Video Games Are Bigger Than Hollywood, Seriously
The nerdy-looking, greasy-haired, and Cheeto-stained finger stereotypes of video gamers are now officially dead. Long have we come from the days of playing Pokémon FireRed and Mario64 on our GameBoys, to what is now an industry which supported 350K total jobs and contributed $66B in U.S GDP. In 2023…alone. In 2024, the Global Games Market value will surpass $188B and 3.3B+ in worldwide gamers, absolutely slaughtering all other major entertainment markets.
For comparison:
Simply put, gamers have evolved from being stereotyped as “mom’s basement introverts” to pioneers of the most explosive media & entertainment vertical. By the end of this, you’ll get up to speed on the mobile gaming market & trends, understand how mobile game studios make money, learn how to assess if a gaming startup is a good investment, and see an awesome spotlight on the sports-mobile game, ForKeeps.
Gaming Studios Are Like Drug Companies
For starters, mobile gaming studios are companies that are dedicated to developing and publishing video games, specifically designed to be played on mobile devices. Like an experienced fisherman, a single gaming studio is able to cast multiple lines into the water in order for at least one of their games to catch the viral adoption jackpot. For example, Tencent Games, one of the largest studios, monopolizes the highest grossing games list with:
Honor of Kings generating $18.7B in revenue (#1 Rank)
PUBG Mobile generating $11B in revenue (#3 Rank)
Clash Royale generating $3B in revenue (#22 Rank)
Although some lucky studios are able to hedge their bets with multiple games, most studios are small, independent groups (called Indie Studios) which have to place all their eggs in one basket, in hopes for a moonshot.
While we’ve seen many game titles hit unicorn status ($1B+ in valuation), studios usually spend years and years of development with NO cash flow into the business. On average, mobile game studios take anywhere from 6-months to 5+ years (up to 10+ years in some cases) to launch a game title to market; with millions of upfront capital investment and years of no return.
Similar to the lifecycle of mobile game development, an average pharmaceutical drug spends 10-15 years and between $1B-$10B+ in research & development. This includes developing the medicine, clinical trials, and cost of failed attempts. Despite immense upfront investment, the average new drug earns $18.6B in global revenue (~10x the average, $1.8B, in costs to produce).
Despite 43% of projects being canceled during development and 83% of mobile games failing within three years of launch, the mobile gaming industry is more promising than ever. This next section shows you why.
The Goldmine Market of Mobile Games:
Mobile is the real behemoth in the gaming industry; out of the $184B of revenue generated in 2023 from the global gaming market, 49% of the market share comes from Mobile Games (~$90B). And it’s not just a few big players that are crushing: more than 1,500 apps and games generated $10M, 219 surpassed $100M, and 13 eclipsed $1B, all in just 2023. There are a few drivers that reflect the seismic hold mobile gaming has on the market.
Even boomers play. It’s not just Gen Alpha & Gen Z playing video games; 47% of gamers are ages 18-50, while 29% are 50+. Even better? Each generation predominantly uses mobile as their gaming platform over PC and console because of its accessibility and casual appeal; 81% of Gen X gamers and 79% of Boomers play on mobile.
Free is Key. Mobile gaming’s dominance is mainly driven by the popularity of free-to-play games. After getting users hooked on their product, mobile games cash in through micro-transactions and subscriptions for premium gaming content. The newly released Pokémon TCG Pocket earned $3M+ through in-app purchases per day in its first week! (We’re currently playing this and reliving our childhood of card collecting.)
It’s the new Madison Ave. Advertisers view mobile games as the ideal platform to promote their products thanks to extended screen time, the ability to tailor ads to user preferences in real-time, and access to a highly engaged user base. In-game advertising is not only effective but cost efficient, averaging a CPM (cost per mille/1K impressions) of $10-20 compared to $15-30 for traditional video ads. Leveraging advanced ad-tech platforms like AppLovin and Unity Ads, mobile game developers are seamlessly integrating banners, interstitial ads, and rewarded ads - boosting monetization without compromising user experience.
What To Look For In Gaming Investments:
When specifically looking at investing in a video game startup, investors are looking for a strong founding team, metrics that show strong user engagement, and a path to generating revenue & profit. Here is the cheat sheet of main metrics to look at when analyzing whether to invest in a mobile game:
New Sports x Mobile Gaming Startup Spotlight: ForKeeps
Recently, we had the opportunity to sit down with Tony Grillo, CEO of one of the most promising sports mobile games out on the market, ForKeeps. We got to get his perspective on how to build a successful mobile game, the future of sports gaming, how to raise money from leading gaming venture capital funds, and advice for ambitious young people.
What is ForKeeps?
ForKeeps is the rebrand of the popular mobile game, GreenPark Sports, and where “ESPN meets Roblox.” Under Tony’s leadership, the team is building a hyper-engaging AAA mobile game for Gen Z gamers that allows users to participate in multiplayer obstacle-course racing games, sports pick’em mini games, and live themed chat rooms. Users play together to win, unlock new rewards, and earn access to 10K+ exclusive NBA & La Liga digital collectibles.
Strong Traction:
Raised a new round from leading VCs such as Phoenix Capital Ventures, Sapphire Sport, ADvantage Sports Fund, and more
Official partnerships with NBA, La Liga, and NBA Players Association
Well-Complemented Team:
Former Chief Strategy Officer, now turned CEO, Tony Grillo
Lead Game Designer from The Sims (Electronic Arts)
Former AAA Game Studio Senior Developers
We’d love for you to download ForKeeps and give us your thoughts! And add us as friends!
Add us: @siddybuckets and @SJSP7
2025 Watchlist: Upcoming Sports Mobile Games
Along with ForKeeps, there are some really cool sports mobile games that we’ keeping an eye out for in 2025
Dunk City Dynasty: NetEase Games will launch the first-of-its-kind 3v3 street basketball mobile game in 2025
Officially licensed by the NBPA
Hit the court with your favorite superstar, from sharpshooters like Steph Curry and James Harden to posterizers like Lebron & Zion
Features a League system to team up with friends and a Dynasty mode where players can build lineups, set tactics, and climb the ranks
If you want to drip out your team, we recommend customizing your own kicks too
Skate.: Yes, it’s back. After 15 years, EA’s Skate. franchise will return in 2025
Players can dive into the new, immersive world of San Vansterdam, inspired by previous Skate. cities like San Vanelona and Port Carverton
Brings back old-school tricks that feel realistic and fun while introducing new ones, including wallies, slappies, boned ollies, variable speed flip tricks, and the held flip trick to name a few
Skating comes back with a little bit more style: you can customize your look from head-to-toe with gear from beloved skateboard brands like Vans and Girl and Chocolate
You’re Now 0 to 1 in Mobile Gaming:
If you’ve read this far, we’d like to genuinely thank you from the bottom of our hearts. You now know the market landscape of mobile games, key metrics to spot a promising gaming investment, and a few hot games that are ripe for eruption.
We spent the last few months figuring out different types of content we’d like to exhibit through The 4th Quarter, and you can expect to see more deep-dives like this, weekly news in sports-tech, and an exciting upcoming podcast series.