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It’s not a surprise to know mobile gaming is still the king; it’s all around us in titles like Clash Royale, Fate/Grand Order and even Pokémon Go (they kept updating!). But still, looking at the results SuperData Research’s study for 2017 reveal is baffling.

(See the full report here.)

In short, as put by Joost van Dreunen, CEO of SuperData Research, “This year the games industry grew in nearly every category we measure.”

“PlayerUnknown Battlegrounds is clearly the year’s big success story, with the game earning $332 million more than its second-place competitor, Overwatch. Esports also experienced significant audience and revenue growth, driven by the sustained success of huge titles like League of Legends. In all, the already-in-demand mobile and free-to-play markets continued to rise, while VR and esports made strides in entering the mainstream market.”

Here’s a summary of the key points brought up by the report:

  • One in three people on the planet (2.5B) plays free-to-play games across PC and mobile platforms. Free-to-play games maintain their grip on the worldwide games market, generating $82B, or 89% across mobile and PC markets.
  • Consumers spent $14B more on mobile games in 2017 than in 2016. Games such as Arena of Valor and Fantasy Westward Journey from Asian publishers like Tencent and NetEase contributed to a 31% year-over-year growth for the worldwide mobile market.
  • Premium PC title PlayerUnknown’s Battlegrounds was 2017’s breakout success, generating $712M in revenue in just eight months. The title reinvigorated player interest in the battle royale genre, paving the way for similar games like Fortnite and Knives Out.
  • Esports generated $756M in revenue and is on track to become a billion-dollar business in 2018. Popular titles like League of Legends and Overwatch helped esports attract a sizable audience of 258M unique viewers.
  • Price cuts on virtual reality (VR) headsets and must-have content drove extended reality (XR) revenue up by 37% in 2017. Steep Oculus Rift price cuts boosted sales and allowed the headset to outsell HTC’s Vive during the year. In the console space, PlayStation VR enjoyed positive momentum as gamers jumped at the chance to play major game franchises like Resident Evil and The Elder Scrolls in VR.

Asia is by far the biggest market for mobile games, but it’s still impressive to see Arena of Valor so beyond its competitors (1.9B vs the 1.5B of Fantasy Westward Journey in second place). It’s interesting to note how both of these are aimed specifically at the Chinese market.

It’s also great to see eSports catching up with such strength, but the biggest surprise (and relief) is probably VR’s hardware price cuts, which are a big one in an already sizable list of barriers for mass adoption of VR gaming.

According to Stephanie Llamas, VP of Research and Strategy and SuperData Research head of immersive technology insights, “in 2017 we saw XR mature as consumer barriers started to chip away and content offerings became stronger.”

“However, VR still has a long way to go to earn a larger share of the consumer market, as we saw more investor money go to augmented and mixed reality than VR last year.”

We also got insights on video content platforms:

  • Twitch keeps growing. Despite having only half the gaming video content (GVC) audience of YouTube, Twitch’s audience is more engaged and willing to spend on their favourite broadcasters.
  • Users on Twitch often support their favourite content creators directly through subscriptions and donations, which accounted for 51% of GVC revenue on the platform. In comparison, direct spending accounted for only 20% of YouTube’s GVC earnings, with the rest coming from advertising (69%) and sponsorships (11%).
  • YouTube’s GVC revenue plummeted by 50% year-over-year after struggling with problematic content and monetization. Controversies surrounding uncensored, offensive content scared off advertisers. YouTube responded by implementing an algorithm that incorrectly demonetized unoffending videos. This, in turn, led to a heavy backlash from its user base. Due to its poor handling of public relations, YouTube became a much less attractive destination for advertisers and GVC content creators.

Here we see Twitch’s creator-friendly policies winning. Some YouTubers have gone as far as to call the platform’s latest copyright strikes hostile, and it’s likely we might be in the middle of an exodus from YouTube to Twitch for gaming content.

The report closes up with more positive projections for 2018, including continued growth for mobile games, free-to-play, eSports and VR. Interestingly, it also mentions an expected growth for Asian and North American PC markets, and a fall from grace in Europe.

This and more details can be found at their end of the year graphs here.

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