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Evolution of Mobile Gaming Creates New Opportunities

The video games industry has changed dramatically over the past decade. Historically, computers and consoles were essentially the only devices used to play video games, requiring a significant initial investment in hardware and software. However, these legacy devices have been supplemented by an array of alternative consumer games channels in recent years. First with the evolution of the smartphone, then with the emergence of the media tablet.

Juniper Research has revealed that by 2019 worldwide revenues from media tablet games usage will reach $13.3 billion -- that's a threefold rise on the 2014 revenue of $3.6 billion.

The latest Juniper market study highlights that growth will be fueled by a number of key factors, including improved storage capacity of devices, better graphical capabilities, increasing mobile broadband penetration and consumer preference for convenience and ubiquity.

The Juniper market study also found that 2015 could be critical for smaller, independent games developers. The upside growth opportunity is significant. Total global mobile games revenues, which include revenues from smartphones, tablets, and featurephones, will reach $28.9 billion by 2016.

Analysts say that in marketplaces containing over 1 million apps, greater funding would be required to optimize the opportunity to achieve consumer awareness, and suggested that crowdfunding would represent an increasingly popular option.

The study findings also argued that there will be strong growth in monetization of smartphone games across emerging markets, with mobile service provider billing deployments increasingly facilitating storefront payments in countries with lower banked penetration rates.

Juniper claimed that with micro-apps now being embedded in mobile messenger services, these may serve as an additional delivery channel for games in the medium term, stimulating further growth.

Meanwhile, in a related Juniper market study, they concludes that amid declining sales, a shift to digital game software distribution and adapting elements of the free-to-play business model are inevitable.

Competition from newly emerging dedicated game hardware manufacturers, such as Steam Machine and Shield, poses new challenges for the traditional players as well as an opportunity for the segment to revitalize itself.

Other findings from the market study include:

  • Advertisements are becoming increasingly key in revenue generation, as only about 6 percent of mobile games will be paid for at point of download in 2019.
  • Diversified gaming offerings have resulted in a sharp uplift in the scale and session length of social or casual games among wider demographics.

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