That’s why mobile developers won’t give up. Revenue from games on mobile and portable devices is expected to grow about 38 percent to $8 billion in 2013 and touch $20 billion in 2018, according to David Cole, an analyst at research group DFC Intelligence. He is disappointed that it’s becoming “harder and harder for new entrants to come in without a big budget.” GOLD RUSHĪs E3, the industry’s largest annual convention, kicks off in Los Angeles next week, console games going up against mobile games will be an underlying theme. “Everybody wants a manual” with the best user acquisition techniques, said Doug Smith, an independent developer who launched his kids game “Chugga Bugga” on the Apple App Store in early April but has had only about 3,500 downloads. To stand out from the crowd, developers big and small are seeking ways to build a sustainable business.Įven Rovio - backers of pop-culture phenomenon “Angry Birds” - has reported that it now leans on stuffed toys, mugs and other merchandise for 45 percent of its revenue. Nexon has had some success boosting its mobile portfolio, a likely factor behind revenue growth of 24 percent in 2012 to 108 billion yen ($1.1 billion). But users get bored or angry because they can’t progress without paying more money,” Nexon’s Mahoney told Reuters in an interview. “You see these rocket ships in the industry that explode on the scene with a casual game that’s easy to develop with not much money and they gain users quickly. Today, there are hundreds, whose apps sell across the globe on Apple and Google Inc’s Android devices. In 2007, when Apple Inc launched the iPhone, there were but a handful of developers. Industry executives say mobile gamers today are spoiled for choice as the industry has exploded. After months of losing users that once peaked to 14.5 million players over a year ago, Zynga last week shut its New York-based studio, effectively laying off the OMGPOP team. The company that shot to fame on the back of Facebook games like “Farmville” bought OMGPOP, developers of the mobile sensation “Draw Something” - for $180 million. But its rapid decline in just the past year illustrates the challenge of hooking new players, and loosening gamers’ purse strings. In recent years, the model has been to offer games for free, then encourage players to spend real money on in-game purchases - a system perfected by Zynga in its online games. “It’s sort of like all the chess pieces have been thrown in the air, and the industry has not yet landed on what the chess board looks like,” said Owen Mahoney, CFO of Japanese online gaming giant Nexon Co Ltd, which has in the past year bought two companies to accelerate its mobile foray. Most are having scant success in an industry peppered with one-hit wonders like OMGPOP and where even established players like Zynga are faltering, industry sources say. With just one game under its belt, its stock has risen tenfold since October and its market cap almost equals that of decades-old Nintendo.įrom veterans like Electronic Arts to rising stars such as “Clash of Clans” maker Supercell, the $66 billion video game industry is scrambling to devise games and experimenting with ways to appeal to a generation of players that spends more time on mobile devices than on computers or consoles. SAN FRANCISCO, June 9 (Reuters) - To get a sense of how investors view the promise of mobile gaming, one need look no further than Japan’s GungHo Online Entertainment. (In paragraph 9 of Sunday’s story corrects to 108 billion yen ($1.1 billion) from 108 million yen ($1.1 million)
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