A Look at Mobile Gaming

• Consumers spend a mind-boggling $120b on mobile in 2019, up 2.1 times since 2016. Gaming will make up 72% of that spend. By country, China is the largest market with 40% of spend.
• Mobile is also the hottest place to play games. It saw a 25% increase in spend, more than all the other gaming platforms combined. Spend here is 2.4 times that of PC and Mac gaming, and 2.9 times that of home console gaming. It should surpass over $100b in 2020.
• Casual gaming is the hottest category for mobile gaming, making up 47% of downloads. However, a portfolio of casual games is necessary for most companies as users will switch between several games. Puzzle games tend to hold attention the longest, with Anipop alone representing 10% of the total amount of time spent on the top 100 games. On the other hand, while core games made up only around 1 out of five games, more time was spent with them. Action games hold attention the longest. PUBG Mobile dominated this category.

Trend 1: In-App Advertising will Fuel Revenue

•  Apple Arcade and Google Play Pass are huge opportunities for game publishers to monetize, as consumers try out new games.
•  5G will also likely be a new battleground as gamers will be the first to try.
• Mobile ad spend will hit $240b as brands continue to invest.
• In November 2019, Mopub had seen brand spend on video increase by about 180% year-on-year.
• In 2019, in-app advertising (IAA) revenue overtook in-app purchases (IAP) for casual gaming, with a split of 56% IAA vs 44% IAP.

Trend 2: Programmatic Advertising Gives Games an Edge with Advertisers

• While the traditional measure for mobile advertisers is cost per install (CPI), many marketers will increasingly move towards Return on Ad Spend (ROAS).
• This will drive the move towards more programmatic advertising, as mobile advertisers demand more efficient use of their dollars.
• According to eMarketer, $36b of mobile ad spend will be programmatic by this year.
•  Rovio Entertainment Corp, the makers of Angry Birds, moved 92% of their ad revenue to run on bidding and say they've seen much better results.

Trend 3: Core Games Drive Revenue

• Core RPG, Strategy, and Action games made up over half of spend in key markets like China, Japan and South Korea. However, Western markets are beginning to shift towards these games as well. The combined effect of this prioritization resulted in core games contributing 76% of spend.
• This growing contribution to revenue is most likely because these games tend to have deeper engagement and longer playing sessions. This trend will only grow stronger, as mobile devices' power and hardware capabilities drive even more immersive experiences.
•  Fate/Grand Order made the most in terms of consumer spend in 2019. It is a Japanese RPG mobile game that's free-to-play with in-app purchases.  
•  Casino games are also promising as revenue drivers. This genre only accounted for 1% of time, but 6% of revenue. Coin Master, the top Casino game, is particularly strong in the US, UK, and Germany. It's free-to-play with in-app purchases.

Trend 4: Gold Rush Continues

• The market still has a lot of space to expand, even as some players are already well-established. This will only continue to grow as people depend increasingly more on their mobile- as it is, consumers spent 35% more time on their mobile in 2019 than 2017. This shift is also underpinned by a generational shift. Gen Z has 60% higher user engagement with mobile vs. the previous generation.
•  17% more games broke the $5m spend in 2019 vs. 2017.

• Once traction has been established, growth seems to become steeper rather than flatten out. Games that exceeded an annual consumer spend of $100m grew by 59% in 2019 vs. 2017.

Trend 5- Increasing Need to Balance Competition with Connectivity

• While esports and combat games take up a large swathe of gaming, there is a very strong desire for cooperative games as well.
• While the appeal may be built around a larger universe to explore, it's also a proven shift driven by age, as older gamers are more likely to look for cooperative games and move away from competition. The steepest drop is between the ages of 13-35, with the sharpest being for women between 13-20. This may be because many competitive games reward an environment hostile towards women gamers, leading them to drop out of those games and seek more cooperative games (or leave gaming altogether).
• On the other hand, 40% of gamers make 6 or more friends a year in cooperative gaming, meaning they are highly invested in the platform and are a ripe target for monetization.
• This desire for cooperation and networking is one of the main drivers behind the success of Fortnite, which let mobile users play alongside and with home console and PC users for the first time. Microtransactions and Battle Passes allow users to purchase skins, dances, and character features that reinforce the social aspect of the game.
• The game's popularity is fed not just by being able to play together, but to watch together. During their recent October 2019 event, there were more than 7m simultaneous viewers across Twitch, Twitter, and YouTube.
• Fortnite's revenue in 2019 was a whopping $1.8 in 2019.