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Mobile game revenue makes up for more than 50% of all game revenue, and that number is only for the US. It's much larger in Asia, which is an even bigger gaming

Mobile game revenue makes up for more than 50% of all game revenue, and that number is only for the US. It's much larger in Asia, which is an even bigger gaming market. For non-mobile games, most of the revenue still comes from mobile-game-like monetization schemes such as lootboxes/gacha/battle passes/skins/etc, not from the traditional sales. These types of monetization schemes are incredibly lucrative, with many people spending hundreds, thousands, or tens of thousands of dollars over the lifetime of such games due to their addictive nature and gambling mechanics. Traditional media does not have an equivalent to these kind of monetization schemes. It's not the size of the audience. It's the monetization scheme. The times when game revenue meant buying good old single player games without DLCs are long gone. Companies have long realized that's not where the money is.

BlueTemplar 4y ago
But the games industry was already bigger than movie/TV/music industry before the rise of those gambling/pay-not-to-grind/pay-to-win schemes...
a13o 4y ago
Only bit I disagree with is that the big spenders are doing it purely because of addiction or gambling. Most big spenders are incredibly wealthy, like buy $30,000 wristwatches for fun wealthy. Games have figured out how to 'go infinite' on their spend possibilities and capture wristwatch money from these folks. The other thing novel to games is social aspects. Just like buying fashion to wear in public, games let you show off your money in a way other mediums don't. Music has a near equivalent with VIP passes and private shows, but scaling these are human-bound in space or time respectively, which games aren't limited by. Second, games provide a sense of community. A lot of game revenue is monetizing people's desire to not be alone. Calling these players addicted is I think reductive. Are people addicted to church? To golf? To therapy? Maybe some of them, but it's a poor generalization.
- adamauckland 4y ago
  What do people do to afford $30,000 throwaway wristwatches? There can't be that many of them in the world, that's the definition of the top 1%?!
  - mousetree 4y ago
    Why are they throwaway?
    - daemoens 4y ago
      Some of the people who can buy 30k watches have so much money that it can become just another throwaway item.
  - daemoens 4y ago
    Lot of kids/young adults with old money is my guess. These people will never have a reason to work so will pad out their days with things like this.
  - HPsquared 4y ago
    If you're on a million a year, 30k is about 11 days' income.
  - ffssffss 4y ago
    The top 1% by household income in the US is about $500k a year. There are more than 100 million households in the US, so that's conservatively at least 1 million families who could afford to support a 5 figure microtransaction whale. That's a lot of money!
  - Tiktaalik 4y ago
    be born wealthy.
- rng_civ 4y ago
  > Only bit I disagree with is that the big spenders are doing it purely because of addiction or gambling. People spend big in games because: * The spending is very stimulating visually and audibly (think lootbox openings) * The gains from their spending translates directly to game-social prestige, game power, or both (i.e. an Advantage) * This Advantage allows them to lord over the players who have spent less (or 0 in the case for F2P players) Whether that manifests into addiction depends entirely on the rest of the game's design (but you know, games that introduce the Advantage tend to want to make a lot of money by getting you hooked on spending...) > Second, games provide a sense of community. A lot of game revenue is monetizing people's desire to not be alone. Calling these players addicted is I think reductive. Yes, these games do provide a sense of community because they are purposefully designed to do so. Without an incentive to play while getting lorded over by whales, the fish will leave. Without a bunch of fish to lord over, the whales will leave. Again, this depends on the game's design, but the vast majority of them encourage addiction to the Advantage and its use against others. Maybe you can extend this analysis to IRL stuff. I don't know because I don't participate in any of it. Source: [Let’s go whaling: Tricks for monetising mobile game players with free-to-play](https://www.youtube.com/watch?v=xNjI03CGkb4&t=0s https://www.youtube.com/watch?v=xNjI03CGkb4&t=0s)
  - Buttons840 4y ago
    > The spending is very stimulating visually and audibly (think lootbox openings) This reminds me of an article (which I can't find again) talking about "the toy in the interface". A good game will be fun to simply interact with on a user interface level. Has anyone built a lootbox simulator yet? Skip the game and just do lootboxes. Give people a way to scratch their lootbox itch for free. If done well enough, with a good toy in the interface, this could actually draw attention and profits away from those who exploit.
    - LikesPwsh 4y ago
      Casino apps are exactly that, and highly profitable
      - 4y ago
- loveparade 4y ago
