Key Drivers Of The Mobile Internet

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Mobile Internet has become a huge driving force in revenue for various companies and marketers, and it will continue to be so for some time, as revenue is likely to grow past $700 billion within just a couple years’ time (by 2017). This year has also brought quite a few shifts in itself, with $19 billion in investments and $94 billion in exists. The market also has its fair share of competitors, with 32 billion-dollar mobile Internet companies making the rounds.

So what’s really driving this community TechCrunch has a pretty good idea, as it’s drawn up six main points when it comes to what’s made the market so big. Here they are, in condensed form, but you can find more details here.

The growth of revenue by 2017

Per a report by Digi-Capital, growth is expected to reach $700 billion in revenue in just a few years, which will triple the amount of $200 billion made last year. mCommerce will be a huge part of that market, with half a trillion dollars calculated from sales. Other top earners in the market include consumer apps ($74 billion), enterprise mobility ($53 billion), ad spending ($42 billion) and wearable tech ($11 billion).

Asia will also play a huge part with mCommerce, clocking in at $230 billion, while America will be in second place with $144 billion and Europe in third with $113 billion.

Consumer apps will be a driving force, but not necessarily about just mobile games. While games drive three-quarters of all mobile apps purchased last year (despite only 40 percent of overall downloads), other factors will rise up in the market over the next few years, such as app-as-a-service business models.

$19.2 billion invested over the last year

Startups managed to raise over $19.2 billion in private investments (not including IPO’s) over the last year, a huge increase of 232 percent over the previous year. mCommerce took a huge chunk of that with $4.2 billion, followed by travel/transport ($3.3 billion), utilities ($1.8 billion) and games ($1.1 billion). Smaller commodities like food and drink, music and finance also play a part as well.)

Exits rose to $94 billion over the past year

Mobile Internet exits also saw a huge increase, up seven times its normal amount to $94 billion over the past twelve months. Making the largest impact was the Facebook/WhatsApp trade exit, although the general IPO market managed to take 39 percent of all overall exits.

Various sectors reached over $5 billion, with messaging leading the charge at $25.8 billion (or $4 billion without WhatsApp), games in second place with $18 billion, and social networking with $17.7 billion in third.

Exit returns engaged nearly 16 times from previous year

While billion dollar exits do leave quite an impact, VC and growth equity investors (and institution backers) show great interest in exit returns. Three-year average return for investments in mobile Internet for the past year showed an increase of 3.5 times normal value, across all 27 mobile Internet sectors. That’s quite an increase, but merely just the averages.

There were even higher returns across different areas, including navigation, which saw a whopping 15.6 times increase. Messaging was close behind with 15.4 times (2.7 without WhatsApp), social networking (15 times) and lifestyle (11.4 times). 12-month exit returns have shown a general average of 4.9 times the general amount of increase.

As far as the other two factors, the return of public stock market sectors was noted, with a 78 percent increase in the last 12 months, as well as 32 companies ranging in the “billion dollar” mobile Internet market, worth a total estimated value of $163 billion. Out of those, Twitter showed the highest value with $29.8 billion, followed by WhatsApp with $21.8 billion and Uber with $17 billion.

Graphs for each of these sections — and more detail on which ones made the highest difference — can be found here.

Virtual Reality Arrives on Galaxy Note 4

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Virtual reality became an option for Samsung Galaxy Note 4 owners today with the launch of the Samsung Gear VR Innovator Edition for users of the popular Android-based smartphone.

A price tag of $199.99 from AT&T and Samsung themselves gets you the Gear plus a number of sample VR experiences pre-loaded onto its 16 GB microSD card, with more available from Oculus’s store. Samsung is mum on whether or not the pre-loaded content is available through Oculus; consumers who bring their own microSD cards might need to do some swapping.

The Gear differs from vanilla Oculus Rift developer’s kits for a number of reasons, most of which have to do with its integration with the Galaxy Note 4. As the “screen” is a Note 4 tethered to the Gear headset, virtual-reality experiences will be available in unprecedented 1440p resolution, somewhat negating the pixel-y “screen-door” effect commonly reported with most contemporary VR equipment. The Note 4 is saddled by a diminished refresh rate, however, which could be bad news for those with motion sickness and investors worried about VR’s nausea problem.

Unlike the Oculus, the Gear is meant to be an on-the-go experience similar to Pinc; as such, it is not expected to be expressly gaming-oriented, since the Gear’s gyroscopes will only be able to check the angle of the wearer’s head. Consumers who can’t go without immersive, enjoyable gaming experiences can take advantage of a Bluetooth “controller” included as part of a $249 Gear bundle and a Google Glass-esque touchpad built into the side of the set.

Whatever consumers end up primarily utilizing the Gear for, it’s clear that Samsung’s latest project is out of the starting gate with a bang, with a number of bite-sized experiences ranging from 1-10 minutes coming along for the ride as virtual reality continues its march out of the domain of science fiction and into everyday life.

 

Five Emerging Gaming Channels On YouTube

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by Jessica Klein

Gamers have long been drawn to YouTube, both as creators and those who follow them for “expert” tips on their favorite games. However, as Ken Halvachs, strategist of social content at DigitasLBi explained, “With so many passionate gamers on the platform not only viewing but making their own videos, content creators may find it difficult to stand out.”

Thus, these growing gaming channels, as found by Outrigger Media’s Emerging Talent Tracker tool, all have something in common–a specialty. Well, their specialties aren’t what they have in common, which is the point. They all stand out on the video platform by focusing on their own, specific niches.

After all, Halvachs confirmed, “Channels that are seeing success on YouTube are often dedicated to specific genres or even individual games. Sleepy Jirachi and FancySimmer are two great examples of this, as their channels focus on Pokemon and The Sims games, respectively.”

See who else has carved out their gaming spots on the ‘Tube…

This article was originally posted on VideoInk and is reposted on [a]listdaily via a partnership with the news publication, which is the online video industry’s go-to source for breaking news, features, and industry analysis. Follow VideoInk on Twitter @VideoInkNews, or subscribe via thevideoink.com for the latest news and stories, delivered right to your inbox.

Pachter: Consoles Have Peaked

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At the Game Monetization conference in San Francisco, Wedbush Securities managing director Michael Pachter presented his thoughts on the directions that the gaming market is headed, updated with the latest data. As always, Pachter isn’t shy about stating his views of the future. “I want to help you think about the next ten years,” he declared, “in a way you probably haven’t thought about it before.”

Pachter began by noting the size of the North American market, because that’s readily addressable by Western publishers “The market is BIG,” he noted. Pachter’s figures indicate a total of about $25.8 billion this year, with $17 billion of that digital and $8.9 billion in physical retail. This includes console, handheld, mobile, handheld and desktop. “I actually don’t think with the next-gen consoles out the physical segment is going to shrink any further,” Pachter said, but the digital segment is growing strongly and will continue to do so. “Consoles probably grow modestly, but the digital piece grows dramatically,” he added.

The expansion of free to play games has helped expand the audience, and contributed to a drop in average prices for games. “We’ve had prices coming down, with on the digital side hundreds of millions, maybe billions of people playing games for free,” Pachter said. “That brings in diversification, with a lot more devices to play games on. I honestly don’t think this industry thinks about devices correctly. Your phone and your tablet are going to become consoles.”

“A lot of people scratch their heads and say, ‘What the hell is Amazon doing with Fire phone, Fire TV, Fire stick, the Kindle,” Pachter said. “I honestly think Amazon is the only company in the world that gets this. Amazon understands there is a gigantic market out there.”

“The console installed base is not getting any bigger,” Pachter said. “We’re seeing digital migration, even on consoles people are playing Bejeweled. You’re see a crossover of demographic – people are playing games on consoles they didn’t used to play, and they’re still playing these games on their phones and their tablets as well.” Pachter doesn’t think we’ll be able to measure the digital market all that accurately, not compared to how well retail sales have been measured by NPD.

