Mobile and Social Gaming Industry: 2014 Highlights

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Golden age of mobile games

Mobile games are definitely on the rise, and that’s a known truth for a regular reader of analytical digests. As forecasted by PennyStocksLab, by the end of 2014 there will be 7.7 billion mobile devices worldwide, with global smartphone sales experiencing the highest growth (source - IDC: smartphone sales in Q2 and Q3 2014 grew by more than 25% as compared to the same period last year).

The accelerated growth of device sales has naturally triggered the increase in mobile content consumption. According to App Annie, over the year the top mobile platforms have augmented their revenue greatly: in Q2 2014 iOS games generated a 70% higher revenue than they did in Q2 2013, and Android games added 60% on top of their last year’s revenues for the same period. Meanwhile, console gaming segment suffered a 28% decline in revenue.

And more is yet to come. Analysts from Newzoo predict that mobile games will close the year with $25 billion earnings and thus exceed their 2013 earnings by 42%. Apple and Google are expected to earn $4 and $3 billion respectively, while Nintendo’s total revenue for 2014 is estimated at only $2.4 billion.

It all suggests that smartphone and tablet games are ousting their console competitors from the scene, and barring a miracle, will outpace them in the upcoming 2015.

iOS in the lead, Android catching up

Someone may want to dispute the statement, but the leader is always the one who’s got the biggest slice of cake, isn’t it? Despite the fact that in only a year after hitting a 1,000,000 apps milestone (July 2013) the number of apps in Google Play increased by 60% (June 2014), Apple App Store still remains the largest mobile application market that generates the highest revenue.

Yet, nobody can deny that the pace Android games have taken over the last twelve months is impressive. The growth dynamics that Android games have been showing from one quarter of 2014 to another is impressive. We dare to predict that in a year or two their revenue will catch up with that of iOS. Especially taking into account the Q3’s data: not only did Google Play outscore the Apple App Store in the number of downloads, but also reduced the revenue gap between the two.

Social games

In the 3rd quarter of 2014 the total number of monthly active Facebook users worldwide reached 1.35 billion. We’ve compared the DAU/MAU values for November 2013 and 2014 and found out that there was an average of 365 million daily users playing Facebook games this year, which is 5% higher compared to the last year’s ending. In contrast, the average number of monthly users this November reduced by 20%. It indicates that the world's biggest social network is becoming less popular, at least as a gaming platform.

The second most popular social gaming platform in the world is the China’s QZone. This November it has driven 645 million monthly active users, exceeding its previous year’s results by 21.5 million. In Q3 2014 the size of Chinese online gaming market amounted to $4.53 billion (increase of over 20% as compared to the 3rd quarter 2013), and it’s expected to grow to $16 billion by the end of 2014.

Making games? Go East!

Some of the biggest publishing companies came round to the East in 2013. They localized their best titles into Japanese (Candy Crush Saga, Clash of Clans) in attempt to get their share in one of the world’s most promising mobile markets.

As of today, Southeast Asia is the region with the biggest growth dynamics, and Newzoo predicts that the market will increase by 86% by the end of 2014. As a matter of fact, the overall number of players on Chinese mobile gaming platforms was above 330 million in the first six months of 2014.

Here’s a curious fact about the Chinese Android apps market: the country has a huge number of Android application stores, and Google Play is only the 4th most popular among them. Its share in the national market of Android apps accounts for only around 13%.

Japan and China stably hit the list of top 3 countries by downloads and revenue on the App Store (Japan goes right behind the USA, which holds the first place). For Android games, Japan is a No.1 country generating the biggest revenue, while Indonesia, India and South Korea are reported to be the most emerging markets in terms of downloads and revenue.

Social video services and Let’s Players for game promotion

In 2014, social video services like YouTube and Twitch became much more influential in the gaming sphere, with let’s players being the chief spring of success. Let’s players are people who record a video with game playthrough and support it with comments (hopefully, funny). ‘Let’s player’ can already be called one of the modern money-making professions: for example, it’s been reported this June that PewDiePie, a celebrity among let’s players, is making $4,000,000 per year (the guy also won the Man of the Year title at the Golden Joystick Awards 2014). But the biggest thing about let’s players is that they represent a powerful tool for engaging users in your games. Moreover, the rumor has it that the social video services are on their way to getting traditional games media out from the gaming stage. And YouTube isn’t the one that game journalists should be afraid of in the first place - the video service has been in the spotlight for years, while Twitch boomed over the last year or so. According to different sources, Twitch’s monthly audience exceeds 600 million viewers making it the largest source of game traffic in the U.S. and a dream of every advertiser. No wonder that Amazon paid $970 million in August to ‘snatch’ it out of Google’s hands.

