Why It's Hot
Mobile gaming's popularity has paralleled the widespread adoption of social media. Two-thirds of adults use social networks, and nearly 50% of cell-phone owners use smartphones. Games such as Angry Birds and Words With Friends are highly accessible, attracting users outside the traditional gamer demographic.
Barriers to Entry
Competition is fierce. In 2007, there were two mobile-game makers, which collected $2 million in revenue and employed 32 workers, IBISWorld reported. This year, there are more than 1,500 developers, employing 28,000 workers and expected to earn $4.5 billion in revenue—a 397 percent annual growth rate.
Analysts expect industry sales to nearly triple, to about $12 billion, by 2017.
If you can attract a big enough following, these games can be hugely profitable. Some companies have successfully tapped Facebook’s massive user base to earn millions of dollars, or seen massive paydays through acquisitions--or both. Last year, Electronic Arts bought PopCap Games, maker of Bejeweled and Plants Vs. Zombies, for $750 million. And in March, Zynga bought rival Omgpop for $180 million, after its game Draw Something hit 35 million downloads in just two months.
Where the Action Is
Many games are integrated with Facebook, making them accessible to women older than 40, who now represent the fastest-growing gamer demographic, IBISWorld reports.