Watch profits grow this year for HTML5 games

Peter Driessen, co-founder of Spil Games, believes that advertisers hold the key to the global acceptance of HTML5 as they look to capitalise on the explosion in mobile gaming.

Over the past few months, we have seen the conversation regarding HTML5 for game development evolve.

While the format debate is still an ever-present factor, more and more developers are starting to invest in the HTML5 browser-based platform because of consumer behaviour, meaning the whole debate is now not over if”, but how”.

With a large chunk of the developer community struggling to make money, HTML5 and the open web, through platforms like our own, offer a more level playing field with more opportunities for smaller developers.

However, there is also another increasingly important reason HTML5 is grabbing developers’ attention. Not only does it allow them to create one game that works across a range of devices, but more and more they’ll also reap greater revenues from advertisers.

With the explosion of casual gameplay among consumers on both mobile devices and PCs, advertisers are recognising the power of this market and turning their eyes toward HTML5 as a vehicle to enable them to tap into it.

When it comes to corporate marketing budgets, the big money is being redirected towards mobile, video and entertainment. Casual gaming through browser-based platforms ticks all these boxes, so is becoming an increasingly interesting proposition for engagement-hungry brands. Through techniques such as pre-roll video it also offers them access to mobile platforms where advertising space is often at a premium.

The reality is that advertisers will soon be marching forward toward HTML5-formatted video ads and will expect those ads to just work” with the games their audiences play. The way for game developers to scale profits is by using HTML5. Native apps for just iOS or Android are still important, and they will remain so. However, the big leap forward for game developers will be with the browser-based solution that works seamlessly.

However, there is still something of a time lag between the developer and advertiser communities as not all advertisers are quite set up for HTML5 yet. Having said that, the industry is working towards it; and they’ll get there soon – especially with the IAB’s (Interactive Advertising Bureau) guidance in the US.

The association announced last month that it’s preparing HTML5 guidelines for advertisers around the world. The organisation’s press release on May 6th, 2013 said: While HTML5 ad units are intended to perform seamlessly across platforms, their development requires a distinct skill set and therefore specialised guidance”.

Clearly the IAB recognises the trend and is working to help advertisers make the transition with publishers.

When advertisers seek out games or game publishers to partner with, the words mobile,” cross-platform”, online” and touch” are all on their radar. Today, barely any Request for Proposals (RFPs) to a publisher from an advertiser lack any of these key issues.

Mark Trefgarne, chief executive of Liverail said that while much of the video ad business is still heavily reliant on Flash, the simplefact is the rest of the world has moved on. As an industry, we’ve been playing catch up, rebuilding the ad delivery ecosystem to run in the post-flash world.

Luckily, this change is moving fast, and the infrastructure for HTML5-based video advertising is now close to full parity. There’s still some work to be done, but it’s getting close.

Coupled with that, we also know that many consumers worldwide are purchasing low-cost touch devices to use in addition to their PCs. Tablet shipments are forecast to increase 67% to 256.5 million in 2013, and reach 579.4 million by 2017, according to the research firm DisplaySearch.

These same millions of consumers who are buying low-cost touch devices play games. And this is particularly important in the developing markets – such as China, India, Africa and Latin America – where people are buying the devices but then don’t necessarily want to be paying extra money to download lots of games; because of this, HTML5 and the open web offer a much broader field of opportunity to developers in these markets.

Finally, with current game and in-game purchase rates unlikely to change in this evolution to new types of devices – 98% of the population will only play for free – the value of advertisers in our ecosystem is only going to grow.

With advertising revenues becoming increasingly important for game developers; and with more and more of the masses” around the globe using touch devices in addition to their PCs, the perfect storm means HTML5 still looks odds on to be a game changing technology.