{"id":16887,"date":"2018-09-25T19:13:58","date_gmt":"2018-09-25T19:13:58","guid":{"rendered":"http:\/\/www.dfcint.com\/dossier\/?p=16887"},"modified":"2018-10-16T19:21:51","modified_gmt":"2018-10-16T19:21:51","slug":"mobile-game-market-size","status":"publish","type":"post","link":"https:\/\/www.dfcint.com\/dossier\/mobile-game-market-size\/","title":{"rendered":"Mobile Game Market Lures PC Game Companies"},"content":{"rendered":"

The newly released DFC Intelligence report The Business of Video Games<\/a>, looks at the diversity of the ever expanding video game market.\u00a0 On a top level, one of the biggest issues is the bifurcation of the industry into two separate segments.\u00a0 One segment is the core video game players.\u00a0 The other is the more casual users that are increasingly playing on mobile devices.\u00a0 The mobile game market has mainly lured the more casual PC game companies.<\/p>\n

Mobile is an extension of the concept that a large number of people play games in their leisure time if given the opportunity.\u00a0 For years, games such as Minesweeper and Free Cell were major features of Windows operating systems.\u00a0 In the early 21st<\/sup> century, a major casual game segment grew on PC.<\/p>\n

Today, the casual PC game companies have either gone to mobile or are out of business.\u00a0 Casual games are designed to be played during quick breaks during the day.\u00a0 Previously, many casual games were played on a desktop during a work break.\u00a0 Mobile devices capture the play anytime, anywhere aspect so necessary to casual games.<\/p>\n

For most high-end games, mobile devices are less than ideal.\u00a0 Of course, most gamers own a mobile device.\u00a0 However, increasingly these are being used for either quick casual games or short burst games like those from Supercell and MZ.<\/p>\n

Quick burst mobile games and high-end PC and console games are really two separate businesses and should be treated as such.\u00a0 Fortnite would be an example of a potential cross-over, but really it is an exception.<\/p>\n

There are several examples of companies that have made the transition from casual PC games to mobile games.\u00a0 This would include Big Fish Games and Zynga.\u00a0 Both had a huge niche in casino games.\u00a0 Zynga got its start on PC via the Facebook social network.\u00a0 Meanwhile, Big Fish successfully established its own game network and subscription service delivering casual games.<\/p>\n

Big Fish Games was sold to Aristocrat Leisure early this year for nearly $1 billion.\u00a0 Aristocrat is a leading Australian maker of gambling machines.\u00a0 Previously, Big Fish had been acquired by Kentucky Derby operator Churchill Downs in late 2014.<\/p>\n

Zynga, while originally known for games like Farmville and Words with Friends has also enjoyed its recent success with gambling games.\u00a0 Slots and poker titles account for over 50% of Zynga revenue.\u00a0 Most of this is now occurring on mobile.\u00a0 In early 2014, only about one-third of Zynga revenue came from mobile games.\u00a0 Today that figure is about 90%.<\/p>\n

\"Zynga<\/p>\n

Much of the mobile growth has occurred in Asia where the leading PC game companies look to expand into mobile.\u00a0 The two most successful companies in this area, by far, are Tencent and NetEase.\u00a0 These companies operate advertising services and have been able to take advantage of the social network features of mobile that add revenue beyond just traditional games.<\/p>\n

Tencent (ADR: TCEHY) is one of the few companies to play in both segments.\u00a0 In 2017, Tencent generated over $9 billion in mobile games, mostly from China.\u00a0 However, they also grew their PC game business and own a diverse product line.\u00a0 The challenge is that outside of acquisitions of Riot Games and Supercell they have limited presence outside China.<\/p>\n

\"Tencent<\/p>\n

NetEase (NASDAQ: NTES) is even more dependent on China.\u00a0 In 2014 had PC game revenue of about $1.3 billion with about one\/tenth of that for mobile games.\u00a0 By 2017, PC games had reached $1.6 billion while mobile games had soared to close to $3.9 billion.<\/p>\n

\"NetEase<\/p>\n

In the 1990s there was great concern over violence and other adult content in video games.\u00a0 Establishing a rating system helped limit those concerns.\u00a0 More important was the aging of the game consumer and the growing realization that games are another media form like music, movies and books.<\/p>\n

Mobile games present another challenge in many of them resemble gambling.\u00a0 Casino games are huge in the mobile space ad governments are starting to crack down.\u00a0 Tencent agreed to shut down its Texas Hold-Em Poker game on September 25th<\/sup> after government pressure.<\/p>\n

Tencent stock has dropped by almost a third in 2018.\u00a0 NetEase has faced a similar drop.\u00a0 Really this goes to highlight the concerns over the mobile game business.\u00a0 This goes beyond just pure casino games and the concern that all virtual item products are more like gambling than playing a game.<\/p>\n

Going forward, the concern over what the mobile game business represents is likely to grow.\u00a0 Some big questions will be how do individual game companies handle these issues?\u00a0 Large publishers of AAA titles often look at the major mobile games with envy.\u00a0 However, it is really a separate business.\u00a0 Trying to incorporate mobile features in high-end games can be a major turnoff for the core audience.\u00a0 This was shown over recent loot box controversies.<\/p>\n

DFC Intelligence reports breakout the many segments of the game industry.\u00a0 The mobile game business can actually be broken into multiple sub-segments each of which has its own challenges and opportunities.\u00a0 If you would like a free copy of out top-level segmentation be sure and register with Venture Beat<\/a>.<\/p>\n

The Business of Video Games<\/a> report, along with the latest DFC Video Game Market Forecasts<\/a>, are available at www.dfcint.com.<\/p>\n

To Request A Talk With A DFC Analyst Fill Out This Form<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

The newly released DFC Intelligence report The Business of Video Games, looks at the diversity of the ever expanding video game market.\u00a0 On a top level, one of the biggest issues is the bifurcation of the industry into two separate segments.\u00a0 One segment is the core video game players.\u00a0 The other is the more casual […]<\/p>\n","protected":false},"author":4,"featured_media":16891,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[49,149,40,39,66],"tags":[],"_links":{"self":[{"href":"https:\/\/www.dfcint.com\/dossier\/wp-json\/wp\/v2\/posts\/16887"}],"collection":[{"href":"https:\/\/www.dfcint.com\/dossier\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.dfcint.com\/dossier\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.dfcint.com\/dossier\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.dfcint.com\/dossier\/wp-json\/wp\/v2\/comments?post=16887"}],"version-history":[{"count":2,"href":"https:\/\/www.dfcint.com\/dossier\/wp-json\/wp\/v2\/posts\/16887\/revisions"}],"predecessor-version":[{"id":16914,"href":"https:\/\/www.dfcint.com\/dossier\/wp-json\/wp\/v2\/posts\/16887\/revisions\/16914"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.dfcint.com\/dossier\/wp-json\/wp\/v2\/media\/16891"}],"wp:attachment":[{"href":"https:\/\/www.dfcint.com\/dossier\/wp-json\/wp\/v2\/media?parent=16887"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.dfcint.com\/dossier\/wp-json\/wp\/v2\/categories?post=16887"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.dfcint.com\/dossier\/wp-json\/wp\/v2\/tags?post=16887"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}