore games, and games with social layers have really large user bases in Turkey. In the last few years, we also started to see international companies allocate more resources for their Turksih operations, given that there’s an increase in spending from players in free-to-play games. From the developer perspective, I wouldn’t really push fully ad-based games to market in Turkey.”
The Turkish giants
12:01 - Emre: “We see lots of new developers and publishers showing up almost every month. After the success of Turkish hyper-casual developers like Good Job Games, we also saw a boom in even more hyper-casual developers in Turkey last year. Unfortunately, we also have seen most of them disappear even before they appeared. But a few of those got a better foothold in the market, such as Rollic Games.
On the game development front, small size studios are being funded every day and are trying novel ideas with local and global hyper-casual publishers. I see this trend very positively, and hopefully it will bring value for the Turkish game development industry. I can also mention Ruby Games and Bigger Games, and also Panteon with their recent success Home Restoration. It’s also worth mentioning Coda and Unico, as their founders are also Turkish.
Apart from those, there are dozens of independent developers and smaller studios working with partnerships all around the world. But it’s not only hyper-casual. There are highly promising startups in other genres too. Dream Games is a good example. We are really starting to see more and more people staying in Turkey or even coming back after years of working abroad - thanks to the improved quantity and quality of studios in Turkey.”
Competition
15:02 - Emre: “The domination of big companies in the casual space is very apparent right now because the playbook of in-app purchase driven casual is well-written and established. That being said, solid game design stepping into relatively less situated audiences can still enable success. So although the market is fairly dominated, there is still room for new studios. But then the billion dollar question here is - are any such audiences left that we can tap into and who are they? The hyper-casual space is already answering that, by testing lots of new, fresh, novel ideas. Hyper-casual evolving into casual might unlock new potential in that sense.
On the other hand, for hyper-casual, the playbook is right now well-written but not very established yet. It’s still evolving. So, I must say the state of the competition for hyper-casual is neither totally blocked nor open for all. Especially now, it is time to act for hyper-casual developers, and time to adapt because the playbook and market is changing.”
16:37 - Emre: “Today, for any developer around the world, including Turkey, it’s fairly easy to connect with a publisher. For any publisher, given that there’s a qualified game in their hands, they know what they’re doing, and they’re capable of doing that, the market is still accessible for new publishers too. Then it is completely a statistics game. But there’s competition at almost every step. For developers, it is to engage the attention of the publisher, to test their ideas, to have timely feedback from publishers, to iterate and release a profitable title. But we see success over and over again, against all odds. So for game developers in Turkey, their deep understanding of the dynamics of the game to cut down the need for feedback from publishers is key.
The state of competition for publishers is changing even more. The market is getting even fiercer. As we see, the market is evolving into a new type of publishing house. As networks and platforms are getting into the party, things are getting much more challenging for everyone in that area. Bright developers and games were previously depicted as a competitive advantage for publishers and today, all of a sudden, publishers of networks and platforms eliminated this perception instantly. So I wouldn’t be betting on starting a new publishing business unless I had a strong competitive advantage against networks and platforms. For a few companies like Alictus that do both development and some publishing, I think it’s time to focus more on games and more on partnerships, and combine our efforts with strong technologies.”
19:43 - Emre: “As our friends at ironSource say, growth is a loop. I believe a company can create a very solid edge in the market having the right synergy and organization structures enabling gaming and growth teams to speak and work together.”
High in-game spending
22:18 - Tom: “In-game spending is far larger than advertising revenue in Turkey. But even though there are many gamers in Turkey, it’s not enough to monetize just the Turkish market through advertising. In-game spending however is quite high compared to other emerging markets. The average spend for a mobile player is well above India or Southeast Asia that we talked about in previous episodes. It’s very manageable to monetize through in-game spending in Turkey and through Turkish mobile gamers.”
An attractive market for foreign developers
23:27 - Tom: “As we have seen from what’s been happening in recent years, Turkey is a very attractive market for foreign developers. Tencent is active - the first time they launched any game outside of China, was in Turkey. Epic Games and Riot Games have a larger presence in Turkey than anywhere else in the region.”
24:14 - Emre: “To the contrary of some other countries, the playtime of people does not decline as people get older in Turkey. Once people are in their 20s, if they’re engaged with a game, it’s fairly common to say that they’ll be active players in their 30s as well.
In Turkey, a strong game can turn into an evergreen intellectual property and it can stay that way for many years. People love playing games in Turkey. The population is young and prefers playing competitive games, again because of the historical reasons. There are lots of internet cafes where people come together and spend their social time. As the technology became more accessible for those people, they became very active players in the market.”
25:54 - Emre: “The only challenge and issue might be for an international company to get into Turkey is localization. What I observe in the market is that if a game is not localized - and not just translation of text and images, I mean really hardcore localized - it can struggle in the Turkish market.”
Having a local office
27:47 - Emre: “For PC and console games and maybe some midcore mobile games, it may be necessary to have a local office in Turkey, because customer success is essential. It is not a requirement for those companies to have a development studio in Turkey but rather a local person to be in touch with the player base.”
Global growth strategies for Turkish developers
28:46 - Emre: “At Alictus, we develop our games for international audiences - mostly for the English speaking market, but recently China and APAC. We don’t really localize our games, because we’re making hyper-casual, which is instant and very approachable content. They don’t have any text or content that can be localized, it’s purely for a mass audience, and anyone in the global area. That being said, for APAC, we do localize the title of the game and the store descriptions.”
30:10 - Emre: “For ad-based games, working with the right partners, technology and infrastructure is key. Then it’s all about testing hypotheses as frequently as possible. If you’re well equipped, you can do that fairly easily, as there are accessible solutions to help you make better monetization and growth decisions. The most important thing is to be informed at all times, whether it’s by talking to partners, reading blogs, or even listening to this podcast. I can say, especially for Turkish developers - we are emerged as a market, the Turkish game developer scene is growing, so this should be the time for Turkish game developers.”
