Checking In on Trends in Mobile Gaming

With over 600,000 games launched on the iTunes store, and more than 41 billion dollars in revenue being generated (which is more than the yearly revenue of console and PC games combined), 2016 was a year of skyrocketing growth for the mobile gaming industry.

Sounds promising, right? For some independent studios, not so much. The number of mobile game developers has increased, and the market has become more competitive than ever, making the path to success a thorny affair. According to InMobi, about 55% of app developers make less $1,000 a month, and overall, Forbes estimates that apps on iOS earned mobile developers an average of $4,000 per month, while Android app developers averaged $1,125 per month.

We’re over halfway through 2017, so how is the industry doing so far?

Some big players in the industry are growing even bigger, Netmarble’s $2.3 billion initial public offering values the company at $11 billion, which could have ramifications for the $46.2 billion  a year global mobile games business. Consolidation is growing among players, and Netmarble has already driven some consolidation by buying Kabam’s Vancouver division. Also, the market’s push (driven by increasing competition) to make mobile games cheaper and cheaper - a trend referred to by some as the "Race to the Bottom" creates new obstacles on the path to profitability for developers.

What does this mean for the future of mobile gaming? Has it reached its peak and started the natural decline of a mature market? Or, on the other hand, are there still new opportunities for growth?  Which industry trends might give insight into what the future holds for mobile gaming? So many questions (most of them we cannot answer without the aid of a crystal ball, I’m afraid), but perhaps some of 2016’s success stories can tell us about where the industry is headed...

In case you missed it, strategy games were consistently in the top 10 highest grossing list of games in 2016. Games like Clash of Clans, Game of War, and Mobile Strike have a following of dedicated and active users. Complex gameplay, content, and engagement were and still are, key drivers to their success. These games still appear to be going strong, with Clash of Clans celebrating its five year anniversary earlier this week!

In addition to strategy games, the big “disruptor” of 2016 was undoubtedly Pokémon Go, with over 87 million new installs in its first month. As you may recall, installs dropped quite significantly in the months after launch, but the Augmented Reality driven game just celebrated its one year anniversary last month, bringing in $1.25 billion from In-App Purchases so far. Will the buzz surrounding Augmented Reality (AR) continue to gain momentum? With the highly anticipated debut of OS 11 just around the corner, developers will be able to build AR apps for iOS using ARKit.

Whatever the next big trend in mobile gaming turns out to be, revenues are still growing. According to Sensor Tower, revenues from mobile games grew to $12.2 billion in Q2 of 2017. That’s a 32% increase from a year ago. Mobile games made up 77% of the App Store’s revenue and 88% on Google Play. While realistically, not every game will make it to the top 10 (or even top 100) highest grossing games list, every game has the potential to optimize and maximize their monetization strategy. We can help, get in touch!