In recent posts on this blog, we have been putting emphasis on the projected growth of the gaming industry. Supporting these claims are recent reports such as the Cloud Gaming Report 2012, which highlights the total global games software sales of $24 Billion in 2012 and is expected to increase to $41 Billion in 2017.
Evolution of Application Development
Also quite notable is the proliferation of native applications (applications running on iOS, Android) use as against web applications (social apps), which more or less has a usage ratio of 70:30. Native applications are usually developed in platforms led by Gree, Mobage and Mixi. There are currently almost 1.3 million mobile apps in the app stores of Apple and Android combined; and just recently, Facebook announced that it has made its native app for iOS. This, alone, shows that the game market is almost totally dominated by social apps and undeniably, marketplaces like Google Play and the App Store, which provision native apps have been significantly growing their sales.
No Technology is Without Challenges
There are of course, a few bumps on the road. In the application development industry, winners and losers are clearly distinguished, where winners are limited to SAP – having the capital, promotion capabilities, and IP (character rights). Having said this, those players that are most prevalent enjoy the highest royalties estimated at about 40%, while the not-so-popular ones are getting weaker. There are other issues taken into consideration like:
- Non-transparency of user rights
- Games requiring anonymity are not popular in social networking services
- Restrictions on card games
- Outbreak of disputes on various copyrights and anti-trust laws
A Promising Future
Nonetheless, the future seems bright for the mobile app industry. One major identifier is SAP’s shift from major platforms to native apps. Other future trends seen are:
- Evolution of web and native apps to hybrid
- Emergence of related services such as app promotion and resale of the hit apps engine (white labeling)
- Diversification of platforms and the marketplace
- Provision of platforms specializing in adult games
- Entry and introduction of other marketplaces similar to Google Play and App Store
Investment and development might appear costly, but in the long run might be worth every penny. When you look at advantages of native applications like its functionality, capabilities and the potential of overwhelming market growth (ergo profitability), it is no question that the mobile app market is heading towards this direction.
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