Mobile to be "primary hardware" for gaming by 2016

Shifting mobile game market to hit $9 billion in 2016, says Juniper; tablets helping to drive in-app purchases

The mobile market is evolving rapidly, as hardware and operating systems continue to shift worldwide. These trends are increasingly important to the game industry, as the market for mobile games is also growing at a rapid pace. Android is gaining on iOS, Windows is getting a foothold on tablets and smartphones, and market share is changing around the world. Recent reports from various research firms highlight the changes.

Market intelligence firm Juniper Research says in a recent report that smartphones and tablets are going to be primary device for gamers to make in-app purchases in the future. Juniper projects 64.1 billion downloads of game apps to mobile devices in 2017, compared to the 21 billion downloaded in 2012.

According to TechCrunch, Juniper believes mobile hardware "will become the primary screen for gamers." Juniper says that will happen with growing numbers of "sophisticated games, which allow for truly multi-platform gameplay through the use of cloud technology," according to report author Siân Rowlands. The fact that mobile device memory continues to rise is allowing more room for games, too. Juniper notes that handheld videogame consoles like the 3DS are definitely being impacted by the rise in smartphones and tablets, as evidenced by Nintendo's cutting its forecast for 3DS sales by 14 percent.

The company sees tablet owners as eager gamers, downloading twice the number of games as smartphone owners. "Tablet games are growing so much because they are such an accessible way for all consumer segments to access games. In particular mid-core gamers, who previously spent a lot of money and time playing games but now have jobs, families or other commitments, are driving this trend," said Rowlands. "These people are really embracing the tablet form factor, and innovative gameplay devices such as the mobile based Ouya console, really appeal to them." Most of the in-app purchase revenue from tablets will be from the Far East & China and North America, and Juniper believes tablets overall will account for 86 percent of in-app spending in 2016.

Juniper projects that tablet gamers will spend over $3 billion on in-app purchases in 2016, which is more than ten times the $301 million Juniper calculated for 2012 tablet game revenue. Still, smartphones continue to outpace tablets, with more than $6 billion projected to be spent on them in 2016. The company's study found a clear migration from portable game consoles to tablets and smartphone. Juniper pointed out that the freemium model is harder to implement on portable consoles, which mostly don't have 3G or 4G connectivity and thus wouldn't have the ability to download new content at nearly any time.

Free-to-play games will dominate the mobile game market even more than today, with Juniper forecasting that only 7 percent of games will be paid for at the point of purchase in 2017. The company also predicts that Social & Casual games will remain the most popular genre at more than half of all games downloaded on mobile.

Meanwhile, vast changes are occurring in the market share of mobile platforms. According to research firm Strategy Analytics, global branded tablet shipments reached 40.6 million units in Q1 2013, up 117 percent from 18.7 million in Q1 2012. Microsoft has made progress in the tablet market, going from zero market share to 7.4 percent after the launch of Surface and other Windows 8 based tablets, with more than 3 million such tablets shipped in Q1 of 2013. Of course, tablets of all kinds were at a record high in Q1, with 40.6 million tablets shipped worldwide, with year-on-year growth of 117 percent. That's impressive growth, but it's still less than the growth from Q1 2011 to Q1 2012, which hit 146 percent.

The Windows 8 tablet may seem to be a minor player in the tablet market, but at least it's outpacing Windows Phone smartphones, which have only grabbed about 3 percent of the worldwide market two years after the initial shipment. Why hasn't Windows Phone made more progress? Strategy Analytics notes that "very limited distribution, a shortage of top tier apps, and confusion in the market, are all holding back shipments." Microsoft has as yet been unable to capitalize on its gaming success with the Xbox, and has failed to get major traction among game developers (despite paying some developers to put apps on Windows Phone).

At least, though, Windows Phone has been gaining share in the US market, according to a recent report from Kantar Worldpanel Comtech, rising to 5.6 percent of the US market. Windows Phone's gains worldwide are steady, as Nokia pushes out a bevy of brightly colored, low-priced Windows Phones to countries around the world. The market for those appears to be largely feature phone buyers finally making the switch to a smartphone; 52 percent of Windows Phone buyers in the US are moving to it from a feature phone.

