Mobile Gaming Market Sees Opportunity for Major Growth as Number of Smartphones Expected to Reach 2 Billion by 2015
October 24 2012 - 8:20AM
Marketwired
The traditional gaming market has experienced a steady decline in
sales in 2012 as gaming on smartphones and tablets continues to
explode. Research firm NPD Group recently reported that retail
sales of video-game hardware, software and accessories had declined
for the 10th consecutive month, with a 24 percent drop in
September. Five Star Equities examines the outlook for companies in
the Technology Sector and provides equity research on Glu Mobile
Inc. (NASDAQ: GLUU) and Zynga Inc. (NASDAQ: ZNGA).
Access to the full company reports can be found at:
www.FiveStarEquities.com/GLUU www.FiveStarEquities.com/ZNGA
While traditional game sales have experienced a major decline in
2012, mobile gaming has experienced the opposite. The NPD Group has
reported that digital game sales -- which includes social games,
mobile apps, and digital downloads -- increased by 17 percent in
the second quarter of 2012. The number of smartphones in use in the
third quarter of 2012 totaled 1.03 billion, a 47 percent increase
from third quarter 2011. By 2015, that number is predicted to
double to 2 billion.
"It's clear that the quality of mobile games is improving with
faster processors and better displays on smart phones and tablets,"
said Michael Pachter, managing director of Wedbush Securities.
"This has caused a migration of gamers at the more casual end of
the spectrum away from dedicated consoles and handhelds toward
mobile phones and tablets."
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Glu Mobile recently announced that Probability PLC, the UK's
only publicly-traded mobile gambling company, will use the
company's existing games to create Glu branded mobile slot games.
Drew Crum, analyst at Stifel Nicolaus, last week initiated coverage
on the company with a "buy" rating and a price target of $5.00.
Zynga recently partnered with Honda Motors to launch its first
reward-based mobile advertising program. Players of "Words with
Friends" and "Scramble with Friends" will earn extra tokens and
in-game currency by finding Honda-related words. "Reward-based
advertising is a concept we leverage with tremendous success in our
web games, so we are thrilled to offer our first-ever mobile reward
advertising program to promote the all-new 2013 Honda Accord," said
Julie Shumaker, VP of Global Brand Sales.
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