With the mobile gaming market booming during the height of lockdowns all over the world, experts are saying that this industry is resilient of the coronavirus pandemic. Game publishers such as Nintendo (OTC:NTDOY), Activision Blizzard (NASDAQ: ATVI), and Leaf Mobile (TSXV: LEAF) are topping the charts with record-breaking earnings.
As the world continues to battle with COVID-19, businesses continue to struggle to remain open and adjust to the new normal. However, this is not a problem for the gaming and e-sports industries, both of which have been thriving during the coronavirus pandemic, and have even experienced a surge in users and revenue. This is most likely due to people finding ways to keep themselves entertained during the lockdown, resulting to games like Call of Duty, Mario Kart Tour, and Leaf Mobile, Inc. (TSXV: LEAF)’s Cheech & Chong Bud Farm achieving record downloads.
Per Reuters, the global gaming market is expected to reach $159.3 billion in earnings this year, and even exceed $200 billion by 2023. Mobile gaming’s share, meanwhile, is forecast at $77.2 billion, a 13.3% increase from 2019. The breakdown is as follows: revenue from smartphones are $63.6 billion, a 15.8% increase from last year, and $13.37 billion for tablets, which saw a 2.7% increase. It is also reported that out of the total 2.7 billion gamers worldwide, 2.6 of these are using mobile devices. These are record-breaking months indeed.
Breakout games bring in the cash
According to The State of Mobile 2020 report by App Annie, mobile gaming has taken over the world as the most popular platform for gaming today. In terms of consumer spending, it has seen 25% more purchases than those using the PC/Mac and other gaming consoles.
When it comes to genres, casual gaming like arcades and puzzles were the most downloaded games worldwide. Fun Race 3D climbed the charts despite being relatively new, published by Good Job Games in May 2019.
Core games, meanwhile, represent only 18% of total downloads but is at the top in terms of user engagement. It also prevailed in terms of longest time spent, with action and RPG games like Fate/Grand Order taking the top spot. Other breakout stars are Call of Duty and Mario Kart Tour, which are some of the most downloaded games in other countries besides the United States.
When Nintendo (OTC:NTDOY) launched Mario Kart Tour last year, it was an effort to improve its digital sales. The game was perhaps the developer’s biggest launch for mobile, and it was a good strategy—its profit increased by 19.5%, not to mention attracting the likes of ValueAct Capital, who invested a 2% stake in the company worth $1.1 billion.
Activision Blizzard (NASDAQ: ATVI), on the other hand, successfully achieved $1.79 billion in first-quarter revenues this year, which has grown by 13% from $447 million last year. The publisher of Call of Duty, it also released free-to-play extension Call of Duty: Warzone, which captured an estimated 60 million players and counting. The company is also behind the popular games Candy Crush and World of Warcraft.
Record downloads during COVID-19 lockdown
Another game publisher that’s turning heads is Leaf Mobile (TSXV: LEAF), who is a long-time leader in counter culture games. It recently launched Cheech & Chong Bud Farm on the highly celebrated 4/20 (April 20th), and just after ten days, achieved $0.1 million in revenue.
In fact, April has been good to the company—despite the quarantine, Bud Farm Idle Tycoon, a game part of its Bud Farm franchise, earned $2.5 million in revenue, with $0.3 million in net operating income. Other legacy games, such as Bud Farm 420 and Bud Farm Grass Roots, experienced their strongest month in over a year, with combined revenue of $0.4 million. Altogether, it is a record revenue for marijuana games—with high growth driven by active daily users as well as player engagement.
What makes Leaf Mobile an icon in both the mobile gaming and the cannabis industry is that its target market identifies strongly with the counter culture brand. It is a very engaged audience (though underserved), and partnerships with celebrities such as the comedic duo and weed advocates Richard “Cheech” Marin and Tommy Chong only serve to make the business stronger. The company also publishes mobile games that are narrative-driven, which makes for high user retention as well as opportunities for monetization via ads and in-app purchases.
The future of gaming
The mobile gaming market is a rising superstar. As publishers make the move to have popular video games be available in different platforms such as desktop, consoles, and now mobile devices, too, it’s not difficult to see where consumer spending and company revenues will come from in the coming years.
With technology becoming more sophisticated for smartphones, and with the advent of 5G, plus the convenience of being able to play whenever and wherever you want—these only cements the fact that mobile gaming is here to stay. The adoption of augmented reality, virtual reality, and advanced artificial intelligence will also play a role in the evolution of the industry.
It is not only game developers and marketers who should take advantage of this trend—investors should also sit up and pay attention to mobile gaming if they want to get ahead in the market today.
