- 1 Definition / Scope
- 2 Market Overview
- 3 Key Metrics
- 4 Market Risks
- 5 Top Market Opportunities
- 6 Market Drivers
- 7 Market Restraints
- 8 Industry Challenges
- 9 Technology Trends
- 10 Pricing Trends
- 11 Regulatory Trends
- 12 Other Key Market Trends
- 13 Market Size and Forecast
- 14 Market Outlook
- 15 Technology Roadmap
- 16 Distribution Chain Analysis
- 17 Competitive Landscape
- 18 Competitive Factors
- 19 Key Market Players
- 20 Strategic Conclusion
- 21 Further Reading
Definition / Scope
Mobile games are games designed for mobile devices, such as smartphones, feature phones, pocket PCs, personal digital assistants (PDA), tablet PCs and portable media players. Mobile games range from basic (like Snake on older Nokia phones) to sophisticated (3D and augmented reality games). Today’s mobile phones - particularly smartphones - have a wide range of connectivity features, including infrared, Bluetooth, Wi-Fi and 3G. These technologies facilitate wireless multiplayer games with two or more players.
Augmented reality games are the latest mobile gaming trend. These programs combine a real-world environment with advanced computer graphics to provide the effect of augmented reality. An example is Sky Siege, where a player shoots virtual helicopters that appear to fly around the room. In actuality, a live image of the player's room is captured by the device camera and fed to the display screen, resulting in augmented reality to the player.Advanced mobile games usually require fast central processing units (CPU), dedicated graphics processing units (GPU), large random access memory (RAM) and high-resolution display screens. Most developers use a royalty-free, cross-platform application programming device known as OpenGL ES to write games with 2D or 3D graphics.
Mobile games tend to be small in scope (in relation to mainstream PC and console games) and many prioritise innovative design and ease of play over visual spectacle. Storage and memory limitations (sometimes dictated at the platform level) place constraints on file size that presently rule out the direct migration of many modern PC and console games to mobile. One major problem for developers and publishers of mobile games is describing a game in such detail that it gives the customer enough information to make a purchasing decision.
The global mobile gaming market is rising at an exponential rate in this age of digitalization. It has grown from the smallest segment to a multi-billion-dollar industry. Half of the global video game revenue is generated from mobile gaming and are the fastest growing source of income in the video game industry.
With easy access to smartphones and tablets; the global Mobile Gaming Market has seen tremendous growth. With the continuously evolving technology such as cloud, sensor technology and augmented & virtual reality and blockchain has created massive demand for the mobile gaming market as they provide an improved gaming experience to the users with realistic visuals. There are mobile games that depend on real-time data along with augmented reality and use GPS technology to access satellite positioning for obtaining the player's location and show their geographical topographies into the games.
- The global games market was predicted to be worth $134.9 billion in 2018.
- The largest sector of this was mobile gaming which was estimated to be worth $63.2 billion, 47% of the global games market.
- Asia Pacific stood as the largest market for mobile gaming market and the region expected to continue its dominance during the forecast period (2018-2022).
- China is the largest market for mobile games and the country occupies a significant share of global revenue. The fact that China has the largest number of smartphone users in the world further supports the aforementioned sentence.
- Battle Royale and esports would continue to represent the strongest areas of growth during the forecast period.
- India would emerge as another important market for the mobile gaming app companies in the coming years. The country in recent years has witnessed a high proliferation of smartphones, a factor aiding the mobile gaming market.
|Base Year||2018||Researched through internet|
- Revenue loss due to mobile hacking
In the rush to get apps in the market, most developers keep security at the backseat. Often, time to market is everything for them and that can prove to be costly. Some real world examples show how mobile developers have lost 50% or more of their potential revenue because of hacking. For example, Monument Valley is a paid mobile game available on iOS, Android and also Amazon Kindle for $3.99. In a statement made by the developers of this game, Monument Valley was installed on 10 million devices but they actually sold only 2.4 million copies. Moreover, only 5% of the install on Android and 40% of installs on iOS were paid for, having almost $6.3 million loss in revenue.
