The surprising runaway success of Flappy Bird shows the folly in trying to predict what The Next Big Thing in games is going to be, but industry observers agree on two things: the global mobile gaming industry will continue to show explosive growth (the tablet games market alone will grow 400% until 2016, to reach $10 billion, according to AppLift, a mobile games marketing platform, and Newzoo, a market research and consulting company focused on the games market).
And European game companies, fueled by a long history of gaming expertise and stoked by a number of recent high-profile exits, will continue to dominate.
The global mobile games market will grow 27.3% annually to double in 2016 and reach $23.9 billion, according to AppLift and NewZoo. This growth is fueled by an increase in the number of players, as well as a higher average spend per paying mobile gamer. Already 966 million, or 78% of all 1.2 billion gamers worldwide, play mobile games.
Many of the most popular global mobile games were created by European start-ups. Alongside the continuing success of games such as Rovio's Angry Birds and King's Candy Crush Saga, Europe saw two major deals in the last six months: the October sale of 51% of Finland's Supercell for $1.5 billion to Japan's SoftBank and game developer GungHo OnLine Entertainment; this was followed by the $527 million swoop by Zynga in January to snap up Oxford-based NaturalMotion, maker of a number of mobile hits, such as CSR Racing and Clumsy Ninja.
Four-year view: more money, improving ecosystem
Furthermore, London-based King is widely rumored to be considering a New York listing. A spokesman for the company would not comment. (Update: since going to press, King has indeed confirmed that it is to IPO)
Nicholas Lovell, CEO of Gamesbrief, a blog about the business of games, believes Europe is not merely reaping the rewards of years of work — he is confident that it the start of something much bigger.
"My four-year view for the games industry? You have an ecosystem of angels and investors who are investing in early-stage businesses that are growing rapidly and they have had some early success and it means they have the capital to do more," says Lovell.
Tommy Palm, "Games Guru" for King, was likewise bullish about the future of the European games industry, mainly because of the available talent built up over many years.
European game makers global from the outset
"We have very experienced programmers, especially in the Nordic countries," he said. "We had Nokia and Ericsson there so a lot of good engineers had the opportunity to work with mobile from very early on."
He also said that European game makers, unlike others in the world, had a global outlook from the outset. "The fragmentation of our languages [in Europe] always makes us consider our external markets. In Finland and Sweden we are making games for international markets from day one."
According to Lovell, Europe stole a march by developing alternative routes to market for developers back in the days when the big consoles dominated gaming and games publishers controlled distribution.
"If you were in the U.S. you could meet most of the global publishers; it was a lot easier to get a game published. We [in Europe] were faster to embrace the free-to-play business model.
"If you were based in Germany you had to find other ways of getting your games out there." According to Lovell, game makers started using the web and browser-based games, before migrating them to mobile devices. Companies such as the 11-year-old King had a string of web-based and social games before its runaway success on mobile.
Success is not tied to technology
As for the impact of future technologies on gaming, Palm said King focused on the mass market, so was not dependent on new handsets or faster networks. "For a casual games company like King we would not aim at the very top end of the hardware spectrum. Instead we put a lot of effort in making sure games work on older models, making sure as many people as possible can access the game and have a great experience."
As the success of Flappy Bird shows, success is not tied to technology — it’s all about creating addictive games. Since Flappy Bird was released in May 2013, it has been downloaded more than 50 million times and earned its creator, Dong Nguyen, more than $50,000 a day. The game, a free-to-play offering for iPhones and Android devices, looked simple but was very difficult, challenging users to guide a cute bird through a series of pipes.
However, on February 9th he tweeted, “I am sorry ‘Flappy Bird’ users, 22 hours from now, I will take ‘Flappy Bird’ down. I cannot take this anymore.” And then the game was gone. Which just goes to show that in the mobile games market success can indeed be fleeting. Or should we say flighty?