AllThingsD (http://allthingsd.com/20130516/mobile-game-biz-to-nintendo-and-sony-seasons-what-are-those/?refcat=mobile) writes about the new portable gaming report that IDC and App Annie have released recently.
The report shows just how different the new generation of mobile games is from the gaming-only devices that previously reigned supreme. For context, back in Q4 2012, total consumer spending on games for iOS and Android devices surpassed spending on “gaming-optimized handhelds” (that is, Sony’s PSP and Vita, and Nintendo’s DS, DSi and 3DS).
But the real bombshell is in the new report, which covers Q1 2013: In that quarter, consumer spending on Sony’s and Nintendo’s handhelds declined significantly, while iOS and Google Play spending both increased, also significantly. Combined, the phone and tablet crowd spent nearly three times as much on games as handheld device owners.
(And bear in mind, of course, that a new 3DS or PS Vita game costs about $40, while even brand-new mobile games are typically free or 99 cents to download, with many offering optional in-game purchases.)
But wait, you say. This is the first quarter of the year, being compared to the lucrative holiday-driven fourth quarter. How is that fair to Sony and Nintendo?
Exactly. It’s not. With slower game production schedules and much lower device turnover, the holiday quarter matters a great deal to Nintendo and Sony. But for consumers with a steady stream of new games and newer, better devices on which to play those games, seasonality is mostly irrelevant.
IDC and App Annie’s numbers, then, amount to a double whammy: At both the best of times and the worst of times, new-school mobile games beat out their older counterparts.
A few other points of interest from the new report:
- The global install base for those “gaming-optimized handhelds” was about 200 million in Q1 2013. To put that in perspective, Gartner estimates that more than 2 billion phones and tablets are being/will be shipped this year alone. In other words, it’s through volume that mobile devices have closed and blown past the revenue-per-user gap.
- Although the total amount consumers spent on mobile games was far greater on iOS than on Android, gaming amounted to about 80 percent of all consumer spending on Android, vs. about 70 percent on iOS.
- The report splits consumers into four geographic zones: North America, Western Europe, Asia-Pacific and the rest of the world. For both Android and gaming-optimized handhelds, the Asia-Pacific share of total spending increased by more than 10 points (see the chart embedded below).
This report is the second such collaboration between IDC, which tracks videogame and entertainment hardware, and App Annie, which tracks mobile software and in-app revenue.
We at Nordic Investor think that for an investor this clearly shows one thing: it is mobile gaming developers you want to be exposed to. Our top-pick G5 Entertainment is the poster child of the listed mobile gaming companies with fast growth, high profitability, net cash position and a 12-months PE-ratio of around 12x.
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