Kantar's study also showed Android leading in sales across the nine markets surveyed in Q1, with 64.2 percent of all handset sales. Japan was the only market where Apple's iOS was in the lead. Everywhere else, Android smartphones are ahead. Once again, though, Apple is fond of pointing out that iOS users spend more money on apps and in apps, which is why game developers still tend to head for iOS first. These market share figures, though, show why game developers don't ignore Android anymore.

Apple's sales of tablets are growing well, as can be seen by the data from Strategy Analytics. But Android is growing much faster, eroding Apple's market share down to 48.2 percent compared to Android's 43.4 percent. Apple shrugs off the raw numbers comparison, pointing out that figures still show that users in the US, at least, overwhelmingly use their iOS tablets to access the Internet and pay for some of the over 350,000 apps that are designed specifically for the tablet.

The Android device fragmentation is still an issue; the multiplicity of devices and versions of the Android operating systems are a major headache. Still, Android smartphone sales are increasingly concentrated in a few top vendors; Samsung sold an astounding 70.7 million smartphones in Q1, almost double the 37.4 million smartphones Apple sold, according to a recent IDC report. Perhaps more tellingly, Samsung grew its smartphone sales by 60.7 percent over the previous year, while Apple grew only 6.6 percent. This is why analysts and others speculate that Apple may introduce a lower-cost iPhone; the company is losing ground against Android.

The wealth of data and informed speculation about the future has several clear implications for game developers. Mobile devices are going to continue their strong growth, and will continue to put pressure on other, similarly priced gaming devices. The sheer number of smartphones and tablets in the world, which has already climbed to over a billion devices, makes it an attractive market. Android is growing faster than Apple, and combined with the maturation of the Android market that means it's not a market any mobile game developer can afford to ignore. Microsoft has shown some life in both smartphones and tablets, though not enough growth to come anywhere near iOS or Android.

The challenge for game developers, large and small, continues to be how games get discovered on mobile platforms - and, of course, how to come up with a hit game that will stand out amongst hundreds of thousands of competitors. The only thing we can be sure of is that significant changes in the marketplace will continue.

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Latest comments (20)

Bruce Everiss Marketing Consultant 9 years ago
Yet still many in the industry are in denial.
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Free will Bruce, Free will
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Ryan Leonski Indie Dev 9 years ago
So does that mean that I will only be able to have bite sized mobile experiences and forego my epic 100+ hour games? What if I want to play competitively? I don't want to do that on mobile.
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John Bye Lead Designer, Freejam9 years ago
The subheader says "mobile game market to hit $9 billion in 2016", but the mobile games market already hit that figure last year. Reading the article, it sounds like the $9bn figure is actually for IAPs on tablets and mobile phones, so not counting premium apps and subscription services.

Also, it's worth bearing in mind that retail game sales alone came to $28bn last year.
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Daniel Hughes Studying PhD Literary Modernism, Bangor University9 years ago
It's no surprise mobile will be the go to device for in-app purchases: that's the dominant business model on this rapidly growing platform. Does that translate to the "primary hardware for gaming" we hear about in the headline? Not at all.

EDIT: My initial comment didn't make much sense. Juniper do state that mobile screens will be the primary screen for gaming, but on what basis is that supported? Number of users, number of hours played, money spent on games? How do you judge what the primary device is? Another recent report said that the number of paying mobile consumers has only just surpassed the combined install base of 3DS and Vita (that's one handheld slow to take off and one yet to take off at all), and that portable console consumers spend far more per user than smartphone equivalents. Which is the primary device?

Does primary make sense here? Or should we be saying "most widespread gaming screen"?

Edited 1 times. Last edit by Daniel Hughes on 1st May 2013 10:40am

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How about looking at it from a different perspective.

To date, we look at it by the amount of net profit and $$$ but in terms of sheer gaming enjoyment, longevity and cult status of games and game IP as embedded in our popular culture, our gaming mindset and memory might be less generous or favourable.

So bottom line, sure it makes money. maybe even loads of money, but 5-10 years down the line, will they still be in popular mindset , much less be beloved.
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Adam Campbell Product Manager, Azoomee9 years ago
I don't really see the confusion.