  > Most big spenders are incredibly wealthy, like buy $30,000 wristwatches for fun wealthy. Games have figured out how to 'go infinite' on their spend possibilities and capture wristwatch money from these folks. Do you have any data to back up this claim? I don't have data to prove the opposite either, but I don't believe this is true. I know multiple big spenders in real life. They have a very average income, but instead of putting the ~$500-1000 that's left each month into a saving accounts, they spend it on mobile games, i.e. make bad financial decisions. FOMO is probably the main driver. I'm sure the people you refer to exist. There are whales that are so rich that they don't care about wasting $10-100k on a game, but I don't believe these are the majority of players that spend large amounts. I think the big spenders on average have below average income, they are just bad at self-restraint, and/or relatively young and inexperienced with money.
  - a13o 4y ago
    I worked in the F2P industry a decade ago and have many anecdotes. Oil sheiks with a direct line to the development team. Wire transfer support for big spenders to get around throughout restrictions on normal payment processing. Spend anomalies in graphs with 7 figure y-axes because some lawyer discovered the game while stuck home with the flu. A lot of customer support energy was put into white glove service for these players because of how important they were to the revenue graph. Kongregate used to share data pretty liberally and had a wide view of the industry in their day. They were playing with less zeroes than the big names but the trends were the same. https://blog.kongregate.com/dont-call-them-whales-f2p-spenders-and-virtual-value/ https://blog.kongregate.com/dont-call-them-whales-f2p-spende... I'm out of the game for a while now but keep in touch with former colleagues and they've gotten much better rounding out the spender curve. But the folks at the tail still got that wristwatch money. If you don't have a spend stream for them you're leaving a huge piece of your revenue on the table.
GalenErso 4y ago
> It's much larger in Asia, which is an even bigger gaming market. Is it because Asian consumers have a lower disposable income and cannot afford gaming consoles and gaming PCs as much?
- rng_civ 4y ago
  I'd wager as much. Consoles and gaming PCs tend to be expensive (in terms of upfront costs), require more physical space to use, and are hard to move. Mobile phones have multiple purposes and, crucially, are mobile (shocker, right?) This means that if you could only have 1 electronic device, you'd 100% choose a mobile phone. And what better way to find a lot of customers than a F2P mobile game? It has 0 barrier to entry, a large audience, relatively low development costs, and little actual "game design" expectations.
- loveparade 4y ago
  That's true for Southeast Asia, which is a pretty big gaming market as well. They essentially skipped PC gaming and went straight to smartphones. For the wealthier East Asian countries like China, Japan, and Korea this isn't the case. It's more of a cultural thing due to various factors including - Smartphones and mobile games became popular long before they became popular in the US. People are used to paying money for mobile games. It was this way from the very start. - The Gacha model was popular in Japan even before mobile games. That's where the word comes from. Korea had similar machines. - People take public transportation much more than in the US, which leads itself to playing games on the go (mobile). - At least in Japan (less so in China and even less so in Korea), people prefer non-competitive gaming. That's why competitive games like DoTA, LoL, Counter Strike, etc, were never popular in Japan. Even Diablo with PVP never was popular.
rng_civ 4y ago
Some interesting data points to back this up: * Activision Blizzard 2022 Report: ~50% of revenue for the first six months of 2022 came from mobile Source(PDF): https://investor.activision.com/node/35551/pdf https://investor.activision.com/node/35551/pdf * Forbes: 7 Mobile Games Now Make Over $100 Million Every Month Source: https://www.forbes.com/sites/johnkoetsier/2021/08/11/7-mobile-games-now-make-over-100-million-every-month/?sh=df83ef02b9b5 https://www.forbes.com/sites/johnkoetsier/2021/08/11/7-mobil... * NCSoft Q3 2022: ~440 KRW billion in mobile sales vs ~97 KRW billion in PC sales Source: https://kr.ncsoft.com/en/ir/irArchive/earningsRelease.do https://kr.ncsoft.com/en/ir/irArchive/earningsRelease.do * Game-of-the-Year Elden Ring has sold 17.5 million copies by September 2022. Assuming a very generous $100 average per copy, thats $1.75 billion. That put's it slightly below the 3rd highest revenue mobile game in 2021. Sources: https://www.eurogamer.net/elden-ring-sales-surpass-175m https://www.eurogamer.net/elden-ring-sales-surpass-175m https://sensortower.com/blog/billion-dollar-mobile-games-2021 https://sensortower.com/blog/billion-dollar-mobile-games-202...
AtlasBarfed 4y ago
Keep in mind that mobile games are employing addictive mechanisms in many other styles of pretty loathsome strategies for hooking users that I don't believe will survive regulation in the next decade. Previous strategies in Las Vegas casinos did not survive such things without being heavily heavily heavily regulated and I believe that is going to be coming to things like pay to win and other types of games where stories of addicted whales dropping tens of thousands per month abound. What is particularly loathesome is that a lot of these strategies have made their way into children's games and it's just shocking considering the amount of regulation that went into 1970s era children's TV programming. I think a lot of adults who are in policy positions who have any exposure to video games are from the 1970s and '80s and '90s where arguably games are made in a by much more egalitarian game designers who just wanted to make a "good game" but the last two decades has seen the rise of amoral mbas taking over game mechanics in search of revenue ar all costs
544838394 4y ago
[flagged]

