Newzoo has released key insights into mobile gaming in the US market as part of a fresh study of markets in Germany, France, the UK and US. Among findings about the American market is that the number of mobile gamers in the US has grown from 75 million to 101 million, of which 69% plays on smartphones and 21% on tablets. The largest growth can be found in the conversion to paying players. The number of paying players has grown 35% to 37 million Americans, or 36% of all mobile gamers. This shows that mobile gaming is set for another year of double-digit revenue growth in the US. While mobile gaming preferences between the US and European countries differ, revenue share clearly angles in favor of iOS games over Android in all countries. American players spend in total five times more on iOS games than on Android games.
These insights are based on a fresh round of National Gamers Surveys that involved 17,000 respondents, in combination with monthly iOS and Android game revenue and download data of the top 200 grossing games, a service provided by Newzoo in cooperation with Distimo.
iOS versus Android
Of all American mobile gamers, 19 million play on an iPhone, which is 28% of all smartphone gamers. An additional 18 million plays games on an iPod Touch. In the tablet gaming space, the iPad is dominant with a share of 60%, or 12.7 million Americans. Apple’s position is strongest when it comes to revenues. In March 2012, all iOS devices combined earned 84% of mobile revenues generated by the top 200 grossing games in the three stores combined: iPad, iPhone/iPod App Store and Google PlayStore. For both Android and iOS devices, the majority of money is not spent on downloading games but within the games: an astonishing 91% for Android and 91% for iOS games. This share is significantly higher in the US than in Germany and France, where figures are between 73% and 87%. The comparison does not include advertising revenues.
Newzoo’s CEO Peter Warman: “When analyzing Apple’s successful monetization, there is one dominant factor outside of differences in audience demographics and preferences: Apple requires users to connect their credit card information directly to their account, thus creating a seamless purchase experience. I can hardly imagine any other company in the world that would be able to get away with this, including Google and Microsoft. Facebook can come a long way, but Amazon clearly has the best chance and is proving this as we speak.”
On Amazon and its Kindle Fire, Peter Warman adds: “ The Kindle Fire, being the runner-up tablet in the US only 3 months after launch, has single-handedly doubled Android’s share of revenues in the US compared to European countries. It will do the same in the UK soon after launch, but the rest of Europe might be a different story. Now that we have monthly revenue insight into game revenues across both Apple’s App Stores as well as Google PlayStore we will soon be able to report on this. And after that, there is Mac versus PC apps, and then finally… the battle for the TV. Exciting times.”
US versus other countries
Overall trends are similar for the western countries involved in the study, however there still are some significant differences when it comes to game preferences. Americans have massively switched to playing games on smartphones and tablets, with only 19% still using a regular phone for playing games. The difference with mobile players in France for instance is huge, with 34% still using their regular phone to play. Both the US and the UK have a similar share of mobile gamers who use a smartphone to play games (69% and 75% respectively). But, in the US, Android takes 16% of the revenues, whereas in the UK this figure is the lowest of all countries involved at only 6%. This big difference can be explained by the huge uptake of Kindle Fires in the US with 17.4 million active users.
Factors fueling growth
Naturally, the uptake of smartphones and tablets are the driving power of the mobile gaming market as a whole, but there are more factors that are accelerating growth. Two of these factors are the potential of “core” games on mobile devices, accompanied by the fact that tablets and smartphones have double-digit growth potential, as the role of both screens in a consumer’s life is different. Increases in processing power and screen resolution, especially in tablets, over the past several years have led to the availability of more immersive play experiences on mobile.
In 2011 already a majority of core console and PC gamers in the US (62%) are also playing games on smartphones or tablets. From a consumer’s perspective, the combination of casual gameplay and immersive experience could specifically appeal to core gamers who, as they grow older, no longer have hours to spend on learning and playing a game. An increasing number of publishers and developers are focusing on this “mid-core” market.
New research and analysis by Newzoo indicates that Russian consumer spending on games will grow to $1.5 bn in 2011. The absolute number of Russian gamers, 38 million evenly split amongst male and female, is even higher than in the UK or Germany. More than half of these gamers actually spend money, comparable to ratios seen in Western countries. The majority (56%) of money is spent on PC and MMO games. The $570m spent on PC games includes $210m spent on direct downloads and $50m second-hand trade. MMO games gross $270m, leaving console games behind with $225m. Boxed revenues are still relatively high considering the fact that 75% of PC or console game buyers also download free illegal copies. Online casual game destinations, games on social networks and mobile devices each account for about 10% of total game spending, and together take an impressive 48% of all time spent on games. With the Internet access spreading fast across the country and local as well as international game companies launching localized high-quality games in Russia daily, the market is clearly set for strong further growth.
Of the 38 million “gamers” in Russia, 53% spend money on games. “ Not everyone knows that the Russian market is already quite large and can be quite profitable for anyone selling games, for example, in the casual game industry or on the Russian Federation’s AppStore. The success of our projects shows that the market is expanding, that there is an increasing demand for high quality games, and that the number of players is growing, and Newzoo’s research supports this,” said Pavel Ryaykkonen, distribution director of Nevosoft, a leading Russian casual game developer and distributor.
