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The Unstoppable Growth Of Mobile Gaming

Gaming apps on smartphones and tablets are huge business

23Jan

When people talk about the gaming industry the conversation usually begins with console gaming’s big titles. Famous franchises like Call of Duty, Assassins Creed, FIFA, Mario, Grand Theft Auto, Need For Speed, etc., have ludicrously high production value, extensive marketing campaigns, dedicated fan bases, and years of online video content dedicated to them. Console gaming has the ability to tell interesting stories, provide gamers with an escape from reality, build brands that last decades, and become important parts of the cultural conversation.

Crucially, though, it is not gaming’s biggest market. In fact, it isn’t even close. Despite the immense popularity of the likes of Xbox and PlayStation, it’s mobile gaming that dominates the market, with titles like Clash of Clans and Candy Crush Saga played by far more people than Call of Duty. Downloads for the latter hit 500 million in 2012, and mobile gaming is even more ubiquitous than many realize. Offer someone a newspaper or a game of Mario on their morning commute and the vast majority will apparently choose the latter.

And the numbers will make for surprising reading to anyone that assumes console gaming is still dominant. According to gaming market intelligence company Newzoo, the global games business rose to $108.9 billion in 2017, with mobile devices pulling in the lion’s share of that revenue. At 42%, mobile’s share tops that of PC (23%) and even console (31%), with smartphones alone bringing in 32%. When forecasting what the situation will look like in 2020, Newzoo estimates that mobile will make up over half of a $128.5 billion market, with smartphone and tablet gaming bringing in a whopping $64.9 billion.

Perhaps even more surprising is the percentage of app revenue made from games. In 2017, Newzoo estimate that 82% of app revenue came from games, representing some $46.1 billion. Fast forward to 2020 and the overall percentage will be slightly smaller (at 76%), but it’s still a dominant section of an incredibly sizeable pie. The growth in smartphone usage worldwide is at least part of the reason for mobile gaming’s projected growth, with 2.32 billion current users growing to 2.87 billion by 2020, and as connectivity improves in less developed parts of the world the potential audience for gaming apps is vast.

One of the main reasons for mobile’s continued and seemingly unstoppable growth is its explosion in China. According to Newzoo, APAC territories accounted for some $51.2 billion of the global gaming market in 2017, or 47% of the worldwide total. When combined with the Middle East and Africa, these regions are seeing speedy growth when compared to the more steady markets of North America and Europe.

Another potential reason for the seemingly unstoppable rise of mobile gaming is developments in augmented reality (AR) technology. The overwhelming success of Niantic’s Pokémon Go in 2016 brought the nascent technology to the attention of mainstream consumers, crucially requiring nothing more than a smartphone to run. Snapchat’s use of AR extends back to its introduction of filters in 2015, but Pokémon Go’s focus on location-based gaming gave users a taste of what overlaying a digital world onto the real one might look like going forward. Appetite for AR gaming has been whetted, and there are countless companies receiving significant funding to produce the next Pokémon Go – if they can harness even a fraction of the buzz around Niantic’s global success, AR will drive the mobile gaming industry to even greater heights.

And, so, there are very few signs that mobile gaming will see anything except a continued upward trajectory and flood of revenue. As smartphone users get more comfortable with in-app purchases, and game manufacturers employ more clever techniques to encourage gamers to part with cash, the incredible popularity will be even better reflected in revenue. The games may not be as sophisticated, and the revenue models may border on the manipulative at times, but mobile gaming is huge business, the scale of which threatens to leave console gaming trailing behind. 

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