What Went Wrong with Knockout City?

Knockout City is among the numerous online games slated for closure this year, with its shutdown scheduled for June 6, roughly two years after its initial release. GamesIndustry.biz spoke with Guha Bala, co-founder of Velan Studios, to delve into the reasons behind the game's demise. Initially, Knockout City got off to a strong start when it launched as a mid-priced premium title under Electronic Arts, bolstered by its inclusion on Xbox Game Pass. However, by the time of its launch, the competitive environment had shifted, with most multiplayer-only titles transitioning to free-to-play models. Despite selling fairly well, it wasn't enough to sustain the flow of content as a mid-price premium title. As a result, Knockout City adopted a free-to-play model a year after its launch, with Velan Studios dropping EA as its publisher and handling the game independently. The developer aimed to avoid divisive strategies commonly used in the free-to-play space, opting for cosmetics-only microtransactions and eschewing loot boxes and pay-to-win models. When the free-to-play version was released, the game faced several challenges, including a significant drop-off in retention and monetization around the end of August, which didn't align with expected seasonal variations. Upon further investigation, Velan Studios discovered that inflation and currency devaluation were severely impacting discretionary spending, affecting all free-to-play games at the time. The economics for newer free-to-play games had become unsustainable, leading Velan Studios to decide to sunset Knockout City. The team chose to commit to the end of the ninth season of content, providing a full two years of experience with the game and one year with the free-to-play model. Bala hopes that the lessons learned from Knockout City can be applied to a potential sequel in the future, acknowledging that a cosmetics-based, free-to-play game requires massive scale to be economically sustainable. He suggests that indie studios aiming to bring innovation to the space should do so on a smaller scale, targeting hundreds or thousands of users. Looking at Knockout City's structure, Bala remains confident that the moment-to-moment mechanics and competitive play experience were well-executed but acknowledges that the meta structure didn't cater enough to all players, particularly those without the requisite twitch skills. To improve retention in the future, Bala believes it's essential to offer more pathways for growth and progression. He also notes that the current wave of online game closures can be attributed to macroeconomic factors, such as inflation, which have a more significant impact on free-to-play economies. The market can only sustain a limited number of popular live service games, with players committing to one or a handful of titles. Bala agrees, suggesting that games must either be among the top few huge ones or serve a niche audience extremely well, with focused monetization strategies. He points to FIFA as an example, where the premium game appeals to a broad market, while FIFA Ultimate Team serves a smaller audience and monetizes highly. For Knockout City, Bala believes the game could go broad, but its competitive nature means it's tough to appeal to a broad market. The key is to provide something that can be broad while serving niches extremely well from a monetization standpoint. As for the market, Bala expects to see more online and live service games close in the near future, attributing the current wave to timing, particularly for developers supported by public companies. He emphasizes that it's not the end of games-as-a-service but rather a cycle, and it's essential to take stock and adjust the worldview that everything can be free-to-play and still maintain sustainable economics.