The Score: How Beatstar generated $73M in revenue — including $16M to rightsholders — in year one

By: Mat Ombler

Published: 2022-11-22

The Score is a collaborative editorial vertical exploring the intersection of music and video games.

In our research on music and the metaverse, we identified gaming as one of the hottest entry points for today’s artists to create and monetize visually immersive, interactive experiences around their music. Yet, the gaming industry also remains as misunderstood as it is overhyped, and carries a much richer diversity in experiences, perspectives, and formats than might make it into the mainstream media.

This column seeks to break down these gaps in understanding for a music-industry audience — highlighting of-the-moment opportunities for artists and their teams to collaborate with gaming companies of all shapes and sizes, across mobile, PC, and console games. Every two weeks, Water & Music member Mat Ombler will break down an underrated music/gaming case study — outlining specific insights around monetization models, marketing strategies, and creative tooling, while contextualizing the case study against higher-level business and technology trends. Our aim is for each issue to leave readers not only more informed, but also inspired to experiment and push the boundaries of what’s possible with music and gaming partnerships.

As a community benefit, we have also set up a brand-new, dedicated forum channel in our members-only Discord server for The Score, where members can discuss our findings and share music and gaming resources in between issues. We encourage you to pop into the forum, say hi, and even make a new post of your own!

Tl;dr

While Guitar Hero and Rock Band are the most successful rhythm games, it would be wrong to suggest that the rhythm game genre died with them in the last decade.

Recently, the genre has experienced a recent revival, through innovative titles combining rhythm elements with traditional gameplay. Crypt of the Necrodancer is a rhythm-based dungeon crawler that was so successful it led to a Legend of Zelda spin-off. Videos for the VR rhythm games Pistol Whip and BeatSaber continue to rack up millions of views. The recently released Metal: Hellsinger throws players into the pits of Hell to blast their way through a soundtrack featuring the vocalists from Trivium, Lamb of God, and The Refused. And let’s not forget Trombone Champ, the trombone rhythm game that’s amassed a massive online community of modders creating musical memes.

One of the most successful modern rhythm games — as measured by both revenue and payouts to music rightsholders — is Beatstar, a mobile music rhythm game from UK-based developer Space Ape Games that currently touts 1 million daily active users. In September 2022, Space Ape Games announced that Beatstar had generated $73 million in revenue — sharing over $16 million of its income with rightsholders.

Beatstar is bucking a trend by operating on a revenue-share model for its music licensing. For the most part, this model is unheard of in the video game industry. As we’ve covered in previous issues of The Score, artists and rightsholders are typically paid a flat upfront fee for sync licenses in games, with no royalty on game sales. But as business models for today’s popular games increasingly evolve towards a “LiveOps” approach of regular content and feature updates — many of which may center music artists or culture in the player experience — we’re seeing opportunities for the music industry to get a more regular cut of growth of the gaming sector as a whole.

We interviewed Space Ape co-founder and interim CEO Simon Hade to dive deeper into Beatstar’s unique approach to music, and what it reveals about the evolution of music monetization opportunities in games. Our conversation covers the challenges and complexities of music licensing, the rationale behind focusing on mobile rather than console, the role of video games as music discovery platforms, and why video games might be the commercial answer bands are looking for given the broken economics of streaming.

Music curation as a gaming business model

Except for BeatSaber, which features licensed music from Timbaland, Linkin Park, Green Day, BTS, and many more, most rhythm games rely on original compositions from smaller, independent artists due to the costs and complexities of licensing. This sparks the question: How did a mobile game such as Beatstar secure licenses for such celebrities as Bruno Mars, Blink 182, Lady Gaga, Billie Eilish, and Post Malone?

“It was a lot of work because we had to learn the business of music, and our partners had to learn the business of mobile free-to-play,” Hade explains. The free-to-play model that Hade refers to counts on users downloading a mobile game for free, enjoying it, and then spending money through in-app purchases to enhance their gameplay experience. In Beatstar’s free-to-play mode, you can only play so many songs per day, but you can spend money in-game to unlock an in-game currency known as gems, used to purchase additional tracks, 30 minutes of play and a one-week subscription of unlimited play ($7.99).

But Hades knew that to make Beatstar the success he hoped it would be, it needed to have the right music to incentivize downloads and engagement. He wanted to find a commercial model for artists that made sense, and for Beatstar to become a platform for millions of kids to discover new songs or rediscover classics that they wouldn’t typically access through traditional formats.

“We spent a lot of time trying to understand what was important to our partners, more than the money (because working with the biggest artists in the world is expensive),” says Hade. “What we found was that music discovery is kind of broken. There are 100,000 songs being uploaded to Spotify every single day. There’s no shortage of great music to listen to, so finding interesting ways to connect with fans and find new audiences is a constant obsession for labels and artists.”

