The Rise of Mobile Gaming
The last 2 decades marked the beginning of a new era of gaming with the introduction of mass-scale PC gaming as well as popular consoles such as the Playstation and Xbox, all of which have had significant impact on the worldwide annual revenue of this industry. But the arrival of the smartphone was a game changer. Improvements to smartphones such as larger screens and incredible computing power set the stage for a new type of video game to emerge: mobile gaming (Techcrunch, 2015).
The enhanced customer experience that these devices offer combined with the fact that almost everyone owns a smartphone today means that there is a more diverse and broader consumer base. Moreover, consumers can now play their favorite games on-the-go.
This has a significant effect on the gaming industry. Mobile gaming is expected to represent more than half of the revenues in the total gaming industry by 2020 (Newzoo, 2017). Countless software development tools make it easier for low-budget developers to create games and removes the high-capital investments required before. New players enter the market more easily, as technical complexity decreases, but since most games are created with the same software tools, there is a convergence of games. It becomes harder for developers to distinguish themselves and easier for gamers to switch to alternatives in case of dissatisfaction. Using Porter’s five forces to analyse these factors, industry rivalry is deemed high. To survive the disruption of gaming, companies are therefore forced to adjust their revenue models accordingly.
Pricing Strategies
Mobile game developers pioneer the free-to-play (F2P) model, in which revenue is created through in-app purchases and advertisements (Shalaan et al., 2016). Gamers could try the game for free as opposed to being convinced by great marketing efforts, which proved critical in the F2P’s success as consumers generally refused to pay up-front for unknown games. On top of that, pricing strategies were subtle and catered to the demands of individuals. Now, it is almost impossible to imagine games without updates, expansion packs or additional features that can be purchased in-game.
What’s next?
In the future, the expectations of these gamers will begin to change. Connectedness in games becomes increasingly important, when we move towards immersive digital entertainment (IGN, 2010). As technologies such as Augmented Reality and Virtual Reality improve, they will be ideally positioned to cater to the future needs of gamers such as real world interaction and physically collaborative games. These changes come with challenges, such as impact on the skills required in the labor market. Also, we can expect that the required computing power from hardware to handle these new type of games will place a significant financial burden on smartphone producers. And finally, with the line between the real world and the digital world becoming increasingly blurred, new regulations concerning things such as privacy will need to be created.
Want know more?
https://www.youtube.com/watch?v=_H8d2gdPui0&feature=youtu.be
Bibliography
Alomari K.M., Soomro T.R., Shaalan K. (2016) Mobile Gaming Trends and Revenue Models. In: Fujita H., Ali M., Selamat A., Sasaki J., Kurematsu M. (eds) Trends in Applied Knowledge-Based Systems and Data Science. IEA/AIE 2016. Lecture Notes in Computer Science, vol 9799.
IGN, (2010) viewed 27 September 2017, retrieved from <http://www.ign.com/articles/2010/02/16/2020-vision-the-future-of-gaming
Newzoo, (2017) viewed 27 September 2017, retrieved from <https://newzoo.com/insights/articles/the-global-games-market-will-reach-108-9-billion-in-2017-with-mobile-taking-42/.>
TechCrunch, (2015) viewed 27 September 2017, retrieved from <https://techcrunch.com/2015/10/31/the-history-of-gaming-an-evolving-community/>
First of all, you guys have made a great video that explains the gaming industry very well in my opinion. I could witness this disruption myself as I started to play playstation when I was 10 and these days Playstation has already moved to the VR Dimension with Playstation VR.
The major breakthrough of Pokemon GO finally paved the way for more AR games to come. The more people are required to move and interact with reality the more the current problem of immobility when playing games can be battled and then indirectly the obesity that comes with the lack of sports.
Children will be externally motivated by the games to go outside and play and move, contrasted with the “old” video games that required sitting for a long time, this is definitely progress.
Hi Julian,
Apologies for such a late reply to your comment, I must have missed the notification. I’m glad you’ve enjoyed watching our video! I think it’s interesting you’re raising the point of mobility. I think this is really where AR is raising the bar compared to VR, as with VR you can be in a virtual space but you cannot actually leave your room (yet). Lots of parents will definitely be happy that with AR their kids will at least still be exposed to the real world in some way when gaming.