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COVID-19's Impact On The Mobile Games Market

The entire world has been battling against the ongoing coronavirus disease (COVID-19) pandemic for quite some time now. The pandemic has already affected the daily lives of millions of people across the globe. Many countries imposed nationwide lockdowns and travel bans to help slow the rate of infection and fatalities. However, it severely disrupted the global economy on various levels.

COVID-19 has made a huge impact (good and bad) on all kinds of businesses including the mobile games market. With strict lockdowns imposed in various parts of the world, it led to a significant increase in consumer engagement with mobile games, especially in mobile-first game markets such as Asia, the Middle East, and Latin America. With more people staying at home due to various restrictions, they are indulging in mobile games to fulfill the social interaction void caused due to lockdown. Mobile games market saw the biggest increase for mobile game downloads ever in a quarter, with more than 13 billion installs across the App Store and Google Play Store.

The Boom in Mobile Games Market

COVID-19 has further boosted the ever-growing mobile games market. In Q1 2020, Apple App Store downloads grew by 35% year-over-year to nearly 3 billion, while Google Play installs increased by 38% to 10.3 billion -- which is a record growth for both mobile store platforms. Following Q1 2020, the rate of game downloads is on the rise only. Mobile phone's portability and accessibility have solidified the platform's dominance even further during this pandemic. People have been resorting to all kinds of mobile games to fill their time and escape boredom.

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Strong Engagement Will Trickle Into Increased Revenues

A unique aspect of mobile gaming is that looking at the number of downloads and sales in isolation does not paint a complete picture since many games are now available for free. It is infamously challenging to convert mobile players into payers. However, the number of users spending on mobile games is also on the up during this pandemic.

In March 2020, the mobile games market generated an estimated $5.8 billion globally, up 8% from February. In April, meanwhile, revenue growth accelerated by a further 10% month-over-month to $6.4 billion. Users spending in the US saw a significant increase in Q1 2020, hitting $1.9 billion in April, up 18% from March. This growth rate is much higher as compared to the rate of previous years.

An increased interest in gaming due to COVID-19 related lockdown restrictions is a primary driver for the increased revenues. The mobile games market is estimated to reach $77.2 billion by the end of 2020. Apple's App Store will generate $38.8 billion (+10.3% year on year) in mobile game revenues this year, while Google Play Store is expected to hit $27.8 billion (+15% year on year). The remaining $10.6 billion will come from third-party Android app stores.

Hardware Manufacturers Face New Challenges

Although COVID-19 has increased the number of game downloads and revenue accordingly, it's not all roses in the mobile games market. A wider picture of the gaming industry reveals that gaming hardware and software development has taken a blow due to this pandemic as factories around the world face supply chain interruptions due to lockdowns. With factories not working at full strength, it negatively affects the manufacturing and distribution of mobile hardware.

Furthermore, game development companies are preparing for a loss in efficiency as more employees are working remotely. The New York Times reports that developers as large as Sony, Nintendo, Amazon, and Square Enix are facing difficulties in providing efficient and smooth services to their customers. If the current situation prolongs more, it can have long-term impacts on the production of gaming hardware and software.

Future Outlook

The mobile games market will continue to grow irrespective of the effects of the COVID-19 pandemic. By 2023, the mobile games market is estimated to cross the $100-billion mark, which will be the first in the history of mobile gaming. There are many factors that can drive this enormous growth such as integration of AR and VR into mobile devices, 5G rollout, Cloud gaming, partnerships with other entertainment sectors, etc.

Final Thoughts

The aforementioned impacts of COVID-19 on the mobile games market may change after some time once the final impact of the pandemic, a potential second-wave, and the long-term effects of the lockdowns are better known.

However, what's clear until now is that consumers are turning to their smartphones more than ever for entertainment and engaging in mobile games like never before. The mobile games market is up on sales and generating a good revenue although the production is not as smooth as it must be. Even when everything comes back to normal these new habits may become permanent.

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