In 2010, $87 million was spent on ads placed inside games on mobile devices according to Juniper Research. This is predicted to rocket to $894 million by 2015 based on a recent analysis from Juniper Research. So what explains this 10x increase?
According to Juniper analyst Daniel Ashdown, “Angry Birds has been a huge hit over the last year on the iPhone since its launch; but arguably its relative impact, in terms of downloads, has been bigger on Getjar and, more recently, on Android Market, as a result of offering the game free with ads. Users get a great game for free, but advertisers get significant product/brand exposure; the same is true for mobile games as marketing tools.”
Mobile gaming revenue is being driven not only by ad revenue but also fees developers charge consumers to download a game on smartphones or to buy virtual goods in-game. This second category is predicted to “still be 10 times higher” in the future. Juniper prognosticates total mobile game revenue topping $11 billion by 2015.
The best way for game developers to make money with an app is still getting consumers to buy the app or buy something while playing the game. Angry Birds by Rovio Mobile currently has 50 million users that spend a cumulative 200 minutes per day in the game. A one touch payment system called “Bad Piggy Bank” is in the works. Rovio is in talks with developers to ink a deal but would not reveal details. Perhaps it will be a revenue sharing agreement and Rovio said at the time that it if that occurs, it would be “much, much better than current app store models.” Instead of credit cards, the in-app payment system charges consumers on their cell phone bills. It’s expected to launch later this year.
Growth in this mobile gaming sector was initiated by Apple with its iAd platform. Apple is largely credited with spearheading the ad space around mobile gaming. Free mobile gaming apps that display ads will continue to lead growth per Daniel Ashdown who authored the Mobile Game Report whitepaper.
Zynga, the creator of the most popular Facebook titles, Farmville (62 million monthly players) and Mafia Wars (45.5 million monthly active users) announced plans to release apps for Android mobile devices which will be another area where ad spend and mobile gaming revenue can grow. Farmville has been ported for the iOs platform. Mafia Wars is available as an iPhone App and as a Google Chrome App. Fees for virtual goods are predicted continue on smartphones with these popular Facebook games translated across the panoply of mobile platforms.
Mobile gaming is highly disruptive to the traditional business model of buying games in retail stores and may affect pricing of more traditional game offerings by video game companies. Research shows the freemium model of mobile gaming goes over well with the consumer base. The main thrust of the Juniper Research report is that mobile app developers need not rely solely on ad revenue to profit as consumers are willing and ready to pay for in-game virtual items. To learn more about mobile gaming growth, visit Lenco Mobile, a multinational mobile technology solutions company.
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Angry Birds has been a huge hit over – News for Dallas, Texas … http://topics.dallasnews.com/quote/0bQzbBm5yf0AU?q=Android Quotes from UK Poli Blogs – News, photos, topics, and quotes http://oneclick.indiatimes.com/quote/08ko4qB41DgEt?q=Android Mobile Games Ad Spend To Rise Tenfold by 2015 | AdSpend on Mobile Games to Reach Nearly $900 Million Globally by … http://creativemac.digitalmedianet.com/articles/viewarticle.jsp?id=1303777 Adspend on mobile games to increase five-fold in the next five … Press Release: AdSpend on Mobile Games to Reach Nearly $900 … http://www.juniperresearch.com/viewpressrelease.php?pr=221 Quotes from MarketWire – News, photos, topics, and quotes http://oneclick.indiatimes.com/quote/02o235ReUY0Ms?q=Android |