BlueTemplar 4y ago

But the games industry was already bigger than movie/TV/music industry before the rise of those gambling/pay-not-to-grind/pay-to-win schemes...

a13o 4y ago

Only bit I disagree with is that the big spenders are doing it purely because of addiction or gambling. Most big spenders are incredibly wealthy, like buy $30,000 wristwatches for fun wealthy. Games have figured out how to 'go infinite' on their spend possibilities and capture wristwatch money from these folks. The other thing novel to games is social aspects. Just like buying fashion to wear in public, games let you show off your money in a way other mediums don't. Music has a near equivalent with VIP passes and private shows, but scaling these are human-bound in space or time respectively, which games aren't limited by. Second, games provide a sense of community. A lot of game revenue is monetizing people's desire to not be alone. Calling these players addicted is I think reductive. Are people addicted to church? To golf? To therapy? Maybe some of them, but it's a poor generalization.

adamauckland 4y ago
What do people do to afford $30,000 throwaway wristwatches? There can't be that many of them in the world, that's the definition of the top 1%?!
- mousetree 4y ago
  Why are they throwaway?
  - daemoens 4y ago
    Some of the people who can buy 30k watches have so much money that it can become just another throwaway item.
- daemoens 4y ago
  Lot of kids/young adults with old money is my guess. These people will never have a reason to work so will pad out their days with things like this.
- HPsquared 4y ago
  If you're on a million a year, 30k is about 11 days' income.
- ffssffss 4y ago
  The top 1% by household income in the US is about $500k a year. There are more than 100 million households in the US, so that's conservatively at least 1 million families who could afford to support a 5 figure microtransaction whale. That's a lot of money!
- Tiktaalik 4y ago
  be born wealthy.
rng_civ 4y ago
> Only bit I disagree with is that the big spenders are doing it purely because of addiction or gambling. People spend big in games because: * The spending is very stimulating visually and audibly (think lootbox openings) * The gains from their spending translates directly to game-social prestige, game power, or both (i.e. an Advantage) * This Advantage allows them to lord over the players who have spent less (or 0 in the case for F2P players) Whether that manifests into addiction depends entirely on the rest of the game's design (but you know, games that introduce the Advantage tend to want to make a lot of money by getting you hooked on spending...) > Second, games provide a sense of community. A lot of game revenue is monetizing people's desire to not be alone. Calling these players addicted is I think reductive. Yes, these games do provide a sense of community because they are purposefully designed to do so. Without an incentive to play while getting lorded over by whales, the fish will leave. Without a bunch of fish to lord over, the whales will leave. Again, this depends on the game's design, but the vast majority of them encourage addiction to the Advantage and its use against others. Maybe you can extend this analysis to IRL stuff. I don't know because I don't participate in any of it. Source: [Let’s go whaling: Tricks for monetising mobile game players with free-to-play](https://www.youtube.com/watch?v=xNjI03CGkb4&t=0s https://www.youtube.com/watch?v=xNjI03CGkb4&t=0s)
- Buttons840 4y ago
  > The spending is very stimulating visually and audibly (think lootbox openings) This reminds me of an article (which I can't find again) talking about "the toy in the interface". A good game will be fun to simply interact with on a user interface level. Has anyone built a lootbox simulator yet? Skip the game and just do lootboxes. Give people a way to scratch their lootbox itch for free. If done well enough, with a good toy in the interface, this could actually draw attention and profits away from those who exploit.
  - LikesPwsh 4y ago
    Casino apps are exactly that, and highly profitable
    - 4y ago
loveparade 4y ago
> Most big spenders are incredibly wealthy, like buy $30,000 wristwatches for fun wealthy. Games have figured out how to 'go infinite' on their spend possibilities and capture wristwatch money from these folks. Do you have any data to back up this claim? I don't have data to prove the opposite either, but I don't believe this is true. I know multiple big spenders in real life. They have a very average income, but instead of putting the ~$500-1000 that's left each month into a saving accounts, they spend it on mobile games, i.e. make bad financial decisions. FOMO is probably the main driver. I'm sure the people you refer to exist. There are whales that are so rich that they don't care about wasting $10-100k on a game, but I don't believe these are the majority of players that spend large amounts. I think the big spenders on average have below average income, they are just bad at self-restraint, and/or relatively young and inexperienced with money.
- a13o 4y ago
  I worked in the F2P industry a decade ago and have many anecdotes. Oil sheiks with a direct line to the development team. Wire transfer support for big spenders to get around throughout restrictions on normal payment processing. Spend anomalies in graphs with 7 figure y-axes because some lawyer discovered the game while stuck home with the flu. A lot of customer support energy was put into white glove service for these players because of how important they were to the revenue graph. Kongregate used to share data pretty liberally and had a wide view of the industry in their day. They were playing with less zeroes than the big names but the trends were the same. https://blog.kongregate.com/dont-call-them-whales-f2p-spenders-and-virtual-value/ https://blog.kongregate.com/dont-call-them-whales-f2p-spende... I'm out of the game for a while now but keep in touch with former colleagues and they've gotten much better rounding out the spender curve. But the folks at the tail still got that wristwatch money. If you don't have a spend stream for them you're leaving a huge piece of your revenue on the table.

