For those with their fingers on the industry’s pulse, this shouldn’t come as a surprise. Mobile gaming was a hot trend, even before COVID-19. But there were concerns that the mobile gaming industry might not sustain the hype that came as Coronavirus took over the world. As lockdowns and distancing measures were relaxed, there were fears that the users who were driven into the app stores by lockdowns and distancing measures wouldn’t stick around. Fortunately, those fears were ill-placed.
Mobile gaming: the industry that just keeps growing
The COVID pandemic unleashed untold destruction across countless industries. Airlines, energy producers, retail stores, and hospitality companies… the list goes on. In stark contrast to this, however, mobile gaming showed that it’s not just a durable industry capable of scraping by in sickness and in health. It is now an unstoppable train, gaining speed and picking up unstoppable momentum.
Finding the perfect illustration of just how rapidly the mobile gaming revolution is picking up pace is not hard, either. Just take a look at the revenue figures that some of the leading firms have posted this year.
One such firm, Canadian countercultural game producers Leaf Mobile, not only delivered double-digit revenue growth—they very nearly hit a triple-digit figure. Delivering a ridiculous 84% increase in Q2 revenue this year vs. the previous quarter, they serve as the perfect example of just how alive and well this booming trend is.
Of course, not every gaming house was able to deliver such phenomenal results—but that’s normal in any industry. There are always those who hit the nail on the head and read all the rewards and those that miss and still struggle, even in good times. However, what is abnormal is the rate of growth the broader industry is delivering: +15% year-on-year, with no signs of slowing down any time soon.
Just in case Leaf Mobile’s results didn’t tip you off, Mobile gaming is where the money’s at
Truth be told, the boom in mobile gaming during COVID is part of a broader flight towards mobile-everything. Mobile browsing and, more generally, mobile apps are all taking off, too. But the bump in app-store downloads that occurred during the health crisis didn’t necessarily equate to an equal distribution of revenues across all sectors. Even if other categories, like conferencing and collaborative work solutions, were arguably sought after even more than games, it’s the gaming industry that people want to spend their money on.
The discrepancies in revenue share are marked, too. While non-gaming apps accounted for the bulk of app downloads in Q3 this year—55% and 70% on Google Play and Apple, respectively—they only accounted for 20% of the total revenue on Google Play, and 35% on iOS.
$20 billion in Q3 mobile gaming revenue and growing: how smart firms like Leaf Mobile are gearing up to grab their share
With combined Q3 gaming revenues of $20 billion across the Google and Apple app stores, this industry, which was once just a novelty, is quickly turning into serious business. And with that much money at stake, the rewards for those that get it right are considerable.
This is why smart mobile game producers like Lead Mobile are gearing up to grab their share with a two-pronged approach: congruent celebrity collaborations and endorsements, and mergers and acquisitions.
Celebrity power and mobile gaming: the right celebrity will even pull non-gamers
A classic example of Leaf Mobile’s wisdom in deploying the celebrity IP approach is Glu Mobile’s Kim Kardashian: Hollywood mobile game. Even to this day, more than five- years after its release, the app rakes in millions of dollars worth of revenue. And this is despite the average Kim Kardashian fan not exactly being the type of person who’d typically gravitate towards gaming at all.
This is why Leaf Mobile has pursued partnerships with the likes of Cheech & Chong and Cyprus Hill’s B-Real for their cannabis games. The pulling power of these icons in the cannabis world is enormous, which ensures that there is not only instant appeal to already converted gamers, but also a whole gaming market laying dormant in the fans of these celebrities that’s just waiting to be tapped.
Taking an even bigger slice of the mobile gaming pie: Why Leaf Mobile has entered into a letter of intent with East Side Games
Aside from capitalizing on marketing strategies and delivering incremental improvements in each subsequent gaming release, the next best way to grab a greater share of any market is found in an old adage. If you can’t beat ‘em, join ‘em.
While there’s nothing revolutionary about the old merger and acquisition route, it has proven its value over the years in just about every industry. And when the opportunity to do so presents itself, it is unarguably the quickest route to capturing a greater share of any market. What’s more, the combined intellectual property and assets, and the streamlined operations and management that follows, usually leads to a whole that’s greater than the sum of its parts.
This is why when companies like Leaf Mobile and East Side Games come together, they will continue delivering revenue growth that outpaces an already booming industry. Their combined game portfolios, and each firm’s respective knowledge insofar as monetization and engagement strategies, will form an unstoppable machine that will be luring in and retaining new gamers within their ecosystem for years to come.
Now’s still a great time to invest in mobile gaming, even if you’ll have to wait to get in on the Leaf Mobile train
If the recent turbulence in tech stocks has given cause for trepidation lately, the current data should only show that, at least in the case of mobile gaming, the hype that sent stocks soaring wasn’t misplaced.
With mobile games dominating app store revenues, and with firms like Leaf Mobile dropping announcements of 84% revenue increases, there is still so much potential for growth. Unfortunately, with Leaf Mobile currently in a trading halt as it works through the M&A process, this option is presently off the table. However, should it resume trading at anything less than a large multiple of its current price, it may just be one of the hottest options around.
DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.
This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.
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