The global gaming industry has remained best in class among the media concerns of the 21st century for over two decades with revenues estimated to be hovering at around $300bn a year. That’s over twice the scale of the movie industry, and belies the monumental scale and reach of this once niche concern today.
But why exactly is the games industry able to command such vast sums? As with any sufficiently complex topic, the answers to this are various – but there are some key factors we would be remiss not to draw attention to.
Part of the reason the games industry is so vast is thanks to its early adoption and widespread investment in mobile platforms. This, more than anything else, took the market from one limited by proprietary hardware – think Xboxes, gaming PCs and handheld devices – to a media and entertainment powerhouse leveraging the single most popular, and populous, hardware platform ever devised.
The numbers here don’t lie. If one looks exclusively at western markets where we have the most detailed data, we can see that around 25% of all households own a games console – and only 10% or so have a PC powerful enough to run the latest titles. Using that same metric, we see that 95% of all households own at least one smartphone. That gives the platform a much greater market ceiling, and investment in mobile gaming has accordingly been an enormous part of the modern industry’s fortune.
In fact, over 50% of all gaming revenue now comes from mobile devices. When Microsoft finally got its historic acquisition of Activision-Blizzard over the line in 2023, the largest ever deal in the history of the industry coming it at $68.7bn, many analysts assumed the motivation for this was to gain proprietary rights over the popular console series Call of Duty.
But this ignores that by far the largest IP of Activision-Blizzard is the mobile title Candy Crush. In Q2 2022 alone, the studio posted earnings of $376 for console games, $332 for PC and a staggering $831 million – more than the rest combined – from mobile.
What accounts for this disparity? It’s more than just platform choice. To find the real driving force behind this, we need to look at the novel monetization approaches being taken by primarily mobile optimized games in 2024.
Free to Play / Live Service Games
F2P games, otherwise known as Live Service games, are titles that offer the base game for free – and do not penalize players with content restrictions. Rather, they make their money through optional purchases – known as microtransactions – of cosmetic items like player outfits, weapon skins and emotes.
This effectively empowers developers to make a theoretically endless amount of money from a single user in exchange for new pieces of content. Combined with a quarterly season pass, a nominal fee for limited time entry to the latest iteration of a live service game, this has more than any other approach resulted in the industry posting revenues unmatched by legacy media.
Hyper-Targeted Promotions and Viral Marketing
While novel monetization models are behind the meteoric rise of the industry, the sector has eagerly embraced a targeted approach for promotions to further contribute to its healthy condition.
Nowhere is this more in evidence than in the iGaming sector, where dedicated platforms like CasinoReviews have established themselves as directories for collating, reviewing and furnishing real money deals for online casinos. By providing a huge array of bespoke offers, sign-up promotions and no deposit free bet bonuses, these platforms not only contribute to the organic growth of the sector, but confer savings that convert to higher digital footfall for the wider iGaming market.
Freemium Franchises
When people think of mobile gaming, they tend to think of the freemium model. This game type locks core content behind pay-walls, letting people play the base game for free while having to contend with time or progress restrictions.
The classic freemium model would resemble a single one-time fee that unlocked the wider game, though with the realization that the vast majority of freemium gamers are unlikely to ever take this step, the sector has increasingly pivoted towards generating income from advertising breaks, marketing surveys and other forms of exchange to great effect.
