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Mobile could soon dominate - so what?

Japan's experience suggests that it might be good for everyone, says Rob Fahey

As the market for games has grown and diversified, it's become increasingly important to take any headline figures you might read with a grain of salt. Every time an analyst or a research firm announces that the games business has reached such and such a size, or that monthly revenues compare thusly with previous figures, or that a certain product or company has over- or under-performed projections, their august pronouncement isn't so much an answer as a source of more questions. What exactly are you defining as the "games business"? Which sectors have you included? How did you measure digital revenues? What about IAP? Are your figures global, regional, merely covering the increasingly unrepresentative US market or "global" for a narrow definition of "global" which means "markets we could find data for with a quick Google search, and to hell with the rest of them"? And as for projections, whose projections, arrived at through which logic and with which agenda?

In short: with a very, very few notable exceptions, most of the sector analysis and research conducted on this industry is awful. It's under-informed, narrow and rarely exposes its methodology well enough to understand and account for its flaws. It's also the best thing we've got, unfortunately, which is why sites (including this one) continue to publish this research as it becomes available, although all of it should probably carry a large flashing warning to remind readers that an infant let loose with coloured crayons and some graph paper would probably have a similar margin of error to their data.

Yet this is only when we're talking about data about what's going on right now. Start to project forward, into crystal-ball-gazing questions like "where will the market be in five years", and you're into the realms where the real nonsense starts. Models and figures are pulled out of analyst's backsides with wild abandon. Rationales and factual grounds are nowhere to be found, but incredibly slick charts and graphs abound; it's a little like astrology, except that rather than blathering about Saturn being in Capricorn and whatnot, analysts seek to bamboozle everyone with charts and then deeply, fervently hope that when the time period they're predicting actually arrives nobody will remember how wrong they were.

Even so, when all of the world's analysts start to point in the same direction - the good, the bad and the bluffing - it's worth taking note. That's the context in which the headline figures from research firm Newzoo's latest report are interesting; headline figures which, in a nutshell, suggest that 2015 will be the tipping point at which revenues from mobile game software surpass revenues from console game software.

"What's happened to consoles as mobiles have taken over? Not much, as it happens"

Newzoo, like most research firms focusing on this industry, doesn't provide sufficient detail to back up or verify its sweeping and grandiose claims, because apparently a really pretty graph with a swish background ought to suffice. They would argue, no doubt, that all the juicy detail which would explain their peculiarly high figures is what they charge clients lots of money for, an argument which is entirely true and still leaves them in the position of peddling figures while failing to show their workings. Nevertheless, Newzoo is not alone in its prediction. It's not even a particularly novel prediction, actually; research firms have been pointing at this tipping point for several years, although when exactly the graph lines would intersect has been a subject of some debate. With mobile growth still strong and the next-gen consoles performing excellently but remaining largely constrained within the core market (rather than seeing another Wii-style breakout success story), the lines are converging a little more evenly and the soothsayers are in accord; next year is the year.

So what happens then? Do burning stones rain from an angry sky to smash all our PlayStation 4s? Will a horde of rampant mobile gamers, driven to murderous insanity by Candy Crush Saga, rip the 3DS' from our hands and beat us to death with them? Shall E3 be swallowed by a lake of fire, and every presentation at GDC be replaced by an ominous looping video of Zynga founder Mark Pincus laughing savagely at the audience?

Perhaps rather than stockpiling tinned foods, filling the bath with potable water and tearfully locking away your beloved RPGs and FPS games in a lead-lined safe, it might be instructive to take a look at a market where this transition has already happened. There is, you see, a place where revenues from mobile games overtook revenues from console games several years ago - as early as 2011, according to some figures, although the safe money is on 2012/13 being the tipping point. Now, in this market, mobile games are the unquestioned market leader in revenue.

The market in question is Japan, where a well-developed market for mobile gaming on existing "feature phone" devices was supercharged by the arrival of the smartphone. Now mobile game revenues have soared well clear of console games. Unlike in the 1990s, Japan's mobile phones aren't vastly advanced compared to those overseas - they queue up here for iPhones just like everywhere else, with Apple's devices being by far the dominant player in the smartphone market, so it's not that games they're playing are technologically advanced compared to those in the west. Rather, it's that the market itself was further down the path than the west, with a wider swathe of consumers familiar and comfortable with mobile gaming, F2P models and in-game transactions.

