In the previous two parts of “The Decline of SIFAS” series, I explained how Love Live! School Idol Festival ALL STARS (SIFAS) has become unpopular and why, in the face of its financial loss, KLab had to sell off SIFAS to MyNet Games. Now, we delve deeper into MyNet Games, and how its management and performance of previous games might have affected SIFAS’ future prospects. I did a lot of research into MyNet Games which included gathering and machine translating lots of Japanese documents, articles and websites and tracking the performance of MyNet Games’ currently operating and terminated games. From my research, I argue that SIFAS’ transfer to MyNet Games and Bushiroad does not bode well for its future. This post will provide background information on MyNet Games and game development before describing how the work of MyNet Games and Bushiroad, the developers and publishers of SIFAS respectively, might influence SIFAS’ prospects.
What is MyNet Games?
MyNet is a Japanese company that does a variety of things in the digital transformation (DX) sector. Its core business is in game services via its subsidiary MyNet Games. MyNet Games does not currently develop its own games. Rather, it acquires and manages existing mobile games from other developers, with the aim of having them last for a total of 10 years (in both the original developer and MyNet Games). MyNet Games is a main driver of MyNet’s diversification into other businesses which include:
- An AI and marketing consulting firm to help businesses in DX;
- Management of two Japanese sports teams: the soccer team FC Ryukyu and the basketball team Shiga Lakestars via data analytics and DX; and
- Establishment of fantasy sports in Japanese professional basketball and baseball.
MyNet Games claims that they have a large number of operating professionals in their team, allowing them to accept any mobile game regardless of genre or platform. Consequently, as of January 2022, MyNet Games currently operates 21 games simultaneously, including SIFAS, plus other games that have not been disclosed publicly. There are two ways that MyNet Games acquires mobile games:
- Purchase: MyNet Games purchases an existing game from a game developer and wholly takes over the game’s operation, either with its own staff or with the original development staff. A developer may want to sell the game to MyNet Games to:
- Sell the company to MyNet (For example, C&M Games sold its games to MyNet Games by placing them in its spin-off company Crooz which they subsequently sold);
- Exit the mobile game sector to focus on other businesses; or
- Raise funds or free up staff to develop new mobile games.
- Collaboration: MyNet Games operates the game with a publisher and shares the profits. This is the case with SIFAS, where Bushiroad has taken over publishing duties while MyNet Games takes over development and operating duties.
After acquiring the game, there are three main ways that MyNet Games manages games to boost and maintain revenues. The first way is data analytics. By acquiring a total of 80 mobile games, MyNet Games claims that they have built a database and a range of indicators and parameters to optimise the user experience and raise the profit margin of games. The second way is increasing sales by redesigning how games are managed and applying sales knowledge to market the game. The last way is cost reduction, where they reduce costs as much as possible by sharing illustrations, assets and users; outsourcing work; automating processes and merging servers.
The business practices and management of mobile games by MyNet Games does not bode well for the quality, profitability and survival of SIFAS. However, Bushiroad, as the publisher of SIFAS, may also contribute to SIFAS’ further decline, and has the final say on whether SIFAS gets terminated. To understand what can go wrong in how SIFAS is currently managed, we must first understand the difference between game developers and publishers, and how either (or both) of them can contribute to a bad game.
Differentiating game publishers and game developers
A game developer is a person, group or organisation that designs and creates video games. Game developers differ in size, ranging from one person who creates the whole game (for example, Stardew Valley) to teams or even companies of people that work on different parts of a video game. In contrast, a game publisher is a company that markets video games to consumers. They have the marketing and public relations expertise to promote the game to consumers and networks to distribute the game globally. Game publishers often provide funding to game developers in exchange for having a say on the game’s development. For example, they can provide input on what to include or exclude in a game, set sales targets to reach or propose timelines on when the game needs to be released.
Often, problems with or negative reception towards a video game can be the main fault of the developer, the publisher or both. Here are some examples of how developers and/or publishers have contributed to some bad games in 2021:
- Fault of developer: Balan Wonderworld, a platform game whose development was led by Sonic the Hedgehog creator Yuji Naka. The game did not sell well, with revenues falling well below expectations, and received unfavourable reviews from everyone. Criticisms of the game include clunky controls and gameplay, bloated, outdated graphics and an uninspiring, confusing story. The fault lies with the developers as they brought forward flawed ideas to a game that cannot be fixed by the publisher.
