Mobile gaming apps can be addictive and highly-profitable. A recent report by App Annie explores their growth between 2016 and 2018 – and identifies popular trends that engage consumers and earn marketing-topping profits.
Mobile gaming apps smash global revenue records
From any angle, mobile gaming seems to be a lucrative industry. Mobile gaming apps continue to dominate both the ‘gaming’ segment of app development and the ‘mobile’ segment of gaming, in terms of global revenue.
Nearly three-quarters of mobile spending is on games
74% of all mobile app revenue was spent on games in 2018, despite the fact that mobile gaming apps only captured around 10% of the total in-app time spent by users.
Mobile is also the fastest-growing sector of the gaming market and generates more revenue than every other format (PC/Mac, console, handheld) combined – a total of 60% of overall gaming spend, up from 25% in 2013.
All top-five parent companies for app development in 2018 (measured by global consumer spend) – Tencent, NetEase, Activision Blizzard, BANDAI NAMCO and Netmarble – are games-focused.
Just three countries dominate mobile gaming app consumer spend
Mobile gaming is dominated by three markets – China, the United States, and Japan – which, collectively, captured 75% of all consumer spending in 2018. That said, mobile gaming apps experienced significant growth across developed and developing economies alike.
However, China’s mobile gaming growth was limited in late 2018, as a government department restructure resulted in the gaming regulatory body freezing approval of new titles between March and December, which wiped around $200 billion in market value from the Chinese developer Tencent – the world’s largest gaming company.
It’s little surprise that Chinese game publishers are continuing to push their expansion into overseas markets – a trend that will continue, even with the government now approving new game titles. Total US consumer spend on games by China-headquartered companies grew 140% between 2016 and 2018.
Mobile gaming apps are increasingly impressive – and casual
Mobile game developers are leveraging two almost contradictory directions in technical improvement to drive their impressive growth in global revenue.
Mobile games can feature high-fidelity graphics
Mobile graphics increasingly give consoles a run for their money. ‘High-fidelity’ games push mobile GPUs towards console-level graphics by using advanced rendering techniques to maximize their efficiency.
What do ‘high-fidelity’ mobile games include?
- Advanced 3D graphics with high vertex counts
- Complex vertex and fragment shaders
- Sophisticated gameplay and potentially AI-controlled characters
- Sustained, high levels of GPU demand
Simple touchscreen controls are popular in mobile games
Meanwhile, mobile game developers have established sets of simple and addictive touchscreen controls that often appear in popular mobile games.
Top-five mobile gaming app leaderboards are dominated by two main gaming styles – each of which is built around one of these two development trends.
‘Battle Royale’ games leverage high-fidelity graphics and in-app purchases
As mobile devices catch-up to consoles in terms of their graphical capabilities, ‘battle royale’ games – like ‘PUBG Mobile’, ‘Fortnite’, ‘Rules of Survival’, and ‘Free Fire’ – place large numbers of players in online maps with scavenging/survival/fighting mechanics.
Fornite is free to download and play – yet it generated $2.4 billion in revenue from its audience of over 200 million players in 2018, through IAP (in-app purchases) of items, costumes, and exclusive access to certain features.
According to a study of 1,000 players by LendEDU, nearly 69% made IAPs, at an average of $84.67 each – giving Fortnight operating margins above 50% and some of the highest revenue-per-user rates in the industry.
‘Hyper-casual’ games are simple, addictive – and reliant on adverts
Games with simple and addictive gameplay mechanics – like Voodoo’s ‘Helix Jump’ and ‘Hole.io’ – are relaxing, replayable, and typically free or extremely cheap. Their developers rely heavily on video advertising to generate profits. Voodoo recently received an estimated $200m in funding from Goldman Sachs.
App Store spend could grow five times faster than the economy this year
Worldwide consumer spending on mobile gaming apps is expected to grow five times faster than the overall global economy this year – reaching a total of $122 billion, or double the size of the global box office market.
Expected mobile gaming app trends for 2019
- Mobile games will both lead the growth in consumer spend on apps, and remain the fastest-growing gaming format.
- Emerging markets like Indonesia will drive growth in the overall device install base – mainly through Android handsets.
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