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As with most industries, a high concentration of revenue among a small group of companies indicates a monopoly-driven environment with difficult prospects for new entrants. While revenue consolidation in the global mobile gaming industry was high in Q4 2013, it dropped by 40% through Q1 2015, according to App Annie’s new App DNA report (see screenshot, below).
Not only are mobile gaming revenues distributing more evenly, but so are downloads; in tandem, these point to improved monetisation and marketing opportunities for small and mid-sized game development studios and independent developers.
Of course, this balancing varies by market:
Both mobile gaming download and revenue concentration dropped in western markets, like the US and the UK, in Q1 2014 year-over-year (YoY).
- In South Korea, revenue concentration grew despite an evening download distribution, which highlights some difficulty for smaller app developers to monetise their products.
- The opposite held true in China (based on iOS stats only), where mobile gaming downloads saw heavier concentration YoY but more evenly distributed revenues.
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This global balancing may not persist as the volatile app market continues to change.
There’s a long-standing tendency for mobile trends that catch on in Asian markets, like China and South Korea, to see delayed traction in Western markets, like the US and the UK.
We’re starting to see this trend hold true with apps becoming gaming platforms, which drives consolidation in terms of downloads and revenue.
Asian companies like China’s Tencent, which owns popular mobile messaging app WeChat, and Japan’s LINE have been building out platforms over the past few quarters and have looked to games to monetise their users.
The US is starting to see some of the same, particularly with Facebook Messenger’s recent addition of mobile gaming. If the west follows this eastern mobile trend, it’s possible for mobile gaming revenue and downloads to see more consolidation.
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