Kwalee is on the hunt for more publishing deals and acquisitions in the casual game space after signing Text Express from GameHouse, says its mobile boss John Wright.
Hypercasual’s ‘ship has sailed’, he said, and Kwalee is now focusing on developing and publishing hybridcasual and casual games. As part of that new strategy, it made cuts to its workforce recently, estimated to be around 10% of its staff (~40 people).
“We didn’t need to, nor want to make layoffs but we had to look under the microscope and say, okay, are we still the right shape for where we’re going, what we’re building and where the market currently is?” Wright told us. “And sadly as a result we had to make some difficult decisions.”
The signing of Text Express is the start of a new effort to publish more ‘forever’ games and fewer shorter term hypercasual titles, Wright continued. “Hypercasual was a great time for us, we made loads of money, we launched dozens of games, we were highly successful. But that ship has now sailed.”
Wright also namechecks contemporaries like Supersonic, Voodoo and Homa as being on a similar journey. “All of the big boys from the hypercasual phase who then pivoted into hybrid also know they need to have their eye on the future,” he told us.
Hybridcasual games like Landlord Simulator, Virus Evolution and Submarine Jump have made Kwalee “millions of dollars, but not tens of millions of dollars”, says Wright. “These are profitable games, but we didn’t have that nine figure smash hit.”
“We are focusing on developing more robust, better quality, long term, evergreen games,” he continued. “What we learned from hypercasual was that it’s great to be able to focus on the quick money, however, when problems arise it’s very hard to look at cash flow and sustainability for a long time…that’s the nature of those games.”
“So we made the decision to expand into hybrid and we’ve been in this market now for probably up to a year. But equally I do believe hybridcasual is a stepping stone to casual. What companies want is the same as what King and Dream and Scopely have, which is games that are going to be in market for years making millions of dollars.”
Kwalee has four internal development teams currently working on hybridcasual games, a team developing casual games and a publishing arm that’s handling Text Express while looking to sign “blue ocean” casual games. That publishing team is also looking into acquiring studios too, says Wright. “Right now we are in multiple conversations with other studios to either fund publishing, to invest in their studio or even acquire the studios outright,” he tells us.
Meanwhile, Kwalee will now be “refocusing” Text Express around its core loop, expanding its meta and building on the game’s existing live ops.
“What they have done a really good job at is events,” adds Wright. “They have positive retention at day 360, so to have a percentage of users still playing after a year is incredible. The next six months is going to be very exciting.”
