Emerging Trends in the World of Mobile Gaming in 2021
The year 2020 will always be tainted in history books as the year of COVID-19. The pandemic shook economies and different kinds of industries across the spectrum, mostly in a negative way. However, the gaming industry, and the mobile segment in particular, is continuing its spectacular rise. With many offices shut across the world and people spending more time at home, more individuals are playing games than ever before as they look for varied ways to spend their disposable time. Gaming has become an alternate way by which people get to socialize with each other. As per research by Neilsen, game earnings were up just 6% year-over-year in January and February 2020 but rose to 14% for the rest of the year. As COVID-19 lockdowns took effect worldwide in March, game spending took off and never let up.
We’re already far past the point of gaming being the biggest earner in the media sector, with an estimated $165 billion revenue generated in 2020 and a gigantic strong force of 2.7 billion gamers worldwide today as per the World Economic Forum. The leading force in the gaming industry was by far the mobile gaming segment with estimated earnings of $73.8 billion. Compare these staggering numbers with the revenues generated by the global box office in 2019 which stood at $42.5 billion and the wholesale revenues generated by the global recorded music industry in the same year which was $20.2 billion, the sheer dominance of the gaming industry in the media sphere can be better understood. Mobile gaming on its own generates more revenue than the film and music industries combined.
With the world now slowly gearing up for a post-pandemic era in 2021, here are some of the trends that we expect to see in the months ahead:
1. Adaptation of newer technologies:
New technologies and developments in the mobile gaming ecosystem are expected to further bolster the industry. With respect to game development, engines like Unreal and Unity are expected to improve their offerings and empower more game developers to create engaging products.
With respect to game platforms, companies like Epic Games and Roblox are expected to continue to integrate the music and film with virtual game universes, bringing in a new era of innovative experiences. Highly accessible distribution platforms such as xCloud and Google Stadia will blur the lines between games and online entertainment in innovative ways.
Ad tech and monetization tools used by developers to make money are also expected to become more sophisticated, with significant improvements expected in processes like in-app bidding.
2. Virtual reality and augmented reality:
Virtual reality and augmented reality are slated to be the next big thing in the tech world. While VR headsets have become a sizable part of the experience with respect to gaming consoles such as the Playstation, the development of VR and AR for mobile phones have only just started. The high prices of mobile VR headsets have resulted in slower adaptation by consumers than expected. But with cheaper and better technologies trickling in, VR and AR are expected to become more mainstream with respect to mobile phones and provide mobile gamers with an all new dynamic and immersive experience. The roll-out of 5G across the world will also boost the adoption given that VR content is data intensive and need higher speeds.
3. Increased social features:
With a plethora of games being available on the Android Play Store and the Apple App Store and new ones being released every single day, finding ways to retain gamers is a difficult yet top priority issue for all mobile game developers.
One of the major ways in which developers are expected to deal with this challenge is by adding various social mechanics like activity feeds, in-game chats, ability to send invites and join teams, etc. Making new friends and rivals is a daily part of a gamer’s life. According to the Entertainment Software Association, it is estimated that 56 per cent of frequent gamers play multiplayer games and 55 per cent say that video games help them stay connected with their friends. With cross-play, gamers are not limited to people with a gaming console. Anybody can join in from their preferred platforms and play together.
Another factor that has contributed to the importance of adding these social features to games is the COVID-19 pandemic. With real social interactions severely affected, consumers have turned to other means of staying in touch. Users have been drawn to features in games which allow them to interact with other people. Bunch, a gaming platform that enables players to hold a group video chat while playing multiplayer games, saw its monthly active user base grow 50 times over since March 2020 when the pandemic first took centerstage, breaking through the million-mark. The subsequent investment of $20 million in Bunch by EA and Ubisoft in September 2020 is indicative of the direction in which the mobile gaming sector is headed.
In addition to the social features in mobile games, games native to social platforms such as Snapchat and Houseparty will continue to gain popularity and market share. Mobile gaming heavyweight Zynga, for example, joined hands with Snapchat in 2020 to release multiple titles exclusively on the Snapchat platform, hoping to tap into its user base. More collaborations like this are likely to happen in 2021 as social media platforms try make their presence felt in this tremendously lucrative industry.
4. Smart playable ads:
According to article by AppsFlyer, mobile app marketers spent $75 billion in 2020, up 30 per cent compared to 2019. Given that the COVID-19 pandemic is far from getting over, this upwards trend is expected to continue.
Playable ads have in the recent past have become an increasingly popular advertising format due largely to their ability to give consumers an opportunity to experience a game before downloading it. A recent survey conducted revealed 46 per cent of game developers consider immersive in-game advertising a key opportunity for monetization.
2021 will see more mobile game developers take advantage of this distinctive ad type. We may also get to see new and immersive interactive ad formats similar to the collaboration between Snap Inc. and Unity wherein game developers will get access to various features of Snap Kit through the Unity Asset Store.
