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Mobile gaming market to reach $850M this year: eMarketer

Revenues from mobile gaming will reach nearly $850 million this year, with the vast majority coming from paid downloads, according to a new report from eMarketer.

By 2014, mobile gaming revenues are expected to top $1.5 billion. Over the same period, ad support will nearly double, accounting for 12.3 percent of mobile gaming revenues in 2014, up from 12.3 percent this year.

?Mobile content offers an opportunity for publishers and marketers with three primary revenue streams?subscription, pay-per-download and advertising-supported,? said Noah Elkin, senior analyst at eMarketer, New York. ?For every type of mobile content, including mobile gaming, the ad-supported component is the smallest of the three streams, but it is also the fastest growing?it will grow at more than double the rate of paid mobile content.

?Certainly one of the main questions the report tackles is fee or free? That is the key question that faces all publishers in every corner of the digital realm today,? he said. ?Consumers prefer free content but they will pay for it on mobile devices provided that what they want isn?t readily available, but how much do you give away for free?

?What do you charge for and how much do you charge for it??

EMarketer publishes daily research articles, analyst reports and a database of online and  mobile marketing statistics.

Mobile gaming drives revenue
The number of mobile gamers in the U.S. continue to grow:

Consequently, eMarketer forecasts that mobile gaming revenues will continue to grow:

The numbers that eMarketer has reported make for a sizeable mobile gaming market, but mobile still makes up only a small amount of all gaming revenues.

According toTNS and Newzoo, only 4 percent of United States video game revenues came from mobile.

Casual gaming on the mobile platform has driven adoption of mobile games to more than a quarter of mobile subscribers and more than one in five members of the U.S. population, eMarketer estimates.

This year, 64 million people will play mobile games at least monthly, a number that will rise to 94.9 million by 2014.

EMarketer?s estimates exclude mobile users who play preinstalled games, which offer publishers decent brand exposure but less in the way of monetization opportunities.

In another key trend, Apple?s iOS continues to grow in importance as a gaming platform.

According to Credit Suisse, both Android and iPhone owners spend roughly double the amount of time playing games on their devices as the average mobile phone user.

Morgan Stanley estimates that Apple has already become the second-largest handheld gaming platform in terms of installed base and is set to surpass global leader Nintendo by the end of 2011.

Mr. Elkin said that in mobile gaming, Apple is the force to be reckoned with.

The company understands the crossover potential between mobile and console gaming and likewise has demonstrated how seriously it intends to do battle with console giants Sony, Nintendo and Microsoft?s Xbox.

However, developers and publishers should not focus on a single platform.

?Looking at the multiplatform gaming ecosystem, consumers are expecting that something is accessible across multiple devices,? Mr. Elkin said. ?Publishers and marketers carry the burden of keeping pace with the ways users want to access and use their content, keeping in mind the larger multiplatform ecosystem.

?From a monetization standpoint, there is a growing emphasis on smartphones and away from feature phones, with the incredible rise of the application ecosystem,? he said.

?Publishers and advertisers need a multipronged strategy, a comprehensive approach to monetize games that includes both paid apps and ad support or sponsorships.?

Final Take
Dan Butcher, associate editor, Mobile Marketer