What's happened to consoles as mobiles have taken over? Not much, as it happens. The softness of PS4's sales in Japan since the stellar launch last spring has been well noted, but it's not a meaningful indicator of an overall problem with the console market; anecdotally, I get the impression that PS4 is extremely desired but still lacks the killer apps which will actually drive Japanese gamers to go out and buy one. Indeed, the line-up of software that appeals to the local market is still weak; a few big titles will shift the needle significantly, just as Mario Kart 8 did for the Wii U (which is now back in a slump awaiting the arrival of Smash Bros; software sells hardware, as ever).

Handhelds, meanwhile, are what you'd expect to suffer most from the triumph of mobile, yet the 3DS is going gangbusters in Japan and the PS Vita is stronger in this market than anywhere else in the world. The rise of mobile to take the crown of most lucrative and expansive market hasn't even impacted the ability of Japanese publishers to launch genuinely massive new franchises on handheld consoles; Yokai Watch may not have made it to the west yet, but if it's half as pervasive over there once it launches, it'll be the biggest new gaming franchise in years.

So the consoles are still pretty healthy, especially the handheld devices. They play to their strengths, for the most part; it's notable that the biggest handheld games around at the moment, games like Smash Bros and Monster Hunter, really wouldn't work on a mobile phone as they rely on accurate, pinpoint controls that couldn't be replicated on a touchscreen to any degree of satisfaction. Other games that work well are those designed for long sessions of play; mobile devices still suffer badly from rapidly draining batteries when playing games, and while a dead battery in your 3DS is a little annoying, a dead battery in your mobile phone is a disaster, meaning few people are willing to put in significant play sessions in GPU-intensive mobile titles.

"If 2015 does see mobile overtaking console worldwide, it may be the best thing to happen to games in years; it won't hurt console, at least not for a long while yet, and it'll allow us to finally turn a corner towards mobile being seen as a platform for everyone"

What's actually more interesting than what's happened to console, though, is what's happened to mobile itself. The mobile game market in Japan is nothing short of fascinating. Ever since its meteoric growth, it's become a hugely expansive market that caters to an enormous range of tastes and demographics, as you'd expect - but the core demographic, the heart of the market for which every company seems to be competing... Well, that's oddly familiar, as it happens.

Every time you see a commuter train festooned with ads for a new mobile title, or a lengthy TV commercial promoting the latest smartphone release, or even the huge screens at Shibuya's scramble crossing taken over with a video of a mobile game, they always have something in common. Their visual language, their core mechanisms and their basic appeal is absolutely in tune with core gamers. Mobile's new position on top of the heap has opened the door to games with higher production values and more depth, aimed at the market that has always played the most and paid the most; the core.

The results aren't always appealing; mobile games launch fast and fail fast, and that's fine. When things do work out, though, they create some pretty amazing hits. Puzzle & Dragons, as you probably know by now, was the biggest-grossing game on any platform in 2013 (probably; analyst figures, you know?), and it's also incredibly deep, compelling and fun. Publisher GungHo advertises the game on trains and TV over here with videos showing advanced techniques for building chain combos in the game; just consider that for a moment, a game so successful that your advertising isn't even "here's why this game is great", it's "we know you already play, here's a tip so you can play better", displayed on evening TV across the nation. Puzzle & Dragons is far from being Japan's only "mobile core" hit, though. RPGs have been rapidly rising in prominence on mobile platforms, and now appear to be even more popular than the collect 'em up titles (mostly card battlers) which dominated up until this point; the latest big title is Mistwalker-developed RPG Terra Battle, a game which I'm resigned to installing on my phone this week because literally everyone around me doesn't talk about anything else any more.

In short, the Japanese market may be peculiar by comparison with the rest of the world, but sometimes that's simply because it's still a couple of years ahead of the western market in a few regards. Not in every regard; Japan is a very retrograde nation in terms of certain tech advances (it's worth noting that streaming video services like Netflix are an absolute disaster here, and let's not even talk about online banking), but in gaming, the market if not the technology is a little in advance of most western countries. Japan crossed the line between console-as-number-one and mobile-as-number-one a couple of years ago, and the world did not end. Console and handheld are doing fine; mobile is doing better than fine, and most excitingly of all, the new titles coming to mobile are better than ever, driven by a strong desire to get the most lucrative market in gaming, the core gamers themselves, playing. If 2015 does see mobile overtaking console worldwide, it may be the best thing to happen to games in years; it won't hurt console, at least not for a long while yet, and it'll allow us to finally turn a corner towards mobile being seen as a platform for everyone - core, casual, and everyone in between.

