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Mobile gaming is a huge industry that’s still growing rapidly. Global revenue from mobile games is expected to top $286bn this year, compared to $107bn as of 2017. By 2027, it’s expected to reach a record $377bn.

There are different types of mobile games, including

• Shooter: Games focused on defeating the virtual character’s enemies using weapons.

• Action: Games focused on physical challenges, including reaction time and hand-eye coordination.

• Casual: Games targeted at mass audiences with simple rules and short sessions, e.g., Angry Birds.

• Role-playing game (RPG): A game where the player assumes character roles in a fictional world.

• Massively multiplayer online role-playing game (MMORPG): A role-playing game many people play simultaneously, e.g., Call Of Duty Mobile.

Some games cut across multiple genres. For instance, Call of Duty Mobile is both a shooter game and an MMORPG; it has made $1.1bn in revenue since its 2019 release by Activision (NASDAQ: ATVI) and Tencent (HKG: 0700).

How Do Mobile Games Make Money?

• Advertisements: Mobile ads are the most common way developers monetize their games. You’ll likely see an advertisement between breaks while playing a free game. Developers charge brands to advertise within their games, earning them money while they keep the game free to play.

• In-App Purchases: Many games sell virtual items to players to earn revenue. For example, you can purchase in-game currency for weapons, costumes, power-ups, upgrades, etc.

• Licensing and Merchandise: Developers license their game’s intellectual property to third parties such as retailers and filmmakers. Angry Birds is a franchise that made big revenue with this model.

• Pre-Payment: Some games require payment before downloading, e.g., Minecraft.

Which Category Is Leading Mobile Gaming Growth?

If you ask a layman what mobile game category leads the industry’s rapid growth, you’ll likely hear action or RPG games. However, casual gaming accounts for the largest slice of the mobile gaming industry’s growth.

Casual games are marketed to a mass audience, so they have the highest revenue potential. This type of game can come in many formats, e.g., puzzle, strategy, educational, simulation, etc. The common feature is that they have simple rules and require less skill to play. They are the types of games that both kids and grandparents can easily understand.

A hardcore gamer might look down on casual games for being too simple, which is true. However, most people aren’t too invested in games to play the complex, hardcore types. The average gamer plays in their spare time and closes it when done. It can be a school teacher playing during breaks, a cashier playing when there’s no customer to attend to, a construction worker playing during their work breaks, etc.

Casual gaming revenue topped $15bn worldwide in 2022 and is expected to reach $25bn by 2027. It remains a competitive space, with tens of thousands of developers testing different ideas and vying for relatively few customers. Like most creative fields, the top 5% takes the bulk of the revenue, leaving a relatively small amount for the average developers.

The intense competition stems from casual games being relatively easy to create. They don’t require the complex programming and customization that RPGs, MMORPGs, action games, etc., need. Anybody in their basement can create a casual game within a few days, but that’s impossible for sophisticated mobile games such as Call of Duty Mobile, Fortnite, and PUBG. Such games demand a lot of resources to create, which is why only big gaming studios usually develop them.

How Do Casual Games Make Money?

Most casual games make money from advertisements and in-app purchases. Players will likely encounter mobile video ads during gameplay, which bring more revenue than text and image ads. Some game developers show ads creatively; whenever the player fails a level and wants to continue from where they stopped, they can watch an ad.

3D mobile ads are the most popular because they’re interactive and the type players are more likely to respond to. Sometimes, the player will encounter a similar game advertised with a gameplay snippet to attract their intention. It’s a win-win for the advertiser, who showcases their product creatively, and the game developer, which makes money.

In-game purchases represent the second main source of income for casual games. Developers can charge real money for mundane virtual items such as costumes, new characters, upgrades, power-ups, etc. Some games also charge real money for virtual gifts players can send to each other. These items are not useful outside the game but don’t underestimate the willingness of casual gamers to pay money to have fun.

Examples Of Successful Casual Games

• Candy Crush Saga

Candy Crush Saga is a popular tile-matching game with over 200 million players. It was released in 2012 on Facebook before later versions were made for iOS and Android smartphones. The gameplay is very simple; players swap colored candy pieces on a board to match three or more of the same color. Matched candies are eliminated from the board, and the players score points for each match. Each level has a fixed number of moves the player needs to make to proceed to the next one.

Candy Crush Saga makes money from ads and in-app purchases. The game generates over $1bn in annual revenue. Its creator, King Digital, was acquired for $5.9bn in 2015.

• Angry Birds

Angry Birds is a popular casual puzzle video game developed by Rovio Entertainment, a Finnish game studio. The player controls a flock of wingless birds that want to save their eggs from green-colored pigs. The pigs are protected by structures such as stones, woods, glass, etc., and the player must find a way to fling their birds to eliminate all pigs.

Angry Birds was released in 2009 and became a big hit shortly after. It has been downloaded hundreds of millions of times and earned north of a billion dollars in lifetime revenue.

Casual Gaming Is the Future

Casual games are what game developers should focus on, as they have the highest growth potential. They are relatively easy to create and iterate than other types of games. The key is to have a good marketing and app store optimization strategy to stand out from the competition. Maybe you can create the next big hit…

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