Consumer & Entertainment Services
A selection of reports and forecasts for 2020 Trends to Watch from our Consumer and Entertainment Services team.
Whereas once mobile games were seen as the poor relatives of the videogame world, they are now its main and fastest-growing source of revenue. According to Ovum's Mobile Games Market Forecast: 2017–22 store-distributed mobile games – which Ovum refers to as "app-store games" or "gaming apps" – should account for more than half of global videogame revenue by 2019, based on end-user spend alone.
In emerging markets, app-store games have hogged more than half of videogame revenues since 2016, whereas in developed markets, they will not quite reach the halfway mark throughout the forecast period. Although developed markets are where most revenue from app-store games is concentrated – about two-thirds last year – they are also where console and PC penetration is at its greatest.
App-store games continue to register impressive revenue and download growth rates – 23% and 14%, respectively, in 2017, according to Ovum estimates. They also continue to comprise the lion's share of mobile app revenue (excluding that not transacted via app stores, such as app-based online shopping). They are creating demand in new mobile technology areas, such as virtual and augmented reality.
With the growth curve for console games revenue pretty much flat, and that for PC games nowhere as bullish as that for mobile games, traditional videogame publishers are increasingly diversifying into mobile.
Some publishers are collaborating with mobile studios to roll out mobile versions of console and PC hits, as Nintendo has done with Niantic for Pokémon Go and Bluehole has done with Tencent for PlayerUnknown's Battlegrounds in China. Others are acquiring their way into mobile. For example, Tencent has built up a large portfolio of partly or wholly owned subsidiaries, including Glu Mobile, Netmarble, Pocket Gems, and Supercell.
Revenue per download for app-store games is on the up, due to both
On the monetization front, new models are emerging, such as sponsored locations for AR games such as Pokémon Go, and subscriptions, in the case of casual games aimed at young children, such as coloring-book apps and learn-through-play games, which benefit parents who want the peace of mind of not having their kids exposed to hidden in-app purchases.
Whereas 10 years ago the revenue of top-grossing mobile game companies was counted in millions, it is now counted in billions. Ovum predicts that global end-user spend and in-app-advertising app-store games revenue combined will be worth $87bn in 2018 and $119bn in 2022.
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