- Fault of publisher: Battlefield 2042, a first-person shooter that was negatively received by fans as the game was very buggy at launch and dropped a lot of features from previous Battlefield games. This is because DICE, the developers of the game, only had 15 months to develop the game, a very short timeframe for AAA game development. The fault lies with EA, the publishers of the game, as their actions adversely affected Battlefield 2042’s development. This included letting experienced Battlefield developers leave DICE, suddenly pivoting to an entirely different genre in the middle of the game’s development and not delaying the game long enough for DICE to get the game to a playable state.
- Fault of developer and publisher: Grand Theft Auto: The Trilogy – The Definitive Edition, which has received backlash from both critics and fans for its numerous bugs, terrible character models, framerate issues and lazy rendering. The game is the fault of both the publisher Rockstar Games for rushing development of the game to make money and developer Grove Street Games for remastering the games from existing mobile ports instead of remaking them from scratch.
In the context of SIFAS, although their actions are being heavily scrutinised, it is not enough to focus solely on how MyNet Games will further fuel SIFAS’ decline. Although I will be explaining them at length in this post, we must also consider how Bushiroad, the game publisher, can exacerbate SIFAS’ problems. I will explain their role later in the post.
How do games operated by MyNet Games fare?
Reading comments from the SIFAS subreddit, some people believe that MyNet Games has garnered a bad reputation for being the graveyard of mobile games. Receiving games from other developers, MyNet Games can shut down unprofitable games. Seeing how SIFAS has been transferred to MyNet Games, I decided to investigate how long games transferred to MyNet Games last and measure the chances that a game gets shut down.
I first compiled a list of all mobile games that MyNet Games has operated. For each game, I noted down the dates that the game was released under its original developer, was transferred to MyNet Games and, if applicable, shut down. I then used the dates to calculate the number of months that each game was operating in total and under its original developer and MyNet Games. The amount of time each game was operated by MyNet Games was tracked up to January 2022 (for a currently operating game) or its termination date (for a discontinued game). Afterwards, between currently operating and discontinued games, I compared the number of months that games operated in total and under the original developer and MyNet Games. I also tested whether differences in operation periods were statistically significant (at p < 0.05) via a Mann-Whitney U test. Statistical differences in operation periods mean that these differences did not arise through chance but usually for specific reasons.
Looking at the number of months that each game was operating, I found the following results.
First, looking at the total amount of time that each game was operating, games that were discontinued operated for significantly less time (by a median of 30 months) compared to games that are still operating (p = 0.027).
This was not due to the original developers, as the operation time under their original developers were similar between currently operating and discontinued games (p = 0.182).
Rather, the lower operation time among discontinued games may most likely be due to MyNet Games. When looking at the periods of time that games were operated by MyNet Games, discontinued games spent less time in MyNet Games (by a median of 14 months) compared to currently operating games. Although the difference is not statistically significant (p = 0.094), the result seems to suggest that MyNet Games played some role in determining how long a mobile game lasts.
I further investigated the operating periods of games by sorting currently operating and discontinued games into different categories. First, I sorted each game based on whether they lasted less or more than 2 years with MyNet Games. I chose 2 years as this is the benchmark set by MyNet in their financial presentations.
Looking at the contingency tables, the most striking result was when looking at the termination rates under different operating periods. Within the first two years of MyNet Games’ operation, the termination rate is 85% which is very high. This is reduced to 53% when the game is operated by MyNet Games for more than two years. This result indicates that even though there is a high chance of MyNet Games terminating a game, the risk is highest in the first two years of operation. This is particularly true for games that were unprofitable or not promising which may explain MyNet Games’ willingness to quickly shut them down.
Just as interesting is how long SIFAS would last under MyNet Games’ operation. To predict this, I sorted currently operating and discontinued games based on how long each game was run by its original developer. I chose 2 years 3 months as the benchmark as this was the amount of time that KLab managed SIFAS.
Out of all the games acquired by MyNet Games, games that have lasted as long as or shorter than SIFAS under its original developer had about a 16% higher chance of being shut down, compared to games that lasted longer with their original developer. This result shows that SIFAS has a slightly higher risk of being shut down while being operated by MyNet Games.