We're moving in a trajectory where mobile will likely be the number 1 in terms of the number of people playing games on this particularly type of gaming capable device.

How aspects such as quality of games or profitability translates is another matter altogether.
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Pier Castonguay Programmer 9 years ago
Analyst firms looking at "trends" are clueless, especially for the mobile market. It boomed in the past few years, but it won't keep going like this forever. The only logic part in the article is the mention about cloud gaming. Yes, mobile devices will be used as a secondary screen for the primary gaming device, which won't be it.
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Paul Johnson Managing Director / Lead code monkey, Rubicon Development9 years ago
This is not "either/or". I agree that consoles might still exist in five years, and also agree that call of duty is fun and will only be fun on a big telly with a good controller. Well, unless you are me.

(From a personal perspective, I'm projecting the "fun on a big telly" thing. I know lots don't seem to mind it, but I think a dpad is as bad a control device for most game types as is a touch panel. I absolutely cannot play FPS games on a console as the input method is as butchered to me to fit on a dpad as is a similar game ported to mobile. Arcade games should have a proper joystick, not a mushroom, etc.)

What the denyers seem to be missing out on though, is that those games will soon be in the minority. (They actually have been for some time, but I'm talking about income now). Which means that nine figure budgets will have to go, which means less will buy them, and before you know it there is a spiral. Maybe not a death spiral, but just a normal spiral covered in shite.

It's amusing to me that the first response from employees at studios making AAA is something along the lines of "yea, but mobile games are shite.". If you look beyond angry birds and cut the rope, you'll find some pretty engaging experiences and this is where the growth is right now - proper games on tablets.

Edited 1 times. Last edit by Paul Johnson on 1st May 2013 3:06pm

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Dwayne Wright Studying Physics, University of Manchester9 years ago
There's clearly room for both. Gaming tablets will probably take off, but mobile as the primary gaming device? I think it's a mistake to group the whole lot of gaming experiences together. Mobile, at least for now, cannot provide a true complete gaming experience. Sure it can be a platform for lots of mini-games and a few core games, but the majority of traditional gamers are not going to give up consoles (be they home, pc, handheld or gaming tablet) for these. Sure some of the market say that the Wii captured may go towards these, but it's like in the 90s saying, "90% of people are now using Windows. It's now set to become the primary gaming platform, making Megadrive, PS1 and N64 obsolete."

This is just analyst gas. The mobile market for games can succeed and grow in its own right, without having a major impact on the existing formats for the industry. Once upon a time most homes had just 1 PC, if any, and that was regarded sufficient. Now each home might have a PC, 3 laptops, 2 tablets, 4 smartphones. Owning or using one, does not necessarily rule out the purchase of the other. Reduce, perhaps, but each still serves its function. I can get TV on my computer - does that mean I'm not going to use my TV?

Edited 1 times. Last edit by Dwayne Wright on 1st May 2013 6:33pm

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Pete Thompson Editor 9 years ago
So earlier today I read that Blackberry have stated that the mobile tablet market is a dying market, and now I'm reading that the mobile market is likely to be the primary hardware for gamers, even though there's a new generation of consoles ready to deploy.. So who's reports do I believe?? Or maybe I just ignore all the reports and wait and see what actually happens..

I remember not so long ago that "Onlive" was being hailed as the death knell to consoles, yet the consoles are getting a new generation, and Onlive has been pretty quiet of late..

I for one do not like gaming on a phone or tablet, and any long time gamer will tell you that you simply cannot beat the social aspect of gaming and chatting with friends over services such as XBL..

Just my opinion of course..
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Brett Caird Production Director/Founder, 5th Cell9 years ago
I like how projections are being made 5 years out (I refer to details inside the article which project 2017 relative to 2012). I know people have to try to do this, but cast your mind back 5 years and consider that mobile and tablets effectively didn't exist as gaming platforms at all. The projections for the traditional games industry made then sure look silly now.

