With over a million units sold, and approaching a million paying subscribers using them, the next step in Nex Playground’s global expansion – backed by fresh investmnent and an expanded leadership team including EA founder Bing Gordon and former Niantic and Zynga CFO Jeff Shouger – is Germany. The family-friendly micro-console will officially release in the territory later this year, retailing at €319.
It’s a predictable next step in the firm’s global expansion, after a blockbuster US launch that saw it outsell Xbox over Black Friday, and a successful UK launch in March, backed by the addition of a Dr Who title to its subscription-only suite of family-friendly games. The firm is confident of seeing similar success in Germany, having already seen personally-imported consoles appear in the territory as they sign into its games platform.
Nex Team president Thomas Kang tells GamesIndustry.biz that the firm’s UK launch is “beating forecasts, which is a good sign. We’re learning new things about the UK market in that the dynamics are a little different than the US.”
“We’re omnichannel, so we’re at Smyths, Argos, TikTok and Amazon. We’re finding really good traction on TikTok. TikTok is a great discovery and conversion channel in the UK – it’s a more well-formed commerce platform than it is in the US. It’s like a virtual showroom.”
Within two months of launching in the UK, over one thousand creators have produced user-generated content on TikTok, “showing people how the product is used [which] is a pleasant surprise for us.” Most of these creators are organic and not affiliated with Nex’s marketing efforts.
Nex Playground offers a curated catalogue of over 60 games, which CEO David Lee says is enough to start a “discovery problem” on the main interface. The firm is now starting to deploy user-facing features to address that, including the ability for users to favourite games, an editorally curated “star pick”, and using the device’s camera and playing history to surface suitable games for the people in front of it.
He says the future could include user surveys, too: “What matters most to you? Which events and new items do you want to earn, and what types of games do you play? We aim to identify relevant content for each user and unlock those technologies, while always prioritizing privacy.”
“Every major publisher has approached us to review their old Kinect catalogue and consider their IPs”
Thomas Kang
Nex Team is selective about its IP partners. “We want to work with quality studios to build high-quality games for the platform,” says Lee, “and some indie studios come in as well.”
Kang notes this presents an opportunity to revive games from previous motion-control consoles. “Every major publisher has approached us to review their old Kinect catalogue, Wii catalogue,” he says, “and also to consider their IPs. We may be able to introduce these IPs so that younger folks can get introduced to their IPs sooner.”
From the back catalogue, the company has already launched Freefall Racers, a 2013 Kinect title originally released by Smoking Gun Interactive – now part of Keywords – which Lee says is being played by 150,000 families after its first month. “My prediction is that this game probably reachs half a million families in year one,” he says.
On the established-IP side, meanwhile, the firm recently announced partnerships with Sega and Bandai Namco for Sonic Forces: Rival Rush and Pac-Man, respectively.
Lee says he was initially sceptical about Pac-Man’s compatibility with motion controls but recognised its potential after internal testing. “You just use your finger to point where Pac-Man should go,” he says. “Pac-Man works because you see the entire map, identify goals, and strategise movements to avoid [the Ghost Gang] and navigate the space effectively.”
Nex Team chose a retro IP to appeal to families. “Grandparents and parents can play retro games,” he says. “With the new mode, they can play together and share a live introduction. Nex has been intentional about creating these opportunities.”
Lee adds: “An important aspect is how we work with IP partners and how we bring forward these family experiences with the IPs, meaningful experiences too. So it’s only on Nex Playground. We aim to continue being very intentional about everything that we do.”
Nex Team, like many in the industry, has faced ongoing component and memory shortages. As a result, the price of Nex Playground in the US increased from $249 to $299 earlier this year, a figure that Lee says “does not cover all the cost increases.”
Despite this, Nex Team does not plan to raise prices further, as the company remains committed to keeping its hardware affordable.
“We want to make sure our device is accessible to families,” says Kang. “We’re doing everything we can to maintain and absorb some of those cost increases to make it affordable while still driving markets.”
Lee added: “We are still maintaining a healthy distance from other companies because of our market positioning – we want to serve families with an easy-to-understand business model. So we can say, hey, these guys work their socks off, make the product better every week and deliver family entertainment at an affordable price.”
“At the end of the day, it’s about the quality of the catalogue and how we make it easy for users to access the games they like”
David Lee
The price of Nex Playground’s subscription service, Play Pass, remains unchanged at $89 annually or $49 quarterly, offering a curated selection of games.
“Our goal is not to have thousands of games on the platform,” says Kang. “It’s a finite number of very high-quality games that continue to get better as we want our craft and the technology on an ongoing basis – we want to make discovery easy and family-friendly.”
Lee agrees, adding: “At the end of the day, it’s about the quality of the catalogue and how we make it easy for users to access the games they like. For IPs, we haven’t rotated anything out yet. But in the future, I think it’s certainly inevitable.”
Play Pass is a “bright spot in the business” that has beaten its own expectations. “There are always people who say ‘we pause and then we resubscribe’, and we see the coming-back percentage is also high,” Lee says, adding that the attach rate for subscriptions has been getting “higher and higher – for some cohorts it’s already past 90%.”
“We have two Christmas cohorts now,” adds Kang. “These are big numbers of users. They renewed, sometimes, twice. And we’re seeing those renewal rates be higher in the second year than the first.”
The firm is confident in maintaining its future growth, citing the platform’s increasing reach in territories where it’s not yet commercially available – where it’s maintaining a similar attach rate as the official territories. “In Australia, over a thousand devices activated already,” says Lee. “I don’t know where they got it, maybe the US, maybe Amazon. But the attach rate is basically as high as what we saw in the US, even though there’s no localisation, and the customer support really doesn’t exist there.”