- Unauthorized installations and piracy
There are dozens of third party app stores around the world especially for Android apps. In many cases, app developers work with these third party app stores to host their apps and receive revenue. Some of these app stores end up hosting pirated versions of apps that people download. Not only does this deny any revenue to the actual app developers, most of these apps also contain malware, thus bringing bad name as well. Multiple game developers have reported 90% or higher piracy rates for their games. The large bulk of piracy is seen coming from China and Russia.
Top Market Opportunities
- More than 2.4 billion people are expected to play games in 2019, according to a new report. It also expects the game industry to generate $148 billion in revenue in 2019. Most of the users are on mobile platforms, and the report notes mobile gamers remain an untapped opportunity for brands and advertisers.
- The number of users who are ready to pay to play are increasing day by day. In U.S. alone 23% of most frequent gamers pay to play online games. This has increased sharply since 2004 when it was just 9%.
- Analysts expect industry sales to nearly triple, to about $14 billion, by 2019. If you can attract a big enough following, these games can be hugely profitable. Some companies have successfully tapped Facebook’s massive user base to earn millions of dollars, or seen massive paydays through acquisitions--or both. Last year, Electronic Arts bought PopCap Games, maker of Bejeweled and Plants Vs. Zombies, for $750 million. And in March, Zynga bought rival Omgpop for $180 million, after its game Draw Something hit 35 million downloads in just two months.
Increasing Number of smartphones
The proliferation of smartphones and tablets has given mobile gaming companies a wide population of users to attract and acquire. The mobile gaming audience in the world continues to grow steadily, even though gaming is already common activity. The sustained popularity of gaming apps and new smartphone users has primarily drive this growth.
Rising popularity of social media networks
The increase in online gaming has run in parallel to the rise in smartphone adoption and social networking. These cultural shifts helped bring new gaming audiences to the fore, including females and older adults. As social media is popular among almost all age group, many games have adopted to use social media as a primary source of gaming. The main reason behind this adaptation is because one can play, chat, talk and stream on a single platform.
One of the latest trends in video games is 4K technology. It allows gamers to have an incredibly vivid experience with the total number of pixels exceeding 8 million. One of the first phones having this feature was the Sony Xperia Z5 Premium. A great number of casual and pro gamers love to use these monitors showing crisper images and more details.
- The dynamic consumer requirements associated with display themes is one of the major retstraints for the market as each game is developed considering a particular theme at its initial stage which is difficult to modify later. Also, due to increasing market competition, the timeline of developing games along with custom requirements has narrowed which is affecting the quality of products. This increasing competition thereby is one of the major challenge for the growth of the mobile gaming market.
- Low monetization rate of players is expected to be a challenge faced by mobile game developers over the forecast period, as only a marginal percentage of gamers are expected to pay for full-versions of games.
- Daily new game releases are growing competition in game market. They are weakening the strong position of already hits like Candy Crush saga, Clash of Clans, etc. Popular game developer are struggling to make their game competitive.
- Users are fickle. They always seek a new gaming experience. They easily get bored of playing same game again and again. If game developers don't make any change in their game, they will tend to loose users rapidly or their users will jump to another game for a change.
- Mobile game development requires investment, not only for the time of development, but even after completion of development. This comes for game marketing expenses and investment for bringing new varieties of users frequently.
Cloud services are on-demand services. Similarly, gaming on clouds is games on demand service. It is new and emerging trend. Mobile Cloud Gaming is known as collective gaming exhausting mobile devices that connects with the cloud as an outsider system for dealing with game interactions and scenarios. It enables innovative features such as heterogenic-platform processing, power saving, and computational or processing capacity enhancement. Mobile Cloud Gaming have many advantages like scalability to overwhelmed end user hardware constraints, cost-effectiveness for software development along with its distribution, flexible business model to earn profit, providing effective antipiracy solution and providing the facility to click and play games.
