The growth in mobile and social games has not gone unnoticed by the investment community. Funding has poured into the gaming sector, and if the current trend continues investment in game companies could hit double the level of 2010, according to a study by Digi-Capital, a boutique game investment bank in London.
“Even though Q3 2011 has just finished, global games investment so far this year is pushing towards double that of 2010, and global games mergers and acquisitions are more than double the level of 2010,” said Tim Merel, the managing director at Digi-Capital.
Most of the investment was directed towards mobile and social games, which is not surprising given that those are the fastest-growing sectors. Much of the growth is in Asia as well as other emerging markets. Their extensive study looks at all sectors of games, and finds that the console game sector is flat to down.
Digi-Capital projects global game sales to hit $87 billion, with mobile and social games accounting for $44 billion, by 2014. Almost half of the revenue for online/mobile games is projected to come from China by that time. Although China has a low ARPU (average revenue per user), the high numbers and relative efficiency of Chinese game companies allows them to reach operating margins of up to 50%, which is fueling their growth and overseas acquisitions.
