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Forever Apps

Gaming platforms have similar profiles to Forever Apps

A Framework for Consumer Apps

Today, we want to suggest a high-level framework for how to compare consumer apps, games, and gaming platforms. Interestingly, end users showcase a similar behavior across all of these categories; both in consumer apps as well as games (and game platforms). In short, consumers spend an immense amount of time in what we view as “forever apps” whereas non-forever apps experience faster churn and must compensate with faster (and sometimes higher) per user monetization.

The below breakdown is supported by examples that are certainly not exhaustive, yet they paint a picture of the types of apps that consumers experience and use. In our view, consumers spend their time across three categories of apps: 

  • Forever Apps: these are the platforms and applications that people use for years on end, because they have an evergreen store of value for the consumer on an hourly, daily, or weekly basis. 
  • Examples: Twitter, Instagram, LinkedIn, Facebook, Uber, Spotify, Gmail, YouTube, Venmo, Ring, Netflix, Amazon, The Weather Channel
  • Characteristics: churn is low but if it increases that is detrimental (signals a platform shift), and meets an ever present need/value prop to the consumer, has the most flexibility in regards to monetization (ads, freemium, upsells, etc).
  • Short Term Apps: these are the platforms and applications that most people only use for a relatively short period of time (1-12 months) or infrequently (once every 2-6 months). Oftentimes, these apps bring core value around a life change or event.
  • Examples: Zillow (buying a house), Kayak (travel planning), Carvana (buying a car), Ticketmaster (events)
  • Characteristics: churn is expected at some point (but not too quickly), meets a core need for the user around a season of life or specific event/activity, and monetization is typically through ads, marketplace models, or paid subscriptions.
  • One-Time Use Apps: these are platforms and applications that are tied to specific life events that are incredibly in-frequent, so you are likely to use an app in each category only once and then delete it until years down the road when you potentially revisit that life event. 
  • Examples: Common App (college applications), TheKnot (wedding planning), RetirePlan (retirement planning), Ancestry (genealogy), Namly (baby names). 
  • Characteristics: high churn is a given, meets an acute and time sensitive need, maximizing a short-lived LTV via ads or commission based (sometimes premium but not often).

That Same Framework, but for Games:

In video gaming, there is a similar dynamic of forever IP, short-term games, and games people usually only play for a bit and never return to. The below is not an exhaustive list but it provides a general idea for how the above framework for consumer apps can also be applied to game IP. 

  • Forever IP: games that have stood the test of time (5+ years), have continually released new versions/updates to extend the life of the IP (either via live-ops or new releases), and are games that people come back to (even years later). 
  • Examples: League of Legends, CounterStrike, Call of Duty, Fortnite, Grand Theft Auto, Rocket League, Mario, World of Warcraft, Dragon Slayer, and many others. 
  • Characteristics: high retention metrics, longer session times, great network effects (driven by multiplayer), 3rd party IP integration, cross-media, and the monetization model is varied between free-to-play, in-app-purchases, premium game sales, battle passes, and subscriptions (note: ads are not the primary driver for games of this caliber)
  • Short-Term IP: games that are played for a period of time but users eventually churn. While this does not mean they were not a commercial success (many are) or that they do not still have a user base, it is fair to say that their glory days were time-boxed to a shorter period (perhaps 2-6 years on average).
  • Examples: Splitgate, Heroes of the Storm, Runescape, Valheim, Battlefront and a long list of other games (often AAA but sometimes smaller studios) that were once incredibly popular yet were unable to establish themselves as forever franchises. 
  • Characteristics: launched in the hopes of becoming a forever franchise, churn happened yet was unexpected, and their monetization followed the same path as forever IP yet fell short of expectations (hence why they faded, diminished, or sunsetted entirely). 
  • One-Time IP: these are typically casual or hyper casual games. There are very few games in this category that become long-standing games (like Candy Crush), so the expectation is that players will play for 15-100 days and then churn out quickly (never to be seen again). 
  • Examples: instead of listing specific games (there are tens of thousands here), this is best described by various game genres such as; hypercasual, casual, and puzzle games (there are exceptions). This style of game is most typically seen in mobile free-to-play (not as often in console or PC).
  • Characteristics: high churn, low conversion to paid, monetized primarily through ads, and the entire model hinges on a high volume of players (likely driven by a high marketing budget). Because One-time IP is interchangeable (any hypercasual game can be swapped out for many others), One-time IP can only monetize with ads as users are unwilling to pay.

