The global online smartphone and tablet games market size was valued at USD 60 billion in 2021. It is projected to reach USD 355 billion by 2030, growing at a CAGR of 21.8% during the forecast period (2022–2030). A platform that allows one or more participants to participate in a game using a smartphone or tablet is known as an online smartphone and tablet game. Many service providers worldwide offer a large selection of games, ranging from those with straightforward text-based gameplay to those with intricate graphic design. These include augmented reality, multiplayer, and location-based games, all of which have sizable user bases. The online smartphone and tablet games market is expanding due to improvements in mobile development platforms and the popularity of free-to-play business models. The market is also growing as smartphones and tablets become more widely used worldwide.
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Low Barrier to Entry and Increased Technological Advances
While focusing on the mobile gaming market, various micro-factors come into the picture that favors the scenario of the competitive landscape, resulting in low barriers for entry within the market. In terms of substitute comparison, mobile devices hold a significant position compared to consoles and PCs, both in terms of price and performance, thereby creating a double-fold growth for the market. For instance, an individual console game costs around USD 50–60, a heavy investment compared to mobile devices. Furthermore, video game consoles like Sony and Microsoft cost around USD 400–450, which is a higher investment category for casual gamers. In contrast, smartphones are the most economical products for all audience categories.
In addition, the mobie games market operating with the premium-based model (the games which do not offer in-app purchase options to the end-user come under the premium-based model. It makes its money through advertisements) has also generated a lucrative demand, which, in turn, has led into garnering of broader customer base. Furthermore, mobile game development technology has undergone severe improvements from its framework. For instance, the advent of HTML5 technology has improved the performance of building apps more efficiently and smoothly. This has been a significant boom in the iGaming industry. The latest mobile slots have been designed to be cross-platform, providing slick and consistent gaming experiences across desktops and mobiles.
Free-to-Play Business Model
Within the last few years, the mobile gaming industry has been experiencing a rise in revenue, owing to one of the striking trends, termed the "free-to-play" operational model. It is estimated that around 80 to 85% of the income within the industry comes from this business model. In-game purchases within the gaming structure have led to an increase in revenue flow. For instance, out of Fortnite's USD 2.4 billion revenue, around 1 billion was generated through sales of in-game items. With this trend on the rise, most online games are shifting to the free-to-play model, focusing on earning higher profit margins through in-game items.
Rise in Concerns of User Privacy and Security Issues
Mobile games have gained colossal growth, specifically during the COVID-19 pandemic, where social distancing measures strictly prohibit outdoor interaction. With such a scenario, in-app spending has increased by 25% since February 2020. However, despite this growth, the market experiences a staggering effect owing to data privacy concerns and data storage within international servers rather than local and national ones.
In September 2020, the government of India announced a restriction on the use of PUBG online mobile games, primarily owing to several complaints regarding misuse of data available on the platform. As India is turning out to be a lucrative market for mobile gaming, companies are focusing on adopting local sever policies, where the data can be stored within Indian servers, following privacy and security policies.
Adoption of Machine Learning and Artificial Intelligence in Mobile Gaming Apps
AI is an integral part of different smartphones and their development. Smartphone manufacturers such as Apple, Samsung, and Huawei are leveraging machine learning and artificial intelligence in developing their smartphone models, providing lucrative opportunities for market growth. In addition, a research study claims that 200 mobile application developers would integrate AI and machine learning into smartphones to enhance functions like camera and security software. Businesses are also integrating AI into smartphones and tablets to strengthen mobile applications and improve the performance of various mobile devices. AI also enables mobile applications to gain insights from multiple data supplied by all users and aids in enhancing users' decision-making abilities, opening up potential business opportunities.
The global online smartphone and tablet games market is segmented by operating system, game type, and region.
By operating system, the global online smartphone and tablet games market is fragmented into Android, iOS, and Others.
The Android segment is the highest contributor to the market and is estimated to grow at a CAGR of 22.7% during the forecast period. The fast growth of the operating system is supplemented by its affordable price and widespread availability. The open nature of the Android platform and distribution through mobile assistant applications dominate the android market. Further to enhance the software, Google is moving to a natural speech recognition feature with "Assistance" that recognizes natural voice in Android. With the introduction of Android One, Google reduced the cost of smartphone development and made it affordable for consumers. A customer-friendly user interface with enhanced platform integrations is expected to fuel the android market. For instance, Fire OS 4 Sangria is an application software based on KitKat that introduces platform enhancements, new upgrades, and services such as household sharing and prime music.
iOS is the second largest segment. iPhone Operating System (iOS) is a mobile operating system designed, developed, and distributed by Apple Inc. iOS supports iPhone, iPod Touch, and other Apple devices such as the iPad and Apple TV. Apple does not license this operating system for installation on non-Apple hardware systems. Apple is adopting Intel processors to boost the software compatibility of their devices. The adoption of chips in apple devices is expected to improve the system's performance and make device software compatible. It has developed a new iOS 8, which provides a HealthKit framework application to users. The operating system leads in enterprise adoption and retail shopping. The focus on functionality and user experience is expected to help the company expand its market share.
