Mobile gaming may keep expanding because of the opportune convergence of consumer, technology and business trends.

1. Mobile, video, gaming convergence
brings opportunities
Anand Srinivasan, Matthew Kanterman, Jitendra Waral and Anurag Rana
Bloomberg Intelligence analysts

2. Mobile gaming bolstered by tech,
consumer and business trends

3. Mobile gaming may keep expanding because of the opportune
convergence of consumer, technology and business trends.
Consumer handheld devices such as smartphones and tablets are
ubiquitous. The software on them makes it easy to deploy games
without the need for physical distributors and to gather a large
number of users. The increasing quality and complexity of games
may have also found a large middle ground in terms of costs and
revenue potential outside of a core group of gamers.
These factors will drive graphics processing both in devices and
in the cloud that connects them. Nvidia and AMD are among
the largest makers of graphics-processing units exposed to this
growth, while EA, Activision and Take Two are among the biggest
publishers of console and PC games.

4. Mobile gaming expands audience, market from ‘luxury’ sport

5. Mobile gaming’s audience has expanded beyond geeky PC and
console gamers, which remains a luxury sport, given the cost of the
hardware and software. Gaming PCs can cost more than $1,400.
With graphics cards’ capabilities advancing substantially annually,
users tend to upgrade their graphics card more frequently than
the PCs themselves, adding almost $1,000 per upgrade. Consoles
also remain expensive, with high-end games costing both for the
initial download and in-game options and mission packs.
Only 20% of PCs sold are high-end game capable today.
Dell’s Alienware, Hewlett-Packard Inc. and Lenovo all make
high-end gaming PCs, while Microsoft, Nintendo and Sony
are the largest console vendors.

6. Device Price, Market Size Comparisons

7. Traditional games carry 20x sales; mobile games has 1.6x users

8. Mobile gaming may only carry revenue of $3 a user, while traditional
PC or console-based games may carry as much as $60 per use
through the game’s life. The base of smartphone and tablet gamers
is 1.6x that of PC gaming monthly active users, according to IDC.
Most of the revenue is skewed toward the purchase value of the
game itself. In the case of console and PC games, about 25%
of additional sales could come via in-game ads and purchases.
For Mobile games, it’s likely much lower.

9. Smartphone vs. PC Gaming Revenue, Users

10. Mobile ubiquity democratizes gaming, drives larger interest

11. Mobile gaming, unlike console or PC gaming requires no physical
distributors for the software. The direct relationship entices game
developers who want to break the barrier of a physical distributor
or hardware intermediary that controls their access to users.
Emergence of social networks has also enhanced mobile gaming.
These factors drive the user growth of the market, which in turn
propel the computational and graphics processing needs of the
device and servers users connect to.

12. Smartphone and Tablet Gamers
by Operating System

13. Graphics are critical in device, data center for mobile gaming

14. Mobile gaming makes the graphics processing subsystem that
much more critical for product differentiation. Currently ARM’s
Mali, AMD’s Radeon, Qualcomm’s Adreno, Intel’s integrated
graphics, Imagination’s PowerVR and Nvidia’s GeForce and Grid
platforms produce graphics capabilities for use in mobile devices,
PCs and servers. The growth of mobile gaming will drive data
needs in the device and in the data center.
This in turn may have effects on power and heat management of
devices and servers and how CPUs and GPUs co-exist logically
and physically.

15. GPU Competitive Landscape

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