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Gaming Shifts From Consoles To Phones

The latest console war is upon the video game industry, as we reported here [1], but the entire industry has slowly been shifting away from dedicated hardware consoles. Wired has projected this console war will end up generating approximately 30 percent less sales than the last generation, with the biggest impact hitting handheld consoles. This is particularly evident in the United Kingdom, which has seen 33 percent of users playing games on smartphones, with a 2 percent drop in those using dedicated gaming consoles for their game playing, according to Emarketer. Here are a few factors leading to the rise of mobile-based gaming in the U.K., and predictions for the future of the video game industry

The Effect of Casual Gaming

Casual games, such as hidden object games [2], do not require a significant time commitment on the part of the gamer. It’s pick-up-and-play-style gameplay, without an extensive and involved story, difficult-to-learn game mechanics, or complex gameplay. Video games have been around in one form or another for 40 years, and people who grew up with video games deal with limited time due to family, work and social engagements. The casual gaming trend allows them to continue playing video games for fun, without making playing seem like a second job.

 Smartphones and tablets also make video games more accessible than consoles and handheld devices. You always have your smartphone on you, so it’s easy to load up a game and enjoy it when you have a few minutes to spare.

Game Industry Revival

The U.K. game industry had a rough time between 2008 and 2011, The Wall Street Journal reports [3]. This has changed in the past year, due to government tax breaks and a big pool of unemployed, experienced game developers. Corporate tax was lowered to 24 percent, and will be reduced to 20 percent by 2014. The changes also provide tax relief for research and development costs. The revival is following consumer trends and avoiding console-based game developers, such as the ones who shut down and caused game industry development issues in the U.K. The startup studios are focusing on digital products and include teams of indie game developers. Microsoft has five U.K. locations, as well. Approximately 80 percent of U.K. game studios have a strong digital focus

Smartphones Taking Over

The mobile gaming market will hit $9 billion by 2016, market intelligence firm Juniper Research predicts. The rising popularity of tablets helps this number out greatly, as well as improvements with Android and iOS operating systems. Juniper predicts smartphones and tablets will take away enough market share from dedicated game consoles to become the primary gaming device for players. Smartphones already produce some amazing games, particularly with powerful phones such as the Samsung Galaxy S4 and the iPhone 5. Tablets allow for more sophisticated graphics cards and processors, so improvements continue to be made in that sector as well. As of 2012, gamers spent $301 million on in-game purchases through mobile games.

~ Annie Friedman