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The discussion in mobile is over, Free-to-Play has won

A look back at the year in mobile shows F2P sealed a comprehensive victory, the top-grossing charts were set in concrete, and traditional publishers fell out of the frame

Editor's Note: This is one in a series of year-end content to be published daily leading up to Christmas that includes analysis, opinion and insights into the biggest news and trends of 2015.

It's been another banner year for mobile games. Market research firm SuperData reckons that by the time Auld Lang Syne is being butchered on December 31st, around $25.3 billion will have been generated by mobile games worldwide in 2015 - a healthy 20 percent year-on-year growth rate. As the market has grown and matured, though, it's taken on a radically different form from the "traditional" games market. A different business model dominates, while an almost entirely different line-up of companies control the upper reaches of the charts. The demographics are different (though more overlapping than many core gamers like to acknowledge), the measures of success are different and the strategies that work are different - leaving lots of developers and publishers flailing to figure out how to make mobile work for them.

So, yet another year in which mobile revenue boomed and growth outstripped the rest of the market, while almost paradoxically, the list of fallen and failed studios who impaled themselves on the unforgiving sword of the mobile market also grew at a faster clip than ever before. How does the mobile market look now, as the end of 2015 looms? Even if there's still no flawless gem of insight that tells us, once and for all, how to be successful in mobile gaming, are there at least some core trends we can identify, and some notion of where things might be going in 2016?

Success is the Best Indicator of Success

Want to know how to have a hit mobile game in late 2015? Actually, it's pretty simple - the main thing you need to do is make sure you already had a hit mobile game back in January. In a pretty clear sign of the maturation of the market, the vast majority of the world's top-grossing mobile games today are exactly the same games that were topping the charts a year ago. I compiled data from the excellent and comprehensive App Annie database, and found that only two of the top ten top-grossing games in the most recent chart were actually released in 2015 - both of them in the rapidly growing Chinese market.

"If you're making a mobile game that isn't free-to-play - or which implements free-to-play in a naive, ill-considered way... then you're probably going to lose your shirt in the mobile market"

The dominance of older games on mobile in 2015 is extraordinary - as is the solid position of the market leaders. Four of the top five games haven't been out of the top five since the start of the year, and all of them are at least two years old; Monster Strike (released September 2013), Clash of Clans (June 2012), Game of War (July 2013) and Puzzle & Dragons (February 2012). New title Fantasy Journey to the West is at number five (although it's based on a PC MMORPG that already had millions of players in China, so "new" is a relative term here), and then it's straight back into the golden oldies with November 2012 release Candy Crush Saga. A corollary to this, incidentally, is that the "top downloads" charts are increasingly irrelevant; although of course it's important to be downloaded a lot so that people have the opportunity to pay you money down the line, the download charts teem with games which never trouble the top-grossing charts.

Of course, the games people are playing now have evolved significantly since they first launched - mobile games that aren't regularly updated are unlikely to keep bringing in high revenues - so while this lock-in of the top of the charts may be disheartening, it's not really all that terribly difficult to the traditional games business in some regards. Franchises like FIFA and Call of Duty reliably dominate sales charts every year, after all. Still, the sheer difficulty of elevating a new game into the upper reaches of the mobile charts is undoubtedly significant, and increasing. It doesn't help that those top games are supported by absolutely enormous marketing budgets, with leading mobile games now supported by expensive TV and outdoor advertising campaigns that traditional game marketers can only dream of.

This isn't to say that there aren't still runaway indie success stories in mobile - Crossy Road, released in November 2014, is probably the biggest one of 2015 - but these are black swans, increasingly rare outliers in a field otherwise littered with corpses. Revenue from mobile games drops off dramatically as you slide down the charts; you make billions in the top 10, millions in the top 20, but by the time you're outside the top 100 you may be struggling to pay staff unless you have a very large slate of games and minimal overheads on maintaining them. The window of opportunity for plucky upstarts on mobile is slamming shut, if it hasn't already; there are ways and means for niche developers to make a living, but barring a lottery-winning stroke of luck, the only way to get to the top of the charts today is with enormous financial investment.

You're F2P, or you're Minecraft, or you're bust.