GalenErso 4y ago

> It's much larger in Asia, which is an even bigger gaming market. Is it because Asian consumers have a lower disposable income and cannot afford gaming consoles and gaming PCs as much?

rng_civ 4y ago
I'd wager as much. Consoles and gaming PCs tend to be expensive (in terms of upfront costs), require more physical space to use, and are hard to move. Mobile phones have multiple purposes and, crucially, are mobile (shocker, right?) This means that if you could only have 1 electronic device, you'd 100% choose a mobile phone. And what better way to find a lot of customers than a F2P mobile game? It has 0 barrier to entry, a large audience, relatively low development costs, and little actual "game design" expectations.
loveparade 4y ago
That's true for Southeast Asia, which is a pretty big gaming market as well. They essentially skipped PC gaming and went straight to smartphones. For the wealthier East Asian countries like China, Japan, and Korea this isn't the case. It's more of a cultural thing due to various factors including - Smartphones and mobile games became popular long before they became popular in the US. People are used to paying money for mobile games. It was this way from the very start. - The Gacha model was popular in Japan even before mobile games. That's where the word comes from. Korea had similar machines. - People take public transportation much more than in the US, which leads itself to playing games on the go (mobile). - At least in Japan (less so in China and even less so in Korea), people prefer non-competitive gaming. That's why competitive games like DoTA, LoL, Counter Strike, etc, were never popular in Japan. Even Diablo with PVP never was popular.

rng_civ 4y ago

Some interesting data points to back this up: * Activision Blizzard 2022 Report: ~50% of revenue for the first six months of 2022 came from mobile Source(PDF): https://investor.activision.com/node/35551/pdf https://investor.activision.com/node/35551/pdf * Forbes: 7 Mobile Games Now Make Over $100 Million Every Month Source: https://www.forbes.com/sites/johnkoetsier/2021/08/11/7-mobile-games-now-make-over-100-million-every-month/?sh=df83ef02b9b5 https://www.forbes.com/sites/johnkoetsier/2021/08/11/7-mobil... * NCSoft Q3 2022: ~440 KRW billion in mobile sales vs ~97 KRW billion in PC sales Source: https://kr.ncsoft.com/en/ir/irArchive/earningsRelease.do https://kr.ncsoft.com/en/ir/irArchive/earningsRelease.do * Game-of-the-Year Elden Ring has sold 17.5 million copies by September 2022. Assuming a very generous $100 average per copy, thats $1.75 billion. That put's it slightly below the 3rd highest revenue mobile game in 2021. Sources: https://www.eurogamer.net/elden-ring-sales-surpass-175m https://www.eurogamer.net/elden-ring-sales-surpass-175m https://sensortower.com/blog/billion-dollar-mobile-games-2021 https://sensortower.com/blog/billion-dollar-mobile-games-202...

AtlasBarfed 4y ago

Keep in mind that mobile games are employing addictive mechanisms in many other styles of pretty loathsome strategies for hooking users that I don't believe will survive regulation in the next decade. Previous strategies in Las Vegas casinos did not survive such things without being heavily heavily heavily regulated and I believe that is going to be coming to things like pay to win and other types of games where stories of addicted whales dropping tens of thousands per month abound. What is particularly loathesome is that a lot of these strategies have made their way into children's games and it's just shocking considering the amount of regulation that went into 1970s era children's TV programming. I think a lot of adults who are in policy positions who have any exposure to video games are from the 1970s and '80s and '90s where arguably games are made in a by much more egalitarian game designers who just wanted to make a "good game" but the last two decades has seen the rise of amoral mbas taking over game mechanics in search of revenue ar all costs

544838394 4y ago

[flagged]