When looking at consumer behavior across both general apps and games, it is interesting to see that consumers tend to spend most of their time on Forever Apps and Forever IP. The rest of their games are all interchangeable or short-lived, they are supplemental “down time” types of games. However, it is worth noting that the short-lived nature of various consumer apps and games does not mean they were not commercially successful (for founders and investors alike), it just means that their value-prop tends to hold on to consumers for much shorter periods of time (and that is sometimes ok: Zillow, Kayak, Valheim). 

Gaming Platforms = Forever Apps

In the gaming industry, there are platforms that mimic the same characteristics that we see in consumer “forever apps”. Unlike consumer apps that typically offer a service or platform, games focus on offering the consumer an additional experience (3D, immersive, competitive, etc).

  • Gaming Platforms: these are the platforms, technologies, and infrastructure that are powering the gaming industry. For this framework, we will only highlight the B2C examples as they mimic the consumers apps and games we outlined above. 
  • Examples: Discord, Twitch, Roblox, Minecraft, Steam, Origin, Xbox, Playstation, Nintendo and many others that are up-and-coming. 
  • Characteristics: these platforms own the relationship with the consumer, have strong network effects, and great flexibility in how they monetize (ads, free-to-play, IAP, subscriptions). 

In short, gaming platforms have very similar characteristics, economies of scale, network effects, and business models that we have witnessed with the Forever Apps (Twitter, Uber, Spotify, etc) that have generated incredible returns to investors. It is also worth highlighting that the volume of competition around a game is far higher than the number of competitors that are chasing the next generation of gaming platforms (which often have greater upside and economies of scale). 

Key Reflections & Takeaways: 

  • Consumer Apps: dethroning a forever app is extremely difficult and requires an immense amount of capital, product differentiation, and a core value prop. For short-term and one-time use apps, it is important to highlight that “churn” is a core aspect of those business models and that is not always a bad thing due to higher LTV or being able to monetize more users. 
  • Games: games are usually trying to establish themselves as forever IP (core IP, endless liveops, additional versions, etc). The exception to this is mobile free-to-play, where short-term play (high churn) is accepted and the business model accounts for this. Games remain highly capital intensive, highly competitive, and have low exit multiples on revenue (1-4x). 
  • Gaming Platforms: gaming platforms for the consumer are seeking to be forever products, mimicking the success we have seen across other gaming and consumer verticals. These platforms have great economies of scale, less competition, solid network effects, and flexible business models. While successful gaming consumer platforms are equally as rare as forever IP, they have a much stronger risk/reward profile for investors and founders alike. 

The above framework provides a structured approach to evaluating consumer apps, games, and gaming platforms. It is especially useful for how we think about risk/reward profiles across various platforms and business models. As we have mentioned before, our team at Konvoy continues to be excited about investing in the technology, infrastructure and platforms of the gaming industry.

Forever Apps

Gaming platforms have similar profiles to Forever Apps

Welcome to Game Changers, the podcast that takes you beyond the games and into the heart of the gaming industry's future. Brought to you by Konvoy, a Denver-based venture capital firm investing in the platforms and technologies at the frontier of gaming. This podcast is your backstage pass to the pioneers, innovators, and visionaries who are redefining how we play and experience these virtual worlds.

In each episode, your hosts—Josh Chapman, Jason Chapman, and Jackson Vaughan, the founders of Konvoy — invite you to join them for candid and open conversations with the industry's most influential leaders. These guests are the “Game Changers”, the masterminds behind the scenes who've built remarkable enterprises and continue to push the boundaries of what's possible for our industry.

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