5. 5G Adoption:
The roll-out of 5G technologies is expected to pick-up in 2021. This year will see continued improvements to network infrastructure and increased government support. With Apple coming out with its first 5G devices in the form of the iPhone 12 series, all major smartphone carriers now have a 5G offering. The iPhone 12 series is expected to be a major driving force for 5G adoption in Apple’s key markets such as the U.S., Japan, and China.
The seamless connectivity and faster internet speeds is expected to boost the gamer experience and usage. With lags becoming non-existent, 5G is expected to usher in a new era in the world of mobile gaming. The roll-out of 5G will also serve as a boost for the development of new and exciting mobile technologies.
6. Implications of the removal of IDFA by Apple:
The changes made by Apple to its latest mobile operating system iOS 14 is being seen by many app publishers as a severe disruption to their ability to market themselves effectively and monetize through targeted advertising. The IDFA policy of Apple shaped current user-acquisition processes and mobile advertising platforms, so its removal will have a significant impact on publishers and other advertising stakeholders as per Newzoo. Notably, Google has not announced a similar change for Android and is not expected to do so in 2021 (though it may take more moderate steps to protect user privacy). Newzoo expects a short-term lower spend on user acquisition across iOS in 2021. Instead, this spend may flow into Android, web, or other channels while the industry attempts to regain its footing.
IDFA’s removal will impact all mobile genres, casual and core alike, in some way or the other, and Newzoo expects it to inspire the revival of traditional forms of creative advertising, which are right now more commonly visible in PC and console campaigns. Offline channels may also start playing a greater role, and marketing creatives and ad innovation will become even more important. It is expected that publishers will learn from more traditional brand marketers, such as strategies found in consumer goods. Marketers are expected to build innovative new campaign structures from scratch and diversify the channel mix beyond Google and Facebook.
7. App Stores will face distribution challenges globally:
A news that grabbed a lot of attention last year was the ongoing tiff between Epic and Apple, following Fortnite’s removal from Apple's App Store. One of the consequences of this fallout was the introduction of the App Store Small Business Program, which sees Apple taking a 15 per cent cut of an app revenue rather than the original 30 per cent from developers earning less than $1 million annually from the App Store. This episode showcases just how much of an impact individual titles like Fortnite can have.
The Apple App Store restrictions have also been recently challenged by cloud gaming platforms like Amazon which released its Luna cloud gaming service via a web app on iOS. Microsoft and GeForce Now too are following suit with Safari-based apps for their cloud gaming services.
App stores in China have been observed to be tightening up publishing regulations. While Epic challenged Apple's 30 per cent commission, it is not unusual for third-party Android app stores in China to take a 50 per cent cut. Given such high rates, individual games have shown an inclination to release independently, due to publishers and platforms failing to reach a mutual agreement on revenue shares. Huawei recently removed all of Tencent's titles from its store due to a similar revenue dispute (the games have now been reinstated).
As per Newzoo, app stores will continue to have their practices challenged in order to create a fairer ecosystem for developers and publishers across the globe.
8. More IP based Games for Mobiles:
The relatively shorter development time frames and lower investment costs of mobile development has made mobile phones the platform of choice for modern-day IP-holders looking to bring their franchises to gaming platforms according to Newzoo. As mobile continues to be the fastest-growing and most-prevalent gaming platform, more and more IP holders across various entertainment divisions are vying to cash in.
We have in the recent past already seen popular gaming IP make their way onto mobile - Square Enix Montréal has created the 'GO' series, featuring the popular Hitman and Tomb Raider IPs. The company is also developing a new Tomb Raider title for mobile this year. The UK based developer, King is set to release Crash Bandicoot: On The Run in the spring. Our parent company, JetSynthesys too has launched a WWE Racing Showdown game which combines racing with combat action. Newzoo has identified over 230 entertainment-based (from movies, TV, or books) IP games currently available on app stores, and over 900 IP-based games released across all platforms in the last two decades alone.
It is also predicted that mobile-first IP will start to grow beyond the confines of the mobile platform. We've seen this in the past with quite a few mobile titles becoming fully-fledged franchises with the likes of Angry Birds and Candy Crush. And as we move into a more connected ecosystem where different forms of entertainment merge into one another, this trend is only expected to boom further
9. Increased industry consolidation:
2020 saw a number of mergers and acquisitions in the mobile gaming industry, with consolidation being the trending theme. Zynga acquired two Turkish developers, Peak Games for $1.80 billion and Rollic Games for $180 million (for a 80% stake, the rest will be purchased over the next three years), Stillfront Group acquired Storm8 for $300 million, Take Two purchased Playdots (developer of the Two Dots title) for $192 million, Miniclip acquired Israel's Ilyon Games for $100 million, and many more. There is a possibility that this trend of consolidation will continue in 2021 too.
Overall, the mobile gaming industry is all set for yet another very successful year. While it may not be able to sustain the growth-rates observed during the heights of the COVID-19 pandemic last year, the industry is in no way stagnating any time soon. With so many exciting developments in the pipeline, this industry will remain a strong force to reckon with.
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