While the gaming industry has been disrupted throughout the decades, none compare to the smartphone’s introduction, which started the era of a new information good; mobile gaming applications. Today the mobile gaming market is the fastest growing segment, currently holding 42% ($46bn) of the gaming industry.
Industry Disruption
Market Size
Nowadays most smartphone owners have at least one game downloaded, no matter their demographics; for example, almost half of all mobile gamers is female. Moreover, since smartphones were developed with simplicity in mind, players without gaming experience were able to access the gaming world effortlessly. In a nutshell, mobile gaming applications enabled a larger group of potential gamers and, subsequently, increased the game industry’s market size.
Developers
The games’ development changed drastically as well. Due to fixed costs decreasing and distribution costs becoming nearly negligible, small developer teams seized the opportunity to enter the market. Thus, the need for large, expensive development teams, such as in the console market, was eliminated. Established names such as Nintendo, are holding their market position due to their brand recognition and other marketing efforts.
Pricing
Firstly, price versioning is used in two different manners. On the one hand, the same game can be bought for different prices depending on its platforms. For example, the cost of Fifa for Macs differs from Fifa for iPhones.
Secondly, the same game can also be sold by offering different versions; Rovio offers 17 versions of Angry Birds on the AppStore.
Thirdly, mobile gaming sellers make use of personalized pricing through in-game offers based on the player’s behavior.
Fourthly, the brand of phone/tablet influences games’ prices. While the AppStore usually charges higher prices than the Google PlayStore.
Additionally to cross-industry pricing strategies, freemium and ad rewards are two that are only present in the mobile gaming industry. Freemium allows the player to download the game for free and then offers in-app purchases. For advertisements, players are being rewarded for watching them instead of skipping, increasing companies’ revenue.
Portability
Portable games already existed with consoles such as Gameboy, however, smartphones increased portability significantly. For the first time, games could be played on phones people were already bringing with them, thus, eliminating the need of a separate console for gaming.
Future disruptions
Firstly, emerging countries have a market of potential gamers that has not been completely tapped into. The hardware base exists, registering a 200% growth in smartphone shipments between 2014-2018 with customers slowly starting to adopt games on their mobiles. Secondly, “touch esports” is becoming more important as mobile usage increases, graphics on mobile devices are improving, and online play becomes more reliable. Vainglory, a competitive mobile game, released only 3 years ago, has already sprouted several professional leagues worldwide. Lastly, VR/AR, a technology that is in its infancy, could revolutionize the entire perspective on mobile gaming. However, only 1 in 10 developers admitted to working on an AR/VR project at this year’s GDC hinting at a slow adoption rate.
Bibliography
EY (2015), ‘Riding the new wave of digital growth’, EY, [online] available at
<http://www.ey.com/Publication/vwLUAssets/EY-riding-the-new-wave-of-digital-growth-infographic/$FILE/EY-riding-the-new-wave-of-digital-growth-infographic.pdf> [accessed 29 Sep. 2017]
Ismail N. (2017), ‘After a decade: the impact smartphones on the gaming market’, Information Age, [online] available at
<http://www.information-age.com/decade-impact-smartphones-gaming-market-123465785/> [accessed 29 Sep. 2017]
Mason M. (2013), ’Demographics breakdown casual, mid-core and hard-core mobile gamers’, Developers Magmic, [online] avaliable at <http://developers.magmic.com/demographic-breakdown-casual-mid-core-hard-core-mobile-gamers/> [accessed 29 Sep. 2017]
McDonald E. (2017), ‘The global games marker will reach $108.9 billion in 2017 with taking 42%’, Newzoo, [online] available at <https://newzoo.com/insights/articles/the-global-games-market-will-reach-108-9-billion-in-2017-with-mobile-taking-42/> [accessed 29 Sep. 2017]
Porter M. (2017), ‘Touch esports bring competitive gaming to mobile phones’, Vice, [online] available at <https://sports.vice.com/en_us/article/aeb7k8/touch-esports-bring-competitive-gaming-to-mobile-phones> [accessed 29 Sep. 2017]
Shapiro, C., and Varian, H. 1998. Pricing Information. In Information Rules: A Strategic Guide to the Network Economy. Cambridge, MA: Harvard Business School Press.
1 thought on “Technology of the Week – Mobile Gaming Applications – Group 24”