A Year in Online Gaming: What to Look For in 2017
Online gaming continues to grow in popularity, with Deloitte anticipating mobile revenue to exceed £24 billion in mobile revenue (smartphone and tablets) in 2016. Mobile has overtaken PC and console games this year, as many expected in 2015.
Mobile gaming revenue was up 20%, with PC games generating £22 billion and £20 billion from console platforms in 2016, with growth only 5 – 6%; compared to mobiles surge in popularity.
The games sector now contributes £1.25 billion to the UK economy, according to Treasury reports, in the year ending March 2016.
For more on the UK iGaming market with insights into payments and fraud download our online gaming and fraud report here.
What Does Mobile Mean for the Gaming Sectors Growth?
Although mobile gaming is surging ahead, the amount of revenue per-game varies widely according to the platform. Console games are the most profitable, responsible for £3.3 million revenue per game. PC games still generate a healthy £2 million. Whereas, mobile games, on average, only generate £27,000. Deloitte expects that only two hundred mobile games companies will gross more than £700,000 in 2016.
Console and PC games require more investment, resources and large marketing/advertising budgets to generate returns. Some of the most popular games sell out fast, with consumers still waiting for midnight launches, both online and on the high street. There are around 17,000 titles on PC and console platforms.
On the other hand, there will be over 800,000 titles on mobile platforms at the end of this year. Five hundred titles are launched every day. Without advertising or an active marketing campaign, many are nearly invisible. Mobile games developers and self-published authors have a lot in common. They share the same challenges when it comes to getting noticed. According to one survey of 8,000 developers found that “17% generated no revenue; 18% made less than £70 a month, and half made less than £700 per month.”
Consequently, we don’t see mobile games studios “eating” PC/console revenue anytime soon. Although we fully expect revenue to keep growing, we anticipate market consolidation and fewer titles available in 2017. Asia and Latin America are regions that will see faster growth, especially if European and American studios are seeking higher mobile revenues and profits.
What Else Should We Expect in 2017?
TIGA, the industry association for games developers, expects the sector to remain buoyant in 2017, “with new opportunities continuing to arise in mobile, PC gaming, console and VR and AR, which have combined to stimulate investment and job creation.” Global growth will continue along the same lines.
We also expect more AR and VR integration with mobile games, especially since one of the challenges that sector is trying to solve is the lack of content. Small and mid-sized studios are perfectly placed to solve that problem.
Providing the Games Tax Relief (GTR) is protected in the next budget, TIGA wants to make it “even more effective so that it will continue to create more jobs, more investment and more video games in the years ahead.” GTR is responsible for increasing annual average growth at 7.1% in the last four years, compared to 3.6% before it was launched.
Overall, studies show that we have no reason to expect anything but positive developments for the games sector in 2017.
Get the Secure Trading Online Gaming and Fraud Report here for more information about customer behaviour, payments and fraud.