Mobile games in Europe : Innovation in European Digital Economy

As the EU looks to grow and unite its digital economy through the newly launched Digital Single Market strategy (DSM), the mobile games industry is the one area of the global tech industry where Europe is a global leader and has been driving digital innovation, not just across the continent, but worldwide. Every day, millions of people throughout the EU and the world turn on their devices to find enjoyment, challenge themselves, and play against their friends on mobile as well as traditional game platforms.

While the mobile games industry is still young, its impact already extends beyond game development and spills over to companies and workers in other creative industries, benefitting the European digital economy. Furthermore, industry forecasts suggest mobile games will grow at an annual rate of more than 10% until at least 2017.

European mobile app developers capture a large portion of worldwide revenues from mobile games. Several of these companies grew from SMEs to organisations with hundreds of employees in the span of less than a decade. Popular games such as Candy Crush Saga (King), Clash of Clans (Supercell), international household names.

More than 90% of the revenues from mobile games come from titles that employ a revenue model known commonly as “freemium”: this approach lets people download and play apps for free and gives them the choice to pay for extra features through optional in-app purchases.

The freemium model is relatively new. While consumers have already embraced it, more work can be done for its commercial and operational aspects to be better understood by policymakers. The Interactive Software Federation of Europe (ISFE), the industry body representing video game companies in the EU, commissioned Deloitte to investigate mobile games and the freemium model.

Among other topics, this study investigates the impact of the freemium model on:

• The choice and affordability of games that it provides for consumers;
• The competitiveness and growth opportunities it facilitates for developers;
• The innovation and entrepreneurship brought to the technology, creative, and related industries, and by extension in the whole EU economy.

The study combines desk-based research with the findings from a new consumer survey commissioned by ISFE from Ipsos that polled 4,000 people between the ages of 18 and 64 in Germany, France, Spain, and the UK in May 2015. Six interviews with large and small EU-based mobile game companies informed the developer-focussed topics of the report.

STUDY Mobile games in Europe : Innovations in European Digital Economy