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Digital games are now a $1.1 billion market, thanks to mobile
Digital games are now a $1.1 billion market, thanks to mobile
August 16, 2013 | By Kris Ligman

August 16, 2013 | By Kris Ligman
More: Smartphone/Tablet

Revenue on digital games in the U.S. tipped the scales at $1.1 billion this July, a year-on-year increase of 5.4 percent. The increase is owed considerably to the current strength of the U.S. mobile games market.

According to analytics firm SuperData, the U.S. mobile market has seen a 32 percent uptick in revenue over the same period in 2012, coming in at $271 million. Leading the pack is, to the surprise of no one, King's Candy Crush Saga, which brought in $438,000 a day in the month of July.

Meanwhile, digital sales for PC and console are on a downward trend, dropping to $286 million last month -- a year-on-year decrease of 12.6 percent. In this category Valve's Steam service was again the chief breadwinner, bringing in $158 million of the month's digital sales for PC.

In the MMO space, Blizzard's World of Warcraft continues to lead nationally, though subscription numbers are still on the decline. Free-to-play MMOs League of Legends and Team Fortress 2, by contrast, held on to the second and third positions as top revenue generators in the category for July. SuperData indicates that 45.8 million people now play free-to-play MMOs nationally, and among those players who do pay for premium content, average spend has reached $40 per player.

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Dane MacMahon
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Completely subjective viewpoint but I feel like the drop in "core" digital is mainly because not much exciting is coming out.

Johnathon Swift
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I'm pretty sure 1.1 billion is an incredibly vast underestimate of digital games. And considering Valve nor anyone else publishes their stuff this SuperData firm is just full of shit and making up numbers.

J Brian Smith
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Yeah, it's very hard to believe anybody knows anything about digital game sales except Apple, Google, and Valve. Until they are publicly revealing detailed sales info, the rest of us are just guessing.

Amir Sharar
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Apple did claim that $5 billion was paid out to developers last year.

Now I believe (could be wrong, can't find link) they also stated at WWDC that 70% of that revenue was generated from games. Interestingly MS echoed a similar number at the Build conference (obviously they wouldn't have near the dollar value in sales, but the percentage being similar is telling).

You are correct in that it is hard to know anything about sales in this realm. I did find it interesting though that in both of their pitches to developers, Apple and MS are willing to let out a BIT of information to get people excited.

Michael Brown
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The other commenters are making sense. Given their doubts, it may be wise to at least qualify SuperData's information as reliable.

One thing that this article brings to my attention is how Mobile Gaming has started to skew stats about the state of the gaming industry. Here, a more in-depth breakdown was offered, which is great to have, but on the other hand we have the often-referenced ESA survey which concluded that "45% of all gamers are female" without mentioning what games most of those female gamers play (upon further research, I learned that according to a Magid and PlaySpan survey, 45% of women preferred to play on smartphones versus 25% of men, as read on bizreport).

Truly, mobile is a different beast, and it seems to be viewed as more accessible to new players. The games themselves are meant for short bursts of entertainment, unlike many other games. And the mobile market is so successful right now.

The problem is, if we include mobile in all of our statistics, we could see the game industry as a whole with false eyes, because many of the industry's successes unfortunately seem to be focused in mobile gaming. So we have to be careful how facts are presented and offer more breakdowns like this.

Nooh Ha
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Given Gamasutra's apparent dismissal of NPD's (partly survey-based) market size data as no longer being useful or reliable, it is somewhat surprising that they have reported on this, in particular as SuperData were the company that in mid 2012, brilliantly, sized the 2012 global mobile games market at $2.7bn, despite the fact that DeNA and GREE's combined publicly stated 2011 games revenue was $2.6bn.
I would not trust these figures or any market size figures produced by extrapolated survey data for a minute.

Joost van Dreunen
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Thanks guys for all your feedback.

What we've been trying to do in the past three years is report on the digital games market by working together with developers and publishers. The digital games market is, as you can imagine, much more fragmented, making it somewhat more difficult to get reliable data. Today we receive the spending of almost 3 million paying gamers every month, which gives us a pretty reliable insight into spending patterns, seasonality, conversion rates, and so on. In addition, we also rely on regular ad hoc studies to 'gut check' our transaction data, and we look at secondary sources like annual reports, interviews, etc.

I'll be the first to admit that market research, especially of a volatile industry like interactive entertainment, is an imperfect science. But as people are changing their preferences (from social to mobile, for instance) game publishers still need to make a decision on what to do about it and how. I believe that we're well on our way, especially if you consider that we're only a small team and don't have the resources and access that the incumbent researchers have. We base our findings on the data we receive from about 50 publishers and 450+ titles.

Re: Nooh Ha, you're right! But if you recall, two years ago mobile games were defined as download only (ie. AppStore), and social mobile wasn't nearly as visible as it is today. And so, in assessing the total mobile gaming market back then, we left that out, which gave us the $2.7B. Since then, we've updated our definitions and now include both game downloads and social mobile gaming, which we forecast to total $14B in 2013e.

Anyway, comments always welcome. Or ping me directly:

CEO & Co-Founder, SuperData Research

Nooh Ha
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What a completely bizarre justification.

1) your research was not from 2 years ago. it was from last year and, more importantly, was about 2012.
2) To suggest that "mobile games were defined as download only" at the time of the research is ludicrous. F2P games with IAP were dominating mobile games market revenues (according to Flurry and others) by early to mid 2011. They had been an important subset of the market for even longer.
3) Mobile social was not visible? This was supposed to be a global study and you ignored the two biggest mobile games companies in the world at the time.

Joost van Dreunen
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@ nooh ha

you have my contact info. send me a few times that work for you and i'll be happy to walk you through everything over the phone.