Mobile gaming is on pace to generate $36.9 billion worldwide this year, but one of the people responsible for kicking off this industry in the first place thinks the West could reach and surpass that number by itself soon.
Consumers will start spending an average of five-to-eight times more on mobile gaming in the West, according to N3twork and Ngmoco founder Neil Young said during a fireside chat Tuesday at the GamesBeat Summit in Sausalito, California. This could push spending on iPhone and Android apps in the United States to $30 billion. To reach that massive figure, Young — who found early success with the iPhone game Rolando in 2008 — says that developers will have to create games that maximize how long people stick with a game and how much they spend each days.
To highlight how possible all of this is, Young points to markets like Japan that use a number of techniques (such as gacha, a prize mechanic that analyst Dr. Serkan Toto explains here) to get players to spend as much as possible. He notes that, over time, gamers in that region have grown accustomed to those kinds of mechanics, and the executive expects the same thing to happen in the U.S., U.K., and elsewhere.
“There won’t be more people playing, but the average revenue per user is going to increase,” said Young.
With that potential in mind, Young is shifting his N3twork social app from video back to mobile games, and he wants to make games that can take advantage of a market that is more accepting of spending money on mobile. Getting to those consumers could prove rough because the cost of acquiring new players is on the rise, but Young thinks he see a way to thrive in that kind of market.
“We have to build games that have a higher lifetime value than the cost of acquisition,” he said. “That’s the number one focus for our company, [while most other] people are still going after the mobile game space the same way they were in 2012.