The mobile app market is growing. And it will also grow in the coming years. The Dutch market research company Newzoo has come to this conclusion in its new “Global Mobile Market Report”. Newzoo predicts a global sales volume of $ 44.8 billion for the 2016 market. 82 percent of this, or around 36.5 billion dollars, is due to gaming app sales. The dominance of the games is also to change until 2020, even if the non-games app sales are to increase significantly more. In 2020, global mobile sales will reach 80.6 billion dollars. 58.1 billion dollars or around 72 percent are due to games apps.
According to a new report from Digi-Capital, the games market will grow from USD 90 billion in 2015 to USD 115 billion by 2020 with an average annual growth rate of 7%. Main segment will be mobile gaming going from $35 billion in 2016 to $48 billion by 2020, with an average annual growth rate of more than 8%.
Asia will be the dominant games region. For mobile games specifically, China’s strong domestic Android app stores and Apple’s surge in the last year mean that it should remain a market leader. Asia as a whole could account for more than half of all mobile games revenue by the end of the decade.
New trends to watch are: Virtual Reality (VR) games and Augmented Reality (AR) games.
Digi-Capital forecasts that Games Software Revenue will grow from $88 billion in 2015 to $110 billion by 2018 at 8% annual growth. In a single digit growth market, games leaders with hit IPs, user scale and cashflow are spending more on marketing and development to drive shareholder value. This dynamic has eaten into games industry margins, and made it more expensive for newcomers to break through.
Mobile Games will generate more revenue than Online Games in 2015, as well as more revenue than Console Software. Where Mobile Games will take $3 of every $10 spent by gamers on software in 2015, that figure will go up to $4 out of every $10 by 2018. Mobile Games revenue will grow from $29 billion in 2015 to $45 billion by 2018 at 15% annual growth. Asia has dominated mobile games revenue since 2013, compared to both North America and Europe, and Digi-Capital forecasts Asia to take over 50% of all mobile games revenue in 2018. Stable top grossing mobile games charts look set to remain the norm. This is great for games leaders and their shareholders, but puts the big squeeze on mid-tier players and makes breaking through more challenging for Indies.
Great article about IEM Consulting in Frankfurter Allgemeine Zeitung (most prestigious German daily newspaper).
The first week of 2015 has been kind to Apple, with two major App Store sales records shattered in the space of a few days.
Apple recorded almost $500 million in billings in the first week in January, including both apps and in-app purchases. In addition, January 1, 2015 was the biggest single day for sales in the App Store’s history, though Apple shared no specific numbers on that front.
That marks an impressive start to the new year, particularly given that 2014 was itself a record breaker: billings rose by 50 per cent year-on-year, bringing in more than $10 billion in revenue for developers.
Not all of that goes to game developers, of course, but a significant chunk does – gaming remains the most popular and voluminous category on the App Store.
According to an estimation of the market research firm Juniper sales are expected to reach in five years 13, 3 billion dollars worldwide. U.S. market research firm Juniper Research forecasts that the market for mobile games tripled by 2019. Currently, Juniper expects $ 3.6 billion from worldwide sales. In 2019, $ 13.3 billion will be achieved.
However, Juniper warns of a further software flooding the market: Already now its more than one million apps available. By 2019, the company nevertheless believes that the business models still continue to move into the area Free2Play: Only six percent of the programs will be still paid apps.
Source: Juniper Research / IEM Consulting
Globally, the physical business on the gaming platform PC only plays a marginal role. The market researcher DFC just announced that 92 percent of all PC-Games-purchases were digitally processed in 2013. This high value is of course affected by the broad focus. In China the physical business on PC as a gaming platform is virtually non-existent, but still the leader. Other emerging and developing countries lack in a retail infrastructure in media trade, while digital services are booming. Also PC games today encompasses a much wider range. So likely beside classic PC full price games especially web and social games that are played on the PC, explain the high digital value. Details will be published in September by DFC.
Source: DFC / IEM Consulting
Juniper Research says that with the rise of mobile, dedicated gaming devices will serve the niche
According to a new report from Juniper Research, total revenues from the mobile games market are expected to reach $28.9 billion by 2016, representing 38 percent growth from the $20.9 billion Juniper cites for 2014. Juniper stresses that “in an effort to maximize their apps’ potential, developers are turning their focus on increasing user lifetime value.”
Rather than focusing intently on bulk acquisition of casual players, many developers and game companies are now looking harder at what can be done to get higher returns on each user that does come on board. To that end, many developers may want to target tablets more heavily than smartphones, as Juniper found that tablet users actually will spend more on in-game purchases – Juniper also believes that the stronger graphical capabilities of tablets has led to “accelerated migration from traditional portable gaming devices.”
Despite that migration, Juniper still sees dedicated gaming hardware continuing to “serve a niche gaming audience.” The traditional games industry is continuing to evolve and adapt its business to an increasingly online and mobile world. Juniper points to Sony as an example, noting that “software will embrace elements of mobile games as reflected by the introduction of PlayStation Now, which aims to let users play games through online streaming via a per-game or subscription basis.”
Source: Juniper Research, IEM Consulting
Market researchers from Digi-Capital expect a continuing boom in the mobile games business. In the “Mobile Apps Investment Review Q1 2014” an annual sales boost of over 70 billion dollars is predicted. Analysts expect annual sales of nearly $ 29 billion for the year 2014. Most important category currently and in the future are games. However, the dominant role of games will get smaller. The share of revenue from non-gaming applications is expected to grow by 26 percent in 2011 to 51 percent in 2017, according to Digi-Capital. Games are then, however, though the highest turnover App category, but would not account for more than half of the market.
Source: Digi-Capital, IEM Consulting