Guest post written by Robert Weber
Robert Weber is founder and senior VP of new products at W3i, an app marketing services firm.
Ever since the first angry bird destroyed the first pig’s castle, the world has been drawing parallels between mobile gaming and its console and PC forerunners.
While mobile gaming is often viewed as more accessible and easier to play, people are quick to point out that the games may not be as deep and involving as console and PC games. 2013 could be the year all that changes. In 2012, mobile gaming progressed by leaps and bounds. This is due in part to mobile hardware advances, but also due to greater smartphone adoption with many now carrying the equivalent of a gaming system around in their pockets. In 2013, we’ll see even greater maturation of mobile gaming as the industry continues to make more money and attract more serious attention from big-hitters like EA and Disney.
With this growth will come some important changes. At W3i we work with hundreds of developers and have already begun to see some of these trends occurring. Here are my seven predictions for the mobile gaming market in 2013.
- More Closures and Consolidations
Mobile gaming has become somewhat of a gold rush, driven by success stories like Imangi’s three-person team creating one of the most successful mobile games of all time - Temple Run - with a very healthy profit margin. Developers flooded the market hoping to strike it rich and churn out more mobile hits. This made the mobile gaming market very competitive and also caught the eye of a lot of investors. I believe in 2013 that will start to wane.
Start-up funding for game companies will dry up to an even lower point in 2013 than 2012. Many cash-strapped indie studios, which were publishing their own work in 2012, will begin taking on more contract work. Additionally, with the rising cost of user acquisition, games are getting more expensive for small studios to develop. The few large acquisitions of 2013 will come from underperforming new gaming companies that have fallen on hard times being acquired by older, more mature game companies.
- Mobile Gaming, The Sequel: More Sequels and Licensed Games
As competition in the mobile gaming space heats up and games become more expensive to develop and produce, we’ll also see the amount of sequels and licensed work jump up significantly.
Taking note from traditional gaming - where Halo's Master Chief has fought through four games and there are more Call of Duty games than you can shake a rifle at, mobile game developers will begin churning out more sequels.
Given the lack of investment in the game market, developers will be increasingly risk-averse. This risk aversion will cause the majority of top developers to double down on their existing franchises, causing a sizable ramp up in sequels to existing hits.
Developers that do not already have hits will increasingly turn to licensing opportunities to improve their success rates. According to Apple’s App Store Best of 2012 list, Electronic Art’s The Simpsons: Tapped Out was the 10th highest grossing game of 2012. Other large gaming companies like Capcom have seen similar successes by leveraging existing popular brands. We’ll see an increase in 2013 in the number of game developers that turn to partnerships with popular existing popular brands for new game launches
- The Mobile Dustbowl: Less Farming Games, More Hardcore and Gambling Games
As evidenced by Zynga’s post-IPO woes, casual gaming, on both PC and mobile is experiencing serious growing pains. Don’t be surprised if we see a mobile dustbowl as digital farms all over America begin to fall into unmanned disarray. There are two main alternatives to this that Zynga is already looking into: real-money gambling on mobile and more hardcore titles. We’ll see a majority of mobile developers follow suit.
While real-money gambling isn’t likely to be legal in the U.S. any time soon, hardcore mobile gaming is a viable and profitable option. It is already estimated at $2 billion in the U.S. and Europe alone. As developers continue to realize that hardcore gamers are more dedicated and willing to spend, we’ll see that genre mature significantly.
- The Rise of True Multiplayer
Three factors will culminate in 2013 and give rise to widespread synchronous multiplayer in mobile gaming.
One, with asynchronous games like Draw Something gaining huge popularity in 2012, more gamers expect multiplayer to be a part of their mobile games. Two, as hardcore games become more popular, the ability to create synchronous games where players can battle each other in real time will be a real asset for developers. And three, lower prices for cloud storage will give more developers the means to build games with mobile synchronous gameplay.
All of these factors will contribute to mobile games that leverage true synchronous multiplayer. This may be one of the biggest steps to take turn mobile gaming into a true console killer.
- Windows 8 Woos Gamers
The jury is still out on Windows 8 as a viable gaming platform. Although the tech giant has figured out console gaming, its mobile side leaves a lot to be desired. 2013 may be the year that changes.
Microsoft made the most radical changes to the desktop PC operating system in decades with their release of Windows 8 but in typical Microsoft fashion, it won’t be until their second iteration that it catches on in a big way.
We’ll likely see Microsoft shorten their release cycle time, and ship either a large update to Windows 8 or Windows 9 by the end of 2013 and it will demonstrate itself as an important platform for games. Expect future Windows’ updates to provide stronger billing functionality for game developers, especially around in-app purchasing and Xbox Live tie ins. These enhancements and others will lead to stronger financial performance for game developers. When combining this financial stronger performance with the greater market size as tens of millions of Windows 8 desktop PC’s make their way to households around the world, expect a much richer ecosystem for games on Windows by late 2013.
- Tablets Kill Consoles
In 2012 we saw a lot of companies pop up that were part of the “post-console gaming movement.” It’s looking more and more like the real console-killer is going to be tablets. We’re already seeing some really visually stunning games with deep storylines on tablets like Infinity Blade. The iPad Mini and Windows 8 tablets will drive further increases to tablet adoption globally driving a substantial increase in the number of core games specifically designed for tablets.
The writing for this one is already on the wall. Year after year, revenues in the console market are shrinking. According to a recent NPD Group report, U.S. video game sales dropped 25 percent in the month of October, falling from $1 billion to $755.5 million. Conversely, digital sales of games and general spending on mobile and social games rose seven percent to $7.24 billion in 2011. The numbers show a market shift towards mobile.
- Consoles Fight to Hold Their Ground
Both Sony and Microsoft realize it’s time to put out a new console. With neither company having launched a new system since before Barack Obama was in office, they risk losing more market share without making a move.
I believe both companies will announce a new console in the first half of 2013 and release them before the 2013 holiday season. Microsoft will focus their console on a broader entertainment strategy versus just a gaming console. Unfortunately, it’s unlikely either system will sell as well as their forerunners, XBox 360 and PS3.
Online software sales will increase - especially digital downloadable content, like movies and music, via the consoles’ online services. Although this will see a slight boom, it won’t be enough to make up for the physical software decline.
