In this LevelUp episode, Melissa sits down with Danny Moy, Chief Strategy Officer at SciPlay. They dive into the role of business strategy at mobile games studios, the secret to navigating M&As (from both sides), how to create long-term plans while working in a fast-changing industry, and a whole lot more.
Tune in here or keep reading for the highlights:
Business strategy for mobile games
“Strategy is generally not the same across every game company from what I've seen and is likely a little different everywhere. Strategy is explaining the entire story and or business case of what you're recommending to do. So first explaining the market opportunity or gap analysis. Then what objective or goal are you recommending based on that opportunity that you're explaining.
What's happened over the last couple of years is that we've gotten better at operationalizing that type of thinking and that type of mentality into everything that we do at the company. As a company starts to scale and get bigger you just naturally have a lot of different functions and a lot of different stakeholders.
You start to have potentially different goals and competing agendas. I think it's good to have an strategy team to kind of help bring that all together and, and look at it from like what's best for the entire company instead of just what's best for one specific group.
At the end of the day, I think the entire company wants to be able to grow and, and continue to scale. So, it’s about how to bring it all together and make sure that the company harmoniously grows.”
Looking for gaps in the market vs. following the data for new opportunities
“I think in the early stages of game development and on the surface they may look different but they quickly come together, especially in free-to-play games and in the industry that I'm in today.
In the beginning, it's about designing and developing a game that your target audience will want to come back to and play over and over and over. But while you know you're developing and you're testing, that data starts to come in and it will inform both your business and the game.
So now it's about, okay, how do I optimize the game? How do I market the game? How do I operate the game? What new content and features should I add to the game? And you know, one may seem like it's business, but it really helps inform the game strategy. So they just become very intertwined, like quickly on when especially in free-to-play games.”
How SciPlay runs marketability testing
“In today's environment where the UA environment has changed and it's harder to find growth we're constantly testing for marketability. But, I think first and foremost it is important to have your in-game retention and engagement metrics be strong. Even if I can market the game, I need to understand that I can retain these players, right? And I can retain them for the long term. I can continue to keep them engaged because that will just give you more opportunities or a longer time horizon to expose them to new content and to try to monetize them.
How we do that is by partnering with our marketing team and the competitive intelligence team to understand, okay, what is the target audience and what is their appetite? We like to use the word TAM - the total addressable market. That total addressable market has to be big enough to help support a potential business in the game. So once we determined that there's an acceptable market to help this game to compete in now we're constantly testing and iterating the marketability.
That's one of the reasons why I love the gaming space so much. It's one of the few industries where you can continue to react to the data and let it inform your decision-making moving forward. In most industries, you kind of just make a decision. You go out and build something, and then you hope you try to try to sell it or get it in front of people. And if it doesn't work, sometimes you're a little bit out of luck, you can't really go back and you change something.“
The risk of unpredictability in the creative industry and how to combat it
“Because we're in the gaming space, I think there's always a level of unpredictability. But you do your best to try to manage that or to de-risk it. So I think the way, the way we look at it at SciPlay, we actively understand our players and always try to focus on them so we understand their behavior and needs from the data that's coming in.
And we try to speak to them - what they like, what they don't like, what are they expecting. This informs what you should try to create and innovate to keep those players entertained and engaged with you for the long term. We always tell our game teams to just never stop understanding and focusing on the player. The minute you stop focusing on the player and you're kind of distracted about potentially trying something new and you're gonna lose sight of what's going on.”
Building a long-term strategy in a fast-changing environment
“I think one of the bigger traditional strategies in the gaming industry has been how to accelerate growth. Over the last few years, I've met and talked to a lot of gaming companies that were only looking for growth through either user acquisition of new players, building and launching new games, or simply just through M&A.
So it's not atypical for gaming companies to overlook the fact that growth can actually come from existing players and hence drive incremental growth from the existing players that you have and not worry about constantly chasing new players coming in.
This is something that gaming companies often overlook when they're building their long-term strategy. At SciPlay, we have a genuine focus on how to improve retention, engagement, and monetization from the existing player base that we already have.
This is a very large component of our long-term strategy. Our long-term strategy that we're building or continuing to evolve and execute is really about trying to grow our core business and making sure we grow the value that we create from an existing player base.
In parallel, we're still gonna try to develop new games and expand into new genres or expand into new markets. But we always tell ourselves our number one priority is not to forget about our existing player base that we have today and how to protect that and how to grow that base instead of trying the next big chase.”
M&A is a tool in the kit, not the fix
“I don't think M&A should be a strategy in itself. It should be a tool or one of the ways to help you execute a strategy. So for most mobile game companies, the strategy is around how do I develop a new game, how do I market or scale a new game, and how do I better monetize the existing games and products that I have. How do I expand into a new genre or category? How do I expand into new international markets? So M&A to me should be about how to accelerate in a cost-efficient way to execute one of those strategies.
It's a tool in a toolkit that can help you execute what you're looking to do. So, for example, we've wanted to expand into the casual genre. But we look at M&A as not the only way to do it. M&A is just one of the multiple paths that we've undertaken to try to expand into the genre, but also we need to gain learnings on how to market and operate, and monetize games in that category.”
After being on both sides of M&As: How to make it work
“When you're the acquirer you're planning and tracking how the target acquisition is meeting that strategic rationale and business case you underwrote for that deal. There's stress on that side too. There's a reason why you're recommending this. You're closely working with the target to execute that plan or vision that you had.
There is one thing that is the same on both sides of that acquisition coin. Whether you're the acquirer or the acquiree the necessity of establishing early on what that long-term vision and expectations are for the two businesses joining up. I'm a big proponent of both sides needing to be fully transparent about what is the bigger goal of bringing these two companies together.
Just make sure that there's full transparency and alignment before you get in bed. When I think you have that, there's a higher success and probability of creating the value from putting the two together - making sure we're creating a one plus one equals three scenario.”
The flywheel of happiness
“At SciPlay, we invest in both our players and our customers, we're a very player-focused company. The next thing that we're big on is developing our talent and their career paths and their professional development.
So, this multi-focused approach on both talent and the player and focusing on the customer, I think is guiding us as we grow our company and develop the most entertaining products and services in a very competitive industry. So I think this focus will deliver a more rewarding experience for your people. Happy people will lead to better quality products that will lead to happier value. It's a flywheel analogy that we often use at SciPlay. Investing in leveling up our people leads to better products for all players and happy customers, which leads to better financial performance and better financial performance lets us continue to invest in our people.”