European Investment Bank Boutique Launches Global Gaming Investment & Industry Review

Feb 19, 2016, 10:55 ET from IBIS Capital

LONDON, February 19, 2016 /PRNewswire/ --

IBIS Capital cites massive opportunities from the smartphone evolution, cloud based business models and female gamers, in new report

Media and tech investment and advisory firm IBIS Capital announced findings from its Global Gaming Investment Review. The report, showcasing key market achievements from 2015 and projections for 2016 and beyond, aims to provide a window into current investment opportunities in the global market. In line with many vertical markets, the games industry has experienced significant digital disruption in the last five years, with new technologies and business models looking set to spur the market on to a potential $113.3bn in the next three years.

"Like many industries, the proliferation of smart devices has had an impact on the market opportunities within the gaming sector", said Charles McIntyre, CEO, IBIS Capital. "The evolution of the mobile phone market has opened up what was once considered a specialist interest hobby, into a mass audience activity available to anyone who owns a smartphone - some 493 million people in Europe alone. This has created a big-bang style explosion of global interest in gaming - and billions of dollars' worth of potential new revenues."

The IBIS report found that the personal screen (smartphones and watches) and the floating screen (tablet/handheld consoles) segmentations are experiencing the greatest growth trajectory, at +21% yoy and +14% yoy growth respectively. Already worth billions, the personal screen ($20.6bn) and floating screen ($12.1bn) are expecting to grow an additional +15.4% and +9.3% respectively by 2018. In fact, the combined growth rate of these two expanding sectors, is expected to be double that of its non-mobile counterparts (+15.9 vs +7.9%).

The advance of personal and floating screens within gaming is introducing new types of fluctuations and notable regional differences, with some global markets seeing phenomenal amounts of growth in a short period of time. In line with the increase in internet and smartphone penetration, APAC (+16.4%) and LATAM (+17.4%) have seen nominal games revenues, as more and more users in these markets adopt these technologies. Despite the steepest growth rate appearing in these markets - sustained growth remains strong amongst the mature markets, with North America growing at +4.1% and maintaining the highest marked revenue per gamer at $119 per user.

The review also indicates a familiar technological trend, first noted within the music industry when digital streaming sales surpassed digital download sales for the first time. The gap between physical console and PC games, and digital games is widening. Much like how Spotify's streaming model disrupted the music industry, cloud platforms with integrated content services on mobile devices have now set the stage for a games-as-a-service model. However, the report further notes that opportunity equals competition, as the paradigm shift toward mobile and online create low barriers to entry for developers. Devices mean games are cheaper, easier to create and inexpensive to buy, generating higher volumes of digital purchases and less brand loyalty.

Included in the report, IBIS Capital lays out six key monetisation opportunities to ensure growth and cut-through in a crowded market, namely:

  1. Communication/messaging - Smaller games tend not to allow for this functionality, but with global VOIP revenue forecasted to grow to $88bn in 2018 it's an important revenue generator
  2. In game mobile advertising - An evolution in in-game advertising mean ads are more organic with a focus on localisation, helping players providing a 360 degree immersive gaming environment for players as such revenues are expected to reach nearly $4bn by the end of the year
  3. Content services - Digital media is often used as a complement to enrich the gaming experience, in fact music streaming is done by 78% of paying gamers, compared to 61% of the entire population
  4. Digital distribution - 20% of global gaming revenue will come from digital distribution of games by 2019
  5. Cross-platform mobile payments - Global mobile payment revenues are projected to reach $3tn by 2019, so providing flexible embedded payment flow for maximum conversion will be a key focus
  6. Artificial intelligence - AI has attracted more than $17bn in investments since 2009 and with gamers eager for greater interactivity, from smarter more realistic characters and environments this presents a real growth opportunity for the coming year

With smartphones helping to broaden the audience demographic of gaming, an emerging trend toward female gamers has also been highlighted by the report. Though in the US the majority split remains in favour of male gamers (56% vs 44%), in the UK market, female gamers have pipped the majority share at 52%.

Charles McIntyre explains "the growing number of female gamers has been largely driven by a surge in social and casual mobile games boosted by the fast adoption of smartphones. Game developers are increasingly targeting female gamers, who are highly engaged. This demographic constitutes 70% of the global smartphone and tablet gaming audience, spend 35% more time in gaming apps and 31% more in-app purchases than males."

To see the full report from IBIS Capital, as well as investment reviews from the Adtech and Health technology sectors, visit:

About IBIS Capital 

IBIS Capital is a London-based specialist media investment and advisory firm with a focus on disruptive media technologies. IBIS Capital aims to make detailed knowledge of the media sector available to the businesses, management teams and investors with whom they work. Co-hosts of the EdTechXGlobal event series, they connect the thought leaders of the global education technology community through annual summits in London & Singapore.