Taken together, the data suggests that MyNet Games may have an influence on which games continue for a long time, and which ones get shut down. These results fit with their objective of having games last for a total of 10 years. To sustainably achieve this objective, they need to shut down bad games quickly and use their resources to promote good games. This may explain how MyNet Games has garnered a bad reputation for being the graveyard of mobile games. This might be worrying for SIFAS as they have a slightly higher risk of being shut down, but that is only one part of the story.
Tracking revenues of games managed by MyNet Games
Other people say that for each game acquired, MyNet Games tries to generate as much profit as possible by either reducing costs or making the games more grindy and pay-to-win, and terminates them as soon as they become unprofitable. To test these claims, I tracked the revenues of two games that were transferred to MyNet Games in 2019 and were still operating:
- Flash God Ceremony: Come Light Live (Shinshiki issen kamuraitoraibu, 神式一閃 カムライトライブ), an action RPG; and
- Future Family Tree Tsugu-me (Mirai-ka keizu tsugu me, 未来家系図 つぐme), a farming simulator.
With revenue data available from 2018 to 2021, we can see how monthly revenues have fared before and after the transfer to MyNet Games.
Looking at both games before the transfer, we can see that revenues fell from their peaks in 2018. This was particularly true for Future Family Tree which saw a precipitous decline in revenues throughout 2018. Consequently, both games were transferred to MyNet Games: Future Family Tree in April 2019 and Flash God Ceremony in June 2019.
The transfer to MyNet Games affected the revenues of both games differently. Flash God Ceremony continued to show declines in revenue even after the transfer, reaching a low of 5.9 million Japanese yen in October 2021 before bouncing back to 38.9 million Japanese yen in December 2021. In contrast, Future Family Tree saw an increasing trend in revenues after the transfer. From a low of 3.6 million Japanese yen in April 2019, revenues increased to 33.2 million Japanese yen by December 2021.
Let’s now look at a game where revenues have stagnated after MyNet Games took over operation duties: Yakuza Online (Ryū ga gotoku ONLINE, 龍が如く ONLINE). Yakuza Online is a card-collecting RPG that recounts the events of the Yakuza series, but starring Kasuga Ichiban, the main character of Yakuza: Like a Dragon. Sega initially developed and operated the game which was released on 21st November 2018. However, the game was co-operated by Sega and MyNet Games from March 2021 due to Sega’s inexperience in operating mobile games for the Yakuza series.
Before the co-operation period, Yakuza Online showed unstable revenues. Not only is there a small decreasing trend in revenues, the game also did not experience a bump in revenues during its anniversary periods in November 2019 and 2020, a warning sign that the game is not doing well. Revenues stabilised after co-operation with MyNet Games but otherwise did not grow. In fact, the game experienced a dip in revenues to 54.9 million Japanese yen in October 2021, only recovering to 90.6 million Japanese yen by December 2021.
Collectively, these results show that the transfer to MyNet Games can have different effects on game revenue. While some games can experience increases in revenue after the transfer, other games can show stagnation or even declines in revenue. Most likely, SIFAS will follow Yakuza Online’s path, stagnating or even experiencing declines in revenue. This is because Yakuza Online and SIFAS are based on popular IPs, allowing them to maintain a player base. However, they did not perform well under their original developers, not generating an ‘anniversary bump’ in their revenues. This does not bode well for SIFAS which desperately needs to improve and innovate to stay afloat in a competitive mobile gaming industry. MyNet Games will not provide that platform for SIFAS to succeed.
The implications of transferring SIFAS to MyNet Games
MyNet Games is, first and foremost, a game services company, not a game developer. It acquires as many games as possible to fuel MyNet’s growth, at the cost of maintaining the game’s quality. This does not bode well for SIFAS’ growth, quality and survival. Here are three key problems of MyNet Games’ game management and how they relate to SIFAS.
More limited resources and staffing
MyNet employs less people than KLab, with only a subset of them working on mobile games. As of September 2021, MyNet only employed 387 staff in total, spread out across game services, sports management, fantasy sports and consulting. This is in contrast to KLab which had 654 employees in September 2021, with 526 of them working on mobile games. This means only a subset of MyNet Games’ employees are actually working on mobile games. Worse, these staff members are simultaneously working on at least 21 mobile games over various genres, with vastly different coding, gameplay and monetisation systems. In contrast, KLab operates a smaller number of games over set genres, each using similar systems.