As we’ve argued previously, the repetitive, immersive nature of video games makes them ripe as focused, high-impact music discovery platforms for artists and labels — providing instant, recurring access to millions of engaged players, with the follow-on consumption to boot. For example, Space Ape Games’ 2017 arcade racer, Fastlane, featured a selection of licensed tracks but also commissioned a song by UK grime artist Harry Shotta. With over 50 million game downloads, Hade believes this single was listened to around one million times.

“In Beatstar, we spend a lot of time curating the playlist and running events that expose people to a range of different music,” says Hade. “We knew we were onto something when some of our friends at Supercell – people from Finland who have a particular obsession with Scandinavian thrash metal bands – started asking for more Britney Spears. Beatstar makes you listen to songs in a completely different light, and the game mechanics incentivize you to try new songs, and this is incredibly valuable if you’re trying to break a new track.”

These playlists and running events form an essential part of Beatstar’s LiveOps, a term that refers to any new changes, updates, or improvements made to a game following its launch. Free-to-play mobile games typically have busy LiveOps calendars to encourage players to keep revisiting to try something new. For Beatstar, this often means collaborating with artists to introduce new tracks into the game, with Beatstar able to drum up excitement for the launch of fresh tracks in the game through its marketing efforts, which are assisted in no small part through the support of its majority stakeholder, Supercell.

“This is why the Black Eyed Peas chose to release their new single Don’t You Worry (featuring David Guetta and Shakira) in Beatstar 48 hours before the track dropped on streaming, and why we get so much interest from huge artists like Eminem, Camilla Cabello, Ed Sheeran, The Chainsmorkers and so on,” Hade explains.

“When you’re managing a service that you intend people to play for ten years, it’s important to find a partnership that aligns interests. We want to continue dropping new songs in the game and experimenting with different event formats etc., so a revenue share nicely aligns our interests in growing the game and our partners’ interests in promoting [the game] to artists and finding interesting content.”

What’s next for Beatstar and music in video games?

Despite the growing popularity of rhythm games in recent years and a flurry of music activations in video games such as those seen in Fortnite and Roblox, Hade believes there’s still much further to go when it comes to innovation in rhythm games. “There are very few people in the world who get both music and gaming,” he says. “Most game developers think of music as some sunk cost, and artists as marketing partnerships. Most people in the music industry think of gaming in terms of a Fortnite concert.”

Beatstar is a good example of the underlying business models and philosophies around music/gaming deals evolving to match the surface-level evolution in player experiences. But Hade also doesn’t shy away from the fact that securing the rights for the music in the game remains often an arduous and expensive process. When dealing with high-caliber songs with multiple writers and collaborators, getting sign-off from all of those individuals and entities can be challenging.

“Sometimes, the mere act of identifying who in the world needs to approve the use of some copyrights is a massive project in and of itself,” Hade says. “It took us years, and we were only able to do this because we had the backing of one of the biggest game developers [Supercell] in the world. I think everyone would be better off if it was easy to navigate all these laws and commercial obstacles, but at the same time I understand how these things have evolved over time and that you need to balance the conditions for innovation with the need for artists to be compensated and in control of how their work is used.”

Partially to offset these licensing challenges, Hade does plan to use similar partnerships with more independent, emerging artists and labels in Beatstar. “Our beatmappers often put in these amazing songs that no one has heard,” he says. “So, we’re always happy to hear from independent artists or small indie labels who have songs that they think would be a great fit.”

While there’s no doubt that partnerships between artists and video game companies require careful calculation, Hade says that one of the biggest lessons he’s learned from his work on Beatstar is it’s impossible to predict how successfully a song will connect with players.

“Maybe a few A&R moguls have the touch, but we have tons and tons of data, Ph.D. data scientists and thousands of A/B tests and billions of impressions — and we are still learning about what songs connect with whom,” he says. “Often, this tracks what you’d expect — it’s no surprise that a song with a billion streams on streaming works well in marketing — but then we might learn that it doesn’t work in the tutorial, but some lesser-known song that we never expected people who connect with somehow drives better engagement. Perhaps it sparks some curiosity. We’re constantly learning on that front.”

Community discussions

As a reminder, we’ve set up a dedicated forum channel for The Score in our Discord server, where members can discuss and share music and gaming resources in between issues. Thanks so much to everyone who has contributed so far — we’ve been super impressed by our community’s enthusiasm and range of knowledge on this topic!

We encourage you to pop into the forum, say hi, and even make a new post of your own. As a reminder, you can suggest topics for future issues directly in the forum by clicking here. If it gets enough upvotes and our editors find it compelling, we’ll feature it as the main topic in an upcoming issue and credit you for seeding the idea.

Here’s our round-up of the latest music & gaming stories being discussed in the Score forum: