Analysts and industry leaders see big changes happening in the mobile games sector in the coming years. The most prominent will be in how the industry will see massive consolidation through acquisitions, until a handful of large companies control most of the games, while small and medium sized companies will have a harder time competing. Activision Blizzard’s $5.9 billion purchase of King Digital Entertainment earlier this year is a sign of things to come.
Speaking to [a]listdaily, Niccolo de Masi, CEO of Glu Mobile discussed how the mobile industry is going through a “maturation phase” that will continue through the next year. Eventually, “there will be fewer big mobile game companies and fewer big mobile games.” In the next five years, the mobile games industry will have big companies looking to acquire smaller ones, most small companies struggling to get noticed so that they can be acquired, and very little in-between. It will also be an opportune time for acquisitions, investments, and partnerships to come from successful Asian companies looking to expand globally.
In discussing what it will take to compete in mobile gaming, Jeff Erle, CEO of MobilityWare, tells [a]listdaily that “right now in this space, itâs ‘innovate or die,’ and the corollary to that is ‘grow or die.’ One way that you can see this is through the rapid power consolidation at the top whereby small and mid-tier players are being squeezed out… If you arenât innovating and growing, there are consequences. Conversely, there is great opportunity because companies in this space are at the nexus of 3 growing ecosystems â growth of mobile devices, growth of mobile gaming, and growth of mobile monetization (via IAP and advertising). So thereâs a lot of opportunity there for a company to ride this tide.”
However, Josh Brooks, Senior Vice President for Brand Strategy & Marketing at SGN (Cookie Jam) states that the key to standing out in the mobile games market is in quality. “Customers are highly critical of the nuances that games offer, and as a result, developers need to be receptive to the feedback given.”
Yet, Brooks also expresses that “2016 feels like a year where taking risks on acquisition techniques is going to be a must. The competitive landscape in mobile gaming is putting pressure on marketers to find customers where they havenât done so before…”
Mobile Gaming Settles In
This year saw the launch of multiple devices that casts mobile gaming in an all-new light. Chief among them are living room set-top boxes like the new Apple TV, Amazon Fire TV, and Nvidia Shield Android TV, which all allow mobile games to be played at high quality resolutions on large screen televisions. While this takes the mobility out of mobile gaming, it puts the industry in closer competition with established gaming consoles like the PlayStation 4 and Xbox One.
Although de Masi doesn’t see new set top boxes as effective gaming platforms yet, he does note how companies like Apple and Google working to promote a “quad-screen experience” across their respective brands of phones, laptops, tablets and televisions. By crossing multiple devices, companies will look to dominate the living room with a single brand.
Jeff Erle shares a similar outlook. “One of the great things about the Apple eco-system is the connection between devices (desktop > phone > tablet > watch and now TV!) across one OS. Each of these platforms has their own unique strengths and I look at each of them as a challenge for game developers. Apple TV is an obvious extension of the Phone & Tablet and itâs easy to see someone starting a game on their iPhone and continuing that same game on the TV, or vice-versa.”
Watching Wearables and VR
Although the Apple Watch launched in 2015 with a great fanfare and greater expectations, de Masi believes that smart watches “probably won’t sell as well as people think in 2016, and tablet sales will be flat.” Although smartphones will remain the primary gaming device through 2016 and going into 2018, de Masi sees a lot of potential with mobile VR devices like the Samsung Gear VR. While virtual reality might not see a lot big revenues in 2016, mobile VR technology (which relies on smartphones) stands a better chance of mass adoption than fully tethered PC headsets due to their comparative affordability and mobility.
Brooks, excitedly told [a]listdaily “VR will take mobile gaming into a new stratosphere and is beyond exciting. Gameplay, game narrative and social interaction will be turned upside down as the experience is working on a new dimension.”
While Erle, whose company recently released Solitaire for Apple Watch, explains that wearables offer a more extreme version of the quick gameplay sessions mobile is already known for. He also states that, “There is no doubt that VR will enable and empower content creators to conceive new, immersive ways to delight mobile gamers. However, content creators will have to think differently about how they engage their players. VR games will likely take on a different shape from how we experience mobile games today. Players will not necessarily be able to ‘play on the go’ or casually consume content with a few minutes to spare.”
What to Expect from 2016
For Glu, successful games in 2014 like Kim Kardashian: Hollywood continued to be big in 2015, and the elongated life of older games may continue throughout 2016. However, Glu is still expanding with new games with an emphasis on specific celebrities, like the recently released Katy Perry Pop, instead of third party brands. de Masi also predicts that the first mobile first-person shooter to break $200 million in cumulative revenue across its lifetime to release in 2016. Coincidentally, Glu is working to develop a game based on We Fire, a popular shooter in China, so that it can appeal to a global audience.
Brooks states, “..developers and studios will need to be more mindful of the games they are creating and marketing outside of their own locales. Going global means paying attention to the cultural trends and buying habits across the globe, not just where they live. Similar to console games and even movies, we will continue to see the growth of mobile game franchises extending the breath of successful IP.”
Lastly, when asked about how he thought mobile gaming would grow and change, he stated ” Most of the good ideas have been taken, so itâs much harder to deliver little true innovation.Â Itâs no longer good enough to find a better mouse trap you have to figure out a whole new way to trap a mouse.”