With games like Kim Kardashian: Hollywood and Deer Hunter, Glu Mobile remains one of the top mobile game companies of 2015. But with the ever-growing mobile gaming space, it will take a lot to get ahead as we move into the next year.
[a]listdaily recently spoke to Niccolo de Masi, Glu President, CEO & Chairman, for his thoughts on what mobile gaming may look like next year and beyond, especially considering emerging technologies like virtual reality.
The Great Consolidation
de Masi states that the mobile gaming industry has been going through a “maturation phase” that will continue throughout the next year. However, with the increasingly crowded market, it will be become harder for smaller companies to compete with ones that are Glu sized or larger, given what’s needed to ship a successful game. “There will be fewer big mobile game companies and fewer big mobile games.”
In addition to having a fun game, you need distribution solutions by either having a great IP or through aggressive marketing. The game also has to be fun enough to retain its users over a long term while monetizing that time, which requires a lot of analytics. At the same time, the success of existing games are elongated. For Glu, the biggest titles of 2014 continued being big in 2015.
Furthermore, “game companies aren’t just competing with other game companies on the Apple App Store any longer. They’re competing with all entertainment products.” These include non-gaming apps like Netflix, Facebook and even Yelp. They’re all competing for the consumer’s time on their phones, so game companies are increasingly describing themselves as technology companies and platforms. They have to in a world that has gone mobile.
As a result, mobile gaming will look increasingly like other entertainment industries like music, TV, books and movies over the next five years. There will be a lot of consolidation, with a handful of huge companies at the top, acquiring smaller ones, while small companies will try to put out breakthrough hits in hopes of being acquired. Very few companies will fall in between. “Activision’s purchase of King for $5.9 billion is a mark of things to come.”
Hollywood needs to get personal
Among the game predictions, de Masi states that we’re likely to see a mobile first-person shooter game (hopefully published by Glu) release in 2016 that will break $200 million in cumulative revenue across its lifetime, setting a high bar for both revenue and longevity.
Secondly, and perhaps more importantly, we’re likely to see celebrity themed game that will meet or surpass the success seen with Glu’s Kim Kardashian: Hollywood. Although Glu has published games based on movie franchises like James Bond, Mission Impossible and The Terminator, none have performed as well in 2015 as Kardashian, which is based on a person instead of a movie brand.
Virtual Reality and The Living Room Experience
Glu released Deer Hunter 2014 for the Samsung Gear VR, and is very confident about the technology’s growth. However, we probably won’t see big revenues come from VR in 2016, and the primary opportunities won’t be with the “thousand dollar, connect-to-the-PC experience.”
Instead, it will be with the $49-99 devices that you can use your phone with. Not only does its low cost make it more accessible, but it’s more compelling for people traveling on a train or plane, or even kids in the back of a car. As we see continuing hardware improvements over the next few years, we can look forward to Oculus Rift quality experiences dropping to a $99 price point or less. Momentum will continue to build up over the next few years, and de Masi predicts that we will see a hundred million devices on the market by 2020, instead of one million.
As for other technologies, de Masi states that smart watches “probably won’t sell as well as people think in 2016, and tablet sales will be flat.” Smartphones will remain the primary mobile gaming device, and “will remain the biggest revenue platform in 2016,” which will probably remain the same in 2017 and 2018.
Despite how primary focus will stay on phones for the foreseeable future, de Masi also talks about how companies like Apple and Google will continue to promote a “quad-screen experience” across their brands of phones, laptops, tablet and TVs. These companies are competing to for living room space, and are looking to different ways to push out the competition and become a single branded entertainment experience. Although devices like the Apple TV and Amazon Fire TV aren’t effective gaming platforms yet, “Glu is poised to expand by following them into the living room” when they are.