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Gaming is a huge industry, but it’s also a risky one.
More developers are switching to mobile gaming, an industry that could hit $20 billion worldwide this year. To help ease the risk of development, research firm SuperData talked to 41 U.K. game companies and completed five in-depth case studies focusing on evolving customer preferences, value creation, popularity of certain platforms, and the ways in which interactive entertainment generates income.
SuperData released its study today. Below are the four conclusions it found for the best ways for game makers to lower the risks of development.
Game companies have to decide who their main customers are: consumers or businesses. Each have advantages (appealing to customers can give you more revenue based on quality while going after businesses can give you more security). However, 37 percent of the companies polled say they go with a hybrid approach.
“Adopting a dual approach can play a role in derisking a business model by bringing in multiple revenue streams,” the report states. “While consumers might be the end-user of a company’s game, it could still be a strategic business partner that accounts for significant parts of the company’s overall income.”
Partners and internal focus
The U.K game companies polled put the most emphasis on partners who helped them reach a larger market, like publishers and digital store owners (like Steam). These companies also valued efficiency over creativity and innovation. While that may seem cynical, efficiency enables you to deliver a product on time, which makes business partners happy.
“Efficiency implies reduction of variable costs and hence alleviates some of the risks associated with the uncertain business of making and publishing video games,” the report states.
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With the advent of mobile, developers have more platforms available to them than ever before. The number of platforms that those polled are active on has increased by 27 percent in the last two years. You can see more about the platforms that they’re using and how they’ve grown in the graph above.
Game makers have access to a lot of revenue streams, including digital sales and downloadable content. Still, traditional “units sold” via boxed copies were the most important to those polled.
“Despite the emphasis in industry publications on the shift to digital, selling units is still the backbone of game revenue in the U.K., in combination with selling downloadable content,” the report states. It also noted the importance of taking advantage of multiple revenue streams.
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