The discussion over what business model to use on mobile is over. Free-to-Play has won. If you're making a mobile game that isn't free-to-play - or which implements free-to-play in a naive, ill-considered way, like the large number of games which have a single, cheap in-app purchase to unlock all their content - then you're probably going to lose your shirt in the mobile market. In the 2015 charts, in every single month, every single top-grossing app was free-to-play. You have to go a really long way down the charts to find a game that's making money from an up-front price tag.

"It's worth knowing that Japan's dominance of the charts is largely down to big wins at home; the country's mobile gaming firms still aren't doing well at away games"

There's one exception - Minecraft, which is the only premium game that's consistently in the top-grossing charts (and almost always on top of the downloads chart). The success of Minecraft is pretty amazing, but it's important to stress just what an outlier it is. No other game has matched this pattern of success, perhaps because Minecraft was a bona fide cultural phenomenon long before it ever existed in mobile form. The sheer momentum of Minecraft has arguably never been matched by any other game (it still almost single-handedly supports the vast revenues of gaming-related YouTube, for example), a fact which I fear is regularly ignored by people making arguments for non-F2P business models on mobile. "Well, Minecraft manages it" is the 2015 games business equivalent to saying "Well, Superman does it" prior to being crushed under a truck.

This isn't to say, however, that all F2P is born equal - or that all F2P strategies are fair game. It's notable, certainly, that energy mechanics (whereby players can spend real money in order to play the game for more than a certain amount each day) feature pretty heavily in most of the top-grossing games. Many developers from traditional game backgrounds seem to find these systems especially distasteful; players, it seems, feel differently.

Japan Rules the Mobile Market

Just as the top games in the mobile space changed little over the course of 2015, so too did the top players in mobile entrench their positions. Supercell's performance was extraordinary; despite Boom Beach and Hay Day dropping out of the top ten over the course of the year (Supercell being the only company to have three titles in the top-grossing top ten simultaneously during 2015), it never shifted from its monthly No.1 position in App Annie's aggregated data.

Supercell, though, belongs to Japanese mobile network SoftBank - which also owns Puzzle & Dragons publisher GungHo, another company that never left the top 10 mobile publishers chart during 2015 (though it did dip in the rankings as its sole hit title, Puzzle & Dragons, continued to slowly decline). In fact, while SoftBank is the daddy, being easily the largest publisher of mobile games in the world, Japanese companies dominate the top-grossing charts. Mixi (formerly a social network firm, now publisher of chart-topper Monster Strike), LINE (a hugely popular messaging platform with a gigantic gaming arm attached) and COLOPL (publisher of White Cat Project among others) round out a top ten top-grossing publishers chart for 2015, fully half of which is made up of Japanese, or Japanese-owned, companies.

So much for Japan's fading influence in games, right? Don't throw away all those handy allusions to Japan's "Galapagos" nature just yet, though, because the figures belie just what an enormous market Japan itself is - and just how tough Japanese publishers find it to make their local market mega-hits work in other territories. Per capita, Japan is easily the biggest market for mobile games in the world - SuperData reckons it'll account for $6.2 billion in mobile game revenue this year, an extraordinary 24.5 percent of the world market. Although some western games have done reasonably well in this market, it's largely dominated by home-grown products - and while Japan alone is big enough to propel games like Monster Strike and Puzzle & Dragons to the top of the global charts, this hides the fact that they don't do terribly well in overseas markets. That probably doesn't do much to disturb executives at Mixi and GungHo as they slumber comfortably in beds made out of ¥10,000 notes, but it's worth knowing that Japan's dominance of the charts is largely down to big wins at home; the country's mobile gaming firms still aren't doing well at away games.

... But China is Rapidly Catching Up

If you have a market as big and profitable as Japan to exploit at home, international expansion probably isn't your top priority - and the same goes for China, whose impact on global mobile market stats soared in 2015. The Chinese market still isn't as big as Japan's (SuperData estimates it to be $5.2 billion this year) but it's still big enough to see several top ten games that will be entirely unfamiliar to anyone outside the country. New entries Fantasy Journey to the West and Journey to the West Online propelled publisher NetEase into the top ten, while Tencent (parent company of League of Legends creators Riot Games) was also comfortably among the world's top mobile publishers this year.

The Chinese market appears to be more volatile and open than Japan or the West is right now; new titles enter and leave the top-grossing charts relatively regularly, with most of the movement in the global top ten being down to shifts in the popularity of games within China, including Raven, MU: Origin and Legend of Mir 2. Like Japan, though, much of the success of Chinese developers comes from within China itself; only Clash of Kings, heavily marketed overseas by publisher Elex Technology, made significant inroads into overseas charts.