Pachter compared his estimates for the new generation of consoles with the last generation, and concluded the overall size of the console market will be about the same. “The Wii U is going to sell 20 million units where the Wii sold 100 million units; the PS4 is going to sell 100 million to 120 million units, probably; the Xbox One will sell 100 to 110 million,” Pachter predicted. “When you add all that up, the next generation of consoles is 240 to 260 million, and last generation was 260 million. So it’s not a growth industry. For everyone in this room not chasing that market, you’re going to be fine. The market is going to get a lot bigger, just not on console.”

“I think it’s the last cycle” for consoles, Pachter noted. “Because you’re not going to need a console to play a console game.” He sees the power increases of mobile devices continuing so that in a couple of years they will have plenty of capability to play console games. “I think consoles are irrelevant in ten years,” Pachter said. Of course, what Pachter isn’t explaining here is that this depends on what you mean by the term “console game.” If by that you mean a game that’s deeper, more complex and engaging, then it’s not so much dependent on whether or not a console can push more polygons than a mobile device.

Certainly game publishers are looking to attract “core” gamers to mobile titles — the wave of games like Hearthstone and Vainglory are merely the latest and most obvious examples. Yes, it will be hard to equal the massive amounts of data that some of the latest AAA games include (many well past 25 GB) on a mobile title. But that limitation could be overcome by streaming parts of the data, or merely providing it in smaller chunks. Designers can certainly work around the limitations of mobile devices to provide deeper game experiences, and they are already doing that. The question then becomes how rapidly that portion of the market will develop, and how it will impact the console market.

Pachter sees a Sonos-like service that will connect your TV to a PC, smartphone, tablet, or the cloud, and games will be played the same way as before without a console. Of course, you’ll need a controller, but that’s getting easy to find. Activision is even providing a controller with its version of Skylanders: Trap Team for tablets, and at the same price point as the console version of the game (the tablet version is identical to the console version, too). Pachter considers this a brilliant move on Activision’s part.

“This is disruptive, and expect to see Microsoft and Sony fight back with even more functionality,” Pachter noted. He sees the big publishers getting together to provide network functionality collectively for multiplayer games across devices, similar to the way National Cinemedia displays ads in theaters (that company is owned by three of the big four theater chains). “Activision/EA/Ubisoft will do the same thing,” Pachter said. “It will be three to four bucks a month to make multiplayer available to all. Amazon Web Services will host it.”

Certainly the publishers have long wanted to allow players to connect across devices. Activision would love to see all Call of Duty players able to compete against whoever they want without regard to whether the other player has an Xbox or a PlayStation or a PC. Or perhaps, in the future, a mobile device. Unifying that audience should mean greater engagement among the players, and that translates directly to higher revenues for the game publisher.

Analyzing The State Of Native Advertising

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Consumers are spending more time on smartphones, tablets, wearables, and other mobile devices than ever, enough so that BuzzFeed West Coast VP Terry City recently declared “if it doesn’t work on mobile, it doesn’t work.” Ad rates, however, are nearly one-fifth of current desktop ad rates, meaning that mobile isn’t getting a cut of ad revenue fair to current usage rates.

Part of the problem with mobile advertising rests with the usage of banner ads, a much-loathed platform that doesn’t exactly scale well to handheld screens. This is where native advertising, ads designed to be less intrusive than their banner counterparts by virtue of seamless integration into site content, comes in.

Polar, a native advertising platform used by a number of major digital media outlets, performed a study to investigate native advertising’s state of affairs on mobile. According to Polar, native advertisements do much better on mobile than ad-cluttered desktops; not all mobile devices are equal, however, as click-through rates are significantly higher on smartphones than “desktop-lite” tablets.

What kind of editorial content brings clicks in, though According to Polar, humor and satire rule the roost, with a 0.04 lead over “how-to” engagement rates. “Informational” content rounds out the pack at 1.3.

Unfortunately, marketers still prefer to buy native by desktop with a 73 percent -27 percent lead over mobile. It’s been suggested that this may be the biggest obstacle to full-throated mobile adoption; though handheld devices are certainly here to stay, publishers have a ways to go before native ads are able to hop on the mobile bandwagon.

