Mobile games

The mobile games industry is thriving. Right?

After all, it's worth an estimated $35b (up from $30b last year). Also, Superdata, who report on the worldwide digital games market, revealed that two mobile games, Clash of Clans and Game of War, made more digital revenue than the top 10 console games combined.

The numbers serve to illustrate the pot, nay, hoard of gold available to the next person or team that releases the next Flappy Bird.  Last year, Nintendo surprised the industry (and no doubt caused some mobile game developers to worry) when they announced a partnership with DeNA to create mobile games together.

Warning sign 1 - Only a few companies are responsible for most of the industry's revenues

Only a select few actually get to indulge in the mobile game revenue pie. The rest fight over crumbs. Tech and mainstream media like to make a big deal out of the revenues possible in mobile gaming. But that's only half the story. The other half? According to business strategist Michael Wolf, the top 10 grossing games are responsible for generating over 25% of global app revenue.

Riches are available for the company with the right game at the right time, like Prune and Exploding Kittens, but it's still hard for a game to break through to the top of rankings without significant marketing dollars behind it.

King spends hundreds of millions to keep Candy Crush Saga and its spin offs at the forefront of your mind. Rival franchise Game of War reportedly had a $40m marketing budget to bring in celebrities like Mariah Carey and Kate Upton as the ‘face’ of the game. 

Warning sign 2 - People are spending less time gaming on their smart devices

This brings us up to point 2. Joe Public actually has an incredibly short attention span for games. A study by Flurry Analytics showed that Americans were spending much less time gaming than they used to. In 2015, Americans only spent 15% of their time playing games on their smart devices compared against 32 percent in 2014.

According to an App Annie report mobile game lifecycles are shortening, “With a timeframe of roughly four months after launch until downloads start to dry up, fast development cycles and continued innovation are necessary to see success in an increasingly less concentrated and higher tempoed space.”

However, Craig Palli, Chief Strategy Officer of app marketing technology provider Fiksu argues that the decline in active users for a game like Candy Crush “is completely normal”. The company analysed five very different games and found a “very consistent retention curve” across all the examples. 

Warning sign 3 – Downward trend for game development interest in mobile phones and tablets

The GDC (Game Developers Conference) annual State of the Industry report showed that in 2013, 55% of 2,500 game developers at the conference were making their current games for mobile devices. And 58% planned to release their next game on mobile. In 2016, only 44% were making a game for mobile and only 42% planned to make their next game on mobile. 

Graph mobile blog

I wonder if these figures actually relate to development resources shifting over to Virtual Reality (VR) covering mobile, PC, and consoles rather than indicating an actual drop in mobile game development interest?

In 2016, 16% of developers at the conference said they were interested or are currently working on VR titles, up from a low figure of 7% last year. Not surprising since VR is predicted to have its first billion dollar year in 2016, creating a driver of growth that could positively impact mobile game development and spur innovation.

Here comes a new challenger

Then there’s Nintendo - the biggest wild card entrant in the mobile game industry with 30 years’ of some of the most recognisable IP in the business like Mario and Donkey Kong. In fact, there’s widespread belief that all they need for monster profits is to put Mario on smartphones.

While they aren’t going to enter the market with a mobile port of New Super Mario Bros, work has been progressing on a new console strongly rumoured to be a mobile-console hybrid that may work with mobiles, PCs, and even rival consoles.

Despite the challenges raised in this post, the potential and impact of VR makes it an extremely exciting time to be involved in the mobile games industry. Videogame giant Sony also believes that mobile gaming is ‘on the cusp of a golden era’. Let’s see what the rest of 2016 holds…

Disclaimer: WiThink is written from a personal perspective. All views and opinions are those of the author.

Jonathan Sia

Johnathan Sia  

Johnathan is a Digital Media Assistant Manager for the Deloitte Go to Market Digital team. He is a technophile who grew up attached to a computer. Today, he's hooked to his gadgets via a bunch of USB cables. Twitter LinkedIn

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