Mobile games have been around since the early days of mobile phones (when screen were introduced). The game that got the ball rolling was Snake on early Nokia handsets. Since then they have always been kind of a small, novelty feature on handsets until the launch of smart phones.
Smart phones completely changed the mobile gaming industry. People were now able to walk around with games in their pockets (full colour, smooth running, complex games). I was in high school when everyone was starting to get smart phones and we all used to play games like tap-tap during our breaks. They were a fun little way to pass time and socialise with friends.
Microtransactions are where most mobile games make their money. Companies release their apps for free and add in small fees to download extra content whilst in the game. These “Micro” transactions actually generate an absolute butt-ton of cash and many multi-million dollar companies have formed off of the back of these. When consumers see new content for just $0.99 they think it’s nothing, but they add up surprisingly quickly.
Data and Location
Another thing that helped the mobile market flourish was the increase in data packages and gps location services. This allowed for augmented reality games like Pokemon Go which broke records for downloads and players. The problem that then arose was that Niantic wasn’t prepared, their servers couldn’t handle it and they were thwart with issues from day one. These issues caused a large percentage of people who downloaded the game, to never play it again after a few weeks.
The threat to mobile games
To be completely honest, I don’t think mobile games will die off but I do think that the number of active users will massively decrease. With the launch of handheld consoles like the PS Vita/PSP, 3DS and more recently, the Switch. I think the number of people who play games on their phones will drop. From a personal point of view, I very rarely play games on my phone now. The apps that I mainly use are social media, news and sports apps. I only actually have 1 game installed currently, Fire Emblem Heroes, and I haven’t played that now for over a week.