The global mobile gaming market is expected to record a value of 151.1 billion USD by 2026, rising at a CAGR of 9.76% between 2022-2026, according to the latest report titled Global Mobile Gaming Market. Factors such as the expansion of the gaming industry, rising consumer spending on mobile games, increase in the number of mobile gaming users, surging ownership of smartphones, rising internet penetration rate, and rapid urbanisation will drive the growth of the market. This phenomenon is not only located in a few countries; the global gaming industry is expanding, and smartphones are playing a significant role in this expansion. The development of mobile games has resulted in unprecedented scalability for the gaming industry. Many market players, both new and old, are trying to stake their claim in this ever-expanding market. One company that is ready for the future of gaming is Unity, and that is thanks to its ability to provide value and capture revenue at multiple stages of the mobile game life cycle.
The Engine
Originally founded in Denmark but now based in San Francisco, Unity is, first and foremost, a software development company. According to the company’s website, they “are the world’s leading platform for creating and operating interactive, real-time 3D (RT3D) content”. Essentially, they are a platform for game developers: 61% of mobile games are developed using Unity’s game engine, making it the world’s most popular mobile game engine. The company’s most lucrative division is one that assists game developers and publishers with their game’s operations. More specifically, that division helps game developers actually make money from their creations based on advertisements and in-app purchases. Because most mobile games are free, monetisation is the only way for game developers to capitalise on their hard work. Globally, there are more than 2.2 billion active mobile gamers (56% of them play more than ten times per week). But there is stiff competition for these users: looking at the App Store and Google Play, more than 99% of the mobile games will have between 50 and 100 downloads. Most of these games are not very good, but even excellent games can get lost in the shuffle. Unity allows game developers a platform that will help them get noticed.
Unity’s ad service also allows developers to introduce monetisation across all app stores within the same process, which greatly simplifies the process for publishers. While this is not a particularly unique offering, and it may not sound like much, Unity’s ability to do this simply and execute it perfectly is a massive incentive for its customers. This is where most mobile game developers fail, and Unity steps in to make sure that things run as they should. Though, Unity doesn’t only provide its services to game developers. The company also offers its services to companies hoping to advertise on mobile games. Unity offers targeted advertising, which it claims it can make more effective due to the swath of games at its disposal and, consequently, the incredible amount of data.
Overall, Unity has developed a business model that allows them to capture revenue throughout a game’s life, both during development and post-publication. And because the company has been prioritising growth over profitability in a bid to capture significant market share, investors are betting that this Amazon-like approach will pay massive dividends down the line. Even though Unity operates in the mobile gaming space that is known for flashes in the pan, the company’s fundamentals have all but assured their sustained relevance, and perhaps dominance.