Comment & Opinion

Despite 'Peak iPhone', this is the opportunity for mobile game developers

Despite 'Peak iPhone', this is the opportunity for mobile game developers

It had to happen.

Nothing can rise year-on-year-on-year forever.

But while everyone else discusses the whys and wherefores of Apple's first decline in quarterly revenue and iPhone sales, the fact is the entire mobile content industry has to think seriously about the wider implications of Peak Mobile, or in this specific case - 'Peak iPhone'.

Top of the mountain

There have been hints of smartphone content saturation in early adopter countries, of course.

Flurry's report for 2015 highlighted a decline in mobile game sessions, for example.

We've also seen success stories such as Puzzle & Dragons in Japan and Candy Crush Saga in the west hit peak earnings and enter a long - a still highly profitable - decline.

And now with China unable to maintain iPhone's upwards sales growth - Tim Cook's "strong macroeconomic headwinds" - and India highly unlikely to step into the gap, we have to accept that the most lucrative segment of the mobile games market is now not going to grow very much at all.

It doesn't look like wearables, tablets or VR are going to explode into a $10 billion games content market anytime soon.

Of course, this isn't to say that Android's install base is slowing any time soon. As smartphone penetration increases in developing countries, especially in south east Asia, Google's ecosystem will continue to expand.

And that will drive the predicted growth of mobile games into a $40 billion industry over the coming years.

But the amount of spending in mobile games among the relative small group of players in wealthy countries - the classic iPhone owner - isn't going to grow unless something disrupts the market and it doesn't look like wearables, tablets or VR are going to explode into a $10 billion games content market anytime soon.

What's next?

So much for the diagnosis. What about the logical reaction to the situation?

To some degree, the trends are already in progress.

Mobile games are becoming more expensive to make, with higher production values and/or using brands to differentiate themselves.

Indies have hunkered down with small, quirky, paid games released across mobile and Steam.

And the dash towards VR - at least in terms of raising money - has been well documented.

More strategically, however, given the financial power of the biggest companies and the endless creativity at the entry level, the smartest opportunity seems to be for developers who can demonstrate razor-sharp operational skills with just enough creativity to stand out.

Operational requirements

The gold rush is long over in terms of effortlessly selling more and more iPhones, or gaining more and more valuable organic players.

The dash towards VR - at least in terms of raising money - has been well documented.

The situation is that less will have to be made into more.

In that context, understanding a wealthy, niche audience and providing them with exactly the entertainment they want - especially if you can do so within worlds and with characters you've created - is the most valuable opportunity.

Competing to be next Crossy Road or Color Switch is not. Not if you want to get paid next month.

Still, the good news is the analytics tools to do makes these sort of games are available - effectively free - and the basic techniques of marketing and customer support are also well understood.

Even better, very few companies have yet demonstrated the skills to be able to take advantage of a market that is getting harder by the day, but remains as lucrative as it ever has been.

So that's the opportunity.

The bad news, of course, is the reason few companies have yet demonstrated such expertise is because it's incredibly difficult to do so.

And that's why it's still the opportunity.

Contributing Editor

A Pocket Gamer co-founder, Jon is Contributing Editor at PG.biz which means he acts like a slightly confused uncle who's forgotten where he's left his glasses. As well as letters and cameras, he likes imaginary numbers and legumes.

Comments

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Evtim Trenkov Game Economy Designer
It's natural that sales of iPhones would eventually drop.
This doesn't mean that contentent development would suffer. I mean in general - yes. There won't be so much space for CoC clones to say the least. But the quality content companies would go on the hunt for the best talent, so it's a sweet time to be proven expert in mobile gaming.;) The competition should finally provide enough incentive for laceration of great fun
jon jordan
I am also excited to experience future "laceration of great fun"
Evtim Trenkov Game Economy Designer
autocorrect :P
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