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Hundreds of billions of dollars not the limit? Who, how, and how much is currently earning from mobile games

Mobile gaming today is not the most unambiguous topic in the gaming industry in terms of the quality of the content provided. But it has to be acknowledged as a leader at least in the field of earnings. Yes, the banal "time killers" on the smartphone sometimes bring more compared to AAA blockbusters on "adult" gaming consoles or PCs. We figure out how this happened and what it will lead to in the future.

Legendary "Snake" and Gravity Defied

Such a definition was found on the internet. Although it's a bit complicated and slightly outdated.

"A mobile game is a video game that is played on a mobile phone. This term also refers to all games that are played on any mobile device, including a mobile phone (feature phone or smartphone), tablet, PDA, portable game console, portable media player or graphic calculator, with or without network availability," several sources affirm.

It is believed that everything began in the 90s of the XX century. More precisely, in 1994, when the legendary "Tetris" was released on a mobile phone called Hagenuk MT-2000. However, three years later, the no less legendary "Snake" game brought more tangible popularity to "mobile games". It is considered that its creator was a phone from the then Finnish company Nokia: the game was released on the 6110 model (the device started selling in 1998).

Why exactly did "Snake" become such a hit? There are several reasons. The 6110 was one of the first relatively mass-market cell phones of that period - the number of potential players increased correspondingly. In addition, the game turned out to be relatively simple: control with only four keys provided addictive gameplay that anyone could try. In general, the entry threshold was low (if you do not take into account the cost of the mobile phone itself at a whopping $900 for those times).

The next noticeable stage of development was the transition of cell phones to color displays, as well as the implementation of the WAP protocol (wireless data transfer). Simply put, some games could now be downloaded to the device later (albeit with certain "crutches") - in the same Nokia of the 1990s, this was impossible.

All programs and functions until this point were "stitched" into phones by the manufacturer in advance - software modification was either completely inaccessible or very limited.

Schoolchildren of the early and mid-2000s will surely remember a game called Gravity Defied - it became a kind of Java classic, making players sweat for a motorcyclist, in essence, fighting gravity (and in fact - overcoming difficult obstacles).

App Stores That Have Transformed the Industry

However, before the spread of smartphones (i.e., before 2007-2008), mobile games amazed us more with the variety of titles, but not with a marked improvement in the quality of projects. Cell phones with physical keys and overly miniature displays limited gameplay possibilities.

Even then, publishers and developers caught one of the main advantages that can provide the promotion of mobile projects: they (if not considering specialized devices like the PSP from Sony) do not need dedicated devices.

At the same time, access to a significantly larger audience of users who already own mobile phones is much easier to monetize.

With the emergence of corresponding app stores - primarily the App Store (for iOS devices) and Google Play (for Android gadgets) - mobile game development began to take on the form it is known for today. Even considering a commission of around 30% (depending on the platform), revenues from distributing games in this way began to grow rapidly.

In 2009, Doodle Jump came out, where all the controls were tied to the iPhone's gyroscope. Even more iconic was the Angry Birds series, in the same division is Subway Surfers. And in the mid-2010s, reissues of "big" games from the beginning of the century made their way onto smartphones. For example, Grand Theft Auto: the performance of devices became sufficient.

The graph above shows, how from 2015 there began a growth in the number of mobile games relative to other applications in the App Store.

How exactly do mobile games make money

To achieve profitability, several monetization strategies for mobile games are typically used today:

Microtransactions are when players exchange real money for in-game items. Microtransactions are arguably the most popular way to make money in mobile games: up to 79% of titles use this strategy.
In-game advertising is the second most popular way to make money in mobile games. About 71% of players say that advertising is the preferred method of "payment" in free-to-play projects. There are different types: reward videos, offerwall ads (where you are offered to install other apps, participate in a survey, or perform an action in exchange for an in-game bonus), banner ads, and interstitial (ads between levels).
Advance payments are becoming an increasingly rare way to make money for mobile games due to the development of the free-to-play model. But some developers still use this method.
The freemium model usually offers both a free version and one or more paid versions of the game. The latter may contain additional levels, characters, features, and other privileges that players do not have access to in the free modification.
Some publishers can learn more about player preferences by analyzing how they interact with their product. “Part of this information can be valuable to other companies,” the material says. However, user data monetization is at least a controversial (if not to say much harsher) way of making money because of privacy law and data collection requirements in a specific country.

What sums are we talking about?

At least tens of billions of dollars. The German company Statista, specializing in market and consumer data analysis, predicts:

Photo: Newzoo

In 2024, the mobile game market will generate revenue of $98.74 billion (the entire video game market is expected to reach around $282.3 billion in 2024).
The combined annual growth rate (CAGR) of the market will be 6.39%, as a result of which the market volume will be $118.9 billion by 2027.
By 2027, the number of users in this segment will reach 1.9 billion people.
If comparing by countries, the highest revenue is projected in China, which will amount to $34,660,000 million in 2024.
The average revenue per active user (ARPU) in the mobile games market will be around $57.64 in 2024.
Revenues from mobile games (at least in the US) are growing due to the high penetration of smartphones and increasing demand for interactive projects.

According to data from the company Newzoo, in 2023 49% of the entire video game market was accounted for by mobile games, while console and PC projects accounted for 30% and 20%, respectively.

Of equal interest in the same report is the list of public companies with the highest revenues in the industry. For instance, the Chinese company Tencent, which owns the famous PUBG, is in the first place. Sony, with a whole slew of "adult" exclusive projects, is in second place, and Apple — which only has the subscription service Arcade — closes the trio.

The article is taken from the Onliner source and translated using AI.

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