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Latest comments (14)

Peter Warman CEO & Co Founder, Newzoo4 years ago
Hi Rob, good article. The comparison with consoles is purely made to illustrate the size that mobile gaming has reached not to bash consoles. Consoles are complementary, particularly the tv consoles. We perform continuous analysis from various angles using various datasources and are very confident about this number. Even looking at the public numbers of apple, google, tencent, gungho, ea for the first half year show that the first half year already was way beyond $12bn. We are happy to share more granularity. Our clients have all granularity and insights that you now might lack to evaluate the value of our data. We are not only about headlines. Check our free reports on pc gaming, esports, china and russia.....
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Tim Carter Designer - Writer - Producer 4 years ago
If the movie industry were like the game industry...

"Hey remember that awesome movie that came out? OMG! You need to own a Sony DVD player to play it! It was on a Sony DVD player. I think Sony DVD players will dominate. Quick, let's go get a new Sony DVD player!"

(Still waiting... crossing my fingers... for the day that the focus will be on the PEOPLE who make these things instead of on the junk that runs it.)

Edited 1 times. Last edit by Tim Carter on 24th October 2014 9:07pm

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As a (part-time) developer, I'm still focused on gameplay and the experiences I want to deliver - more so than just trying to maximise profits.

Even with all the headaches, I'm definitely going to stick with the WiiU (eshop) for now.

(That said, I'm no longer in the position of "trying to make a living" from this - that died years back).
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Show all comments (14)
Jordan Lund Columnist 4 years ago
The problem with mobile is that it's so hard to separate the wheat from the chaff. There's so much stuff coming all the time and the Apple App store and Google Play store don't make it easy to find content unless you already know the name of what you're looking for.

With console games it's pretty easy. Major releases are MAJOR releases, there's no questioning availability. Mobile has no physical presence so it's kind of invisible.

I have an LG G3 Android phone, I couldn't tell you the best games for it because I don't know what they are myself and I have no idea how to find them.
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James Berg Games User Researcher, EA Canada4 years ago
Dangit Rob, now I've got another mobile game to check out.

Glad to see more folks aren't talking about "game playing people" (can I still say 'gamers'?) as if they were an extremely limited, finite resource, and that adding them to the mobile population somehow removes them from the console one. Mobile begets console, and console begets mobile.
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Paul Johnson Managing Director / Lead code monkey, Rubicon Development4 years ago
unless you already know the name of what you're looking for.
That doesn't help much either.

A lot of our games don't turn up on the first page of hits if you type the name in verbatim. They're more interested in pushing older stuff with more downloads, which then becomes self reinforcing.
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Paul Johnson Managing Director / Lead code monkey, Rubicon Development4 years ago
Wrong article!

Edited 1 times. Last edit by Paul Johnson on 25th October 2014 2:44pm

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Neil Young Programmer, Rebellion Developments4 years ago
@Tim - it's not a meaningful comparison. Films basically just need a screen and speakers, with the playback device just being a means to get data off a medium. The same film will work on anything that fits that description, leaving the user to pick the best setup for them. Sure, some films are better on certain setups, but they still work fine on all of them.

Games are a piece of interactive software: they tie into both the device the software runs on, and the means it offers for interaction. It's not only much more work to make a game playable on any combination of hardware and input devices - it's outright detrimental to the game in many cases, since so many games benefit from being targeted at certain combinations.
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Andreia Quinta Photographer, Studio52 London4 years ago
@Neil Young

Let me just tweak that first sentence a little bit:
"Games basically just need a screen and speakers and a controller unit, with the running device just being a means to get data off a medium. The same game will work on anything that fits that description, leaving the user to pick the best setup for them. Sure, some games are better on certain setups, but they still work fine on all of them."

That sentence would work for games just as well as it does for movies if the entire industry didn't start off biased to individual hardware manufacturers. The problem since the dawn of games was that a machine to run them was never standardized - understandably why, but still - and since then we all just got used to a conformed "it's just how it is".
See the Steam machines for example, it's a perfect example how things could work so differently in this industry in a parallel universe, a few standardized models (some better than others, just like DVD and BR players) that are all capable of running the same game regardless. The problem is we're in a hardware / brand war since the dawn of time and nobody really knows why we're still 'fighting', we just are because it's just how it is and always has been.