Augmented Reality Gaming
Augmented reality gaming (AR gaming) is the integration of game visual and audio content with the user's environment in real time. Unlike virtual reality gaming, which often requires a separate room or confined area to create an immersive environment, augmented reality gaming uses the existing environment and creates a playing field within it. Pokémon GO, considered the breakthrough AR app for gaming, uses a smartphone’s camera, gyroscope, clock and GPS and to enable a location-based augmented reality environment. A map of the current environment displays on the screen and a rustle of grass indicates the presence of a Pokémon; a tap of the touchscreen brings up the capture display. In AR mode, the screen displays Pokémon in the user’s real-world environment.
Cross-platform play describes the ability of players using different video game hardware to play with each other simultaneously. It is commonly applied to the ability for players using a game on a specific video game console to play alongside a player on a different hardware platform such as another console or a computer. for instance, the world’s most popular battle royale game is available on pretty much any platform you can think of, including iOS and Android.
- The mobile games is the cheapest in the gaming segments. Most of the games are available for free in App stores and Play stores while those games that are paid, cost on average of $1 to $3 only. The free games uses hybrid monetization models such in in-app ads and in-app purchase.
- Pc and consoles gaming are expensive as they are priced over $20 to $200. They are expensive because of the big budget development costs.
- Under the new set of procedures released by China’s State Administration of Press, Publication, Radio, Film and Television (SAPPRFT), all mobile games released in the People’s Republic of China going forward must adhere to specific criteria dictated by the agency’s comprehensive approval document and be submitted for review 20 days in advance of the game’s release date. Among the laundry list of prerequisites, mobile game publishing companies must also provide information such as the release date, download link, and other operational details to a local province-level government organization within a week of the release. If approved, the publishing company is required to display a “Healthy Gaming Notice” prior to the start of the game.
- Laws regulating the licensing of remote gambling are currently being implemented in an increasing number of jurisdictions across Europe. Many of these laws are therefore in their infancy and may not yet have been faced with questions of mobile gambling.
- In the U.S., COPPA (Online Privacy Law For Kids) is directed towards businesses (websites, mobile apps, Facebook apps, etc.) that have kids under the age of 13 as their audience. The agreement must disclose all parties that collect personal information from kids while using the game. It needs to disclose how you collect this data, how you store it and how are you using it (for what purposes).COPPA also requires all mobile games to get a parent’s verifiable consent over the collection of their kids’ personal information.
Other Key Market Trends
- In 2018, there were 2.2 billion mobile gamers worldwide. 203 million of them were in the US. 56% of them play more than 10+ times a week.
- As of December 2018, Candy Crush generates only $1.1 million daily, while Fortnite shows off with $1.3 million. Pokemon Go tops the chart with its $1.4 million in daily profits.
- The Betting on Billions report found that gaming was the third most popular app type, together with music. Half app users have opened a gaming app in the last week. The most popular kind of app, by far, is social media, followed by shopping apps. 50% of mobile app users play games (and the same percentage of music apps).
- Mobile games managed to grab 46% of the global gaming revenue in 2017. In 2018 the number went up by 5% and it grew by 3% more in 2019. By 2020, that number is expected to reach 59%.
- Casual games are the most popular Android game apps worldwide, with 59% percent reach among Android mobile device users while Puzzle games were recorded as the second most popular Android game apps globally, with 57.29% reach among Android mobile device users in September 2018.
Market Size and Forecast
Forecast by region (only mobile gaming)
- The market value of mobile gaming in North America was $15.8 billion in 2018 and is expected to reach $60 billion in 2026.
- The market value of mobile gaming in Asia pacific was $30.96 billion in 2018 and is expected to reach $109.29 billion in 2026.
- The market size of investment banking in Europe, Middle east, Africa was $11.3 billion in 2018 and is expected to reach approximately $35 billion in 2026.
- The market size of investment banking in Latin America was $5.05 billion in 2018 and is expected to $ 21.3 billion in 2026.
Top 5 Countries by Revenue (in US Dollars) and # of Players (global gaming market including consoles, mobile, video games etc)
- United States of America (209.5 Million Players) – $36,869M
- China (586 Million Players) – $36,540M
- Japan (32.20 Million Players) – $18,952M
- Republic of Korea (12.4 Million Players) – $6,194M
- Germany (13.43 Million Players) – $6,012M
- The mobile gaming market was valued at US $63.2 Billion in 2018 and will be growing at a CAGR of 19.6% and is predicted to reach almost US $214.3 billion during the forecast period from 2019 to 2026. Mobile gaming is also projected to dominate all other sectors of gaming. By 2021, mobile gaming (which includes tablets) is expected to account for over half (59%) of the entire gaming market.
