In-game buys to double mobile game revenues by 2015

Revenues from in-game buying will overtake the traditional pay-per-download payment model as the primary source of monetising mobile games by 2013.

According to a report by Juniper research, total end user revenues will exceed $11 billion annually by 2015, nearly the double the $6 billion generated in 2009, with Apple’s in-app billing mechanism providing a model for other game designers to follow.

It is noted that an increasing number of games are being offered free to entice customers to download a game, with in-game purchases such as extra levels or items costing a fee once they have the gamer hooked. 

“The key feature is that you catch the person while they are still in the game meaning that you have a captive audience,” Daniel Ashdown, the author of the report, told Techeye.

However the Juniper report also shows that actually being discovered in the first place remains a major problem for many developers and publishers.  The report highlight the fact that with app stores containing a bewildering amount of game applications, often in the hundreds of thousands, it is increasingly tough for a new game to get noticed.

“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,” said Ashdown.

“It is becoming particularly difficult for smaller games developers in particular to get noticed in the increasingly crowded market, with a firm like Electronic Arts showing an ever increasing number of games in the Top 100 of best-sellers, which is of course mainly due to the fact that the major companies are able to spend much more on marketing.”

“Games on the Android app store also face a tougher task in getting noticed, though this is mainly due to a difficult user interface that makes finding similar games much more problematic.  Interestingly tohugh this means that there is less of presence by major companies, with the top game having recently been Robo Defense, a game by a smaller publisher”

Despite the difficulty that publishers face in getting games noticed, the report finds that the mobile games industry has further improved from the last published Juniper report.  Juniper also suggests that Apple has set the benchmark with a higher share of revenue for developers, and development platforms which take advantage of advancements in handset technology.