TikTok For Games: A Pipe Dream

TikTok For Games: A Pipe Dream

TikTok has revolutionized social media, captivating a vast audience of >1.5 billion monthly active users. Overall, the platform has had a positive impact on the gaming industry by providing an accessible and scalable marketing channel for studios of all sizes.

Last week, we wrote about TikTok’s precarious future. This uncertainty, combined with the platform’s historic explosive popularity may spawn numerous imitations across different sectors. In gaming, the proposition is that a “TikTok for Games” may emerge with a TikTok-like algorithm and feed-deliver games (not gaming-focused videos) to users.

The allure of adapting TikTok’s model to fit gaming has caught the attention of investors and founders alike. However, we believe that TikTok's quick, scrolling nature clashes with the deeply engaged way players typically interact with games.

What Would a TikTok for Games Look Like?

Despite the success of the platform, the strengths of TikTok’s platform do not translate well to games.

Breadth of content: The core value proposition of TikTok is a seemingly unlimited supply of short-form videos across different interests and creators. The platform's algorithm tailors content recommendations based on each user's preferences, seamlessly delivering engaging material aligned with their interests and tastes. A single user can engage in science, history, comedy, fashion, DIY (do-it-yourself), social trends, etc. While the breadth of content benefits social platforms, it creates hurdles for gamers.

For a TikTok for Games to work, the delivered games should be aligned with the end user’s interests. This could range from the genre (simulation, FPS, platformer, etc.) to game mechanics (turn-based, deck building, role-playing, etc.) to game type (hypercasual, casual, mid-core, hardcore, etc.). Since most gamers have a preference in each category, a TikTok for Games would require a massive library to provide value to each user.

There could also be a shift from quantity of content (TikTok) to quality of content and focus on algorithmic repeatability. This would deliver the same content to users multiple times, keeping up-to-date data and information and allowing users to master games over time. This also helps encourage the multiplayer feature of games (a strong network effect) by focusing on mechanics like leaderboards, player versus player (PvP), and even real-money gaming. Instead of 100s of millions of games (like TikTok videos) the platform could instead offer hundreds or thousands of games.

User interaction and behavior: For this platform to feel anything like TikTok the user experience would be optimized for quick sessions and multiple games. These would most likely need to be designed with hypercasual mechanics so users continue to scroll to new games (a significant portion of monetization for TikTok comes from ads between videos), instead of getting stuck playing one game indefinitely. Additionally, these mechanics are the easiest to pick up quickly and rarely require tutorials.

Business model: While TikTok has recently expanded into ecommerce, like other social platforms, their business model is primarily driven by advertising. This model is dramatically less effective on a TikTok-like platform for games given that people spend more time playing a game than they do watching a video. Less scrolling means less ads delivered. While there are a few logical alternatives like offering distribution (becoming a discovery and app store platform), IAP or subscription (mimicking Twitch’s “bits” creator support model, limiting number of plays per user, or paying for competitive features), these models have not driven a majority of revenue for any social network to date.

Consumer trends: The average TikTok user opens the app 20 times and spends ~95 minutes per day on the platform. The average video is 34 seconds long, which would suggest the average number of videos watched per day is roughly around 279. In practice, this number is likely much lower as the TikTok algorithm rewards longer watch times.  

Consumers forgo using around 62% of apps on their phones, meaning that they find the apps/games they like and stick to them, and the rest sit in their “home screen graveyard”. Gamers may even be pickier with content than the average consumer; the average mobile gamer plays 2-5 mobile games per month (Udonis).

Mobile games success: mobile games have constantly improved depth and quality with developers moving away from hypercasual-like mechanics and into long-lasting IP. Companies like Voodoo, who have long been one of the top hypercasual publishers, are moving to what they call “hybrid-casual,” with Voodoo’s Head of Strategic Partnerships, Alex Shea, stating “hypercasual is dead” (PocketGamer).

2023 highest-grossing mobile games (estimated):

1. Honor of Kings, $1.58b
2. PUBG Mobile, $1.16b
3. Candy Crush Saga, $984m
4. Genshin Impact, $957m
5. Roblox, $888m

Looking at the top games and the shift away from hypercasual, the mobile landscape is shifting towards deeper games.  

Why a “TikTok for Games” Will Not Work

The biggest misalignment between user expectations for a social platform versus a game are around passive versus active engagement. When on TikTok, most users only swipe to the next video and then passively watch. For games, the only way to engage is to play, or there will be little-to-no progression.

This affects how each medium can be monetized. Gamers are typically monetized in-game due to their longer-term engagement habits. This gives more opportunities to deliver ads or offer IAPs and subscriptions, but these users are still monetized within one game. The only exceptions to this are distribution platforms.

There is a significant difference in barriers to entry for content creators: TikTok has over a million content creators who post 707m videos per month. Due to the ease of creation and variety of video content, scale is much easier to hit compared to games. Creators on TikTok can create content simply by recording themselves or stitching a video for a reaction. Game developers need to build games, which takes significant time and specialized skills. Keeping content fresh would be an uphill battle.

An alternative to TikTok for Games could be a TikTok for Game Demos, which would cater more to game discovery. In practice, short sessions or even demos would be delivered to end users who can try and then download games they like. While we think this is the best option for success, we still do not believe there is much upside. As we mentioned, mobile gamers do not play many different games; when they find what they like, they stick to it. This would drastically impact retention for this version of a TikTok for Games and the monetization opportunity would be limited. That said, it could be an interesting addition to an existing distribution platform (app stores).

Takeaway: The concept of a "TikTok for Games" presents challenges and opportunities. Despite TikTok's massive influence in social media, adapting its model to gaming is not straightforward. There are fundamental differences in user engagement and content consumption between games and short-form video content. Games require active participation and are generally not suited to the transient, swipe-and-watch style that defines TikTok. Gaming trends towards deeper, more engaging experiences, which contrasts with the brief, often passive engagement typical on TikTok.

Although a gaming platform inspired by TikTok could potentially increase game discovery through short demos and varied sessions, the retention and monetization models present significant hurdles. Most gamers tend to commit to a few favorites rather than continuously exploring new games, which could limit the efficacy of a TikTok-like model in the gaming sector. Thus, while there is a niche for a TikTok-inspired gaming discovery platform, the concept faces substantial barriers in aligning with current consumer habits and industry trends in mobile gaming.