With the success of Coin Master, and the disruption it is causing in the social casino space, many are looking to understand and replicate its success. Although Coin Master is unquestionably doing great and has found a Blue Ocean, it would be the second largest social casino product if it was officially classified in that category, you need to proceed with caution if you plan to imitate it.
I will be writing in the near future about the Halo Effect and Survivor Bias, two heuristics that often lead to flawed decisions. With both of these heuristics, people look at a success and draw conclusions from that success in retrospect and are not repeatable (i.e. Monday morning quarterback). They miss, either consciously or subconsciously, many of the factors that led to the success and are necessary to replicate it, while potentially attributing the success to dynamics that actually did not contribute positively.
Given its current momentum, it is very easy to dissect Coin Master and say A, B and C can help you make $250k/day. Rather than jump on the bandwagon, I decided to take a step back and look at what Moon Active is not doing well. I may look stupid in twelve months if Coin Master consolidates its position and continues to grow but there are some fundamental issues with the product that suggest it may decline rapidly, despite most social game franchises lasting for years (Slotomania, DoubleDown, Clash of Clans, Candy Crush, CSR Racing, etc.). The issues below suggest Coin Master might experience a much shorter life at the apex.
Lack of new content
Social casino products, and social games in general, drive most of their on-going revenue from new content. From the early days of Farmville and Mafia Wars to current top grossing games like Slotomania and Fishdom, new content most consistently contributes to revenue. New content drops are accompanied by much stronger player activity, including reactivating lapsed players and getting lapsed spenders to resume purchases, with little variance (unlike a new feature that may or may not resonate with the audience). This content can be a new slot machine, a new tournament format or theme, new virtual goods, etc., and for different games different content resonates (or falls flat) with its audience. Conversely, I cannot identify one top game where the content is largely unchanged from several years ago, let alone several months ago.
Coin Master, however, adds virtually no new content for the customer. They may add new villages for players who have completed every village, but that impacts very few players and those it does impact it touches very infrequently. Moon Active only has one slot machine that never changes. There are no new slots, new symbols or other new items to rejuvenate the gaming experience.
Deviation from random number mechanics
When I took my first social casino position, after being in traditional free to play games for several years, I quickly learned how strong casino mechanics are at driving monetization. Rather than finding artificial ways to “pinch players” or otherwise drive monetization, slots have generated revenue for over 100 years in a very straightforward manner tied to the core mechanic. Moreover, the random nature of casino games creates a fantastic roller coaster experience for players.
After playing Coin Master extensively, it is clear that rather than a random experience your outcomes are choreographed by Moon Active’s Product Managers. The patterns start to repeat and players see the same outcomes session after session. The hot and cold streaks that are part of gambling, driven by random numbers and the laws of probability, are absent. I have been involved with several social casinos where product managers believed they could create a better (or more profitable) experience than random number generation could and it never works. The gameplay gets stale or players realize they are being manipulated. In the long run (or even medium term as the experience is not as good), players enjoy a true random experience better than one created by product managers.
Uninspired elder gameplay
For a game to thrive for years, it needs to keep a base of loyal and valuable players and keep growing that base. Given user acquisition costs, you cannot grow a game to franchise proportions if you have to replace the entire player base less than six months from acquiring each player. It is this core of valuable players that provide a revenue floor each month that allows you to spend aggressively for new players without creating very adverse cash flow conditions. Most games appeal to their core of experienced players by adding new features or mechanics so the player is not doing the same thing day after day, month after month, year after year. Even in slot games, social casinos release slots with very different bonus games, graphic styles, math and mechanics.
Coin Master, however, is virtually the same game day one that it is if you have played it several hours a day for six or sixteen months. The mechanics do not change or evolve, depth is not introduced, and the experience is identical to past sessions. Even Microsoft Windows apparently evolves at a faster rate than Coin Master.
Poorly crafted advertising monetization
Advertising revenue is becoming an increasingly important part of the social gaming business model, an important additional revenue stream for games that rely on in-app purchases (IAPs) and increasingly it allows products to succeed even without IAPs. Hypercasual games, which now represent about 60 percent of app-store downloads, are almost entirely ad driven. Even more importantly, advertising works with the rest of the game to improve the overall experience and increase retention (watch to earn videos allow players to keep playing or earn premium currency).
Moon Active, however, still approaches driving advertising revenue in the conventional way. It identifies players not likely to monetize through IAPs, then forces players to watch ads. From the structure of how Moon Active uses ads, it is not concerned about users churning due to ads, instead it wants to get as much ad revenue as quickly as possible. This short-term approach is likely to reduce current user return rate (CURR), which is critical to maintain DAU. It is also important to deploy advertising smartly to optimize LTV, as it is better to have someone watch four ads per month for 12 month than force ten ads on them in a month and prompt the player to churn. Similar to the lack of new content and unsophisticated elder gameplay, Coin Master is not constructed to build its player and revenue base month over the long term.
Hygiene
In addition to these large issues, there are many smaller problems (often referred to as hygiene issues) that are likely to impact Coin Master negatively. As the genre gets more competitive, these issues can be enough to get players to switch to other games. Success in the social game space often reminds me of chaos theory, where a butterfly in Beijing can impact the weather in Chicago. Small issues can have big consequences. The hygiene issues in Coin Master include:
- Stability and tech. People often underestimate the impact technical issues have on KPIs. A small change in loading time or app size, which the player might not consciously notice, often impacts KPIs 10 percent or more. Anecdotally, I have noticed that Coin Master’s slot will crash occasionally, sometimes freezing the player out until there is an app update. Even small crashes can contribute to user churn. Related, the absence of deep linking for push notification, usually a coding or tech debt issue, limits the ability to engage players through CRM.
- Economy balancing. As players progress through Coin Master, the economy becomes a drag on the experience. While initially a reward (daily bonus, raid proceed, etc.) might be relevant, as the game progresses this relevance varies. As the player advances, less of the features are significant (for example, watching a video has so little value there is no incentive). This problem, coupled with the lack of new content and elder gameplay mechanics, make the game less (rather than the desired more) interesting for established players.
- Portrait only mode. Coin Master is only available in portrait mode, creating a sub-optimal experience for players on a tablet or large smartphone who are looking for an immersive experience. While some casino games are limited to either portrait or landscape mode, the decision is often driven by an abundance of content (and the need to modify so much art). With Coin Master enjoying an uncontested market space, this limitation obviously is manageable (hence the $250k/day), but again it leaves them vulnerable to a competitor taking away some of Moon Active’s players who desire a landscape experience optimized to their device.
The future of Coin Master
It is impossible to predict the future and Moon Active has found an uncontested market space that protects it from many of its sins. That moat may protect it from the issues identified above and allow it to continue to grow Coin Master. More likely, Moon Active will either address these issues (it now has extensive resources available) or new entrants in the genre will surpass Coin Master.
Key takeaways
- Despite being a runaway success, Coin Master generates about $250k/day, some limitations in the product suggest it will not become a long-lived franchise.
- Unlike most successful franchises, Moon Active fails to regularly release new content into Coin Master or provide a deeper experience for long-time players.
- Coin Master’s deviation from a true random gaming experience, unlike other social casinos, also provides a discernable pattern that will take away from player enjoyment over time.
The Business of Social Games and Casino 