2016 MOBILE GAMES AND VR YEAR IN REVIEW | © 2017 SuperData Research and Unity Technologies. All rights reserved.CANT STOP, WONT STOP: 2016 MOBILE AND VR GAMES YEAR IN REVIEW2016 MOBILE GAMES AND VR YEAR IN REVIEW | © 2017 SuperData Research and Unity Technologies. All rights reserved.2ExecuMve Summary page 4-5Global trendsSpecs and installs Engagement and spendingpage 6-8page 9-11page 12-142016 MOBILE GAMES AND VR YEAR IN REVIEW | © 2017 SuperData Research and Unity Technologies. All rights reserved.3Virtual Reality page 15-17About Unity and SuperData ResearchMethodologies page 19page 202016 MOBILE GAMES AND VR YEAR IN REVIEW | © 2017 SuperData Research and Unity Technologies. All rights reserved.4The mobile games market earned $40.6B in 2016 - the equivalent of global box office sales for the year. The ever growing U.S. mobile market is now amongst the ranks of traditional media as mobile gamers play more often than they watch Netflix, Hulu or YouTube. Larger screens do not yield higher retention. Instead, developers should focus on RAM as more than half of smartphones worldwide have less than 2GB. Developers also want to consider how their games will affect battery life, particularly in the most popular smartphones with less processing power. One in three apps on a smartphone in 2016 were action games More American mobile gamers played puzzle games than any other genre (58%). Games on iOS retained almost twice as many American players on day 1 as those on Android. In the U.S., developers made 45% more on an iOS player, but in China Android players were worth eight times more.2016 MOBILE GAMES AND VR YEAR IN REVIEW | © 2017 SuperData Research and Unity Technologies. All rights reserved.5At 30 minutes a day, mobile engagement was 19% higher in Q4 2016 than the year before. Revenue for mobile games increased 14% year over year, largely due to Android, which saw a 32% uptick in revenue. Virtual Reality made $1.8B in its first commercial year. Samsung Gear VR led with 4.5M devices sold. Sonys PlayStation VR beat out other non-mobile headsets, approaching a million sales by the end of 2016. “The mobile games market earned $40.6B in 2016 - the equivalent of global box oce sales for the year.” 62016 MOBILE GAMES AND VR YEAR IN REVIEW | © 2017 SuperData Research and Unity Technologies. All rights reserved.2016 MOBILE GAMES AND VR YEAR IN REVIEW | © 2017 SuperData Research and Unity Technologies. All rights reserved.7$40.6BWorldwide Mobile Games Revenue, 2016 Mobile games earned the equivalent of all box oce sales in 2016. Acer blockbuster Unity Mtles like Super Mario Run and Pokémon GO, the mobile games market grew 18% in 2016 year over year and accounted for half of the enMre digital games market. This sustained growth is helping legiMmize mobile games in the tradiMonal media landscape. It also is adracMng big players, with acquisiMons like AcMvision Blizzards $5.9B deal to buy King and Tencents $8.6B payout for Supercell. Asias Big Three are among the ve largest mobile games markets in the world. Though Chinas dominance is a result of the nearly 1 billion monthly acMve users playing on mobile, Japan and Korea solidify their places in the top ve by boasMng big spenders: among players who made in-game purchases in 2016, Koreans spent almost $60 in an average month while Japanese spenders shelled out $70. The other three top markets came in well below, with spenders in the U.S. and China paying about $25 a month and Brits paying just over $30. North America $6.9BLaMn America $2.4BRest of World $0.8BAsia $24.8BEurope $5.7BU.S. Mexico India Indonesia7%7%2%5%2016 MOBILE GAMES AND VR YEAR IN REVIEW | © 2017 SuperData Research and Unity Technologies. All rights reserved.8U.S. Mexico India Indonesia192%51%52%63%Total RevenueInstallsIndonesia tripled its potenHal for adverHsers in 2016 and boasted spenders who paid 84% more on average than Indian players. Indonesia is the fastest growing market in Southeast Asia - and among the fastest worldwide - creaMng an undeniable opportunity for developers. The country has the third largest populaMon in Asia, steeply dropping behind China and India. However, it is gearing up to have a similar relaMonship with Asia to what Japan and Korea have with China: fewer players but higher spenders. Compared to India, the percentage of Indonesian mobile gamers who paid was almost 50% higher and they spend almost twice as much. Mexicos declining economy made it harder to turn players into payers last year as conversion dropped 2% on iOS. Mobiles top three markets in LaMn America - Brazil, ArgenMna and Mexico - all saw an economic downturn in 2016, which translated to slow growth. Mexico, the regions second-largest market, had a 52% increase in installs, but only single-digit growth in revenue and spending. Since less Mexicans are paying, its important that developers keep spenders happy in order to also keep their revenues up. The ever-growing U.S. mobile market is now amongst the ranks of tradiHonal media as mobile gamers played more oPen than they watched NeRlix, Hulu or YouTube. Mobile games are solidifying their posiMon as a media staple for Americans. Players are installing more apps than ever and are more engaged with mobile games than TV and online videos: they play six days a week but watch content only ve. Americans are spending even less Mme on other media like podcasts and books, engaging with them only half of the week.Growth in key markets Q4 2015 vs. Q4 2016U.S. Mexico India Indonesia44%47%9%26%Average monthly revenue per paying user (ARPPU)“More than half of smartphones in 2016 had less than 2 GB of RAM, which will conKnue to be the trend for the next 12 to 18 months.” 92016 MOBILE GAMES AND VR YEAR IN REVIEW | © 2017 SuperData Research and Unity Technologies. All rights reserved.2016 MOBILE GAMES AND VR YEAR IN REVIEW | © 2017 SuperData Research and Unity Technologies. All rights reserved.10Does size really ma2er? Growing screen sizes dont mean growing retenEon - the power lies within.Size doesnt maWer. but looks do. RetenMon was comparable across all major screen sizes, so in terms of retaining players, size was not a key factor. Large screens do not necessarily have beder resoluMon, but games that work on small screens with high resoluMon will render well on large screens with lower resoluMon as well. In the end, processing power is whats important when rendering textures or assets, so bigger doesnt always mean beder. Its also whats on the inside that counts. The muscle behind smooth graphics and funcMonality is RAM. More than half of smartphones in 2016 had less than 2 GB of RAM, which will conMnue to be the trend for the next 12 to 18 months. This is especially the case in emerging regions, which means developers looking to penetrate them should aim for games smaller than 500MB. That way phones wont slow down when mulMple apps are running at the same Mme. Live long and process: lower the processing power to keep baWery life going. Users with high-powered phones tend to be higher spenders as they are willing to pay top dollar for their phone. Games with graphics that require high processing power should be targeted at those with top shelf phones like iPhones and the Google Pixel. But aordable Android phones are sMll the global standard, so developers looking for a wider audience should aim to run on the range of duo-core processors clocked at around 1.6gHz.3.9“ 4.0“ 4.6“ 4.7“ 7.4“ 9.7“34.7%40.3%43%36.3%33.7%39.5%Worldwide day 1 retenMon by screen size3 GB or more 17%2 GB 19%1.5 GB 6%1 GB 43%512 MB 15%Market share of memory size (RAM)