Growing smartphone usage trumps purchases of expensive computer games.
People playing games on their mobile phones will spend more than the hardcore audience of PC gamers for the first time this year. By next year, the hordes of Candy Crush and Clash of Clans players will even be outspending gamers on Xbox, PlayStation, and other consoles, according to a new report.
Spending on mobile games, mostly for in-game purchases, will account for 27% of the $99.6 billion global video gaming market in 2016, market tracker Newzoo reported. The $27.1 billion worth of skipped levels and sacks of digital gems is up 24% from last year and forecast to increase another 18% to $32 billion in 2017.
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PC gamers will spend $26.7 billion this year, just a 4% increase from last year, while console gamers will top the charts in 2016 spending $29 billion, a 5% increase.
With spending rates expected to continue to increase only modestly among those hardcore gamers over the next few years, the expanding ranks of more casual mobile gamers is becoming the most important—and most lucrative—segment. Thus, Activision Blizzard atvi paid $6 billion for Candy Crush saga publisher King Digital in February.
But the bulk of the action is in China, Newzoo highlighted. Chinese gamers are forecast to spend a total of $24.4 billion in 2016, edging out U.S. gamers spending $23.5 billion.
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There’s been plenty of hype about virtual and augmented reality gaming this year with the recent arrival of first-generation headsets from Facebook’s Oculus unit and smartphone maker HTC. But Newzoo sees only “marginal” revenue from VR and AR in 2016, and it will largely substitute for spending on other gaming platforms.
“As the uptake of VR hardware plays out, game software revenues will automatically be absorbed into current PC, TV/console and mobile revenues,” the intelligence firm projected in the report. “VR and AR will in the long term change how consumers communicate with each other and interact with content. In the short to medium term, Newzoo expects the lion’s share of VR revenues to be generated by hardware sales, spectator content, and live viewing formats.”