Mobile gaming traditionally experiences a spike during the holiday season as a result of an increase in new devices being given as gifts. For the last several years, those increases have not fallen off for the mobile gaming industry. For the 2016 holiday season, gamers spent a record $968 million on Android and iOS gaming apps, which represents a 53 percent increase over the 2015 holiday period.
When looking at the total mobile gaming revenue figures, year ending 2016 was $37 billion. Consoles brought in $31 billion and PCs accounted for $21 billion. Those figures will become even more lopsided as mobile gaming takes an ever larger slice of the pie. Technology is increasing exponentially, allowing for more complex games with greater functionality and better graphics. The younger generation of internet users will be more apt to game on mobile devices rather than being tied down to a PC. The advent of the smartphone was the catalyst for the explosion of mobile computing.
In the early days of mobile gaming, a consumer would pay a fee to download a gaming app. As gaming became more popular, a proliferation of apps became available, thereby saturating the market. App designers had no choice but to offer the apps for free with the hope of monetizing the game with adds and gambling in order to make back their design expenses.
Gaming apps became based on the free-to-play (F2P) model and now consumers expect quality mobile gaming apps for little or no cost. Monetization of a game comes later through in-app purchases of an upgrade of the game. In-app advertising of affiliate products and commission sales also are part of the monetization strategy. And as online gambling and sports betting becomes legalized in more states, so too will the amount of betting on egaming competitions skyrocket.
The conundrum of needing to monetize a gaming site is clashing with the need to keep mobile gamers who do not spend in-app, involved in gaming. Currently, a very small percentage of players spend the most money. So, naturally, marketing tends to focus on those players. This strategy is alienating a large group of gamers who do not spend money in-app.
Mobile gaming will continue its meteoric rise, especially with the advent of eSports. So too will the mobile gaming app market, which accounts for 20 percent of all apps in Apple’s App Store. In order to keep continue that growth, the industry needs to find a way to embrace non spending gamers similar to the way online gambling sites have free- to-play casino games.