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#Mobile gaming: Strong market growth expected

iphoneappswww.pocketgamer.com reports that market research firm Newzoo’s latest Quarterly Global Games Market Update predicts global mobile game revenue will reach $25 billion in 2014.

Of this, Newzoo reckons $7.6 billion will be from tablets and the remaining $17.3 billion from smartphones. That’s up 42 percent compared to 2013, and also up on the $21.7 billion market value Newzoo predicted in Q1 2014.

That strong year-on-year growth means that mobile games are on track to replace the console market as the largest game segment in terms of revenue, by 2015.

Newzoo says market growth is broad with both western and emerging markets witnessing healthy growth during 2014.

It predicts growth of 47 percent in western Europe and 51 percent in North American.

Newzoo has already uprated its predictions for 2014 and beyond

The fastest growth, however, can be found in the east, with China (86 percent annual growth), Japan, and southeast Asian markets enjoying an increase in iOS and especially Android revenues.

The research also shows that the mobile platform is being driven by organic growth, which lifts the overall market, and cannibalistic growth, which consumes other market segments.

Newzoo estimates that Apple’s App Store will account for half of 2014 revenue, with Google Play accouting for the majority of the remainder.

Newzoo analyst Vincent van Deelen believes that the new forecast undermines those who still claim that the mobile market is becoming saturated, particularly in the west.

With the public release of these new forecasts, Newzoo is deliberately countering the sentiment aired in recent months that the mobile gaming market is becoming saturated in mature Western markets, especially the US. This is simply not the case,” explained van Deelen.

Up, up and away – mobile games worth 40.9 billion dollars by 2017

We are also emphasising that the recent results of individual high profile companies such as Rovio, King, DeNA and GREE are not necessarily indicative of the state of the mobile market as a whole.”

It is not in our interest to inflate market figures, but the hard facts have forced us to adjust our estimates upward. We have maintained our year-on-year growth rates toward 2017, ultimately leading to a $40Bn+ market in 2017.

This of course very good news for mobile gaming developers and publishers such as G5 Entertainment, CMGE and Glu Mobile, some of our top picks at the moment. Such a strong market development, combined with individual hit titles pave the way for revenue and earnings growth for the companies. G5 Entertainment is a largely undiscovered (and undervalued) niche player listed in Sweden, while CMGE is one of the biggest mobile gaming developers in China. Glu Mobile has had somewhat of a breakthrough year 2014, with titles such as Deer Hunter 2014 and Kim Kardashian: Hollywood performing beyond all expectations.

Nordic Investor

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