Softbank continues showing strong interest in mobile games
Softbank, a Japanese telecommunications corporation, has invested some $1.53 billion in a mobile games developer based in Finland. Per the investment, Softbank now owns a 51% stake in Supercell, developer of popular games like Clash of Clans and Hay Day. Despite the success of its games, Supercell is still considered a small development studio, but the developer is growing quickly and has established a formidable presence in the mobile games space.
Supercell boasts of strong revenue in games sector
Supercell has surpassed Zynga in terms of market value. The developer is currently valued at $3 billion and the developer’s games produce estimated daily revenue of over $2.4 million. The majority of this revenue comes from in-game purchases on virtual items and digital currencies. The financial clout that Supercell represents demonstrates the economic promise that can be found in the mobile games sector. As mobile games continue to grow in popularity, large companies like Softbank are looking to establish a lead in the sector.
Global game industry revenue expected to hit $86 billion by 2016
Market research firm Newzoo predicts that the global revenue produced by the game industry as a whole will reach $86.1 billion by 2016. The firm expects the mobile games sector to grow quickly over that time, accounting for approximately 30% of global gaming revenue. Mobile games currently represent 17% of the revenue produced within the game industry. Consumers have shown that they are willing to spend money on mobile games despite the fact that the majority of these games are free to play.
Softbank aims for the global stage with mobile games
Approximately 20% of the investment coming from Softbank will be funneled through the company’s own mobile games studio, GungHo Online Entertainment. Softbank has already established a formidable presence in the Asian game market through its subsidiaries, but the company is not turning its interests to the global stage. Softbank is well positioned to compete with other large companies, such as Electronic Arts, that have begun entering into the mobile games sector.
Mobile games transition proves turbulent for Zynga
Once-acclaimed game developer Zynga continues to work toward recovering from its recent fall from grace with consumers. The company has faced harsh criticism over the years due to its approach to gaming. Some of this criticism suggests that Zynga blatantly copied other, more popular games in order to attract consumers through confusion. After Facebook cut ties with the developer, the company has been working to reclaim its position through a strong focus on mobile games.
Zynga continues to see financial difficulty and criticism from consumers
Though Zynga believes that mobile games will lead to its eventual ascension to fame, the company is still struggling in its transition into the mobile space. Much of Zynga’s interest in mobile games comes from the success other companies have seen in this sector, such as Japan’s GungHo Online Entertainment. Even major publishers, such as Electronic Arts, have been finding success in mobile games, largely due to the simplistic nature of these games and how much they appeal to a massive number of consumers.
Zynga makes drastic cuts to staff
Zynga has been having trouble acclimating to the mobile space, however. The company has yet to produce a single mobile game as much of its focus is currently centered on reinventing itself. While Zynga is making progress toward embracing mobile games, the company has yet to shrug off its complications. Late last week, the company announced that it had laid off 18% of its staff throughout the U.S. This move was meant to save the company as much as $80 million annually but has done little to win the company the confidence of investors who consider Zynga’s acquisition of OMGPOP in 2012 as the mark of the company’s ultimate decline.
OMGPOP now defunct
OMGPOP is the development studio behind the acclaimed Draw Something, which is largely considered to be one of the most successful mobile games on the market. Since acquiring Zynga acquires OMGPOP in 2012 for $200 million, but has had to make several cuts to the development studio in an effort to save money. Zynga had once considered OMGPOP to be a powerful step in its journey toward mobile games, but Zynga closed the studio last week without having it produce another game.