 

Advertiser Interest In Mobile Native Grows

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When it comes to native ads with mobile advertising, not all marketers are on board. There are a few, to be sure, but not everyone is keen on the trend just yet. eMarketer explained a few factors why in its recent report.

Back in September 2014, Socintel360 estimated US native ad spending growth to the tune of a 46.7 percent increase, totaling $3.2 billion in 2014. That number is estimated to continue rising through the next four years, into 2018, totaling $8.8 billion on a gain of 23.9 percent.

The marketers on board with the trend of native mobile ads feel that small screens and feedable content play a huge part, and polling earlier this year between Rubicon Project and InMobi believe that digital ad buyers see these are big factors, with 57 percent already devoted to native ad campaigns on smartphones and tablets.

However, that does leave an estimated 43 percent that are not interested in mobile native advertising. Why Mainly due to a lack of in-house resources and knowledge, according to eMarketer. They also believe that certain global standards aren’t in place as far as ad units go.

Those who are interested, though, believe that mobile native ads are a great way to not annoy users of devices, with 55.2 percent believing that the ads blend in smoothly with editorial content. They also believe that conversions and engagement rates can be on the rise from this.

As far as getting the others to change their minds, digital ad buyers not interested in mobile believe that testing would certainly help, to see if certain branding met pre-set objectives (47.2 percent of those polled) or the ease of launch with the proper tools (44.4 percent).

There could be more of an upswing from this if certain marketers change their minds. If so, they can take part in a bigger piece of the mobile ad spending pie, with spending set to rise 91.7 percent this year to an estimated $36.46 billion. This number is expected to grow three times by 2018 to $125 billion.

Maybe it wouldn’t hurt for a few marketers to look at the trends and see what works right for them. Mobile native advertising could be where it’s at.

iPhone 6 Plus Grabs Big Market Share

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Ever since Apple launched its new iPhone 6 models earlier this year, they’ve been leaving quite a mark in the industry, selling like crazy – and becoming a big holiday item, at that. However, the iPhone 6 Plus in particular is leaving a bigger mark than anyone could have expected.

With its 5.5 inch display, the device falls out of the smartphone market and into the “phablet” category, and, according to the U.S. data from Kantar Worldpanel, the device has managed to account for 41 percent of all sales in the “phablet” category.

The device has only been in the market for an estimated three months, but has still captured nearly half of it in that time, according to Uber Gizmo. In addition, Kantar also reported that “phablets” now have a 10 percent overall place in smartphone sales overall, a two percent increase over the previous year. While makers of smaller devices have nothing to immediately worry about, it’s clear that larger devices are gaining more of a foothold.

As far as why people have been purchasing the iPhone 6 Plus, Kantar states that 58 percent of those surveyed after buying the device explained that the larger display size played a key part – something many Apple device fans have been waiting for (even though the iPad minis were only a slight bit larger).

However, while the Plus continues to blaze a trail, let’s not forget about the original iPhone 6. It continues to be the best-selling iPhone model for Apple, with 33 percent in sales overall. iPhone 5s continues to be close behind with 26 percent, while iPhone 6 Plus is on the lower end at ten percent. However, these numbers are likely to change in the next year, as the Plus grows more and more with ownership – for those who don’t pick up the regular iPhone 6, anyway.

 

Fullscreen CEO: Internet Stardom Has Rules

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reInternet stardom is being more and more common these days, with superstars rising amidst such sites as YouTube and Twitch with just a few simple (and well-placed) broadcasts. However, Fullscreen CEO George Strompolos believes there are still ideas that need to be followed when it comes to being an online celebrity, according to Re/code.

Fullscreen is a site devoted to the Internet mainstream, with video financing for over 50,000 creators and over five billion views on a monthly basis. “We have a lot of teenage millionaires at Fullscreen,” said Strompolos, while speaking at the Code/Media event in San Francisco earlier this week. And most of them are “personality driven,” he admits.

He also believes a connection with an audience makes all the difference, compared to people on television. “I think the new breed are going to be people who developed an audience, and they will continue to feed that audience,” he explained.

