The Rising Influence of Mobile Gaming on Toys and Games

Strategy Briefing

About This Report

Jan 2018

Mobile games have become the most influential segments of toys and games, accounting for 20% of sales in 2016 and with an expected CAGR of 13% over the period to 2021. This growth has had a ripple effect across toys and games, as traditional toys attempt to fight increasing age compression, while video game companies shift more of their portfolio into the mobile space. Mobile gaming will spread its influence further as nearly every child will now grow up in a household with smartphone access.

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The Rising Influence of Mobile Gaming on Toys and Games

Mobile games the leading driver of toys and games growth globally

Mobile games enjoyed enormous growth globally over 2011-2016, growing by a CAGR of 49%, and driving value growth for the entire toys and games industry. This growth is having a ripple effect across traditional toys and video games, as manufacturers and developers look for ways to contend with or benefit from mobile gaming.

Emerging markets see major mobile gaming, but developed markets likely lead age compression

Emerging markets have been one of the fastest growing areas of mobile gaming, however developed markets are still the larger area of sales globally. In addition, developed markets have higher penetration of smartphones, meaning children have greater access to these devices, accelerating age compression as children are moving more quickly from traditional toys to video games.

Traditional toys and other areas of video games find new ways to integrate with mobile games

With rapid growth of mobile games, players within traditional toys and video games are looking for ways to adapt. Within traditional toys, manufacturers are looking to integrate mobile gaming into their products, while video game developers are moving their non-mobile games to the mobile platform.

Hand-held and online gaming decline as mobile gaming and AR/VR headsets rise

In video games, hand-held and online gaming have seen the greatest impact of the rise of mobile gaming, with consoles largely being abandoned and online games moved to mobile, especially in China. AR/VR headsets, however, could benefit as mobile-based VR has the potential to tap into the large mobile gaming base.

The high growth of mobile games could find an upper limit as smartphone penetration slows

Mobile games’ fast growth is expected to continue over the period to 2021, leading toys and games as a whole. However, this growth will get slower closer to 2021 as smartphone proliferation slows, suggesting an upper limit for mobile games, which will lead to further shifts across traditional toys and video games.

Introduction

Scope
Key finding

Mobile Games' Rising Influence on Toys and Games

Mobile games the driving force behind toys and games’ growth
Mobile growth stems from smartphone possession and free-to-play
Emerging markets lead growth while developed markets lead value sales
Mobile gaming to affect all areas of toys and games

Mobile Games Take Over Video Games

Mobile games softening the impact of the console cycle
Value sales growth mobile driven in video games
Hand-held games feel the immediate impact
China’s mobile rise could end the online gaming boom
Top mobile brands in constant flux
Mobile gaming helps smartphone based VR lead the headset market

Age Compression on the Rise Off Mobile Growth

Age compression on the rise
Developed markets leading age compression
Adding mobile games to traditional toys has mixed impact
Mobile gaming part of licensing’s rise in traditional toys and games
Physical activity an important advantage for traditional toys

Mobile Gaming's Future: Is There a Limit?

Mobile gaming momentum to slow by 2021
Emerging traditional toys markets will have a mobile gaming hurdle
China accounts for vast majority of global mobile gaming growth
Static consoles have risks and opportunities with mobile gaming’s rise
Smartphone and tablet penetration to slow beyond 2021
Key recommendations

Report Definitions

Data parameters and report definitions