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Will Games Continue To Dominate The App Landscape?

The mobile gaming industry is soaring, and shows no sign of slowing down

29Nov

Thanks to the overwhelming popularity of apps like Facebook, Instagram, WhatsApp, Google Maps, and Uber, you might think that the app market is dominated by social media, lifestyle, or messaging apps. Social media, for example, is something you’d expect to find on almost any smartphone, and retention is high almost by definition. However, in terms of market share, though, all other types of app pale in significance up against one clearly dominant giant: Gaming.

Some 24.4% of all available apps on the App Store are in the Games category (Business comes in a distant second at 10%), and these apps account for some 66% of the app market, including in-app advertising and app purchases. According to a report from analytics firm App Annie, this dominance will shorten somewhat to 55% by 2020, but this chunk represents $189 billion. Some of the most famous and ubiquitous apps - think Candy Crush or Angry Birds, the latter of which was made into a movie - are gaming apps. It was impossible to ignore Pokemon Go, too.

One luxury afforded to game developers is that they can try new things with relatively little at stake. Games can be put together, tested, edited, or abandoned just as readily as any other type of app, but the user is far more ready to accept gimmick or whimsy in its production. Again, take Pokemon Go as an example - the game used actually quite basic augmented reality technology, but it was the novelty that led to its explosion in popularity.

Having said that, the market for mobile gaming apps is becoming increasingly competitive and, with larger gaming companies wading in, the market has never been more hostile for small developers. Nintendo, for example, has one mobile game on the App Store and another, Mario Run, in the works, with plans for this slow entry to continue into 2017. Zynga - creators of social games such as FarmVille and Mafia Wars - is planning to expand into India with a focus on the growing market of female gamers. Again, it plans to launch in 2017 if initial feedback to the offering is positive; next year could be a significant one in the development of the mobile gaming industry worldwide.

Other industries can learn a lot from the success of gaming with regard to its retention rates and monetization wins. Games are very easily localized with language options, and when these more fundamental choices are combined with a Pokemon Go-style real-world setting, the appeal can be universal. Games are also a step ahead with regard to push notifications and targeted native UI messaging, an area app developers across industries would do well to improve in.

And the dominance of gaming in the app world has led many other apps to ‘gamify’ - to work in an element of gaming into an industry that’s otherwise not been touched by it. Duolingo is a languages app with clear game elements, Tinder has - for better or worse - been charged with the ‘gamification of dating culture,’ and almost all fitness or quit smoking apps, for example, are gamified to some extent.

It also looks as though a subscription model is set to break out onto the gaming app landscape. As with the likes of Netflix and Spotify, the subscription model is arguably beneficial for both brand and customer; the customer gains access to a wider range of products for a relatively cheap monthly fee, and the brand can project its finances far more accurately based on a number of subscribers rather than more ephemeral metrics like app downloads. If the narrative of many other industries is to repeat itself in the world of gaming, any such offering would tower over the competition.

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