Global mobile gaming industry to generate $56.6 billion annual revenue by 2024

The global rise of the mobile gaming sector shows no signs of letting up, with new figures forecasting annual revenues reaching $56.6 billion by 2024. The mobile gaming industry will generate $52 billion in revenue this year, representing a 6.2% year-on-year increase. It’s a substantial rise from 2017, when mobile gaming yielded almost $8 billion less per annum.

Taking geographical demographics into account, it’s the Chinese that appear to be the driving force behind mobile gaming. The Chinese market alone is forecast to generate profits approaching $20 billion this year, equating to almost two-fifths of mobile gaming revenue worldwide. According to a recent report on China’s mobile gaming market, some 691 million Chinese residents were regular mobile gamers as of June 2019. That’s a rise of 70 million from December 2018, when the Chinese government agreed to loosen restrictions on new mobile gaming apps.

China still head and shoulders above the rest in terms of mobile gaming revenues

There are allegedly over 320 million mobile games available for Chinese consumers to enjoy within Tencent’s WeChat platform, a nationwide messaging app with an active user base of more than a billion. Another Beijing-based data firm believes that annual mobile gaming revenues could peak as high as $30 billion by the end of this year. However, it must be said that these forecasts were prior to the Coronavirus outbreak that has led to a pandemic and the handbrake being pulled on global economic growth.

China is home to the world’s gaming capital, Macau, which has taken a huge hit since the Coronavirus outbreak caused a shutdown of the city. In early February, the city’s casino resorts were also requested to close their doors for at least a fortnight, preventing travellers from mainland China and beyond from spreading the virus. In a warped way, the Coronavirus pandemic could raise awareness of the rapidly growing options of mobile slots and table games that can be played on smartphones and tablets without having to leave the confines of consumers’ homes.

The likely paths that mobile gaming could take next

The US is the world’s second largest mobile gaming market and is expected to generate around half of China’s annual revenue in 2020, underlining China’s dominance in the sector. The next mobile gaming craze to consume US and Chinese gamers looks almost certain to be mobile-based virtual reality (VR) games. As gamers increasingly crave more immersive and engagement with their video gaming, VR allows players to transport themselves into virtual three-dimensional environments.

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Smartphone devices are being increasingly viewed as the gateway to mainstream VR gaming. In recent years, several tech giants have sought to develop and launch mobile-powered VR gaming experiences, transforming smartphones into VR headsets. Samsung’s Gear VR was one of the most successful, reaching out to the brand’s owners of its Galaxy smartphone range, allowing them to sample VR gaming without having to fork out the $1,600 needed to own a dedicated VR headset such as the Oculus Rift or HTC Vive. Oculus is also focusing more heavily on infiltrating the desktop gaming sector, with the Oculus Quest gaining PC support.

There is also one other mobile gaming trend that could leave VR and augmented reality (AR) mobile games behind – hyper-casual gaming. The concept of hyper-casual mobile games is that they are designed to be exceptionally lightweight in terms of resources. Thus, making them suitable for the mainstream smartphone market. The games themselves are also designed with rudimentary gameplay, delivering instant pick-up-and-play appeal for time-poor consumers.

While some people view hyper-casual gaming as a genre, others have labelled it an out-and-out business model for gaming publishers. Most hyper-casual gaming publishers are heavily reliant on ad revenue. In fact, some acquire up to 95% of their income through ad placements and monetization. Gamers are never asked to pay to play hyper-casual games, they simply pay with their spare time by viewing ads and placements, without restricting or limiting gameplay in any way.

However, in order to drive more revenue from the hyper-casual mobile gaming niche, the onus will be firmly on the advertising networks and platforms to provide more intuitive and native placements. A rise in playable ads could be an interesting development, particularly if developers are prepared to launch half-baked games that steer players more to the lucrative ads than the main games themselves. It’s hard not to see this particular niche heading in that direction.