In recent times, more and more people are opting for a digital platform to play games on rather than appearing at gaming hubs in person. One reason is that instead of going to these physical locations, people can now stay in the comfort of their own homes while playing popular online games such as live blackjack. In general, industry trends indicate that revenue from physical gaming locations is decreasing, and while it is difficult to gauge whether this is a temporary blip or proof of lasting change, it makes sense to begin considering other avenues for the gaming industry to maintain and develop its market growth. Through this shift in platforms, the question also arises of who the biggest benefactor behind this transition is.
In contrast to non-digital gaming, the mobile gaming industry is relatively new but has been developing rapidly and upholding a high revenue stream. Though mobile gaming used to be the smallest segment in 2012, it currently dominates the entire global games market, with mobile games generating $70.3 billion or 51% of the entire market in 2018, as a testament to its tremendous growth.
Compared to other platforms such as PC or console, mobile gaming takes up the majority of the entire market on its own. There is no evidence of such growth slowing down either as the revenue trend follows a near exponential model with its being an expected $100 billion industry by 2021.
Beyond mobile gaming consumers (an estimated 2.1 billion players in 2019) heavily outweighing all other gaming platforms, the customer segmentation is also much more even than other gaming industries. In 2019, 63% of all mobile gamers were women while gamers between the ages of 13–34 represented 43% of the total age distribution. This shows that though younger audiences have traditionally comprised the majority of the age distribution for gaming, mobile gaming shows that it’s accessible enough for people of any age group to show significant usage rates. Resultantly, whatever games released on a mobile gaming platform can expect to see an increase beyond their target age groups.
Studies have indicated that games such as Blackjack, Roulettes, and Texas Hold ’em Poker have seen recent success in the online sphere, in accordance with what CEO of Blue Ocean Capital, Antony Liu has said, “Online gambling has been performing quite well in the overall online gaming industry and we feel optimistic about future prospects in this industry. Resultantly, we have made several gaming investments in this scene.”
Mobile gaming is no doubt currently having great success and showing strong growth, but what may not be so apparent is that many of them are backed by venture capital funds. For example, Clash of Clans — one of the hottest mobile games in the apps store since 2013, is developed by a mobile gaming company called Supercell. Since the release of this game, Supercell has been able to generate much revenue through help from venture capital financing. Top venture capital firms such as IVP, Accel Partners, Index Ventures and Felicis Ventures all invest in the mobile gaming industry. Specifically, IVP is the largest supporter of Supercell’s Clash of Clans, having invested an early $130 million back in 2013 which has yielded tremendous results as Supercell is now valued at well over $10 billion. Thus, though most investments by venture capital firms and family offices, like Blue Ocean Capital, are kept confidential, it is reasonable to believe that they are actually the biggest beneficiaries of the uptrend in the mobile gaming industry through their strategic investments in this segment.
About Blue Ocean Capital
Blue Ocean Capital is a cross-border private equity firm dedicated to actively pursuing investment opportunities in Entertainment Management, High-Tech and Blockchain, Healthcare, Family Office and Cross-border Real Estate Investment. We are committed to capital appreciation and value creation. We strive to be creative in our structuring approach to consummate transactions quickly and efficiently. We understand the need to be nimble and decisive in this competitive marketplace to capitalize on investment opportunities.
- Wijman, T. (2018). Global Games Market Revenues 2018 | Per Region & Segment. Retrieved from https://newzoo.com/insights/articles/global-games-market-reaches-137-9-billion-in-2018-mobile-games-take-half/
- Golightly, D. (2018, March 30). Mobile Game Study Reveals Interesting Demographics & More. Retrieved from https://www.androidheadlines.com/2018/03/mobile-game-study-reveals-interesting-demographics.html