Mobile gaming

Mobile gaming industry could yield revenues of $77bn in 2020

In May, Newzoo published its annual Global Games Market Report, once again assessing the potential for the gaming industry worldwide, including mobile-based, desktop and console-based gaming. During these trying economic times, Newzoo believes gaming has provided a much-needed form of escapism in 2020.

According to the report, all aspects of the worldwide gaming industry experienced increased revenues and player engagement in the past year. Interestingly, it was mobile gaming which saw the biggest increase, with Newzoo forecasting global annual revenues of $77.2 billion for 2020, which is a 13.3% year-on-year rise.

Newzoo have identified three key elements as to why the mobile gaming industry is likely to experience more sustained growth than console and desktop PC gaming this year.

Minimal barriers to entry

When it comes to mobile gaming, there are few – if any – barriers to entry for players. When you consider that two-fifths of Earth’s population now own a smartphone, it’s easy to see that there is an audience of billions ready and waiting to download and play mobile apps. By comparison, cost is often a barrier to entry in the console gaming market. Individual console video game titles invariably cost £40-£50, which is more of a substantial investment than mobile titles.

Furthermore, the initial cost of buying the latest video game console hardware is also somewhat prohibitive. Although Sony’s new PlayStation 5 has not officially had its RRP published at the time of writing, video gaming analysts anticipate the console coming in at approximately £449. If it is priced any closer to £500, this might make it a very difficult sell, particularly to casual gamers. It’s a similar issue with Microsoft’s next-generation console, the Xbox Series X. This too is likely to priced around £450, which is still a major stretch for most households even if it is designed to usher in a next-level console experience.

On the flip side, a huge proportion of mobile gaming apps are free-to-play, requiring users to download and install the app onto their handset or even their SIM card to get started. Of course, some mobile games are built using the freemium model – enticing gamers with apps that are free to play in the initial levels but requiring small investments to unlock additional levels or to improve game features. Nevertheless, these investments are a drop in the ocean compared to the likely costs of a new PS5 or Series X title.

An alternative to desktop gaming cafes

PC gaming cafes are all the rage, particularly in the Far East. These cafes offer local area network (LAN) gaming, whereby gamers can compete against or work with other gamers in the same establishment in their favourite games. In China, the most popular title played at PC gaming cafes is Dungeon&Fighter. The temporary closure of these cafes in recent months has hampered many of the big-name developers of PC titles, including Nexon – but their revenue has remained strong elsewhere in Asia, with South Korea driving revenues up 78% year-on-year thanks to titles such as FIFA Online 4 and MapleStory.

Those who would ordinarily pay to enter their local PC cafes are increasingly turning to mobile gaming apps instead. Although this may only be a short-term measure, even if a small percentage of these desktop gamers become hooked on mobile gaming as an alternative to desktop titles, mobile gaming will once again have expanded its player base.

Mobile game development makes titles easier and faster to release

Purely and simply, the development of a mobile gaming app tends to be much less complex than building games for console or PC. One of the main factors behind the initial success of the mobile gaming industry was the simplicity of its games. Most of the time, there are not huge amounts of skills or manoeuvres to master; players can just load up the app and get started in genuine pick-up-and-play fashion.

The advent of HTML5 technology has also ensured the design and build of mobile apps is more efficient than ever before. Gone are the days of mobile developers having to design multiple iterations of the same app to function on mobile devices for certain operating systems or screen sizes. This has been a significant boon in the iGaming industry, whereby the latest mobile slots have been designed to be cross platform, providing slick and consistent gaming experiences across desktop and mobile. Across different gaming niches, this is made possible via browser-based gameplay rather than a native app approach.

Newzoo anticipates the demand and engagement of mobile games to continue to grow – perhaps even quicker – in the coming months. By the end of this year, it predicts that around 2.6 billion people will be playing some form of mobile games. The real challenge for mobile gaming developers is turning players into payers, with less than two-fifths (38%) currently happy to pay for their mobile entertainment. The freemium concept will continue to grow in the coming months, enticing players in to experience games and storylines before asking them to part with their cash. By now, players will already be invested emotionally in the titles – which makes freemium such a good model for developers going forward.