Europe shows a growth of 15 percent, totaling 70 million gamers for seven key territories. Men slightly outnumber women in the US (52 percent) as well as in key European countries (55 percent). Growth rate in terms of time and money spent is significantly higher. In addition to the growing installed base of smartphones and tablets, three key drivers are accelerating growth of this games market segment: uptake of in-game purchases in free games; tablets and smartphones each creating their own market; and the popularity of “mid-core” games. In 2011, mobile gaming took 13 percent of all time spent on games worldwide, totaling more than 130 million hours a day, and 9 percent of total money spent on games, grossing $5.8 billion.
The Mobile Games Trend Report with key facts and graphs can be found in the Newzoo app available in the Apple AppStore and PlayStore. It can also be found online: http://newzoo.com/ENG/1632-Mobile_Games_Trend_Report.html
Uptake of in-game purchases in free games
The free-to-play business model is increasingly converting players into continuous payers and already accounts for 79 percent (EU) and 90 percent (US) of mobile game spending. In February, the top 5 grossing games for Europe and US were all free games, with Dragonvale, Smurfs’ Village and Zynga Poker topping the charts. Paid games enter the top 5 at launch, but in most cases drop out within a month. Monetizing games as a free service clearly provides a more continuous and higher revenue stream.
Smartphones and tablets are each creating their own market
69 percent of US mobile gamers play games on a smartphone, 21 percent on a tablet and 18 percent on an iPod Touch. Figures for Europe are comparable: 69 percent, 16 percent and 11 percent. Treating tablets and smartphones as a single “mobile gaming” market segment overlooks the fact that both screens fulfill different consumer needs. From a consumer’s perspective, tablets are used as a “floating” screen in their lives, in addition to the “personal” smartphone screen, which travels everywhere with the consumer, thus providing two sources of growth. Both screens combined fill the gaps in time, place and social setting that the TV (or “entertainment”) and computer screens do not service. Taking consumers and their interfaces as a starting point, Newzoo is working on a new segmentation of the games market that stands the test of time, illustrates cross-screen gaming potential and points to areas of future growth.
Newzoo’s CEO Peter Warman adds: “The recent launch of the new iPad did not bring us the edgeless display and other innovations we were hoping for, but… the two main upgrades, processing power and resolution, dramatically improve the immersive experience of “core” games on that platform. The intuitive interface forces developers to offer more casual gameplay, ensuring the games cater to a far broader audience, including the young moms and dads who used to play core games on their PC, Xbox or PlayStation. Immersive experience and casual gameplay combined is what “mid-core” gaming is about.”
Popularity of “mid-core” games
Tablets and smartphones are often seen as “casual” game platforms, focusing on the success of games like Angry Birds, Smurfs Village, a variety of Poker games and, most recently, Draw Something. The major opportunity on smartphones and tablets is now for “core” games to be offered as full games or game extensions, as the majority of “core” console and PC gamers also plays games on mobile devices: 62 percent in the US and 67 percent in Europe. Up until now most “core” mobile games have been offered as paid games, making limited use of the potential. Companies who can combine the “core” genres on mobile with the games-as-a-service business model will maximize this potential. Lords & Knights of Xyrality is proving this in Europe, taking the number one grossing spot in Germany above the usual suspects, Zynga Poker and Grand Theft Auto 3.
Sven Ossebrűggen, Co-CEO of Xyrality comments on the success of Lords and Knights: “The success of Lords and Knights is based on targeting the experienced o-players from the browser area waiting for a real strategy MMO in the mobile space. The players especially like the fact that they can play online at all times of the day.”