A recent report published by Juniper Research predicts that the mobile gaming market is expected to reach revenues of more than $10BN by 2013. One of the key factors driving the prediction? Apple’s iPhone. The iPhone has single handedly driven mobile gaming publishers and developers into frenzy to get their games to market ASAP. The consequence? Paid-for mobile game downloads have more or less flatlined across North American and Western Europe.
At the same time, it’s not all roses for mobile gaming developers. The potential for growth is being damped by a combination of limited on-portal revenue shares for publishers and poor games marketing. The resulting outcome is a mass exodus from the mobile gaming industry.
Dr. Windsor Holden comments, “The revenue share offered by Apple to games publishers is incredibly attractive. The danger is that if operators do not respond with a similar business model, publishers faced with low margins may simply exit Java completely, thereby reducing consumer choice in the longer term.”
A suggestion? What about a monetization toolkit for mobile games developers that could dramatically shorten their time to market AND help fund continued development?
Juniper’s report also found that ad-funded downloadable content has increased in popularity, BUT the revenue generated from this advertising is most likely insufficient to provide developers or operators with a primary revenue stream (read: why bother?). Given the current state of financial affairs, CPM rates are falling through the floor, thereby making ad-supported games less and less attractive to developers. Again, see suggestion above.
But fear not mobile game developer, for all is not lost. Juniper does see room for growth and profitability in the Indian Sub Continent, Africa/Middle East and South America. Increased mobile use and low levels of console gaming systems combined with fixed (landline?) Internet have been a driving factor in making mobile phones the gaming platform of choice.
Other significant findings in the Juniper report include:
- China and the Far East will remain the largest regional market for mobile games throughout the period covered by the report.
- Global revenues from in-game advertising will rise significantly from 2008 to 2013.
- Operators need to reduce data charges further for out of bundle customers to encourage casual mobile Internet usage and thereby stimulate the mobile entertainment market
Further details and the study are freely available at Juniper Research.