Mobile games: In-game purchases to overtake pay-per-download

01/12/2010

Mobile Games revenues are set to reach $11bn by 2015, with more players opting to buy games while playing the free version, according to new research. The study, from Juniper research, indicates how App stores are driving changes in monetisation, but discoverability still remains an issue on some platforms.

Juniper Research forecasts that revenues from in-game purchases will overtake the traditional pay-per-download model as the primary source of monetising mobile games by 2013. With Apple’s in-app billing mechanism showing the way forward, total end-user revenues will surpass $11 billion annually by 2015, nearly double what they were in 2009 ($6bn).

01/12/2010

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An increasing number of games are being offered free at the point of purchase, in order to garner attention, with in-game purchases – which include extra gaming levels or gameplay items – being utilised by developers and publishers to monetise the game once the user has been given a taste of what the game has to offer.

However, discoverability remains a problem for developers and publishers on some app stores, given that many now contain 100,000s of applications, the majority of which are mobile games.
According to Mobile Games report author Daniel Ashdown, "Discoverability can be a “chicken and egg” problem: high downloads lead to prominence, but achieving a high number of downloads is largely dependent on already being prominent. Consequently, a small minority of games achieve very high downloads, whilst the vast majority achieve very small download figures."

Nevertheless, Juniper Research’s report finds that the mobile games industry is in a much healthier state than it was when the last edition was published. Apple’s iPhone/App Store combination has set the benchmark, with a higher share of revenue for developers, and development platforms which take advantage of advancements in handset technology, as discussed in the report.

The Mobile Games video whitepaper is available to view on www.juniperresearch.com together with the whitepaper, ‘High Score for Mobile Games!’ and further details of the study 'Mobile Games: App Store Strategies, Business Models & Forecasts 2010-2015'

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