Mobile Gaming Growth Due To Asia


During the early days of the console era of video games, Sony, Nintendo and Sega were the dominant Japanese companies. When console gaming was making a transfer to PCs, American company Electronic Arts was the driving force. Today of course it’s the PlayStation 4 and the Xbox 1, from Sony and Microsoft respectively, that are the “big kahunas” of gaming, but a new platform is poised to take over, and Asia is taking a leading role in making it happen.
That platform, as many reading this article probably already suspect, is mobile.

In the last year, out of the 10 biggest merger and acquisition transactions that involved gaming companies, 8 of those were initiated by Asian buyers. This includes a $1.5 billion deal to invest in the new company Supercell, one of the biggest ever seen in the industry when the Japanese game company GungHo was joined by SoftBank.

The fact is, the long-standing business model of gaming is being upended by the incredible growth of mobile gaming and gambling with companies such as M88 and Sbobet. The former was based on the sale of video games as well as the devices that users needed to play them. The new business model includes giving away games for free to be used on smart phones and then earning revenues from purchases that are made “in game” as well as advertising and numerous other add-ons. Although it’s spread to the rest of the world already, the “free to play” business model was actually pioneered in Asia.

“If the U.S. and Europe are great conceptually, the leading Asian markets are masters of the science of making money from mobile,” said Tim Merel, founder of Digi-Capital.

For example, last year Japan and South Korea accounted for an incredible 62% of all revenue made worldwide, including games being sold on Google Play through their mobile app store. The United States, in comparison, was only 15%. Right now, over 50% of the revenue being generated by mobile games is generated by Asian countries and, by 2016, this is expected to grow by over 65%.

There are a variety of factors involved that explain how Asia became the leader in mobile gaming, including the fact that, way back in 2000, the sale of video game consoles was banned in China due to what they considered hyper-violent games that were corrupting their county’s youth. Although the government has eased restrictions of late, the fact is that Chinese players have gotten used to playing their games on mobile devices and they are now the dominant platform of choice.

Another factor is simply that playing games on mobile is much more convenient, especially when you consider that many Asian cities like Tokyo are extremely crowded.

Add that to the fact that wireless operators in Japan were offering rudimentary mobile games for free before smart phones and apps even arrived and you have that setting for a mobile gaming explosion with Asia right in the center of it all.