In addition, sponsorship deals don’t always equal “selling out,” as it might have in the past. “If you grow up online, the fans say, ‘We’re so glad we got you to the level where advertisers want to work with you.'”

Strompolos also admitted that having a site that shoots with such superstars provides a way to reach out to advertisers, with a distribution system built in for good measure. “A lot of advertisers come to us saying, ‘How do we reach millennials ‘” he explained. “The truth is, they don’t. Instead of interruption, we help them be part of this world.”

Fullscreen has recently taken its outreach to other countries, including Brazil and India, in the hopes of breeding new stars – because there’s always room for more. “We overfund and over-promote certain creators,” he concluded. “Because as soon as one person breaks, everyone else says, ‘That’s really cool and I want to do that too.'”

Vietnam, Indonesia Helping Asian Game Market

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China has a big market when it comes to mobile video games, but it’s not the only country making waves in the overall Southeast Asian market.

VentureBeat has reported that countries in the region are estimated to total $784.4 million in gaming revenues for the year, according to Niko Partners. The countries within the region include Vietnam, Thailand, Singapore, the Philippines, Malaysia and Indonesia – proving that big business isn’t just coming from China.

Niko believes that Indonesia, Thailand and Vietnam are the most effective in terms of game sales, leaving their mark just as much as larger Asian countries. “The Southeast Asian [SEA] games market is often compared to that of China,” said Niko managing partner and regional analyst Lisa Cosmas Hanson. “And we can see that it is following behind China by a few years. Gamers in SEA embrace massively online battle arena [MOBA] games, shooters, and mobile games, just as they do in China. However, older Chinese gamers still embrace higher revenue generating MMORPGs, a segment that many SEA gamers shy away from.”

Developers and regional game distributors work hand-in-hand to get these products out in these countries, with such companies as Garena and MOL developing devoted audiences that keep coming back for more. EVN US companies are getting into the act, with Super Evil Megacorp launching its Vainglory mobile MOBA in Southeast Asia first.

The idea has paid off, as Niko believes that only seven percent of hardcore PC gamers in the region don’t play mobile games, leaving a huge 93 percent that do. That’s a huge change of pace from the 25 percent stating they don’t play them from last year.

As far as a future outlook, Hanson believes that Indonesia will have the biggest impact in revenues over the next five years, while Vietnam will see a bigger growth in gamers. However, developers and distributors need to make sure their strategies stay on point, especially when it comes to a reliance on “free-to-play” content.

“The challenge to developers is to compel an increase in the level of spending on the type of games for which Southeast Asians have shown enthusiasm,” concluded Hanson.

App Annie Launches Demographic Tracking

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App Annie has become a very reliable site when it comes to seeing the best-selling (and most downloaded) applications and games on the mobile front. Now, it’s expanding its services even further, in an attempt to help developers get the most out of user information, according to TechCrunch.

The company has launched its new Audience Intelligence system, which enables developers to get a better comprehension of demographics from users, as well as information on preferences. It will also expand even further than that next year, when App Annie introduces the opportunity to keep an eye on sentiments of users, through the posting of reviews.

This latest tool works alongside the Intelligence product previously offered to developers, which has become quite effective. To prove how well the systems work together, the company reported that, in the United States, two-thirds of iOS Travel applications were downloaded by men for the year, ending September 2014. Other apps such as Lyft, Uber, Easy Taxi and others were also calculated, and led to a small rise in the numbers.

Meanwhile, App Annie also reported that two-fifths of the Travel app downloads came from people aged 35 and up, as were weather apps, which were highly enjoyed by older users.

Other stats include sports apps (such as ESPN) showing three-quarters of downloads coming from a male audience, while photo and video related applications, like Instagram and Snapchat, had a higher following with a female audience.

These are just the tip of the iceberg in terms of statistics developers can get from the new system, allowing them to make changes that could make them more effective in terms of sales. While this is hardly the first product to track such information, it’s certainly one that will prove beneficial to App Annie – and developers – down the road. (And with an audience of 60,000 publishers producing over 640,000 apps, that’s quite a bit.)