[Gamasutra takes a look at the state of the market for iOS, Android, and Windows Phone 7, marrying statistics with commentary from PopCap, Gameloft and Glu to uncover the present and future of the markets for both phones and tablets.]
Ever since developers began churning out hits for the iPhone in 2008, the mobile gaming market has exploded, and the stigma of games on mobile phones has all but disappeared. Since the initial success of iOS -- which continues to be a strong market thanks to the continued popularity of the iPhone and now the iPad -- other platforms have popped up as well. Android now maintains a larger overall market share than Apple, while Microsoft continues its attempt to push into the mobile space with Windows Phone 7.
But which of these platforms is most viable right now? And how will that change going forward? Speaking to developers at PopCap, Gameloft, and Glu, Gamasutra explores the present and future of the ever-expanding smartphone and tablet gaming market.
Ever since the iPhone App Store debuted in 2008, games have been an important part of its success. Titles like Angry Birds and Cut the Rope have become household names, while indie success stories like Sword & Sworcery and Osmos are gaining prominence. Less than two years after the App Store launched, one billion applications had been downloaded, many of them games.
According to research firm Gartner, in 2010 Apple maintained nearly 16 percent of the smartphone market, with worldwide sales approaching 47 million units. That number is expected to grow even larger in 2011, with 19 percent market share and over 90 million devices in the hands of users. By 2015, analysts predict that there could be nearly 190 million iPhones sold to consumers.
And when it comes to the tablet market, Apple is in a relatively dominant position. In 2010 Apple owned more than 80 percent of the tablet market, with over 14 million iPads sold. And though that market share is expected to dip below 70 percent in 2011 thanks to a number of competing devices, the number of iPad users is expected to grow to nearly 50 million. In 2012 it could be 70 million, and in 2015 140 million.
So what is it that makes Apple's line of mobile gadgets so appealing? According to Mike Breslin, VP of marketing for Glu Mobile, the "frictionless e-commerce engine" that powers the App Store is a big attraction. Consumers get a better overall shopping experience, which in turn leads to higher sales and increased revenue for developers. And unlike other mobile marketplaces, the range of handsets and operating systems developers need to take into consideration is minimal, making development a relatively smooth process.
There are plenty of original games that have been very successful on the platform, but as the market grows and the sheer number of games available expands, brands are becoming ever more important for visibility. A new Angry Birds spin-off is sure to reach the top 10 sales charts, as is a new release from one of PopCap's stable of popular franchises.
"We are launching games that are adaptations of hugely successful products on the platform," explains Andrew Stein, PopCap's director of mobile product management. "So when we come to the App Store we're a known quantity. We've already sold millions and millions of copies of our existing games, so if we launch something new we can get visibility for those new products in the existing games."
This has allowed games like Bejeweled 2 and Plants vs. Zombies to remain best-selling titles even years after their initial release. PopCap currently receives around 30 percent of its revenue from mobile releases, with the largest chunk of that 30 percent coming from iOS.
But in the App Store's four years of existence, the model for releasing successful games has changed dramatically, shifting steadily towards a more service-based system. Instead of simply releasing a game for a set price and then waiting for the sales to come in, developers now need to regularly update games with content to ensure a steady stream of sales and a happy customer base.
According to Giordano Contestabile, PopCap's senior director of mobile product and business strategy, the market has shifted to a place where "sales of the game are not necessarily the primary revenue driver."
In-app purchases are becoming more and more common, and a large number of titles now shed their price tag all together, going the freemium route instead. This creates a space where sheer numbers become even more important: the more people who are playing your game the bigger the potential in-app sales are.
"Volume is the answer," says Breslin. "With the freemium model, the consumer consideration funnel broadens by multiples. If a game is good, it will succeed. If it's not good, it won't succeed.
"As a publisher and/or developer of freemium games, the goal is to get as many people to play your game as possible to allow for the social and viral hooks to work. So, it's easy to see how a freemium model that takes away the number one hurdle to a consumer, cost, is attractive to developers and publishers."
"That [shift to freemium] literally is changing the way games are designed, games are marketed, and it's changing the way games are maintained and operated," adds Contestabile. "So we don't have, anymore, a developer that develops a game, publishes it, and then sits back and waits for the revenue. It's actually a living product that they need to update and keep alive over the months and over the years."
For those games that do go the freemium route, there's a good chance that the ability to connect to social networks like Facebook could become a large factor in their success. Proper social networking integration provides more visibility for games, which is important to get noticed in an increasingly crowded marketplace.
However, that's not to say that all games will be free in the future. Gameloft has recently demonstrated that premium titles coupled with a subscription fee can be successful, as its iOS MMO Order & Chaos (which costs $6.99, as of this writing) managed to generate $1 million in revenue in its first 20 days. Though the developer is planning on testing the freemium waters this year, it will also be using a variety of payment structures going forward.
"We think that there's still a place for other types of business models: premium, paymium (small premium up front and in-app purchases), subscription-based models," explains Baudouin Corman, Gameloft's VP of publishing Americas. "These models are probably better adapted to more hardcore games or more niche products. It will be interesting to see how Apple makes these models coexist on the App Store."