The video gaming industry has been ruled by big brands and established IP from a few major game publishers and developers such as Electronic Arts, Activision, Ubisoft, THQ and others. High production, marketing and distribution costs created formidable barriers to entry for the long tail companies. High retail price points created risk for consumers to try new titles with which they were not familiar. For these reasons, brands published by larger companies dominated the landscape.
Flurry separated game sessions between indie game developers who started their businesses on iOS and Android versus established gaming companies who extended to iOS and Android from other platforms. Starting from the left, in 2010, we see that about 60% of all mobile game sessions occurred in games built by independent studios. In 2011, this figure declined slightly to 56% primarily due to a wave of consolidation by established game companies who acquired independent studios (e.g., EA acquiring Chillingo, Zynga acquiring Newtoy, DeNA acquiring Ngmoco and Gameview, etc.). However, in 2012, another larger wave independent companies appeared to emerge, overwhelming established companies once again, pushing indie game session share to 68%.
With Apple and Google entering the ecosystem, the rules of competition have changed dramatically, arguably creating the most open, egalitarian market in the history of video games. Flurry first wrote about this phenomenon in 2009 in a series entitled The Rise of the Middle Class. While we would have expected indie game developers to fare better early on in the history of iOS and Android mobile app platforms, it’s remarkable that their dominance has grown over the last several years, with no signs of slowing. Even when traditional, established game companies have attempted to buy a stronger position on iOS and Android through acquisition, the reduced importance of brand power in mobile app gaming allows indie developers to continue to innovate and capture increasing consumer mind share.
In the new smartphone app economy, Apple and Google have truly empowered indies to thrive. And among indies, game developers are thriving the most.