EA, Other Videogame Companies Target Mobile Gaming as Pandemic Wanes

- Advertisement -

Videogame companies are increasing their financial bets on mobile games as pandemic restrictions ease and people ditch their PC and TV screens to go outside.

“Before, you could avoid [mobile] if you wanted to make certain games,” said

Nicolo Laurent,

chief executive of “League of Legends” developer Riot Games, part of

Tencent Holdings Ltd.

TCEHY -0.76%

“Now the platform is relevant for any type of game. So it is a big deal for everybody.”

SHARE YOUR THOUGHTS

Are you bullish about investments in mobile gaming? Why or why not? Join the conversation below.

Game makers are jockeying to expand their user bases by reaching billions of people on the device they tend to use most, a smartphone, according to company executives and analysts. The moves come as industry revenue from mobile games is projected to continue rising in 2021, while revenue from PC and console games—which boomed during the pandemic as people were stuck at home—is projected to decline.

U.S. companies this year have already spent more on mergers and acquisitions for mobile-gaming studios than in all of 2020, according to research firm PitchBook Data Inc. There is a “race for scale” going on in mobile to acquire the largest user bases, said

Doug Creutz,

an analyst at investment bank

Cowen Inc.,

and more users mean more revenue.

“I don’t think we’re done with the consolidation,” Mr. Creutz said.

EA agreed last month to acquire Playdemic, a mobile-game studio with just one title: the top-grossing mobile sports game by player spending in the U.S. over the past 12 months, “Golf Clash.” That deal came about two months after EA, which publishes the Madden NFL and Sims franchises, completed its roughly $2.2 billion purchase of another mobile-game maker, Glu Mobile Inc.

Videogame companies had a monster year in 2020, with revenue from consumer spending growing by a record 23%, the highest annual rate since analytics firm Newzoo BV began tracking the data in 2012. Now, the companies are trying to continue capitalizing on growth as more consumers leave their controllers and consoles at home.

Mobile-game revenue, which accelerated rapidly in 2020, is expected to rise 4.4% from a year earlier to $90.7 billion and account for slightly more than half of overall global videogame revenue in 2021, according to Newzoo. Revenue from PC and console games is expected to decline 1.7% and 8.9%, respectively, from 2020, Newzoo said.

One reason mobile isn’t expected to take the same hit as other platforms is that people who started playing games on their phones during the pandemic aren’t going to stop just because they can go outside now, Mr. Creutz said. They can play on the go.

Mobile gaming already was growing before the pandemic. More people have smartphones than game consoles or PCs, and technological advances mean people can play variations of complex console and PC franchises such as Call of Duty on their phones.

“As a company, we go where the players are. So if people are playing on mobile, we’ll go on mobile,” Riot’s Mr. Laurent said. His company recently announced plans to produce a mobile version of its popular PC game, “Valorant.”

Activision Blizzard Inc.,

ATVI 0.39%

the largest U.S. videogame publisher by market value, wants to expand its user base to one billion active users from 400 million and is using mobile games to get there, said

Daniel Alegre,

the company’s president.


‘If our mission is to connect players around the world, you absolutely have to have an entry point with mobile.’


— Daniel Alegre, Activision Blizzard president

When the mobile version of Activision’s Call of Duty franchise made its debut in 2019, the game broke the then-record for the best launch of any game, according to research firm Sensor Tower, with more than 100 million downloads world-wide in its first week. No other game that has been released on the App Store or Google Play since then has seen more downloads, Sensor Tower data show.

Activision plans to release its next title, a mobile version of its Diablo franchise, later this year and ultimately to make a mobile version of each of its games where possible.

“If our mission is to connect players around the world, you absolutely have to have an entry point with mobile,” Mr. Alegre said, calling it “absolutely imperative” for the evolution of the business.

EA and Take-Two declined to comment for this article, but they and others have been snapping up mobile-gaming studios.

In June, Take-Two announced an agreement to acquire Serbia-based mobile-game studio Nordeus, which owns a popular soccer title. Take-Two also has said it plans to roll out 10 new mobile games by March.

Some game offerings from Zynga, which has been expanding its mobile-gaming footprint.



Photo:

Zynga

Zynga, known for mobile games like “Words with Friends” and “Farmville,” has also expanded its mobile-gaming empire to compete with rivals. The company bought more mobile-oriented studios in the past year than it did in all of the past four years combined and is working on a mobile “Star Wars” game, Zynga CEO

Frank Gibeau

said.

“As you went through Covid and you saw the relative growth rates—console grew great. But mobile grew even more,” Mr. Gibeau said. “So as you come out of it, you’re like ‘Hey, that looks like a really great place for me to put capital.’”

The outcome of a federal court battle between “Fortnite” creator Epic Games Inc. and

Apple Inc.

may also have implications for the economics of developing mobile games. Epic sued Apple in August, claiming that the iPhone maker operates its App Store unfairly, in part by charging developers excessive fees for processing in-app purchases. Apple has denied those claims, saying its fees are necessary for maintaining user privacy and security.

If the judge overseeing the case rules in Epic’s favor, analysts say more developers may be encouraged to make mobile games, because they would likely be able to keep a larger portion of the money that players spend inside their games.

Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Latest news

Canada’s Penny Oleksiak wins record 6th Olympic medal at Tokyo Summer Games – National

Canada’s Penny Oleksiak has won her second medal of the Tokyo Olympics and sixth of her career, taking bronze in the women’s 200-metre freestyle...

Starbucks, Facing Higher Costs, Pushes Upscale Coffee

Starbucks Corp. said higher labor and supply costs are likely to linger for...

Ride-Sharing Startup Swvl Nearing Deal to Go Public With Female-Led SPAC

Middle East-based ride-sharing technology startup Swvl Inc. is nearing a deal to go public via...
Related news

Canada’s Penny Oleksiak wins record 6th Olympic medal at Tokyo Summer Games – National

Canada’s Penny Oleksiak has won her second medal of the Tokyo Olympics and sixth of her career, taking bronze in the women’s 200-metre freestyle...

Starbucks, Facing Higher Costs, Pushes Upscale Coffee

Starbucks Corp. said higher labor and supply costs are likely to linger for...

Ride-Sharing Startup Swvl Nearing Deal to Go Public With Female-Led SPAC

Middle East-based ride-sharing technology startup Swvl Inc. is nearing a deal to go public via...

LEAVE A REPLY

Please enter your comment!
Please enter your name here