The mobile gaming industry has come a long way from Tetris on bulky flip phones. With mobile games starting to become recognizable brands, major companies have noticed the investment opportunities. There's a lot of potential money to be made: from 2011 the number of American mobile gamers has grown from 80.7 million to 180.4 million in 2016. In fact, mobile gaming industry revenue ($36.84 billion) is projected to finally exceed revenue from the much more established PC and console gaming industries ($31.92 and $30.78 billion, respectively) as of 2016.
Companies are opting to simply buy their way into the mobile gaming market: Activision Blizzard (NASDAQ:ATVI), best known for its "Call of Duty" franchise, purchased King Entertainment, creator of the infamous mobile game "Candy Crush" for $5.9 billion in 2015. With the purchase, Activision addressed one of its chief weaknesses, gaining a huge foothold in the realm of mobile gaming. Tencent Holdings (OTC:TCEHY), the largest internet media company in China has also decided to try to enter the mobile gaming market by buying Supercell--a Finnish developer known for titles such as "Clash of Clans" and "Boom Beach"--for $8.6 billion this year. Rovio entertainment, known for its massively successful "Angry Birds" franchise (which generated €173 million in revenue for 2015) has partnered up with Disney (NYSE:DIS) to produce Angry Birds: Star Wars I & II, with over 100 million downloads. Clearly there is no shortage of corporate interest in valuable mobile gaming properties.
As the industry matures, companies are starting to make their own forays into the mobile gaming market. Nintendo (OTC:NTDOY), after seeing revenues drop from 17.5 billion to 4.5 billion from 2009 to 2016, has decided to make it first foray into the mobile gaming market with "Miitomo", based of its previous success with the original Wii platform. It managed to be the top ranked app for both Apple and Android's app stores for almost two weeks straight, proving to be a smash hit. Activision made a mobile version of its popular PC game "Hearthstone", and in mid-2015, revenue from the mobile version have surpassed the PC version's, generating $240 million in annual revenue.
For the most part, companies have been making mobile games based off of existing franchises, and not the other way around--however the recent Angry Birds movie from Rovio is a prominent exception. Rovio's revenue was slowly falling off after its initial success with its first release of Angry Birds. In an attempt to restore brand interest, it developed a children's television show based off its Angry Birds franchise, with over 4 billion cumulative views. With the release of the Angry Birds movie (which netted $333 million), Rovio will hopefully show a turn around after a poor year in 2014, which showed a drop in operating income by 74%.
Rovio's gamble looks like it will pay off, setting a new precedent when it comes to 21st century media, where the new "Star Wars" might not come from well-established media companies, but from tiny upstarts with a good idea. Media companies looking to stay relevant will have to start paying attention to mobile gaming trends, and start thinking about starting or buying their own mobile gaming properties, before they're left behind in the on-going mass adoption of smartphones.