- The world’s mobile gaming population is expected to rise from 2.2 billion in 2018 to over 2.7 billion by 2021. China is one of the countries where mobile gaming is most popular, with 459 million total mobile gamers—the equivalent to the U.S and Japan’s populations combined. In 2018, China’s mobile gaming market accounted for more than 25% of global revenue.
- The U.S., Brazil and Mexico are expected to emerge as lucrative markets for online mobile games in terms of growth potential as well as monetization. The Asia Pacific regional market is expected to witness a surge in gamers over the forecast period Europe and Middle East regional markets are also expected to witness high growth potential.
With the emerging technologies such as augmented reality and sensor technology has given a tremendous growth to the Mobile Gaming Market as they provide an enhanced gaming experience to the users with realistic features. Location based games such as Geocaching, Pokemon Go and Bot Fighters are currently trending in the market. These games are enabled with augmented reality and use satellite positioning through GPS technology for obtaining the player's real-time cordinates for playing games on devices.
The latest trends prevalent in the mobile gaming market are console quality mobile games and wearable devices for gaming. The introduction of smartphones enabled with powerful graphics and increased storage capacity allows developers to build console quality games across various mobile platforms. Wearable devices such as starVR, Emotiv Insight, HTC Vive and Microsoft HoloLens with virtual and augmented reality are enhancing the overall gaming experience.
Distribution Chain Analysis
Value chain analysis, which represents analysis of an organization or industry that uses value-creating activities, is a useful way to understand influence of key players during video game development process. From a closed innovation perspective, the figure above illustrates 5 critical industry players that put value in the development of video games.
Every step adds value to the final product and incomes are distributed among agents according to preset percentages. Hardware manufacturers can best be described as console, gaming platform manufacturing companies, which produce hardware components and devices to process video games: PCs, gaming consoles, tablets, handhelds and smart phones.
Nintendo, Sony and Microsoft are the top hardware manufacturing companies for video game platforms. Developers are key players in this value chain analysis. They are the ones that develop software to make players able to play video games with specific devices as indicated above. Software developers do not always work in video game publisher companies.
They might own different software developer companies that might sell software licenses or develop software for video game publishers. The development cycle of the video game starts with design, research, implementation, testing and lastly mastering. Video game publishers are software marketing companies that pay commissions (licensing fees) for rights to publish video games or contract and sub-hire developers to produce video games for them.
Afterwards they market the game titles and distribute them to retailers and end-consumers. As with book publishers, video game publishers are responsible for their product manufacturing, distribution and marketing.
The global mobile game industry is booming like no other. A horde of 500 000+ titles is inhabiting Appstore alone, and new recruits are tagging along at an exponentially growing pace. With mobile, Apple faces a bruising fight with Android, which has begun to win the race in terms of numbers of phone activations.
The fierce competition is driving the mobile market forward at a faster pace, and that should result in a faster growing mobile games market. Android app downloads have crossed 5 billion, and there are about 40,000 games on Android now.
The result is a spiral of competition, where Android and Apple are propelling each other forward at faster and faster rates.
Pricing There are lots of companies who provide freemium games which means that can be downloaded free. There is a large base of users around the world who are into this free games. Lots of big companies who have been providing this services has been successful overnight. The main reason behind their success was how they are using games for monetization, they simply give games for free but the items in the games are need to be paid.
Since the mobile game industry is evolving and new technology are popping into existence, the gaming industry is coming out with different innovative games to attract the users.
Key Market Players
One of the leading and recognizable mobile gaming companies, Supercell is based in Helsinki, Finland. Founded in 2010, Supercell has had an astonishing growth curve thanks to popular game offerings like ‘Clash of Clans’ and ‘Hay Day.’ In 2017, the company scored a profit of around $1 billion with 100 million active monthly users. Supercell is currently valued at an impressive $10 billion.
