Mobile games are expected to be the largest gaming segment in 2019. Per Newzoo data, mobile gaming (smartphone and tablet) is anticipated to contribute 45% to the global games market this year.
Moreover, TechCrunch estimates that 2.4 billion people will play mobile games globally during the same period. Additionally, 50% of mobile app users play games, making it the second-most popular app category after social media and communications apps, in terms of time spent.
The prospects of mobile games have attracted well-established video-game developers like Activision Blizzard ATVI. The company is set to launch its much-anticipated Call of Duty: Mobile, which is based on the top-selling Call of Duty franchise.
The free-to-play game developed by Tencent’s TCEHY Timi Studio will be available on Google Play and App Store from Oct 1 across all countries (except China, Vietnam and Belgium).
Notably, Call of Duty: Mobile will feature maps, modes (including Battel Royale), weapons and characters from across the Call of Duty franchise, including the Modern Warfare and Black Ops series.
Mobile Games Solid Prospects Attracting Investments
According to sensortower data, mobile game spending was $29.6 billion in the first half of 2019, up 11.3% year over year. Newzoo estimates mobile gaming to grow 10.2% year over year to $68.5 billion this year.
Solid growth prospects have attracted investments not only from video game developers like Tencent, Supercell and Riot Games but also from private equity and venture capital firms.
According to a GameDaily.biz Jul 10 article, which cited a Digi-Capital report, the gaming industry witnessed investments worth $9.6 billion in the past 18 months. Mobile games is one of the three industries within the video game sector that attracted huge investments.
Additionally, according to Tim Merel, managing director of Digi-Capital, SEA Limited, Tencent-backed Fortnite developer Epic Games and YY were the largest game fundraisers during the period.
Moreover, established video-game developers, like Tencent, Activision, Electronic Arts EA, Zynga ZNGA and Ubisoft, fortified their footprint in the burgeoning mobile games space through inorganic initiatives.
Tencent Leads Mobile Games, Contenders Rising
Tencent is leading the mobile games space, backed by its solid content portfolio. Per sensortower data, the company’s Honor of Kings dominated the global mobile-gaming market in the first half of 2019, closely trailed by Sony Aniplex's Fate/Grand Order. Mixi’s Monster Strike, Activision division King’s Candy Crush Saga and Tencent’s PUBG Mobile were other notable games.
However, competition is intensifying in the crowded mobile games space, with a plethora of games set to be rolled out in the near term.
Apart from Activision’s Call of Duty: Mobile, the game slate includes Nintendo’s NTDOY Mario Kart Tour (Sep 25 release), Supercell’s Rush war, Valve’s Artifact and Gamevil & Slightly Mad Studios Project Cars GO.
EA is also slated to release the new season of FIFA Mobile this month. Other notable games include Diablo Immortal, Game of Thrones: Beyond the Wall, Minecraft Earth and Disney Sorcerer’s Arena.
Additionally, Zynga recently expanded its mobile-gaming portfolio with the launch of Merge Magic!, based on its hit series of Merge titles available for iOS and Android.
Activision, Tencent, EA, Zynga and Nintendo currently have a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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