Even more concerning is that in its December 2020 financial presentation, in an effort to cut costs, MyNet announced that they will reduce the amount of work done by full-time employees and transfer their work to part-time and outsourced workers. This thinly spreads out game operations to many people, many of whom will have less stable jobs, have to work on multiple games and are less experienced in game management.
All of these problems are detrimental to SIFAS. First, under MyNet Games, there are less resources and staff to operate and improve SIFAS, both in terms of fixing SIFAS’ problems and innovating to keep players stimulated. Second, as staff are working on multiple games, less time will be spent maintaining SIFAS. Any bugs or issues in SIFAS will take longer to identify and fix as staff will be preoccupied by other games.
MyNet Games are less familiar with SIFAS
Given the complex game mechanics of SIFAS, it is imperative that the new development team in MyNet Games are sufficiently briefed on how the game works. Although we do not know who is currently working on SIFAS (as the staff list was not updated after the transfer), it is likely that not many people have transferred from KLab to MyNet Games to keep working on SIFAS, leading to new staff being recruited to operate and manage the game. Despite claims that MyNet Games has a large number of operating personnel to accept any game regardless of genre or platform, the staff would be less familiar with SIFAS’ codebase and gameplay. This has resulted in two problems that cropped up in SIFAS.
First is based on the staff’s unfamiliarity with SIFAS’ codebase. Given that MyNet Games staff were not the original developers of SIFAS, they may introduce bits of code that inadvertently alter the game or introduce new bugs. For instance, in one of the recent School Idol Channels, the song for the Voltage Rally changed from Torikoriko PLEASE!! to Mirai no Bokura wa Shitteruyo, the song from two weeks ago. What might have happened is that a MyNet Games staff member accidentally changed the code for the Voltage Rally song, shifting the Voltage Rally back by two weeks. This example not only shows how unfamiliar MyNet Game staff were with SIFAS’ codebase, but the reduced resources and staff time towards SIFAS meant that the bug was not fixed in time before the School Idol Channel ended. This highlights that it would take longer for MyNet Games staff to identify and fix SIFAS’ bugs and problems which would demotivate players from playing the game.
Second is based on the staff’s unfamiliarity with SIFAS’ gameplay. MyNet Games staff have little to no understanding of how the game works due to less staff time being dedicated to understanding the game. Hence, they would be less familiar with SIFAS’ gameplay (which is vastly different from other rhythm games) or its meta (i.e., which cards are powerful or not powerful).
For instance, in the Year of the Tiger Unit, Assemble! marathon event in January 2022, all three URs, including the event UR, had the exact same attribute, type and skill set as their respective UR cards in the Pure White event (March 2021 in Japan, April 2021 Worldwide). The only differences were in their stats and their art work. By copying UR cards from a previous event, it shows a lack of understanding from MyNet Games of SIFAS’ meta. This makes it likely that they will not keep the meta balanced, either introducing underpowered cards that have no impact on the meta or overpowered cards that can disrupt the meta (and making players pay to get them).
Given the terrible working conditions in MyNet Games, it is not surprising that no KLab staff would want to transfer to MyNet Games to keep working on SIFAS. Even if KLab’s financial situation is dire, they would rather stay in KLab to work on a new game than move to MyNet Games to work on something whose future is uncertain.
An analytics approach to game management cannot solve everything
A data-driven approach to game management cannot solve everything as it neglects the inherent flaws of SIFAS and the reasons why the game is failing. MyNet Games uses analytics and AI to manage its games, analysing different kinds of data such as user loyalty data and game costs based on the performance of past games. It then uses the results of these analyses to take different actions on various games, from marketing promising titles to reducing costs to boost profit margins or even terminating unprofitable games. This approach, based on past performance of previous games, forces MyNet Games to adopt the same strategies to manage different games which stifles innovation. It also ignores the unpredictable behaviour of humans and the unique gameplay elements of each game. This can be seen by the fact that after the transfer to MyNet Games, some games become tougher to play with more pay-to-win elements. These actions are in an effort to quickly milk as much revenue as possible before it falls, leading to their discontinuation.
