Mobile games ring in millions for creators

Matching pieces of candy in a row and killing evil piggies with flying birds on smartphones and tablets mean big business here.

Sales from mobile games, similar to Candy Crush Saga and Angry Birds, hit US$100 million (S$125 million) here last year, up by 54 per cent from 2012, based on data from research firm Frost & Sullivan. It could grow to US$150 million to US$200 million by the end of the year.

This dwarfs music sales, which fell 11 per cent to US$13.1 million last year, based on figures from the International Federation of the Phonographic Industry.

Some firms have hit the jackpot with mobile games too. While not quite the US$850,000 daily sales Candy Crush can command, made-in-Singapore game Brave Frontier by game studio Gumi Asia makes US$80,000 in sales daily in the United States, based on estimates by game analytics firm Think Gaming.

In Brave Frontier, players assemble a team of five to six characters to battle monsters.

Game industry players put the rise in the sales of mobile games down to their simplicity, which makes them easy to pick up, and more people owning smartphones and tablets that let them play wherever they go.

"This has increased the number of gamers. People like to entertain themselves, which (has translated) to their spending money on games," said Mr Roland Ong, chief executive of Singapore-based games publisher and distributor IAHGames.

Consumers such as Web developer Nathaniel Cher, 27, do not mind paying for mobile games they like because free ones might have limited content or force them to wait before playing again.

"It takes almost an hour for me to travel to work. To pass the time, I play games on my phone. Time flies when you're having fun," said Mr Cher, who bought a music game for $1.28 on his iPhone 5s a couple of months ago.

It helps that mobile games tend to be cheap or free with game upgrades that can be bought.

That makes a mobile game cheaper than a $60 console game, said Mr Allan Simonsen, coordinator for the International Game Developers Association's Singapore chapter.

Investors have taken notice of mobile games too. Local venture capital firm Red Dot Ventures led a $839,000 investment with other investors in Singapore mobile games developer Daylight Studios last year.

Red Dot managing director Leslie Loh said the firm invested in Daylight Studios partly because mobile games are high-risk and make high returns, which can balance out ventures that are not as risky but make less money.

For instance, an investment by Temasek Holdings subsidiary Vertex Venture Holdings in a mobile games maker in China is now worth 25 times the initial sum.

"But for every highly successful game, there will be 100 games that are not," said Vertex chief executive Chua Kee Lock.

Even so, investing in a mobile game that tanks may not result in millions of dollars of losses compared with other business ventures, said Mr Marc Einstein, an industry principal for information and communication technologies research at Frost & Sullivan.

Making a quality mobile game might cost US$200,000 to US$300,000, said Mr Simonsen. A low-budget mobile game in the vein of the hit Flappy Bird could cost a three- to four-figure sum.

In contrast, a Hollywood film's production might cost US$100 million to US$200 million.

Still, game experts said more money could be made with a larger gaming audience now, especially if a firm's game is No. 1. But getting there has become harder as there are now more titles competing for consumers' attention.

"You need a much better game to stand out these days. That means spending more time and money on it. The days of fast returns on a mobile game are gone," said Mr Simonsen.

kennyc@sph.com.sg

This article was published on April 19 in The Straits Times.

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