In its quarterly global games market update, the company estimates that revenues from smartphone and tablet titles will reach $25bn in 2014, up 42% on 2013, and $30.3bn in 2015.
The company sees steady growth in the mature US and European regions, but much more explosive expansion in the emerging south-east Asian markets and China up by 86%. Newzoo also predicts strong growth in Japanese iOS and Android game revenues, offsetting the decline of the region’s previously dominant feature phones.
From the report:
Our research shows that the high mobile growth rate is driven by both “organic growth”, lifting the overall market, and “cannibalistic growth”, at the expense of other segments. In addition to the initial casualties of mobile growth (handheld console and online casual and social gaming), Newzoo notes signs of slower growth in (online) PC games and MMOs as spending is diverted to mobile devices.
Newzoo’s estimates are more generous toward the mobile sector than those of other market analysts. In its October 2013 report, Gartner had mobile revenues at $22bn in 2015, against over $50bn for console games. SuperData Research puts mobile revenues for 2015 at $25.3bn.
Indeed, most industry figures put the console business way over the $25bn mark. Statistics portal, Statista, has console games at $55bn in 2015.
The Newzoo report also predicts that Apple’s earnings from games this year will double those of Nintendo:
We estimate that Apple and Google will earn close to $4 billion and $3bn respectively in games revenues in calendar year 2014, explaining the fast growth in Google’s “other revenues” in its recent quarterly results. To put this into perspective, Nintendo’s game revenues amounted to $2.4bn last year and will likely be slightly lower this year.
Newzoo’s report suggests that, in mature western markets, the battle between Apple and Android will be most intense in the growing tablet gaming sector. In a recent report by Juniper Research, global sales of tablet titles were expected to reach $13bn by 2019.
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