Mobile Plays Lead Role in Growth of Gaming

The number of gamers playing on mobile devices is growing so rapidly that it is now the most valuable gaming platform, according to research seen by Marketing Week. Michael Barnett discovers why this is good news for advertisers.

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Games have been on mobile phones since the days of Tetris and the brick-like handsets of the 1990s. Yet new research shows a huge surge in the time and money that UK consumers spend playing on mobile devices with the advent of smartphones, while console gaming has increased by only 1 per cent in a year.

The National Gamers Survey, shown exclusively to Marketing Week, finds that spending on mobile games has risen by 30 per cent in the past year, while the time users spend playing them has gone up by 43 per cent. Nearly half of mobile gamers – 45 per cent – play three or more titles each month, according to the study by gaming website GameHouse and research company Newzoo.

Mobile devices have now overtaken social media and casual game websites when it comes to players giving up both their free time and their cash. Social and mobile games also appear to have affected the revenues made by casual websites, on which users are spending more time but less money.

Rumbi Pfende, UK manager for GameHouse, says: “Mobile gaming is in a situation where casual gaming was when it started. Everyone knows everyone does it, but nobody has quantified – particularly for advertisers – just how popular it is and more importantly, how receptive people are to paying for it. This is the next phase on from social gaming.”

Smartphones are the dominant device for mobile gaming. Three-quarters of mobile gamers use them, while fewer than a fifth use either more basic phones, tablet computers or iPods. More gaming apps are now downloaded from Google Play – the app marketplace for Android phones – than from Apple’s iPhone App Store, although Apple is ahead when iPad games are added in.

Indeed, Apple is still some way from being dethroned as the most valuable mobile gaming platform. Owners of iPhones are much more likely to spend money on games than other handset owners. While a quarter of mobile gamers have iPhones, 37 per cent of those who pay for games use Apple’s handset. Samsung comes second, with 20 per cent of mobile players. Additionally, 18 per cent of people who pay for games do so on a Samsung device.

The market is changing rapidly, however. As Marketing Week reported exclusively in May, the past year has seen a breakthrough for mobile commerce, which has now reached a mainstream consumer audience. That trend appears to have filtered quickly through to the mobile gaming market too.

Pfende says: “With micropayments, the gaming audience is used to spending money online, but there was a concern that wouldn’t translate from PC to mobile. But it has. Users will pay up to £5 on average for a mobile game and that is a fair bit of money.”

The proportion of mobile gamers willing to pay is higher than those who don’t mind spending money to play via casual gaming websites and social networks. Nearly 40 per cent will part with their cash for a mobile phone game, but still more money is spent on consoles and ‘massively multiplayer’ online games such as World of Warcraft.

Consoles are still the most popular gaming platform, with 51 per cent of the online population aged 10 to 65 using them, and 61 per cent of console players paying to do so – the highest proportion of any platform.

Nintendo’s Wii is the most used console, followed by Microsoft’s Xbox 360, then Sony’s PlayStation 3. But in 2012, the money spent on consoles has increased by only 1 per cent compared with 2011, and their share of total gaming revenue is decreasing.

Pfende says: “When consoles first came on the market, everybody had to have one. Now there is a barrier to entry, because it costs money, whereas casual gaming is free.

“Casual and social gaming is now easy, quick and has broad reach. It is so simple to do that it is easy for the genre to pick up new users and grow quickly. You get the same entertainment fix in a convenient way, whereas consoles require you to plug in and buy things.”

Sales of boxed desktop and laptop games have dropped by 7 per cent in the past year, and revenue growth from downloadable games for these platforms remains flat. This is despite a 31 per cent increase in the amount of time users spend playing both types of game in total.

Alongside the lack of growth in the console segment, this suggests a bleak future for the established gaming industry if it doesn’t evolve. Console and computer games are struggling to translate playing time into money to the degree they once could.

For this reason, console manufacturers are increasingly diversifying their businesses to move into content partnerships, hosting streaming services such as Lovefilm, Netflix and BBC iPlayer, for example. Game developers depend more on downloadable games and add-ons, in addition to their boxed titles, and are also expanding into casual and social gaming.

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