A small time American gaming company previously owned by Google, Niantic has gone from obscurity to being counted amongst the top mobile gaming companies in record time. Niantic lab exploded onto the scene with its most famed augmented reality game Pokémon Go. With over 100 million downloads, Pokémon Go became one of the most headlined games in 2016. Last year, Niantic announced that its successor to Pokémon GO will feature the incomparable, and immensely profitable, Harry Potter.
Tencent is a leading value-added internet services provider that became the first Chinese tech brand to be valued at over $500 billion. The 19-year-old company has showed no signs of slowing down- indicative of the massive Chinese surge in tech advancement. Gaming makes up a significant part of Tencent’s revenue, with its most well-known game being ‘Honor of Kings”.
One of the top Chinese online and mobile gaming companies, NetEase poses significant competition to Tencent. Although better known for its distribution of World of Warcraft and other Blizzard games in China, NetEase’s foray into mobile gaming has been a successful endeavor thus far. It presently holds the number one position in the Chinese App Store with the game, Fantasy Westward Journey. The company is also ranked fourth in terms of global revenues amongst mobile gaming companies. Currently, NetEase is also the number two iOS publisher in China.
A little-known game developer that began with text-based role-playing games a few years ago, Machine Zone is now a prominent player in the mobile gaming industry after launching the “Game of War: Fire Age.” Machine Zone was previously known as Addmired and rebranded after it annexed $8 million in funding from Menlo Ventures.
Netmarble is South Korea’s largest mobile gaming company and was founded by Bang Jun-Hyuk (the most headlined entrepreneur). One of Netmarble’s games wound up in the top 5 grossing charts spanning 78 countries around the world, thereby earning this pioneer instant recognition amongst global mobile gaming companies. The company has reached this milestone with two games actually- Lineage 2 Revolution and Marvel Contest of Champions. According to App Annie, Netmarble was ranked No.8 pertaining to global in-app sales last year.
King Digital Entertainment
King Digital Entertainment, the makers of ‘Candy Crush,’ is a world-leading interactive entertainment company specializing in mobile gaming. The company’s Candy Crush franchise has surpassed 2.75 billion downloads since the first game in the series launched on mobile five years ago. King Digital Entertainment’s franchises include Candy Crush, Pet Rescue, Farm Heroes, and Bubble Witch.
EA, the popular video game company, is making well timed and profitable sorties into the mobile gaming domain with EA Mobile. The creator of sports-related games including, FIFA 15 Ultimate Team, and Madden NFL, EA has seen a substantial shift in the amount of business it transacts over mobile devices. EA Mobile hit a milestone of $500 million in 12-month revenues in 2016, and for the subsequent year, mobile revenues surpassed $637 million.
Mixi Inc.’s ‘Monster Strike’ game is a mobile juggernaut in Japan. It has frequently been ranked amongst the top grossing mobile gaming apps on both iOS and Android, boasts of over 40 million downloads, and has spawned a devoted fanbase.
GungHo Online Entertainment
Gungho Online Entertainment is the largest game publisher in Japan, well-known for the ‘Puzzle and Dragons’ application, a combination of a standard gem-matching game and a Japanese-style RPG. This wildly successful game has already been downloaded 47 million times in the region. While it has been immensely successful in its native Japan, uptake in the lucrative and critical US market has been slower.
Nintendo is one of the most vibrant makers of mobile games in the industry. The company enjoyed a profitable 2017, thanks to the Nintendo Switch and the long awaited foray into mobile gaming. From ‘Super Mario Run’ to ‘Animal Crossing’ and ‘Zelda’, Nintendo is consistently launching a range of mobile gaming applications that will eventually help them annex a significant stake in the industry.
As the mobile gaming revolution continues to spread worldwide, developers should consider country-specific differences to identify ways to best maximize scale and revenue in each country. They should research the types of games that are popular in each region, the gameplay behaviors in that region, the context in which games are played, and the gamer’s typical length of gameplay. This information can also help developers decide where, when, and how to use in-app advertising to their advantage.