The marketing investment required for mobile games We would expect games play to remain a principal publishers is likely to keep the market stratified in 2016. usage of mobile devices. However, while consumers Deloitte Global expects about 80 percent of mobile are likely to continue to enjoy playing mobile games, games revenue in the top 1,000 titles to be earned life may become increasingly arduous for mobile games by the top 20 publishers in each region: that leaves publishers, potentially leading to some major players a fifth of the remaining revenue to be shared among exiting the market in 2016 or 2017. 170 many tens of thousands of developers . We would also expect sizeable rewards to be maintained for Given these data, we further predict that the rise of the number one game; the best grossing game could mobile games, in terms of revenues, will not ‘eat’ generate five times that of the number five game, and console and PC games revenues in the medium term: 171 the three platforms will co-exist, with each serving 10 times that of the number 10 game . largely distinct needs, underpinned by different business We would expect only a few hundred mobile games dynamics. 172 companies to gross over $1 million in 2016 ; this would be sufficient to run a studio with 5-10 developers. One survey of 8,000 developers found that 17 percent Bottom Line generated no revenue; 18 percent made less than $100 The mobile games industry as a whole should 173 a month, and half made less than $1,000 per month . thrive in 2016, but the outlook for individual A further difference between mobile games and mobile games developers is likely to be far both console and PC games has been longevity. more varied. When touchscreen based games Movie franchises can be criticized for offering up a mere first became available for smartphones and three sequels to a blockbuster; nine console and PC tablets, it was relatively easy for an individual franchises have launched over 10 editions, of which or small company to create a game that three (Madden NFL, FIFA and Mario Brothers) have had would then become a major hit. over 20 editions. One 17-year old title, Counter‑Strike, However success has its consequences, one has on average hundreds of thousands of concurrent of which has been to encourage a deluge users of its latest iteration: Counter‑Strike: Global of developers, and the result has been an 174 Offensive . A major benefit of successful sequels increasingly challenging outlook for fledgling is a lowered marketing cost; the historical inability mobile games publishers. to launch mobile game sequels further adds to the marketing cost. The mobile games sector now has the same Some media properties can diversify across multiple core challenges as most mainstream media: platforms, such as books or plays being turned into creating compelling content and making movies or TV shows. Console and PC game hits should, people aware of it. arguably, transfer easily to mobile. Yet very few mobile This may leave three options for small mobile games hits (under 10 percent) were originally console or games developers (aside from keeping their PC hits. day job). A first option would be to hope for We predict that in subsequent years mobile games a serendipitous hit, such has blessed recent revenues will continue to grow, propelled by both hits such as Crossy Road, Flappy Bird or 175. A second is to align with a rising base of mobile devices, and a marked increase Monument Valley in device specification, particularly for smartphones. a major publisher which has the resources Better processors and sharper screens will likely enable to market a new game heavily – but those more sophisticated game play and more complex downloading the game on a freemium basis graphics over time, although game play on a five – or may not pay for add-ons with sufficient ten-inch screen will be different than on a 15 – or regularity. A third option may simply be to 50-inch screen. Faster connectivity will enable quicker focus on the console or PC market: while the downloads as well as online play. addressable base may be far smaller, gamers in this category have long been accustomed to paying for content. Technology, Media & Telecommunications Predictions 2016 27