Comment & Opinion

The 5 trends that will dictate mobile gaming's evolution in 2016

David Diaz consults his crystal ball

The 5 trends that will dictate mobile gaming's evolution in 2016

David Diaz is VP Developer Relations at mobile advertising technology company Fyber, which helps freemium app and game developers grow revenue streams through ad monetisation across all connected devices.

Mobile gaming is big business.

The global market has nearly doubled in the past two years, with hit games capable of bringing in more than $1 billion in revenue.

That growth is sure to continue as time spent on mobile cuts into consumers' TV time.

A massive opportunity like this will inevitably lead to changes in the still nascent gaming industry.

Companies will come and go, investment will increase, and hit titles will continue to emerge from established players in the space.

This past year gave us several indications of where the gaming industry is headed in 2016, with Mobile World Congress set to give us further insight into what the next twelve months will hold.

Here are five trends that we see emerging throughout the year ahead.

Click here to view the list »
  • 1 Production costs will increase

    While there is huge revenue potential in a hit game, developing one requires substantial upfront investment.

    A big title in 2016 could have productions costs upwards of $30 million, and gaming studios are one of the only entities positioned to fund these productions.

    The studio concept isn’t new, however what will change is how closely the system resembles the film industry.

    In 2015, the gaming industry saw more sequels and games based on existing intellectual property than ever before. That’s in line with film, where three of the top six highest grossing films in history came out this year.

    Star Wars; Galaxy of Heroes - proving the power of IP

    All three were sequels developed by major studios.

    In 2016, studios will cover the production costs for some of the biggest hits, and we should expect new entries to the field.

    IP-based games will be the best way for newcomers in the gaming field to break their way into the top grossing charts and stay there.

  • 2 No new advertising unit will make a dent in the current landscape

    Every year, a few startups are born with new and innovative ad units that they believe will reshape the market.

    This year will be no different.

    That being said, none of these ad units will make a major dent in how advertisers purchase the bulk of their users.

    Video will remain the dominant and fastest growing ad unit, while traditional banners will steadily decrease (but still keep a significant market share).

    Google recently came out with their playable ad units, but I don’t believe these will take off in 2016.

    They will likely become effective for certain game genres, and at limited scale, but I don’t see them getting to 10% of market share.

  • 3 Who's buying Machine Zone, Scopely or Super Evil

    Acquisition activity has focused on smaller companies in prior years, but 2015 brought our first taste of a blockbuster when Activision purchased King Digital for $5.9 billion.

    Given mobile media’s increased presence in consumers’ lives, we can expect similar major acquisitions throughout 2016.

    The most attractive candidates will be companies that can generate consistent revenue through strong content creation abilities and in-app monetisation tools.

    There are companies in the industry that match these criteria and are primed for exits, and you can expect others to position themselves as acquisition targets throughout the year.

    Vainglory - an acquisition target?

    Companies to watch for next year that are well-primed for acquisitions are MachineZone, who have been able to replicate their success of Game of War with newly minted Mobile Strike, and Scopely, who have been able to consistently churn out top IP games that hit the top-grossing and top-free charts.

    Super Evil MegaCorp, with its competitive MOBA Vainglory and well-built engine will likely be a prime target for acquisition, especially by companies from the East.

  • 4 A holistic channel view will drive better insights into app discovery

    One of the biggest challenges of developing a hit game is attracting a user base.

    Increased competition will make this more important in 2016, and as a result we’ll see developers seek more granular control over app discovery, ad serving decisions and optimisation.

    In essence, game developers will need to master sophisticated marketing strategies as they go beyond mobile media to build their audience.

    Mobile game ads are everywhere

    They’ll need a holistic view of how all channels - including TV and outdoor advertising - work together to reach the best possible consumer targets and drive app discovery.

    This will increase demand from developers for performance marketing and analytics tools throughout the year.

    In order for this to happen, third party providers will need to break down barriers and partner with each other to help publishers achieve this. Inevitably, publishers will push these thirdparties down this path.

  • 5 VR will continue to grow and create new opportunities

    With brands as diverse as the New England Patriots, the Stanford Cardinal (go #WildCaff!) and The New York Times exposing consumers to the technology, we can expect to see more games extend into VR in 2016.

    This area is ripe with potential for developers, and while companies like Google have made inroads here, triple-A developers are in the best position to leverage this technology when it comes to gaming.

    We already started to see this with CCP (creators of Eve Online) becoming the first major studio to significantly invest in this technology with the creation of Valkyrie.

    Will 2016 be the takeoff year for VR and/or Oculus?

    Samsung's Gear is taking off, and in the spring of 2016, Oculus Rift will become available, laying the infrastructure for virtual reality to really fly.

    VR will open new monetisation opportunities for the developers themselves as well.

    This potential may not be realised until 2017, but given the immersive and powerful nature of this technology, we should expect to see new ad formats available for developers across virtual and augmented reality relatively soon. regularly posts content from a variety of guest writers across the games industry. These encompass a wide range of topics and people from different backgrounds and diversities, sharing their opinion on the hottest trending topics, undiscovered gems and what the future of the business holds.