This document provides an overview of the mobile gaming market, with a particular focus on the sizeable segment Mowjow is launching into. The first section reviews the key data and global trends of mobile gaming, with a particular focus on the social aspects of playing, user behaviours and advertising. The second part highlights the relevant features of Mowjow’s offering and how these correspond to current and future consumption demands for mobile, engaging, rewarding, free-to-play and social experiences.
The digital entertainment industry is currently undergoing dramatic change driven by significant technology and consumer trends:
Rapid growth of mobile platforms
According to Strategy Analytics, the global smartphone installed base will grow at a CAGR of 9% from 2015 to 2020, reaching 3 billion units. The proliferation of these powerful mobile platforms now enables large audiences to enjoy interactive entertainment whenever and wherever they wish. IDC estimates that in 2012 worldwide hours per month spent online on mobile devices was 12 billion, which is expected to rise to 63 billion by 2017, representing a 39% CAGR.
Social networks as part of the entertainment fabric
eMarketer estimates there will be 2.3 billion users, or 32% of the global population, on social networks in 2016. The entertainment experience is social by nature. We believe that users now expect social features as a critical component of their entertainment experiences; such features enhance the consumer experience through interaction, collaboration and competition. In addition, they introduce powerful virality to attract and retain the audience.
App stores as key distribution gateways
Mobile platforms and social networks have opened their platforms to developers, transforming the distribution and consumption of digital content. Developers can now distribute applications (apps) to a global audience and refresh these with regular content and feature updates. Key distribution platforms such as the Apple App Store, the Google Play Store, and Facebook serve as key distribution gateways.
These trends are having a significant impact on the digital gaming industry: the size of the global gaming audience is increasing dramatically, free-to-play models have vastly expanded the population of potential customers, mobile gaming is emerging as a dominant advertising medium, and sophisticated targeting strategies for player acquisition have made it economically viable in a sustainable way.
Dramatic increase in the size of the digital gaming audience
By enabling broad distribution and virality, Facebook drove an initial surge and demographic shift in the digital gaming population. As smartphones and tablets have become key gaming platforms, this population is expanding further and the demographic broadening. According to Digi-Capital, mobile gaming revenue will grow at a CAGR of 22% through 2018 to $39 billion. Most smartphone and tablet game revenue will be derived via the free-to-play business model. As a result, games now represent the largest share of time spent on smartphones and tablets, at 39% on smartphones and 67% on tablets, according to Flurry Analytics. We believe that this share of users’ time is not replacing other forms of leisure activity or entertainment, but is incremental and maximizes moments of free time.
Vast expansion in the “free-to-play” model
In “free-to-play” games, the audience can enjoy the experience for free and can choose to make in-app purchases. Free-to-play business models have significantly increased the revenue potential of the category by eliminating upfront barriers and facilitating purchases throughout a customer’s game experience. The emergence of transaction aggregation has brought down the price of in-app purchases to very low levels, which has vastly broadened the population of potential customers. As a result, many successful free-to-play games now generate revenue that is in line with the largest console titles.
Mobile gaming emerging as dominant advertising medium
Following expansion of mobile gaming audience and demographic shift in the digital gaming population, mobile gaming ad spend is becoming more robust. Mobile users spend the majority of their time using apps and as the app market grows, ad inventory expands with it. eMarketer predicts that in 2016, mobile users will spend 79% of their time in-apps, which correlates to 73% of ad budgets being spent to serve in-app ads. While mobile gaming constitutes for a large part of the mobile app industry - eMarketer estimates that by 2020 64% of US population will be using their mobile devices to play games - brands have started developing an advertising strategies tailored exclusively to mobile games.
Sophisticated targeting has transformed player acquisition
The virality induced by social features has greatly boosted the potential returns on marketing investment. Furthermore, data analytics and the emergence of sophisticated ad targeting on digital platforms now allow highly granular campaign management. This provides the opportunity for increased overall efficiency and allows marketing to specific segments of the audience based on predicted ROI. These developments enable a rigorous approach to marketing investment sustained over the life of a game which greatly differs from the traditional burst marketing launch model.
Social gaming is large and growing quickly, driven by key technology and consumer trends, creating the potential for leading entertainment franchises to emerge from the category.
Social: one of the most popular gaming categories for decades
Social games, including skill-based games, are an enduring category of entertainment: they have been enjoyed since at least the times of Ancient Egypt. Many of today’s most popular sub-genres were pioneered in Japan in the 1980s and have spawned historic, global franchises such as Space Invaders, Pac-Man and Tetris. Large Internet portal sites, such as Yahoo!, as well as game destination sites, such as Pogo or king.com, attracted large audiences.
Dramatic expansion in the social gaming audience
The social gaming category is distinguished by its broad appeal; it has historically attracted women between 35 and 50 but now the gender and the age mix are both widening. While Facebook drove wider adoption than the historic distribution channels, the proliferation of mobile devices has recently accelerated this trend. Furthermore, social formats are well suited to mobile usage as they can typically be played in a few minutes, allowing frequent and unplanned breaks in gameplay that do not detract from the quality of the experience.
The Quiz segment is among the preferred social game types
Of the 2 billion current mobile gamers, more than 20% state that quiz and trivia games are their preferred game type. That means Mowjow’s global potential core target audience falls in the range of 400 million potential players.
Free-to-play has created the potential for casual to lead other categories by revenue
Despite mass market appeal and sizable audiences, casual titles have typically not reached the revenue scale of leading games industry franchises. The dramatic increase in the audience powered by the app stores combined with the effectiveness of free-to-play business models has allowed numerous social titles to become the top grossing franchises on Apple’s iOS and Google Play Store.
Mobile gaming advertising is booming
Historically, mobile gaming ad spend lagged mobile gaming user base growth. However, the situation is starting to change as advertisers become more comfortable with mobile in general and with some of the special features mobile games offer marketers. The global mobile advertising market is expected to reach $196 billion in 2019, with a significant portion of the ad spend going to the mobile gaming segment.
Our Value Proposition
To address this opportunity, we have designed our mobile quiz games to be playable anytime, anywhere and on any device. They have the following characteristics:
Our games can be enjoyed in short sessions allowing frequent and unplanned breaks in game play that do not detract from the quality of the experience.
Our games can be enjoyed wherever our players are and on the vast majority of devices, connected or not.
A distinguishing feature of our platform is that players can switch seamlessly between devices and platforms and continue their game wherever they left off. Our platform offers real-time synchronization of level progression, social graphs and virtual items.
Our games are easy to learn, but hard to master. While gameplay is simple and intuitive, it takes skill. This creates a sense of achievement that underpins the high engagement in our games.
Our games are designed to appeal to every user. Users can compete in the challenges for bragging rights, or win gadgets, escapes and cars in the prize tournaments, or play for cash and Jackpots in the cash games.
Our games provide social interactions that enhance player experience: social connectivity is built around competing with each other and sharing achievements. The tournament progression funnel is not artificially narrowed and based purely on a user’s skills. We believe this drives game longevity and audience loyalty.
Our players can enjoy our games for free. Most of those that reach the highest level of a game do so without making a purchase. For those who do, we price our virtual items relative to the entertainment value they deliver. We believe preventing buyer’s remorse drives long-term customer retention.
Supportive of good causes
Our players are able to enjoy our games while also contributing to charitable causes that they support. One of the features of the “Influencer” program enables them to make donations to selected charities.
This article was originally published on November 3, 2016.