Despite the fact that there's fundamental market growth in the mobile game industry, there's "a significant investment gap in the games market," as many investors turned away from the games industry following the lackluster Zynga IPO
This is according to a new report from digital investment bank Digi-Capital
, whose founder Tim Merel says that many venture capital games investors "have exited the games market completely."
This has led to a mismatch between investment supply and demand, he adds, such that capital markets are not taking advantage of the long-term growth of the mobile game space. "There could also be mispricing across both private and public games markets in 2013," he says.
"In our experience we haven't seen a market as large, growing as fast as mobile apps/games," Merel goes on to say. "We think this could be the highest growth, large technology market today. Yet capital markets aren't taking advantage of the opportunity."
"Particularly in mobile, we think the opportunity cost of not investing is potentially more significant than the investment itself," he adds. "As well as being a major opportunity, mobile disruption could pose a significant risk for those who don't learn how to play."
Mobile games continue to dominate mobile usage, the report states, accounting for 72 percent of mobile app revenues in 2013, up from 40 percent in 2010. The report also notes that mobile games monetize around 4 times more effectively than other app types.