Though the prediction made by Blackberry in that recent article lacks any substance and when they claim they will end up on top it comes across more like a case of desperate sour grapes... reality is we totally could see another revolution in the next 5-10 years which will make a mockery of all current attempts to project outcomes. Including those that rely on the conventional wisdom that the smartphones and tablets we understand today will continue to be the growth/newly-dominant platform in 5 years time.
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Tim Carter Designer - Writer - Producer 9 years ago
Who wants to play Call of Duty or Half Life 3 on the subway with a tablet in ten minute spurts?
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Spencer Franklin Concept Artist 9 years ago
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Paul Johnson Managing Director / Lead code monkey, Rubicon Development9 years ago
Who wants to play Call of Duty or Half Life 3 on the subway with a tablet in ten minute spurts?"
Nobody. It doesn't take a tablet version to do this. A console version is even worse for playing in the subway. But mobile provides SOME gaming that can be played there. Love to see the PS4 manage that.

"Who wants to play Call of Duty or Half Life 3 on the subway with a tablet in ten minute spurts?"
Who wants to play it on a dpad? On the TV in 10 minute squirts because the wife wants to watch big brother.? At all?

I can't play call of duty with some stupid mushroom to move with my thumb. But most of the games I want to play - RTS, TBS, 4X, etc all play BETTER with touch control. And better still without needing a telly. WoW would be awesome. All of these formats have been epic in the past and will be again once the current love affair with grass shaders and DoF (i mean fps games) runs its course.

Tablets give you a big screen of your own, bolted to a powerful computer. What more needs to be said here? Anyone that thinks this is a poor recipe that can't provide proper gaming needs their bumps feeling. It HAS to be denial.

Edited 1 times. Last edit by Paul Johnson on 1st May 2013 10:25pm

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Josh Meier9 years ago
@Paul Johnson - You must not have gotten all that far into WoW if you think touch controls are going to get you anywhere aside from soloing at low levels. The sheer number of different skills, items, macros and other things I used for tanking and healing would have made it impossible to be effective in a raid or pvp with a touch screen.

WoW on a touch screen just sounds clunky. To even be effective you'd need both hands, which means you're no longer holding the tablet. If you're not somewhere you can place a stand, you're already at a disadvantage. To play with one hand would be like trying to do everything with just the mouse. Sure, you could do it, but your response times would be atrocious.

The more I think about it, the worse it sounds.
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Adam Campbell Product Manager, Azoomee9 years ago
Who wants to play Call of Duty or Half Life 3 on the subway with a tablet in ten minute spurts?
Why must people make out as if those games are more important than anything you'd play on a portable device? Why is it so bad for portable gaming to become the number one most popular form of gaming?

Why should it stop you playing bigger, more sophisticated games on a console or desktop? Number one 'here' doesn't mean decline or irrelevance 'over there'.

The discussion always becomes some silly talk about moving console games to mobiles and replacing them, because mobiles are now 'number one'.
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Private Industry 9 years ago
I know the mobile market is something new in the western market and plenty of people like to jump on it and make it out to be the destroyer of consoles and PC gaming and the major future gaming platform. But I don`t see it working that way. It`s a valid market thats worth making games for, but I wouldn`t go as far as saying it`s going to be the primary hardware for gaming any time soon unless of course you jsut go by the numbers of how many people have a smartphone and Angry Birds or Cut the Rope installed on it. If you look at it that way sure smartphones are winning because having a phone is more important than having a console in general and you can install those games for free. Will mobile the mobile market generate more revenue in 3 years compared to the console market? I highly doubt that.

I believe Japan is a great example, over there mobile gaming is very popular since a long time. While we where playing Snake on our phones here in the west they where playing full games in Japan that featured DLC, in game purchases and so on and it had 0 impact on the console market and still has 0 impact on it. Since mobile and social games emerged in the west and people pretended it has an effect on consoles the sales for consoles and software have far exceeded those of any other previous generation. Please don`t quote the decline in software sales numbers year over year that was released a few weeks ago when it was comparing this year with far fewer game releases compared to last year with a lot more big games in the same time frame.