Combined with the reduced time budget to manage each game, MyNet Games will not have sufficient time to understand and fix the problems of each game to improve quality and restore profitability. In the case of SIFAS, this is aggravated by KLab being less invested towards SIFAS as they believe that it is on the decline. This will be worsened by MyNet Games as they will have less time to understand the problems of SIFAS and make meaningful improvements on the game. Hence, SIFAS is under the mercy of MyNet Games’ ruthless operation and management procedures which is not adapted to the unique elements of SIFAS.
Explaining Bushiroad’s role in SIFAS’ further decline
The saving grace of SIFAS is that it is being managed by Bushiroad. As the publishers of SIFAS, Bushiroad can direct MyNet Games to improve certain parts of SIFAS, set up promotional campaigns (such as allowing SIFAS players to enter a lottery for online viewing tickets of Niji’s 4th live if they clear L!L!L! in chapter 30, hard mode), and has the final say on whether SIFAS continues or is terminated. However, Bushiroad has been laissez faire on SIFAS while KLab was still running the game. While Bushiroad was not the publisher at the time, it did recruit a producer to oversee SIFAS. As one of the gaming partners of SIFAS, it should at least intervene to get SIFAS back on track. This did not happen when season 2 of SIFAS’ story went out of control, where Bushiroad did not intervene in time to defuse the situation. If Bushiroad and Sunrise had foreseen this and forced the writers to rewrite the story, the fate of SIFAS might have been different.
With publishing duties handed over to Bushiroad, they now have more power to decide where SIFAS should go, and how it should be promoted. It is unclear how responsible Bushiroad will be to keep SIFAS running smoothly. For instance, Bushiroad decided to speed up BanG Dream! Girls Band Party on the Global server to catch up to Japan. This has caused a lot of consternation among players as events are out-of-sync with their respective holidays and less time was available for staff to prepare and implement updates and fixes, ironically causing delays. This highlights how problems in games can be not just the fault of the developer but also the publisher.
Additionally, SIFAS is at the mercy of Bushiroad who can decide whether to continue the game or terminate it. This is not helped by the announcement and release of Love Live! School idol festival 2 MIRACLE LIVE! (SIF2) which introduced a lot of uncertainty on whether SIFAS can keep running in the future. As soon as the game was announced, Bushiroad poured all their efforts in promoting the game while neglecting SIFAS. Consequently, SIFAS’ popularity and player base dropped as players eagerly await for the new Love Live game, putting it in a further downward spiral that may lead to its termination.
Hence, just as much as SIFAS’ further decline can be driven by MyNet Games’ actions, we must also consider how Bushiroad may contribute to the decline.
Conclusion
The transfer of SIFAS from KLab to MyNet Games is regrettable given that KLab had given up on SIFAS towards the end of them operating the game (and the fact they have resorted to NFTs to recoup their losses instead of fixing how they develop and operate their games). It is reasonable that, with more time and effort poured into it, SIFAS would bounce back. It is also reasonable that, should it be transferred, SIFAS can be given to a developer that is passionate about Love Live and is willing to improve the game to restore its growth and reputation.
Instead, KLab have handed it off to MyNet Games, a game services company that has less resources to operate or improve SIFAS. As highlighted in the post, SIFAS was at the mercy of MyNet Games’ management which is known for spreading its staff thinly across many games and for ruthlessly terminating games it does not see as profitable. Bushiroad might also aggravate SIFAS’ decline, given how unpredictable they will be to keep the game operating smoothly or promote the game in the face of a new Love Live game. Hence, at best, SIFAS would survive, albeit with no prospects for future growth. At worst, SIFAS would be shut down, to make way for new games that are more faithful to Love Live or have better gameplay than SIFAS. That is when the final nail in SIFAS’ coffin will be hammered.
References
- MyNet. (2021). Financial Results Briefing Materials: 3rd quarter of the fiscal year ending December 2021. MyNet Co. Ltd., Tokyo. https://pdf.irpocket.com/C3928/gK0G/VKkO/O6Xm.pdf.
- https://gamebiz.jp and https://www.4gamer.net were used as the main Japanese websites for collecting dates on the launch, transfer to MyNet Games and termination of games operated by MyNet Games.
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