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Mobile Devices Are Fastest Growing Platform for Electronic Games, Business and Industry Trends Analysis

The use of smartphones and tablets to download and play video games is growing quickly worldwide.  Newzoo forecast mobile game revenues to overtake PC game revenue by 2016.  Mobile game software has become an industry of its own, with startup firms such as Rovio and GungHo showing stunning growth.  Analysts at PwC expect global smartphones to total nearly 4 billion by 2019.

Zynga, maker of classic Facebook games FarmVille, CityVille, Mafia Wars and Words with Friends, severed its ties with Facebook in 2012 in order to concentrate on developing more sophisticated games for mobile users.  This was a radical shift from the company’s previous focus on so-called “freemium” pricing model, in which games are free at first, but then encourages players to buy virtual goods in order to progress to higher playing levels.  The move has led to negative press and falling revenues.

Meanwhile, Microsoft is also working on increasing access to its products via mobile devices.  The firm offers an app called SmartGlass.  It connects the Xbox game console with a smartphone or tablet, thereby creating a second screen for interaction with games, music, sports and video entertainment.  Microsoft’s recent operating system, Windows 10, increases mobile access, linking Xbox controllers with other devices running the system, including phones with Windows 10 Mobile.

Small firms with mobile video games are ripe for acquisition by larger manufacturers.  For the first seven months of 2016 alone, videogame acquisition deals totaled $25.1 billion according to Digi-Capital LLC.  88% of those deals were for mobile game companies.  One small firm of note, Machine Zone, Inc., which makes top selling Mobile Strike and Game of War:  Fire Age, had an estimated $913.2 million in 2015 revenue according to SuperData, and is a likely target for acquisition



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