I know Burce and other people like the Doom and Gloom of consoles and handhelds and all things non smartphone game related and social, but the facts are facts. Mobile gaming has been quickly expanding in the last few years because well it started at Zero here. It will slow down and it is/will be a difficult market over time because of several things. The market is already crowded right now when you look it into the app store you will see good games, bad games and a lot of useless apps that where made in probably a couple of hours that turns your phone into a fart machine because it can be cheap to make mobile apps. Although there is the saying that the creme rises to the top that only works to a certain extend the more apps are released per week the harder it gets even if your mobile game is really really great. The more you stand out the higher the cost will go may that be because of increased spending on advertisement or increased spending on the development costs, that in turn would force you increase the price of your app. That in turn makes it more difficult to sell you are app because the audience of mobile games and majority of people spending money on them only want to spend a small amount or nothing. Console and PC gamers are the big spenders and they are not going to migrate to the mobile market, they might play the odd game here and there when they are on the road but they will not give up consoles or PCs to play on smartphones or tablets and they will not spend much money on it.

I have exactly 2 paid apps on my phone, Broken Sowrd 1 and Broken Sword 2. Those games work on a smartphone and they are great, but if I look into the Android store the first one sold 100 000+ and the second one only 10 000+. They are great games and better than the majority of apps on either iOS App Store or Android store but the numbers arent great and thats only 3 bucks for a game and those games actually work great on a touchscreen device. The thing is if they would release it for consoles or the Vita I would instantly buy it even if it`s 10-15 bucks, but for the exact same game I wouldn`t pay that price on a smartphone and for several reasons with one important being that games suck the energy out of a battery faster than the blood of a Xenomorph burns through the skin of a human.

All in all there is a market for both, consoles will stay and still exceed the yearly revenue of mobile apps for years to come, console gamers will not migrate to mobile or social games, if you go only by user numbers mobile and social will be the winner and don`t put all your eggs in one basket.

@ Paul No wonder you don`t like FPS games on consoles if you play them with the D-Pad, you should switch to the analogue sticks that makes things a lot easier :)
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Ridiculous, mobile games appeal to the kind of people who bought a game boy as a kid, I preferred the NES, sure I own a few, some of them do look good, and the only time I've played them is if I was stuck in a particularly nasty que at the dentist, or most of the time during an airplane flight, but tbh, why on earth would I play a game on a portable device as long as I own A. a pc and B. consoles, and have access to them.

Mobile gaming is not a superior experience its merely a more accessible experience, sure some people prefer it, but most will not, frankly the controls even on iphone games, are for the most part poor, fps controls on consoles are bad enough but on a touch-screen mobile, are terrible, and gyro controlled games, whilst fine in theory, don't live up in practice, as in order to do some of the movements you have to tilt the very thing your trying to see to weird angles preventing you from actually seeing the whole screen possible, its hardly an ideal control scheme when every time you turn a corner the screen becomes instead less accessible just when you needed a better view and more control.

And anything remotely demanding and the little things heat up like rocks in a sauna room, not to mention there are just so many clones on the app stores, that for every genre there's 1 original game and 99 identical clones, with little distinguishing about them on the store page, sure the shere proliferation of "games" may make mobile seem better then it is, but reality is A) 90% of them are just clones, B) 90% of them barely earn enough to justify the apple developer license in a year, let alone serious development, and C) predicting weather your mobile game is going to be worth it is very difficult, short of a traditional triple A approach along with its considerable marketing budget, success is pot luck, and even triple A can struggle to make itself seen, and Android is even worse due to even more apps.

So the bottom line is, sure there's money floating about in the pot, and plenty of it but grabbing a fair share of it for yourself is anything but assured, and whilst some people get a kick out of a quick burst of casual gaming on a mobile device, allot of gamers with access to better machines will rarely avail themselves of the facility, as a result the two markets are not mutually exclusive, mobile games will continue to grow until every human being on earth owns a mobile, but spend per mobile on games will always be far lower then a console, and a pc, and unless new mobile stores with a fraction of the games appear, they will always be a pot-luck market.

Edited 1 times. Last edit by Alexander McConnell on 2nd May 2013 10:30am

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Sergio Rosa9 years ago
if developers blindly followed what "trends" say, we would have no skyrim, bioshock infinite and many other cool non-mobile non-multiplayer games
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