Marvel Rivals numbers are in free-fall. The engagement bump from the latest season won’t reverse its decline toward equilibrium: potentially matching but not exceeding Overwatch’s audience size, which has since recovered from Rivals’ launch. Is that a “successful outcome”? It feels like a blow to the arms race hypothesis.
Chinese developers are releasing AAA content at a historically high pace and quality, yet the outcomes remain…complicated. Genhsin, Honkai, and Zenless Zone Zero (ZZZ) are massive capital endeavors with limping revenue tails. Genshin Impact’s mobile revenue alone dropped from over $100m monthly last year to around $30m this March. Genshin’s annual budget is reported to be ~$200m on 700+ headcount, so while the game remains a profit powerhouse, its margins are significantly shrinking, a trend consistent across the entire portfolio. Honkai and ZZZ are following a similar but quicker decline from their launches, and it’s unclear if those projects remain in the red.
The launch “love bomb” blitz from marketing and content appears to converge on a game’s long-run engagement equilibrium within months, not years. Is the long-run equilibrium higher given the initial push? I’m struggling to see it. But in all the conversation around engagement, we’ve neglected monetization. Rivals will likely struggle here too, and it remains a more pressing concern than sustainable engagement. Embark’s The Finals was written off soon after its launch, as it attempted to revive part of Battlefield’s content productivity thesis: destructibility invites emergent gameplay. Despite this, it’s likely settled around 400k-500k DAU when considering console and PC. That’s a substantial player base, and certainly enough to build a sustainable business, but the familiar and broken cosmetic-only monetization model continues to hold back the expansion of HD F2P.
At 500k DAU, ARPDAU must exceed $0.40 to generate a $100m annual run rate, but this is an extreme benchmark for 99% of cosmetic economies, where $0.15 is considered a “great” outcome. At its peak, Fortnite reached ~$0.40 ARPDAU, where even mobile titles like Royal Match reach 20-30 cents ARPDAU at scale. The answer from most titles and developers is to go premium, and it’s the right one. However, if the HD F2P model is to expand, it must support lower DAUs, and that means new models that can reach mobile-esque monetization levels.