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The Mobile Gaming Revolution: An End to Social Gaming?

The Mobile Gaming Revolution: An End to Social Gaming?

Aug 21, 2013

There’s a revolution going on! Haven’t you heard? Social gamers around the world are abandoning their monitors and keyboards for the shiny frontiers of mobile gaming, leading a trail of prospecting developers, pan and shovel in hand.

This year alone, more than 100 million people are playing mobile games in the US – almost 1/3 of the whole population. In Europe, a younger market which is still rapidly growing, mobile gaming is approaching 70 million players.

In today’s world we are more connected than ever before, as the Morgan Stanley Research group remarked “the growth in mobile internet is one of the most powerful trends [of 2013]…We estimate that the addressable market for mobile internet customers will be far larger than for desktop computing, reflecting the availability of smartphones.”

With an expanding market such as this, it is not difficult to see why it would be appealing to developers. While only 2 or 3 years ago social gaming on platforms such as Facebook dominated the casual gaming market, today many view mobile devices as still a relatively untapped gold mine yet to reach it’s peak.

Is it game over for social gaming then? Lately, a large amount of disinterest in Facebook is becoming more evident as teenagers, a crucial age group, end up being frustrated with the online platform. Moreover, the demographics under 30 are becoming increasingly¬†acclimatised¬†to instant access to everything – films, music and games can all be accessed instantly, on demand. The allure of being able to download a game within moments onto their smartphones, switch it for another one if they don’t like it, and then take it on the move is powerful indeed; why be restricted to their swivel chairs or sofas?

Megapolis, the city building game from Social Quantum.

Megapolis, the city building mobile game from Social Quantum LTD.

According to statistics compiled by web agency GO-Gulf, the social gaming industry is still growing, with global annual revenue increasing from $6.20b USD in 2012 to $7.49b USD this year, and expected to grow to $8.64b in 2014. Read between the lines, however, and we see the year-on-year growth has steadily declined, from 25% in 2012, 20% in 2013 and 15% predicted for next year.

Meanwhile, 51% of consumers paid for mobile games in the US, and most purchases were, in fact, from individuals who had previously started with trial versions, proving the theory behind the model to some extent. A staggering 90% of mobile game purchases were in the free-to-play department. Additionally, for today’s developers the idea of “freemium” content through mobile phones can in turn allow them to experiment with target audiences on a larger scale and use the metrics to generate more revenue in the long-term.

Multiplayer is also a key stength as mobile consumers will find time during commutes and other typically dead periods to challenge both friends and family to friendly competition; a time window impossible to leverage in social gaming.

The educational benefits of mobile games are also noteworthy, as 40% of children aged between two to four are smartphone and tablet users. As more technology literate children increase with each new generation it is to be expected that more ‘kid-friendly apps’ will be produced.

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In the midst of this financial struggle, social media giant Zynga Inc, while still dominating the social market with more than double the number of monthly active users than their closest rival King.com, is facing declining revenues, a falling customer base and a complete executive re-shuffle. Recently Zynga are reported to have lost 100 million players globally; inevitably a major factor in the decision to bring in former Xbox boss Don Mattrick to take over the reigns as CEO, who will be looking to restore the 15% drop in stock prices since July.

Analyst Tony Wible commented on a major factor surrounding these developments; “Successful social games benefit from a virtuous cycle as the popularity of a game makes it more enjoyable, pulls more users into the game, and helps promote other games. This helps reduce marketing demands and sustains revenue. This benefit is starting to turn against Zynga as the loss of players erodes the social experience in games, incrementally limits reinvestment, and makes it more difficult/expensive to promote games”.

Monster World, by Wooga

Monster World, by Wooga

A recent report by Super Data Research had established that “In early July, King dethroned Zynga as the leading social game developer on Facebook by number of monthly active users (MAUs), despite having a much smaller portfolio of titles.” King’s more complex approach toward gaming mechanics and design would explain their relative success. For instance, Candy Crush Saga generates an estimated $438,000 per day.

Prosperity lies also with Wooga, a social gaming team based in Berlin. Around 50 million people have played the farming sim Monster World, and 1.7 million continue to play daily through Facebook. With the introduction of fresh characters and a new underwater environment in August, Wooga relies on data obtained from monitoring players’ progress and updating Monster World‘s mechanics to make the game more enjoyable and long-lasting.

Despite the boom in mobile gaming and the successes highlighted here, figures reported by iMore last year showed that 80% of mobile developers didn’t make enough money to operate as a standalone business, and 59% of Apple store developers didn’t even break even.

Facebook recently announced plans to join the mobile gaming world with a publishing program. This bold move would support small to medium sized developers in exchange for revenue share, allowing amateur programmers to put their projects to the test. Perhaps this ambitious mobile platform will mark the beginning of an era of hybrid platforms spanning both worlds.

Clearly social gaming is not out for the count, as it continues to grow – albeit on a declining scale. Additionally, since the largest demographic of social gamers is still females over 45, this is a group relatively unaffected by smartphones, and thus may continue to provide a core user base for years to come. Nevertheless it cannot be denied that the mobile industry is growing very rapidly, and shows no sign of slowing down any time soon.

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