1.) There is still some growth in the mobile market, in the form of a few hundred million every year. Generally the biggest hits are what are going to be pushing that.
Of the overall market size, that sounds fairly small and I wonder how much of that isn't already centralized in the top. But its a good point, I had thought the market plateau had been a bit more rigid and that the overall growth had largely stagnated. But this ties into the next bullet...
2.) It's important to keep in mind that Japan's mobile market is a bit different than the West. The amount of people monetizing is closer to 20-30% of the market instead of 2-3%, so games are distinctly less dependent upon whales to succeed. Similarly, I believe that paying mobile users in Japan were averaging in the range of $20-$25 a month (in total, not per game), which works out to be equivalent to buying 4-5 new $60 games a year, or put another way, a new $60 game every ~2.5-3 months, so it's not a crazy investment for your average gamer.
This is actually very interesting because I look at the games I have played (but let's focus on FEH), and almost all of the major spenders are Japanese. Even the biggest whales that we know in our discord for the game are small fry compared to some of the major spenders on the Japanese side of things. Perhaps this skewed my perception to think that there was a huge whale distribution/dependence in Japan, but it would seem it is more likely that Japan has (perhaps?) bigger spenders but less of them and the overall market is supported by a more even distribution in spending. So less whales, more dolphins. That said, putting the spending of the average consumer into the frame of the video game retail market does paint a fairly clear and succinct picture on where the "market went".
It didn't disappear, it just went to a place it more prefers.
3.) There is some decentralization of the money being spent. Most notably, at their height, Puzzle & Dragons and Monster Strike were earning $4-$5 million a day. These days they're more in the $1-$2.5 million range, and the market size has increased dramatically since the time they were making that, so there's a lot more cash to go around to all the other titles. These days you have a lot more $100K to $2 million a day hits, which are all very profitable endeavors. $100K a day works out to $36.5 million a year, so you could even be averaging half that and making a financially significant profit on a lot of mobile titles.
So in reality, my understanding was actually skewed in reverse of reality. The market *decentralized* and the major tops are actually more heavily competing with each other and the lower market than I thought. I had thought that the top earners would own almost the entirety of the market.
It does also seem that Japan's "top earners" are very much linked to events and even the smaller titles can shoot up around event cycles and make a good bit of money on these periods even if, for the majority of the time, they hang out not in the top 10. In a year over many titles and many events, this would add up to a fairly significant portion of the market cap total for mobile revenue.
5.) It's important to keep in mind that Japanese mobile games are looking progressively more and more like Japanese handheld and console games. For Madoka in particular, it appears to be a game similar to Fate/Grand Order, in that it's going to have a ton of story focus. Imagine a gamer who likes playing visual novels or adventure games with very large narrative components. They might play and notably enjoy both Ace Attorney and Danganronpa. Releasing a new Danganronpa game does not lower their desire to keep buying Ace Attorney games, it simply results in them purchasing both titles, as they really enjoy this kind of content. There's also a limited amount of content at any given time, so after they run out of content in one series (for example, by beating the newest game), they will go play the newest Danganronpa, and then repeat this process as new titles come out in each given series. Fate/Grand Order and Madoka have a similar relationship. It's just that new content for both will come out much more quickly, but in smaller chunks, so you might play through a new storyline or event in Fate one week, and then play through new content in Madoka the next week.
I hope that helps make a bit more sense of the mobile market. In a lot of ways, it's actually pretty similar to the console one, if you just pretended every console game was a service title, or at minimum a singleplayer game like Hitman.
I think the fact that some devs have even started outright porting mobile games to the Switch with positive results shows just how close these markets are becoming. I wouldn't even be surprised if we saw more "more like a handheld" mobile games just outright launch with the Switch selling a version. I look at Implosion, old game as it is, and if Implosion 2 were to come out, I wouldn't be the least bit surprised to see it on both iOS/Droid and Switch on the same day.