Additional research shows that Brazil has grown to be a significant market for games, comparable in size to larger European countries. The uptake of social, mobile and MMO gaming and its “free-to-play” business models are accelerating growth in spending on games, expected to total $2bn this year. The majority of money is spent online or via mobile devices. Games on Facebook or Orkut account for 11% of spending, while dedicated casual game destinations take 15%, comparable to the 16% of money that is spent on MMOs: $320m. Mobile devices gross 9% or $180m. Console games and boxed PC/Mac games take a considerable 34% of spending but a large part of that money goes to second-hand trade and illegal copies. Three quarters of console and PC game buyers state to acquire games in this manner. Brazilians also spend more money ($300m) on game downloads than on new boxed PC or Mac games.
Brazilians spend an identical amount on boxed PC or Mac games as games that are directly downloaded: $300m each. But $48M of the boxed spending goes to second-hand and copied products. Of the 23 million Brazilians that download PC or Mac games, an amazing 64% admits to use filesharing software to acquire games for free. 21% does so at least once a week. For console games a similar trend can be seen. A relatively high 13% of the $380m spent on console games, or $49m, is spent on games and additional game content that is directly downloaded to the console. Approximately $61m is spent on second-hand boxed products and illegal copies, leaving $270m for new boxed products, bought online, in retail or abroad.
This year’s edition of the Festival of Games will take place on 28-29 April in Utrecht, The Netherlands. The gaming trade show sees a major uptake in interest from abroad: More than 60% of this year’s Festival of Games participants are international visitors. Ranging from Jordan to Korea and from Russia to Canada these participants turn the Festival of Games into the major business platform for the European games industry. During the Festival of Games, Deloitte will present a research report with market data on the Dutch games industry that substantiates these advantages. In addition, Newzoo presents the first results of the 2011 National Gamers Surveys. Key insights on consumer gaming behavior in Western as well as Emerging markets: number of gamers, consumer spend, type of games played and a comparison between the Western and Emerging markets such as Russia, Mexico and Brazil. With this, the Festival of Games wants to offer an exclusive and unique view on the games industry and its consumers.
The opening keynote of the Festival of Games Conference will be given by Al Lowe, the creator of Leisure Suit Larry, the adventure game that opened a new genre in the game industry during the 80s. Lowe will be joined by delegates from the international games industry like Activision, LucasArts, Eidos, Endemol,Unity Technologies and many others. Newzoo’s National Gamers Surveys have provided market data for several years now. From the raw 2011 data it already has become clear that the average time spent on games in western markets has grown 50 to 100 percent depending on country. This growth is clearly fuelled by the expansion of mobile devices and social networks as game platforms and the large scale adaptation of the free-to-play business model of online gaming.
According to Reinout te Brake, CEO of MMO Traffic, the research results show that MMO / social gaming will achieve exponential growth in the coming years. “This is driven to a large extent by a move towards ‘free to play’, the participation of new groups of gamers, and mobile gaming. We expect that especially the latter will provide a great boost to the market in 2012.” Te Brake is pleased with the growth in the international character of the Festival of Games: “With this show The Netherlands underline their role and ambition in the worldwide market for online gaming and beyond.” The participation at the Expo & Career Fair is free, you can sign up here.
Consumer data from Newzoo’s new Social Gaming Monitor 2010 shows a large overlap between two favourite pastimes: playing computer games and using social networks. Of all 143 million social network users in the US, 88% also plays computer games. Vice versa, 79% of all 160 million Americans that play games are active on social networks. As such, it’s not surprising that an ever increasing number of “social games” are offered through platforms such as Facebook. The survey reveals that 61% of all social network users play games within the network adding up to 87.3 million US social gamers. This is 41% of the total online population aged ten years and up; a percentage slightly lower than the UK (42%) but significantly higher than France (35%), Belgium (35%), Germany (30%) and the Netherlands (27%).
Women like to play but men pay
The majority of games on social networks are free to play. Money is spent on in-game items, additional levels and giving friends virtual gifts to enhance their game experience. The share of people willing to do this is comparable to traditional game websites and ranges from 12% in the Netherlands to 32% in Germany. The UK and US are in-between. Social games are slightly more popular with women – 51% of all social gamers – than men (49%) but men are more likely to spend money, making up 58% of paying social gamers. Alex Agostini, Director of Business Development at social games publisher 6Waves comments: “2010 will be a year of transition for most social gaming companies. Transition from management of explosive growth to search of higher efficiency”
Social games, side dish or main dish?
It is hard not to run into a social game when active on a social network but there are signs that social games are attracting a steady crowd. Almost half (47%) of American social gamers plays three or more games a month and also almost half (49%) plays frequently: three or more days a week. There is room for growth too, as only 26% spend more than an hour a day on social games and 44% play a single game not more than a period of four weeks. But with 46% of social gamers stating Facebook as their main online gaming destination – 61% in the UK – there is no question that social networks provide an opportunity as well as a challenge to all “traditional” console and online game platforms. Peter Warman, MD of Newzoo adds: “There is no game company out there that does not have social networks high on the agenda. The big question is if playing games on social networks is tapping into a new group of consumers, adding more time and money spent to existing gamers or taking time , players and budget away from game websites and consoles. The same accounts for iPhone, iPod and iPad gaming. With our surveys we aim to get a grip on these major shifts in the games market.”
Click below to see detailed statistics about the US, the UK, France, Netherlands and Belgium. (more…)