In brief
Mobile gaming is forecast to account for 60% of spending across gaming platforms in 2019, driven by casual and hardcore games. This 2018 outlook also predicts growing App Store spending, mobile video viewing and in-app advertising.
2019 will see global App Storespending grow at 5 times the rate of the global economy as a whole. Mobile will continue to dominate consumer attention and become a priority for business development. However, this represents only a small part of the mobile economy's overall growth—mobile spending is also expected to grow through app advertising and commercial transactions outside App Stores, such as those involving Uber, Starbucks and Amazon. As mobile gaming continues to be the fastest-growing form of gaming, games will drive most of the growth in App Store spending. China remains the main driver of App Store spending growth; however, if the issuing of game licences remains on hold, spending growth in China is also expected to slow in 2019.
Although games account for nearly 75% of total spending, consumer spending on in-app subscriptions will give non-gaming apps a growth rate equal to that of gaming apps multiplied by two. In emerging markets, growth in the installed device base will be driven by Android devices. In emerging markets such as Indonesia, the installed base will increase, and time spent using apps on each device is also expected to rise. In Indonesia, for example, the average user's daily app usage will exceed 4 hours.
II. Casual and hardcore games will drive mobile gaming growth, taking its share of the overall app market to 60%
2018 saw mobile gaming come of age. Fortnite and PUBG each established their own foothold as multiplayer gameplay gained momentum. For the first time, it stood on an equal footing with real-time strategy and shooting games on PC / Mac and consoles, providing a valuable addition to existing mobile games. Advances in mobile technology are also reflected in the emergence of cross-platform gaming. As a result, 2019 will see games become less restricted to individual platforms, with cross-platform play increasingly common. For publishers, mobile devices represent a particularly attractive market because of its scale and continuing growth.
Meanwhile, hyper-casual games with simple gameplay are expected to drive growth in mobile game downloads and the installed base in 2019, attracting a substantial audience of people who are not traditionally considered “gamers”. Since these games generate relatively little revenue per active user, publishers need lightweight games with strong appeal and user retention to compensate for insufficient scale. Overall, both casual and hardcore games will continue to drive mobile gaming growth in 2019.
Mobile gaming's share of consumer spending will reach 60% across all gaming platforms, including PC / Mac, consoles, handheld devices and mobile devices. If China's suspension of game licensing continues into 2019, more Chinese companies will step up international expansion, and mergers and acquisitions may become more common. Developments in multiplayer mobile gameplay, and the cross-platform play emerging as a by-product, will also lead to new experiments in livestreaming and esports. Esports will, in turn, make livestreaming more popular. Meanwhile, the 5G era is gradually beginning. Wider 5G adoption and improved phone battery life will help drive mobile gaming development, although they may not have a material impact over the coming year.
III. 2019 will see streaming video account for 10 minutes of every hour of media consumption
The average person spends more than 7.5 hours a day consuming media, whether listening to music, watching videos, reading or posting. 2019 will see every hour spent on media such as television and the internet include 10 minutes of streaming video watched on mobile devices. From 2016 to 2019, total time spent watching streaming video per device will grow by 110%. 。Entertainment app spending worldwide will grow by 520%, mainly through streaming video apps' in-app subscriptions. Streaming viewing will continue to be dominated by short-video apps—among the top ten streaming video apps in the US, users spend four-fifths of their viewing time, or 5 minutes with 4 of those minutes, on YouTube. Growth will also be driven in part by the rise of social video apps such as Douyin and short videos on Instagram, Snapchat and other social apps.
With the launch of its streaming video service, 2019 will see Disney make waves in the market. Disney+ will give Disney 4 leading streaming video apps: ：Disney+, 、Hulu, the service integrated into the ESPN app, ESPN+, and ABC. However, competition in this field is intense, with each provider seeking to own its content. As competition increases, providers are expected to strengthen their market positions through partnerships, content bundles or acquisitions. We have already seen many studios work directly with streaming video services—Paramount with Netflix, ，A24 with Apple—and expect this trend to continue in 2019.
IV. Niantic's Harry Potter: Wizards Unite (Harry Potter: Wizards Unite) could generate more than US$100 million in consumer spending within its first 30 days after launch, exceeding US$1 hundred million
Discussion surrounding Niantic's Harry Potter: Wizards Unite has focused on its trailer, its 2019 release window and comparisons with Niantic's Pokémon GO (which sparked a craze in 2016 for location-based AR games). Harry Potter: Wizards Unite is expected to become a leading game in the download, usage and consumer spending rankings.
We are curious whether Harry Potter: Wizards Unite can outperform Pokémon GO. Although the Pokémon franchise's overall value is approximately 2 times that of the Harry Potter franchise, Harry Potter has attracted a large, devoted following through its novels and games, potentially drawing in a new group of highly engaged casual players. If Harry Potter can make effective use of strategic brand partnerships established early on—similar to Pokémon GO's meetups and sponsored sites—it could earn substantial returns early.
However, as the market's first mainstream location-based AR mobile game, Pokémon GO draws on nostalgia and still has a large, devoted fan base. Although time spent on Pokémon GO significantly increases users' total gaming time, they are unlikely to play two AR games simultaneously. Nevertheless, the two games target different market segments and could together expand the overall active user base of Niantic's portfolio.
Pokémon GO broke mobile gaming records, reaching consumer spending of US$1 hundred million within two weeks of launch and becoming the fastest game to reach US$10 hundred million in spending. While we do not expect Harry Potter: Wizards Unite to outperform Pokémon GO, reaching US$100 million in consumer spending within 30 days of launch would still be no easy achievement for Harry Potter: Wizards Unite, with a target of US$1 hundred million.
V. 2019 will see monetisation through in-app advertising adopted by more apps, with their number increasing by 60% as they compete in a digital advertising market worth US$2,500 hundred million
Mobile already accounts for a substantial share of advertising spending and is the main driver of growth in digital advertising spending. 2018 will see mobile's share of global digital advertising sales rise from its 2017 level of 50% to 62%, reaching US$1,550 hundred million. In the US, mobile advertising sales have already exceeded television advertising sales.
We expect mobile's share of digital advertising in 2019 to reach a new high. Mobile app publishers are watching the rapidly changing advertising market. 2019 will see in-app advertising used for monetisation by more apps, with their number increasing by 60%. This will intensify competition among advertisers.
For apps using in-app advertising for user acquisition (UA), these apps' advertising strategies have already become more mature. 2018 saw the most-downloaded US iOS apps use advertising platforms whose number, compared with 2017, increased by 35%, while their number of advertising creatives, compared with 2017, increased by 170%, indicating that app marketers are adopting more robust targeting and testing strategies.
The same applies to popular games. 2018 saw the most-downloaded US iOS games increase the numbers of advertising platforms and advertising creatives they used by 10% and 20%, respectively. Advertising revenue is expected to increase as more consumers use mobile devices and spend more time on them.
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