Gamasutra

Richard Firminger, managing director of EMEA territories at metrics firm Flurry Analytics, told a GDC Europe audience today that revenue that is coming from the iOS and Android is killing off the handheld video game market, where dedicated portable game systems like Nintendo's 3DS and Sony's PlayStation Vita currently compete.

Firminger said that the share of revenue for iOS and Android games in the overall U.S. handheld and mobile game market has grown from 19 percent of a $2.7 billion market in 2009 to 58 percent of a $3.3 billion market in 2011.

"It's really sort the biggest content revolution that we've ever seen. It's exciting and it shows that indies can kill a very, very established market."

However, Firminger warned that, in order to tap into its incredible potential, developers had to "stop building the future of their businesses on hunches, or who speaks loudest around the table when you're discussing the next big project."

He observed that app downloads, regardless of how valuable they may be, do not mean that developers have won a new, paying customer. "It's just the first in a very long process to get people to open and play your game," he said.

"The retention rate is really depressing." Firminger said. "In general, after 12 months, most developers would have lost 96 percent of their audience."

Given the circumstances, an understanding of the target demographic is vital. Firminger explained issues like male and female spending habits ("Women are thrifty. Men binge.") and how "generation X pays while generation Y plays." According to Firminger, these are elements that should be taken into consideration when pursuing a new project. 

"What's the expected male/female age distribution for your game? Where are you heading and who are you designing the game for? Are you designing for middle-aged men or are you designing for teenagers? What's the DAU you're supposed to expect if you're going to compete and you're going to compete effectively in this genre? What sort of revenue might you get back in terms of monetization from in-app purchases and advertising?

"'Build them and they will come' no longer applies here. Having significant marketing is an advantage and it's not the only thing you should be doing but it should be part of your consideration if you're taking this challenge by the horns," he said.

http://www.gamasutra.com/view/news/175905/Mobile_games_taking_big_bites_out_of_Nintendo_Sonys_handheld_biz.php

1) It's exciting to "kill" a market? Wow, bloodthirsty much...

2) Using increased market share is a retarded way to determine that you're "eating away," "killing," or otherwise "destroying" competitors. The Wii U had immense market share but the 360 still sold very, very successfully. Battlefield 3 gained significant market share in the FPS market but didn't steal 15 million sales from CoD.

3) Of course flurry is going to make the market which they support sound like it's a god-send.

4) 3DS is still selling better than any dedicated portable game system in history (I believe). If not, it's still selling well last time I checked.

5) Herpa derp.

Where is this supposed >$1.5 billion in mobile game revenue? Rovio makes $100m in revenue globally, anyone else?

The market retention is depressing if they don't watch out that market will burst, the "indie" mobile market seems very much like .com market in the 90's. So much money to be made and the market is "big" but so many people trying to get into it and not enough structure and the market collapses and only the big name survive.

Isn't flurry mrstickball's company?

I would really like to know where these analysts are getting their numbers from ...

The mobile app and game market is primarily made up of companies bleeding money or individuals who are working for "free". A couple guys who spend 40 hours a week (combined) for six months developing their mobile game, releases it in an ad based format, gets 500,000 downloads each with an average of 40 ad impressions, and sees an ECPM of $5.00 from these ad impressions, may be happy with the $100,000 they earned; but that is more downloads, more ad impressions, and a higher ECPM than most of these games get; and a business paying these guys a typical salary with reasonable benefits would basically break even on this performance.

The mobile app/game market is a lot like the dot com market of the late 1990s ... Lots of products with impressive usage without the business model to monetize it, and most efforts to monetize it result in a dramatic decrease in usage

Yep, using my andriod tablet to play old school gameboy advance and super Nintendo games right now. I actually am easily able to play old games that are rare this way. I thought about buying an old ds or psp because I have gotten tired of this gens banality, but really I could probably get decent emulaters for both portables. I just cannot justify buying any of the portables when they all only have one through 5 games I want. Tablets in the future will be even better at this. Sony and Nintendo have a lot to worry about.

He sounds like a politician trying to spin things to look more extreme than they are.

The market has grown substantially and now touches customers it never did before. It's pretty much a no-brainer that market share would sift in that situation. It certainly doesn't mean the previous segment of the market has been replaced or "killed".

Also, with that massive growth in the number of customers, an increase of .5 billion in revenue seems awfully tiny. It leaves the impression that this new market segment spends very little per customer. I'd love to see a breakdown of that.

Finally, this doesn't mean a whole lot to me right now, since he's using the last years of a generation, and the first year of a lackluster launch, as the basis for his conclusion. Let's see how much revenue handheld consoles account for in 2012, and if the Vita does improve it's numbers, 2013. THEN he can tell me that he has killed that market.

I'm of the complete opposite view, and mobile revenues have mostly peaked with much more slow growth in revenues in the future, the "bubble" will burst with most (small) developers going out of business, and the major publishers will eventually be forced to treat the mobile market as a third pillar ...

The thing that is rarely talked about in regards to the revenue numbers of the major publishers is how much of their revenue is generated by hardware manufacturers bundling their games with their hardware. Certainly, EA earns less per unit from bundled games, but with tens of millions of copies of games being "Sold" when people buy a phone or tablet they make a significant amount of revenue which doesn't relate to the health of their market. A couple hundred million devices being sold in a year, each providing $2 to $5 in revenue to major publishers distorts the real health of the market dramatically.

No, that's Fade LLC http://fadellc.com/About%20Us.html

Flurry: http://www.flurry.com/management-team.html