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Headsets: In-Game Purchase Revenue to Monetize Mobile Games by 2013

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December 02, 2010

Headsets: In-Game Purchase Revenue to Monetize Mobile Games by 2013

By Carolyn J Dawson, TMCnet Contributor

Juniper Research, provider of research and analytical services to the global hi-tech communications sector, recently published a Mobile Games video whitepaper that forecasted that by 2013, in-game purchase revenue will soon become the primary source of monetizing mobile games, thus replacing the traditional pay-per-download model. The report also states that the total end-user revenues will surpass $11 billion annually by 2015, which is almost double the revenue generated in the year 2009, mostly driven by Apple’s (News - Alert) in-app billing mechanism.

In order to gain attention, an increasing number of games are being offered free of charge at the point of purchase along with in-game purchases. Developer and publishers utilize the extra gaming levels or gameplay items that are offered along with the purchase to monetize the game once the user has experienced the various lucrative gaming options. However, the major problem faced by game developers and publishers is discoverability since there app stores are loaded with more than 100,000 applications out of majority are mobile games.

In a press release, Mobile Games report author, Daniel Ashdown, said, “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.”

In spite of these challenges, Juniper Research’s (News - Alert) reports shows that mobile games industry is in much more stable compared to the time when the last edition was published. The report also discusses various benchmarks set by Apple’s iPhone (News - Alert)/App Store, whereby the developers receive the higher share of revenue, and also the development platforms that leverages latest advancements in handset technology.

A number of mobile games business models are also investigated in the sixth edition of the mobile games report with the key forecasts being the number of users downloading mobile games, the number of offstore and onstore downloads as well as end-user revenues and mobile advertising expenditure revenues. The report also analyses the decline in Java and BREW platforms in relation to the mass deployment of app stores while considering the positive impact of handset development. Challenges that hinder the future development of mobile markets such as discoverability, and OS fragmentation are also discussed in the report.

Carolyn John is a Contributor to TMCnet. To read more of her articles, please columnist page.

Edited by Jaclyn Allard

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