The Gaming Industry has been more popular than ever. With player numbers expected to pass 3 billion by 2023, and global revenue also expected to pass $200 billion by 2023, it is an exciting time for this ever-expanding market. It has been an interesting year for gaming as a whole, particularly with the impact of COVID-19. All areas of gaming have been significantly impacted, and these changes are expected to have long-term effects. Mobile gaming has seen a larger effect than most industries. It is only partially due to the fact it currently holds the largest market share. We summarise the recent reports on the past year of gaming, with a focus on the mobile gaming market.
Mobile gaming has seen a significant increase
Mobile gaming currently holds 40% of the market share, in terms of revenue. This increases to 49% if you include tablet gaming. It has also seen the largest increase in revenue of any industry section of 15.8%, which is over twice the 2nd largest increase (6.8%). Due to the success and accessibility of mobile games, traditional PC browser games are slowly fading into non-existence. They now only hold a meager 2% of the global gaming revenue, which is only decreasing; -13.4% from last year.
The prevalence of smartphones and physical simplicity required for mobile games is the main reason mobile games were able to gain such a foothold in the first place. The ongoing investment and innovation in mobile games are why they continue to thrive. Almost everyone has a smartphone now, making it the best market to tap as a new game developer. Most gaming markets tend to target the 18-30 age demographic, whereas mobile games are free to target just about any audience due to the abundance of smartphones.
The fastest-growing regions for mobile gaming are in Asia and the Middle East. Due to the rapidly developing economies in the past decade in those areas, luxury goods are becoming much more available. However, the reason being smartphones once again being the most accessible.
Companies are investing more in mobile gaming
In the last decade, gaming is finally being recognized for the permanent market-force that it is. Most people between the ages of 12 and 30 play games today. In the past few years, we have seen younger generations moving away from Social Media and into gaming environments as the go-to way to socialize online. This shift is pushing the tech-giants (Facebook, Google, Amazon, etc.) to enter the gaming industry in more significant ways. Investing in gaming companies simply isn’t good enough, these tech-giants now need to enter the market themselves to keep up!
An interesting development is that more people are using games as a backdrop for “hanging out” with their friends. Games may drive conversation but are frequently becoming a side-draw rather than the main attraction. This has caused the emergence of community-driven voice-chat services (e.g. Discord) which facilitate gaming as a form of “hanging out”.
The richness of gaming worlds and unprecedented levels of engagement from players is providing unique opportunities for advertisements and marketing. This is a very new development, as a traditional or poorly placed advert can ruin an experience. As gaming becomes increasingly immersive (particularly with developments like Virtual Reality) these opportunities are becoming akin to real-world advertisements. It is only a matter of time before gaming adverts are treated the same as real-world adverts.
The Chinese market has, once again, exploded the mobile gaming scene
The Chinese government must approve any game (including mobile) before it is released in Chinese (app) stores. In 2018, the government placed a 9-month freeze on any new game approvals. This was already a slow process, but completely stopping any new games from entering the market for 9 months. It was potentially crippling to any Chinese developers. So, what did these developers do? They adapted.
Surprisingly, this 9-month freeze was one of the best things to happen to Chinese developers. Whilst it did cause many smaller developers to go under, it forced many developers to look to the Global market to survive. Developers that survived the difficult initial period and successfully entered the Global market saw a huge boost in revenue.
Historically, China has a very low proportion of console players, so this shift was particularly noticeable in mobile gaming. This also led to an increase in the number of mobile game clones due to many developers struggling to keep afloat.
Many Western publishers are now collaborating with Chinese developers to produce mobile versions of AAA titles. PUBG Mobile and Call of Duty Mobile (which currently sits at the top of the international mobile charts) are both Western titles produced by Chinese developers. Similarly, Chinese tech-giants (e.g. Tencent and NetEase) are investing in overseas studios and establishing a global foothold mobile gaming. Tencent is currently the largest gaming company in the world in terms of revenue, primarily through the mobile gaming market.
The impact of COVID-19
Many more people are turning to games during the lockdown period as a form of escapism. With a lot of traditional entertainment unavailable, gaming is a much-needed relief for many people during these difficult times. There have even been events (concerts, talk-shows, even weddings) hosted in a variety of online worlds. Most games include some form of chat, allowing people to communicate in a more engaging way than a video-call.
Mobile gaming has particularly thrived in these conditions due to its low barrier for entry and relative simplicity. Most people already own smartphones, removing the largest barrier for entry in console or PC gaming, physically acquiring the hardware. The lower complexity for playing compliments the low barrier for entry and enables new players to easily enter mobile gaming. This lower complexity also translates into developing mobile games. Their development has stayed fairly steady despite the lockdown.
The gaming market is thriving during these times due to an increased player-base. However, these effects are expected to reverse when the lockdown is lifted and people seek outside activities with an increased passion due to their inaccessibility during the lockdown. Due to its (almost) unique ability to play anytime and anywhere, mobile gaming is expected to be less affected by this reversal.
The one drawback of mobile gaming is its notorious difficulty in converting players into payers. Currently, only 38% of the 2.6 billion mobile gamers pay for games. While the level of engagement is expected to stay high, companies are going to be challenged with generating revenue from a market base that has grown accustomed to the free-to-play model.
Overall, this has been a fantastic year for mobile gaming, even with the current state of the world. Mobile gaming is here, and it’s here to stay. It has already established itself as a major player. With increasing investment from multi-disciplinary companies, mobile gaming is only expected to increase its market share.
As it is still a relatively young industry, we can expect much innovation to come over the coming years. It should be an exciting time for both players and developers alike. Will the accessibility of mobile gaming drive the market to new heights? Or will free-to-play models limit what is possible? Only time will tell.