Smartphone Makers Look to Gamers for Sales Boost

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Smartphone Makers Look to Gamers for Sales Boost
Highlights
  • Video games on smartphones have reportedly taken off in recent years
  • Tencent's purchase of majority stake in Supercell highlights potential
  • Smartphone video game competitions are now even held

Smartphone makers hope video games will help them stand out in a crowded market with dwindling sales, but analysts warn that handsets don't have the power or the screen size to lure hardcore players.

Video games on smartphones have taken off in recent years and accounted for nearly half of the global video game market in 2018, according to a report from French telecoms research group Idate.

"Most analysts predict the mobile game industry is moving towards a focus on casual players. 'Hardcore' gamers that care about displays would probably much rather play on a dedicated portable console," said Fitch Solutions analyst Cristina Liberal.

The purchase by China's biggest gaming group Tencent of a majority stake in Finnish mobile game maker Supercell in 2016 highlights the growing focus on the mobile video game market, she added.

Smartphone video game competitions are now held, especially in China where Tencent launched its widely popular mobile strategy game "Honor of Kings" in 2015.

And popular games such as "Clash of Clans" and its successor "Clash Royale", which were developed by Supercell, are now a regular part of the esports scene where they can be played on mobile phones.

Esports is a form of competitive video gaming with multiple players battling against each other usually in teams, often in matches that are streamed live to throngs of fans.

'Key element'
"Video games are inevitably a key element in the conception of smartphones," said Thomas Husson, a consumer devices analyst at research firm Forrester as the Mobile World Congress trade fair was underway this week in Barcelona.

They require devices with "high level of performance" and low latency, or response times, to work well, he added.

Honor, a sub-brand in Chinese telecoms giant Huawei's smartphone portfolio, highlighted the advantages of its new View 20 model for video game players such as a large screen and cooling system when it was presented at the end of 2018 in Paris.

South Korea's Samsung, the world's biggest smartphone seller, in 2016 introduced a gameboard that could be paired with its Galaxy S8 flagship phone for gaming.

"Video games are very important for us," a Samsung spokesman said, adding the company prefers to make handsets that "respond to many different needs" instead of a model dedicated to a specific use such as gaming.

Few dedicated devices
While gaming is taken into account by handset makers when they design their devices, few have moved to make specialised models for video games.

This contrasts with computer makers who have put out many models aimed at video game players which are often more expensive and much more powerful.

Xiaomi, Asus and ZTE have phones geared towards gaming but often the difference with their other devices is negligible.

"The only differentiation factor is to modify settings, like display or battery usage. Mobile game developers prefer to focus on 'casual' gamers that don't require extra features, and generate more cash," said Liberal.

Most mobile games do not need high powered devices to work well so the incentive to come out with a device geared specifically to gaming is low.

Husson said video gaming helps underpin smartphone sales "but not to the point where it could compensate for the decline in sales" of handsets.

"If there was a real demand for smartphones specifically for gaming, we would have already seen them, therefore it is not really the case. What could possibly change things are flexible screens, which open up new possibilities," he added.

Samsung and Huawei have both unveiled in recent days new smartphone models featuring screens that can fold open like a tablet and others firms are expected to follow their example.

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