In-Game Purchases Overtake those of Pay-per-Download, says Juniper Research, App stores drive changes in monetisation, but discoverability still remains an issue on some platforms
A new report published today by 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).
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 juniperresearch website 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’
Juniper Research provides research and analytical services to the global hi-tech communications sector, providing consultancy, analyst reports and industry commentary.
What was said in 2008 -2009
PC game software grew 18 percent in 2008, thanks to growing usage of online games that are played primarily on computers and not on consoles.
The PC Gaming Alliance is one of those groups that insist PC gaming is not dying. If you look at U.S. retail game sales, it certainly looks like it is. But much of the growth is in online sales and new kinds of business models that aren’t easy to measure.
In 2009, getting that kind of growth is going to be tough. PC game hardware sales are expected to drop 7 percent, or $1.4 billion, to $18.6 billion from $20 billion in 2008, according to a report yesterday by market researcher Jon Peddie Research. Sales are expected to bounce back to $23 billion in 2010, and the firm expects PC game hardware sales to hit $30 billion by 2013.
According to the PCGA, PC game software revenue was $12.7 billion in 2008, up 18 percent from $10.8 billion in 2007. The group says that in 2008, there were 42 million desktop computers and 31 million notebooks that shipped that, and here’s an important qualification, could be used for PC gaming. By 2013, that desktop figure is expected to grow to 59 million, and the notebook number will grow to 118 million.
Full told, the consumer PC and game hardware market was $68 billion in 2008, and that’s expected to hit $143 billion in 2013. The installed base of consumer PCs capable of playing games in 2008 was 228 million, and by 2013 that number will hit more than 600 million. The closest rival platforms are the Nintendo DS at 100 million, the Sony PlayStation 2 at 136-million-plus, and the Nintendo Wii at 50 million-plus.
Are consumers actually playing games on those computers? About 60 percent of U.S. consumers over 18 play some kind of games, according to Bob O’Donnell, an analyst at IDC. About 59 percent prefer the PC as their primary game platform, he said.
Software growth was driven by online sales worldwide, particularly in Asia, where PC games dominate in some countries. In China, for instance, game consoles are not legally sanctioned for sale. And in Korea, consoles are virtually nonexistent. David Cole, an analyst at DFC Intelligence, said that China became the No. 1 market in the world for PC games in 2008.