Despite China's economic slowdown, it's almost certain that the country's impact on mobile revenues will continue to grow in 2016 - and combined with the phenomenal strength of the mobile market in Japan and signs of rapid growth in south-east Asia and India, it's pretty clear that Asia is going to be an increasingly dominant force in mobile. Already, SuperData estimates that 55 percent of the global mobile game market is concentrated in Japan, China and Korea alone. Doing business in these markets isn't easy, given local tastes and often complex business environments, but any publisher that wants to be on top of the mobile game can't afford to ignore Asia.

Traditional Publishers are Struggling

Speaking of being on top of the mobile game, that's officially what traditional game publishers were not in 2015. Electronic Arts, by far the most successful of the traditional publishers who have made a move to mobile, dropped out of the top ten highest grossing mobile publishers chart in April; Namco Bandai, the only other traditional publisher that's been in that top ten all year, only made brief appearances at the bottom of the pile in January and September.

That's not to say that traditional publishers aren't doing well and making money on mobile; merely that even the most successful traditional publishers are a long way behind the "upstarts" who dominate this market. The publishing landscape has shifted dramatically; companies most of us have never heard of are now significantly larger than the firms generally considered to be the "mainstays" of videogames. Over 2016 and beyond, expect to see what we mean by the term "top publishers" - and to whom that category extends - to be significantly redefined.

"Over 2016 and beyond, expect to see what we mean by the term 'top publishers' - and to whom that category extends - to be significantly redefined"

Of course, as 2015 drew to a close one traditional publisher did make inroads into the top ten - Activision Blizzard, which by its acquisition of King becomes a top ten mobile publisher. It joins Machine Zone (publishers of Game of War) as the only American company to be ranked in the top ten publishers by revenue in the latter half of 2015. For other companies hoping to join the fray by similar means, though, the window of opportunity is closing. As previously mentioned, SoftBank owns two of the top ten; Activision Blizzard now owns another. Even if acquiring Chinese firms weren't extremely challenging legally, Tencent is out of the question unless you have a quarter of a trillion dollars lying around, while the Korean/Japanese firm behind LINE is also well beyond the price range of even most very large firms. There are a handful of acquisition targets still on the market (COLOPL could probably be had for less money than King cost, while Machine Zone is probably in the same ballpark) but any giant firms who want to buy into mobile gaming need to do it sooner rather than later.

Desktop Class Games are here - in China

Given that the top ten mobile titles shifted little during 2015, it's unsurprising that the kind of games people played also remained largely consistent - with one exception. Desktop class games, primarily MMORPGs and MOBAs, started to make serious headway on mobile this year. The Journey to the West titles which entered the top-grossing charts are ports of NetEase's hugely popular PC MMO titles, while Tencent's We MOBA, though it didn't trouble the top-grossing charts, did immensely well on downloads and may yet build up to becoming the first seriously commercially successful mobile MOBA (US-based Super Evil Megacorp's Vainglory having won plaudits, but fallen far short of the top of the charts).

Note that both of these developments happened in China. It would appear, in fact, that the long-predicted explosion in PC quality games on mobile devices is actually happening right now, but only in the Chinese market; pretty much everywhere else in the world, including neighbouring Asian market Japan, the focus remains on very distinctly "mobile-first" style games. I defer to experts much more versed in the Chinese market for why this may be, although I would speculate that it's at least partially rooted in the smartphone, not the PC, being the primary internet device for many Chinese users, and the country's significant preference for large screened phones (thought to be a considerable impetus for Apple's creation of the iPhone 6 Plus models, for instance).

Whether this trend will break out beyond China remains to be seen; certainly, the games which are leading the charge within that market are largely titles which were previously successful as PC games in China and enjoyed little overseas success, which makes it highly unlikely that their mobile incarnations will set the western world alight. Western developers may, however, look with interest at what's happening there; as more powerful phones with larger screens become de rigeur in the west as well, perhaps 2016 may see some hit western PC titles getting a new lease of life on mobile as well.

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Rob Fahey avatar

Rob Fahey

Contributing Editor

Rob Fahey is a former editor of GamesIndustry.biz who spent several years living in Japan and probably still has a mint condition Dreamcast Samba de Amigo set.

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