The portrait of a Mobile Player 2014

A ‘sacred’ stereotype of traditional gamer has continued to fall apart in 2014. The portrait of a modern player acquired more feminine features and a few wrinkles. Yes, the gaming industry is getting emancipated, too! We’ve come to this conclusion after having studied 5 different user researches for the expiring year.

The almost perfect gender equality is observed in the US gaming industry on the whole (source - ESA: male - 52%, female - 48%), but in mobile gaming segment alone female players dominate the male ones: it’s 57% vs. 43% (according to SuperData research). The most conservative minds would probably picture a high school girl playing Candy Crush Soda Saga on a glamorous smartphone, but this is not the case - the research states that 48% female users play games both on mobile devices and consoles. It means that women are adopting the culture of playing games, and what used to be merely a ‘fun on the run’ is turning into a hobby/addiction/form of leisure. And here’s the most shocking observation: ESA’s report revealed that females over the age of 18 account for the most numerous group of gamers across the US (36%), and the second biggest group includes middle-aged men (35%). Now guess what is the percentage of teenage boys believed to be traditional gamers? Only 17%! The stereotypes get defied over time, and it’s not bad - especially if you’re in the gaming business, as women usually spend over 30% more money on in-app purchases than men, their average playing session is ⅓ longer as compared to those of men and they are more loyal - they stick with the game they like for a long time.

Top game genres

We have reported on the top grossing iOS, Android and Facebook games this fall, and now it’s time to see a complete picture of 2014. Having compared January and November rankings across 4 major gaming platforms, we can say that Match 3 and slots games did their best in 2014: both have increased their share across all mobile application stores and Facebook App Center. For Match 3 titles, the biggest revenue growth in 11 months was observed on Google Play (from 17.2% to 22.7%), while slots apps almost doubled their revenue share on the App Store, iPhone in particular (from 7.6% to 13% in less than a year). For simulation games, this year became a year of losses: farming apps lost 2% on Facebook, and building simulations lost 4.5% on iPhone. Generally, the first lines of top charts haven’t changed much since January: Match 3 titles still yield the highest total revenue on Android and iPhone, and slots games are topping the lists on Facebook and iPad.

Game of the year

That’s probably the best part of analysis - awarding the best games of 2014. The card collecting game Hearthstone: Heroes of Warcraft was recognized as the best mobile/handheld game of the year at two major ceremonies - Golden Joystick Awards and The Game Awards 2014. The sequels Cut the Rope 2 and Plants vs. Zombies 2 won Users’ Choice title among iPad games at Tabby Awards dedicated to the tablet apps (the latter is nominated for the Best mobile game at Mobile Excellence Awards 2014 that will be held on January 13, 2015).

A few weeks ago Facebook also announced the best titles of 2014: the Match 3 title Cookie Jam published by Social Gaming Network was named Game of the Year. The total number of Facebook users that play it every day is currently estimated at 2.6 million. However, the 9.2-million army of Candy Crush Soda Saga daily players looks far more convincing.

Based on MAU & DAU metrics, total number of mobile downloads and the number of days it took apps to enter the top grossing charts from the date of release, we’ve determined our own winners.

People’s Choice 2014.
The already mentioned CC Soda Saga has impressive DAU and MAU values after only 1,5 month since its launch on Facebook. The sequel has 24 million active users playing every month. Compare: Kim Kardashian: Hollywood released around 2 months ago has a MAU of 1.2 million users. The second most popular game is Diamond Digger Saga by King.com (MAU = 13 million users). On Android platform this Match 3 title also shares the first place with Boom Beach: both apps reached a total of 18 million downloads in four and six months after release, respectively. Boom Beach is also No.1 app in total downloads among iOS users (34 million).

Breakthrough of the Year.
The quickest dash from release to success on Facebook was done by Candy Crush Soda Saga, and Family Guy: The Quest for Stuff became a champion on mobile platforms. In less than a week the title hit the top grossing chart both on Google Play and Apple App Store. Two more apps also found the shortcut to the most best-selling Android games (Kim Kardashian: Hollywood - 6 days; Boom Beach - 9 days).

In conclusion

Looking back, we may call 2014 a year of high-speed evolution in mobile and social games that have penetrated into the mass culture so deeply that almost every each of the hundreds of millions of web-connected smartphone holders is a gamer now. Games have become the core revenue-generating product on the leading mobile platforms and Facebook. There is no doubt that, in the nearby future, the ever growing game content consumption and the rising cost of user engagement will encourage game developers and publishers to invent new creative ways to promote their games and retain their users.

The article has been prepared by Renatus Media, LLC.

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