The Rise of Social Mobile Gaming

By Amy Vale 

 We all know that mobile gaming has become a huge phenomenon in the past few years. Undoubtedly, it is the result of several factors, such as the massive rise in Smartphone and tablet sales, mobile Internet subscribers and app downloads. Young adults today, in particular, have grown up with computers, Internet, instant messaging and social media, at their fingertips. Gaming has evolved from a solo activity to an inherently “social” activity that lets users connect and engage with others. So what is the implication of social mobile gaming for you and other publishers?

According to a recent comScore report analyzing results in December 2011, game-playing was performed by 31.4 % of the mobile audience – that’s 2.6 percentage points up from September 2011. In just a short period of time, we are witnessing big gains. What’s the reason for this rise in social mobile gaming?

Mintel has found that sales in the mobile phone and tablet gaming market in the U.S. more than doubled between 2005 and 2010—reaching $898 million—and sales are forecasted to increase 82%, to $1.6 billion, by 2015. Smartphone sales in the U.S. increased a massive 538%—from 11.3 million units to 72 million units—between 2006 and 2011. What’s more is that U.S. tablet sales are forecast to more than triple between 2010 and 2015, from 10.3 million units to 44 million units. These numbers are staggering. Of relevance here, comScore has found that about 25% of mobile Internet subscribers (as of February 2011) are playing games. They also found that each additional Smartphone or tablet owner is likely to use their device to play games.

What does all this mean for us? Mobile gaming is fun, and a widely-accepted cultural pastime. But in the marketing world, it’s also a key tool for generating revenue and a significant amount at that. In 2010, revenue from mobile gaming reached nearly $850 million, but only 6% came from ad support, according to a new report from eMarketer. By 2014, mobile gaming revenues are expected to top $1.5 billion with ad-supported gaming making up 12.3% of that total. That means ad-supported gaming is expected to double, and the “Freemium” gaming app model can be seen as one of the major contributors to this growth.

As you may know, most social mobile games are offered in both the free or paid app model, but most people agree that the Freemium model has changed the face of mobile gaming. Why? This model lets users install the basic versions of a game for free and then prompts them to upgrade or add key game functions or features, such as “unlocks” or other virtual tools by making an in-app purchase. Free apps or those under the Freemium model almost always rely on mobile advertising as a source of income to monetize the app.

Not only are the sales of Smartphones and tablet devices expected to explode over the next several years, but it’s clear that ad-supported gaming is also on the rise. So now is the time to get on board with social mobile gaming, if you aren’t already.