An Overview of the Mobile Gaming Market

Already, mobile game statistics clearly shows that more than 50 percent of the global video game revenue is generated from mobile gaming and it is the fastest growing source of income in the video game industry.

This massive growth has been made possible with many factors including the rising purchase of smartphones, tablets and gamers as well as the 4G/5G internet connectivity to most of the global population. Technological advancements have also contributed a great deal in driving the mobile gaming market ahead.

The continuous evolution of technology such as augmented and virtual reality and sensor technology have provided mobile gaming users with an improved gaming experience with things such as realistic visuals and real-time data looking at the current mobile gaming industry trends, it is crystal clear that the explosive growth of mobile gaming is not slowing down anytime soon.

Newzoo estimates that by the end of 2020, the mobile game revenue will hit $77.2B. 50% of mobile app users play games, making this app category as popular as music apps like Spotify and Apple Music, and second only to social media and communications apps in terms of time spent.

Forecast of gaming revenue projection

Usage in mobile game revenue will continue to outpace growth on PC in the coming year, which will ultimately result in a shrinking PC market share dipping below 20% in 2022. 

2012-2021 global games market

About Nintendo

Nintendo is a multinational consumer electronics and software company headquartered in Kyoto, Japan. Founded in September 1889 as a small Japanese firm producing handmade playing cards, Nintendo has evolved into one of the largest video games manufacturing companies.

While its two main rivals in the gaming industry, Microsoft and Sony, rely almost solely on third-party software for their consoles, a significant proportion of Nintendo games are created and developed in-house. The company is known to have created some of the most popular video game franchises in the industry, such as Mario and The Legend of Zelda, and it also is a part owner of The Pokémon Company.

Current Scenario

It’s been five years since Nintendo first announced its foray into mobile gaming on iOS and other platforms. Although the company has seen some success in the business, it’s also seen some backfires, and this week Bloomberg is reporting that Nintendo is now “retreating” from its mobile gaming plans.

For the near future, Nintendo will now focus on apps that have already been released. In terms of potential new Nintendo apps, developer partner DeNA has mentioned recently that players shouldn’t expect a new game until near the end of the current fiscal year.

Although Nintendo saw high profits with titles like Fire Emblem Heroes, the company’s recent earnings have been declining. In total, Nintendo released iOS apps like Animal Crossing: Pocket Camp, Dragalia Lost, Mario Kart Tour, Super Mario Run, and Dr. Mario World from 2016 through 2019.

According to Sensor Tower, three of Nintendo’s biggest apps saw decreasing revenue from February through May, 2020 (including Dragalia Lost, Super Mario Run, and Fire Emblem Heroes). This was during a period when mobile apps were otherwise noticing an uptick in user engagement due to stay-at-home orders.

Nintendo lost in shares

In the beginning, Nintendo kicked off the smartphone gaming initiative following struggling Wii U console sales, hoping that the booming mobile gaming market could help prop up poor console numbers.

In the wake of the success of the Nintendo Switch, a mobile/home console hybrid released in 2017, it seems that Nintendo has less of a reason to keep up with releasing games for smartphones and tablets.

 Switch titles like Animal Crossing: New Horizons and Fire Emblem: Three Houses have proved to be gigantic successes for Nintendo whereas the corporate’s cellular video games together with Mario Kart TourAnimal Crossing: Pocket Camp, and Fire Emblem: Heroes aren’t rising practically as a lot as they’d have preferred in relation to different prime earners available in the market.

Reasons For Retreating

The cellular market is at the moment saturated with “Gacha” video games: video games that, whereas often free-to-play, encourage customers to spend enormous sums of cash on digital skins, loot bins, characters, objects, and extra.

While Nintendo has toyed with this enterprise mannequin for a few of its titles like Fire Emblem: Heroes, the corporate reportedly fears that going all-in on this mannequin with their hottest franchises can harm their model popularity. Additionally, Nintendo doesn’t even have plenty of sequence that they’ll successfully convert to the Gacha enterprise mannequin.

Nintendo has tested various revenue models for its smartphone games, including one-time purchases for Super Mario Run and subscriptions for Mario Kart Tour. Both apps have fallen short of market expectations in terms of revenue, according to Kazunori Ito of Morningstar Research.

Approach to be Followed

The depressing revenues and unsatisfying monetisation options, along with the constraints of the platform, have obscured Nintendo’s zeal for smartphone games. This is to not say that Nintendo will fully retreat from the cellular gaming market, however, they might not be as invested in it as they had been earlier then. New video games will possible solely come in an effort to appease their shareholders, however they might not receive proper focus now, because the Switch is proving to be actually profitable.