By game type, the global online smartphone and tablet games market is segregated into Massively Multiplayer Online Games, Casual, Social, and Others.
The Massively Multiplayer Online Games segment is the highest contributor to the market and is estimated to grow at a CAGR of 21.9% during the forecast period. Massive multiplayer online (MMO) gaming involves several players playing different roles and strategies in a particular game from across the globe. In addition, substantial multiplayer games include various types, such as real-time strategy games (RTS), first-person shooter (FPS), and role-playing games (RPG). Moreover, rapidly improving internet connections in developing nations of Asia-Pacific and LAMEA and the growing gaming industry globally drive the market growth in this segment. Furthermore, the rise in adoption of multiplayer gaming globally and the surge in demand for multiplayer gaming experiences by end-user propel the market's growth.
The Casual segment is the fastest growing. The central feature of causal games is their simple mechanics, making them easy for anyone with a mobile device to figure out and play. In addition, countless causal games have been published and are available on various operating systems, further driving the market's growth in this segment. The rise in the adoption of causal games among the general public, owing to its varied benefits such as low cost, user-friendliness, and easy installation, propels the market's growth. For instance, according to a research report in the US published in 2019, around 45% of the population of the US are casual gamers or occasional gamers, which drives the market growth in this segment.
Region-wise, the global online smartphone and tablet games market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
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Preeminence of Asia-Pacific Over Others
Asia-Pacific is the highest revenue contributor and is estimated to grow at a CAGR of 24.1% during the forecast period. The Asia-Pacific online smartphone and tablet games market is analyzed across countries such as China, Japan, India, South Korea, Singapore, Australia, and the Rest of Asia-Pacific. The market is driven by an increase in online smartphone and tablet gaming among critical Asian nations, such as China and Japan, as well as a decline in the cost of mobile gaming apps like Liftoff, AppsFlyer, Clickky, AppLift, and Aarki.
Furthermore, many mobile game developers in South East Asian countries such as Indonesia, Malaysia, and Singapore produce qualitative and attractive game products with online smartphone and tablet game features. Such development in the gaming industry is driving the growth of the regional market. A rise in the adoption of new mobile gaming applications also propels the market. For instance, according to the mobile growth map, nearly 3500 applications were released in 2018 in countries such as Vietnam and China. Consequently, the increase in demand for gaming applications and the rise in gaming users in countries such as Myanmar, Thailand, and Vietnam, fuel the market growth in this region.
North America is the second-largest region and is projected to reach USD 55,865 million by 2030, growing at a CAGR of 18.6%. This is attributed to the large IT industry base and higher number of mobile gaming application developers within the region. According to a research report published by Pfizer, Inc. in 2020, an approximately 45% hike was seen in gaming industries in the US, with USD 1.6 million spent on various gaming accessories and software after the pandemic. Therefore, the rise in such spending by end-users and different gaming application developers across North America drives the market growth.
Furthermore, vendors in this market have developed innovative online smartphone and tablet games to cater to various operational and development demands among end-users, propelling the market's growth. In addition, the consumer-oriented professional culture and presence of some of the leading market players in the region boost the market growth. Moreover, the rise in the number of gaming applications and the development of gaming applications fuel the market's growth. For instance, a survey conducted in North America showed that the number of gaming applications installed increased by 40% from 2017 to 2018.
Europe is among the prominent regions for the adoption of smartphones. The European market is witnessing rapid growth, owing to an increase in internet connectivity and a rise in the number of smartphone users in this region. In addition, growth in government initiatives in various countries of Europe to increase the adoption of educational gaming applications for the region's youth propels the market's growth. For instance, the LUDUS project uses serious gaming to develop a European network to exchange knowledge and best practices. The Erasmus+ program of the EU co-funds the initiative.
Furthermore, several European governments and other organizations are using severe gaming programs to teach their staff to combat various illegal activities across the EU member states. For instance, Europol is creating a game to instruct law enforcement personnel on how to combat crypto crime. In the upcoming years, it is anticipated that such regional use cases for the technology would further increase demand.
In addition, the rise in the use of gaming and entertainment applications among users in countries such as the UK, Germany, and France drives the market's growth. An increase in revenue of most popular paid apps such as Minecraft or Facetune, owing to the surge in the use of online smartphone and tablet games features among end-users, is also expected to boost the market growth during the forecast period. Furthermore, adults in the European nations are spending more on mobile games to improve their moods and increase brain power.