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Pure skill mobile games: what you need to know about this investment opportunity

Twenty years ago, the idea that you could make money just by being good at mobile games would have seemed absurd. But times have changed, and thanks to companies like Riot Games – publisher of League of Legends and Valorant – and the surge in popularity of Major League Gaming, online gaming and esports are now a big deal. multi-billion dollar industry.

So what does the data say about the penetration and growth of the mobile gaming industry? In 2021, the mobile gaming industry has become the most profitable gaming segment in the world, reaching 2.65 billion users, with Asia and Europe coming in first and second position with 1.29 billion and 551.7 million users. In the same year, the industry generated a staggering $93.2 billion in revenue, a 7.3% year-over-year increase that accounted for 52% of global spend by gaming consumption in 2021.

It is clear that mobile gaming is a rapidly growing segment. Professional players have earned six or even seven figure salaries. The association between gaming skill and monetary return is well established at this point. Add to that the growing popularity of video game streaming and gaming culture in general, and you can see why mobile gaming has become so ingrained in our society. All this led to the birth of a new genre – pure skill games. To understand why this represents such an attractive opportunity for investors, one must first understand what the term means.

What is the game of pure skill?

Skill-based games make up a considerable segment of the broader gaming market. As the name suggests, the outcome of skill-based games mainly depends on the skills of the player. In the context of digital games, all skill-based games fall into one of three categories:

  • Physical games, which require traits such as high reflexes, dexterity, or entry speed.
  • Mind games, which require strategy, problem solving, or knowledge of the game.
  • Hybrid games, which require a mix of mental and physical skills.

League of Legends, mentioned earlier, is a hybrid game. Although mechanical skill plays an important role at the start of a match, matches are ultimately decided by which team is able to strategize and work together most effectively. On the other hand, Angry Birds, which is developed and published by Rovio (HEL:ROVIO), is almost entirely psychological.

Most skill-based games have an element of randomness. In League of Legends, this takes the form of both the game’s matchmaking algorithms and the items that can appear in a match. The Angry Birds series, on the other hand, randomizes the placement of objectives.

Pure skill games completely eliminate this element of fickleness. There are no random events or circumstances in these titles to help or hinder. Instead, the outcome of a game of pure skill is entirely in the hands of the player.

In a game of pure skill, the player has complete control over the outcome. This makes it an ideal medium for the emerging game-to-win genre. Typically mobile-based and easy to play and access (known as hyper-casual), game-to-win titles give users the opportunity to earn prizes such as cash rewards solely through play.

Who are the leading pure skill game developers?

The main players in the pure skill games market are Activision Blizzard (NASDAQ: ATVI), Electronic Arts (NASDAQ: EA) and Square Enix (TSE: 9684). Microsoft Inc (NASDAQ:MSFT) and Sony Inc (NYSE:SONY) are also market leaders, notably with the acquisition of Activision Blizzard by the former and that of Bungie by the latter.

The companies above represent solid investments in their own right and each is a great option from a gaming investment perspective. However, most have yet to make any tangible inroads into the win/cash game. Investors looking for a more immediate entry into the niche category might instead consider investing in one of the companies listed below.

Royal Victories (CSE: SKLL)

Royal Wins is notable for developing the world’s first fully licensed real-money pure skill gaming platform, Kash Karnival. Currently available on Android and iOS, Kash Karnival offers players from 147 countries the opportunity to win real money using their abilities and talents as opposed to pure odds. It features an expansive and ever-growing suite of titles, and its prominence makes Royal Wins an emerging leader in the pure skill-to-win game.

Skillz (NYSE: SKLZ)

Founded in 2012, Skillz is an eSports platform for mobile game developers. When integrating with an existing application, it allows the developer to host competitions and add cash rewards to their titles. The platform also includes social features and built-in analytics.

Roblox (NYSE:RBLX)

A free platform, Roblox allows players to create and monetize their own games and virtual items, both of which can be directly monetized through one-time purchases and microtransactions. Between them, Roblox players produce around 20 million titles a year.

What does the future of investing in pure skill games look like?

There is a significant overlap between paid pure credentials and GameFi, which combines cryptocurrency and skill-based games. As such, in 2022 the pay-to-win niche is expected to grow exponentially, driven at least in part by the popularization of GameFi. As major game developers continue to explore the limits of pay-to-win, this growth could be further amplified, especially with the growth of the Meta Platforms (NASDAQ:FB) metaverse.

Much of this growth will likely occur in the mobile games space, which has long been one of the main growth areas for games. As of last year, mobile games account for 57% of total gaming revenue, with consumer spending on games reaching $116 billion. . Hyper-casual games are the number one genre of mobile games.

Non-fungible tokens (NFTs) represent another potential growth catalyst for mobile game companies. Although NFTs are still relatively new, several notable names in the gaming industry have started exploring innovative ways to integrate them into the gaming experience.

The take-out sale

The mobile games market is poised for significant growth as major game developers seek new ways to monetize their games. Pure skill games have an important role to play in this growth story, as they offer both healthy competition and a compelling rewards structure that directly aligns with the mobile gaming industry‘s focus on the creation of sustainable communities around popular games.

This INNSpred article is sponsored by Royal Wins (CSE:SKLL). This INNSpred article provides information sourced from the Investing News Network (INN) and approved by Victory Royales to help investors get to know the company better. Victory Royales is an INN customer. Company campaign fees allow INN to create and update this INNspired article.

This INNSpred article was written to INN editorial standards to educate investors.

INN does not provide investment advice and the information in this profile should not be considered a recommendation to buy or sell any securities. INN does not endorse or recommend the activities, products, services or securities of any company featured.

The information contained herein is for informational purposes only and should not be construed as an offer or solicitation to sell or buy any securities. Readers should do their own research for all publicly available information regarding the company. Before making any investment decision, readers are advised to consult directly Victory Royales and seek advice from a qualified investment advisor.

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