Why isn't Sony and MS fighting for Blu-Ray exclusives or hardware specs? I'll tell you why, because the very notion is ridiculous. Limiting movies that people can see to only certain BR players, it's just silly. Yet it's just as ridiculous with the games industry. In all these years and more and more I still don't understand why it turned out this way. Why is the consumer paying a licence to play something 2x, 3x over because he want's - or needs to - change platform to play it?

I hope in 15 to 20 years time this entire notion of hardware exclusives and limitations has been scraped in favor of total digital availability in standardized machines built by Sony, MS, Steam, Apple, Toshiba, Walmart, whatever-brand, that can run any game disc we place inside it or download into it.

I loathe the ever lasting games industry hardware & exclusive games war...
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Can't find a decent game to hold ones attention significantly on a mobile for ore than 2 mins....but if there were, great!
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Neil Young Programmer, Rebellion Developments4 years ago
@Andreia - sorry, it's really is quite a lot more complicated than that. Firstly, games are software, so a common platform is rather more complicated than agreeing an encoding as for DVD's. Even once the tech reaches a point where a single platform would be possible without sacrificing performance, games are inherently interactive, so the input device matters. Some games aren't well suited to some controls, others don't work at all. Even in cases where they do work on most, a separate implementation is often needed.

Games being as widely playable as possible has an obvious appeal, but that doesn't mean a single unified device is possible, or desirable.

It's also not about exclusives - they are far outnumbered by games that aren't exclusive, but are still available on a single type of device (mobile only, console only, etc).
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James Podesta Programmer 4 years ago
Neil, I think you are right for input devices (touch, keyboard/mouse, joypad, or "motion device")... so that will never change and while its possible to support all, some are supported just-for-the-sales, rather than it being an ideal interface for the game..

We could theoretically unify Windows, OS X, Android, Steam OS, Linux & IOS, nintendo-os (whatever you call that) & Sony's OS - so that all games would just WORK anywhere, but I think anyone can see this isn't going to happen in the forseeable future - All but one of those companies would need to leave the hardware game before that would happen, and the lack of competition to innovate between them would probably be a very bad thing for all of us.

Maybe one day there will be a html 5 type interface that runs fast on all platforms, but given that Apple just released an even lower level non-cross-platform library so that games can be even better on IOS hardware, I don't think anything high level is ever going to be too competitive in that field.

Edited 1 times. Last edit by James Podesta on 27th October 2014 4:37am

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Alfonso Sexto Lead Tester, Ubisoft Germany4 years ago
I'm seeing the same problem in mobile gaming (at least in Android devices, which are the ones I use). Although you find some very good projects there, their are buried under a mountain of either rip-offs of classic console games, games which ripoff the looks of another popular games, some PC ports (Carmageddon is a excellent one, BTW) 20 clones of "Flappy Bird" and another 20 of "Candy Crush Saga", It's Atari 2600 all over again (And we know how that ended)

Mobile platforms need a filter; a compliance service that keeps at bay those people searching for a quick cash-in at the expense of other people's creativity. Until then The market may keep growing, but most likely not in the direction that is good for most of the studios out there.
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Shane Sweeney Academic 4 years ago
I'm a core mobile gamer. I bought an iPad for Sword and Sworcery and it is my platform of choice. I have bought a wide array of games and played titles like FTL, Ridiculous Fishing, the Room, Civilisation, Monument Valley, Duet, Hearthstone, Oceanhorn, Kingdom Rush etc. On public transport I play it maybe an hour a day and often at lunch for an hour if engrossed.

If what Paul Johnson says is true that 1000 games are added every day to the mobile app stores, all I can say is that I'm still starved of good content. I find myself feeling like I've played everything and when a new high quality Mobile game comes out I get pretty excited. So there is still plenty of room for better games.

But I am guessing though most of these 1000 games are poor clones of existing games. That's not very good. Plus if >95% of the revenue from mobiles is F2P, projecting and relying on exponential growth could be dangerous. It can't keep growing especially when people get a bit more savvy to the tropes of the genre. If there was a more healthy balance between high quality paid (and F2P) Mobile games and Low quality F2P I would be less concerned about the health of the platform. Revenue is not a mark of quality.

Mobile isn't a bubble, it will and should grow, but I am nervous about the dramatic growth levels seen in the F2P sector. There probably will be a crash.

Edited 1 times. Last edit by Shane Sweeney on 30th October 2014 12:43am

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