Strong growth momentum in the mobile games market, yet, few gaming developers achieve profitability

21 Feb


Mobile games are the most prevalent tool to kill time while commuting on the subway, trains, or waiting, according to SmartMobix.

In the past, as the market had been dominated by Java-based games, there was a wave of mobile entertainment for mobile phones that support Java. Despite that only a few developers were profitable, various popular games were developed.

With the introduction of a new generation of smartphones, the most discerning difference is mobile internet connectivity. In addition to the revenue from game downloads, game developers can profit from in-game advertising in free-to-play games, whether it is an ad display or user click ads, game ads have comprised an important source of profit in 2010.

The earliest and most notably successful case of mobile game was developed by the leading Finnish mobile phone maker Nokia, which began to develop a variety of built-in mobile games in 1997, and have gradually gained widespread popularity since.

Currently, the volume, growth, and profitability of mobile games on smartphones platforms such as iPhone, Android, Symbian, are fairly satisfactory overall; among them, there are numerous hot-selling star games that have generated substantial profit.

In practice, however, it is difficult for mobile game developers to achieve profitability. Fortunately, with the introduction of the new generation of smartphones, consumers are able to connect to the Internet at any time; therefore, revenues accrued from online advertising help mobile game developers to achieve profitability.

At this stage, mobile game companies in developed markets such as Europe, America, Japan and South Korea develop higher quality games, and achieve higher profitability. Yet, China makers tend to imitate the design of popular games, and those products are made readily available in Chinese. With the huge Chinese-speaking population in the China market, there is substantial growth in the Chinese mobile gaming market, making it a noteworthy investment in the mobile phone industry.

Many well-known mobile phone game developers have already included Chinese in their multi- language support, therefore, in order to gain a foothold in the Chinese market and to prevent imitation versions from being released, many game developers now provide Chinese game menus and Chinese game instructions for their popular games.

Global mobile game market is expected to reach $7.3 billion in 2011

SmartMobix indicated that global mobile game market is expected to reach $7.3 billion in 2011, a 40% growth from $5.2 billion in 2010. China’s mobile game market is expected to grow to $557 million in 2011 from $429 million 2010. In addition, a majority of the revenue in the mobile games market is dominated by leading game companies and a select number of independent gaming companies that developed popular mobile games; it is relatively more difficult for small independent mobile game developers to make a profit.

Benefitting from the boom of tablet PCs in 2011 and the steady growth of Android-platform smartphones, coupled with the potential acceleration in the development of mobile games spurred by the next-generation iPhone 5 launch in 2011, the market of mobile games will continue to boom as the market matures.

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