The Mobile Game Industry Made Over $20 Billion Last Quarter
It’s set to outdo consoles and desktops by 3.1x and 2.8x this year
It’s no secret that the pandemic has drastically altered our lives. The phenomenal spike in consumer spending via app stores is an unprecedented shake-up of the status quo. While game developers have traditionally set their sights on consoles and desktops in the past, $20 billion is a truckload of green bills no company in their right mind would pass up. We’ve already seen efforts in the mobile gaming space from behemoths like Nintendo but none of them eclipse games found on hardware dedicated to gaming.
Strength in numbers
In an eye-opening report from the analysts at App Annie, games accounted for an impressive 80% of the money consumers spent on the Google Play Store last quarter(65% for iOS users). The COVID-19 pandemic resulted in a 15% surge YoY in weekly game downloads with over a billion downloads occurring every week. $20 billion is an amount that has the potential to make game developers rethink their approach when it comes to focusing on dedicated hardware. Truth be told, a predicted lead of 3.1x and 2.8x over consoles and desktop gaming this year makes me wonder why I was hyped for the next-generation consoles in the first place. Why would Sony and Microsoft battle with narrow hardware margins if they could make more money off devices consumers already have? The latter has already begun its move away from traditional console wars into the lucrative mobile gaming market.
This also drives home the point that mobile gaming could very well be the future of gaming itself, despite the popular opinion that smartphones aren’t hardcore enough. Companies only care about such opinions when they shape trends, which clearly isn’t the case here. Games like Fortnite and PUBG found widespread success once they hit smartphone app stores, tapping into an audience that embraced a digital-first environment, one ready to spend big bucks on cosmetics and other in-app purchases. It’s no surprise that giants like Google, Amazon, and Microsoft are shuffling about to bolster their cloud gaming efforts to merge their hardcore and casual earning streams with cloud-based subscriptions.
That $7.5 billion Bethesda acquisition by Microsoft wasn’t a move against Sony’s PlayStation 5, it’s a decision that could teleport franchises like DOOM and The Elder Scrolls into a market that earns $20 billion per quarter. Don’t tell me it’s not about the money, trillion-dollar corporations aren’t charity operations.
Mobile gaming is the future
Like it or not, gaming companies won’t sit idle and wait for the $20 billion cash cow to walk away. With iconic franchises like Pokémon and Call of Duty getting in on the feeding frenzy, it won’t be long before you get to play as Master Chief or Kratos on a smartphone. And I’m not just talking about streaming, I’m talking about mobile-first variants of games that trade complexity for accessibility. Sure, the move might not get the hardcore gaming crowd’s approval. But Microsoft and Sony will be laughing all the way to the bank.
Mobile games have the potential to form steady streams of revenues in a market that was once crowded with $60 AAA titles. Subscription models and in-app purchases have finally taken off. Despite being over 4 years old, Pokémon GO currently sits at the top of the charts when it comes to cash being spent in-game. Constant updates ensure that players are hooked up with new things to do on a recurring basis. It’s an enticing model both for game developers who want some more coin and consumers who just can’t seem to get enough of a game.
With hyper-casual games dominating the downloads charts, developers will be forced to use existing IPs in creative ways. They’ll have to craft experiences that retain the original series’ charm while opening doors for an audience that they haven’t served before. While games like Among Us work pretty well already, games that had earlier relied on lightning-quick reflexes and muscle memory will now have to rethink their mechanics. With the mobile gaming market on a steep rise, it’s the perfect time for age-old PC and console developers to throw their hats into the ring. After all, it’s already making more than desktop and console gaming combined.