Mobile Game Revenues Hit $6.6 Billion, Mobile Video $14.570 billion By 2011: Report

Worldwide mobile game revenues declined by 9 percent sequentially in the second quarter of 2007, according to iSuppli, compared to an 11 percent growth sequentially in the first quarter. Although you shouldn’t really compare revenues in sequential quarters due to the seasonal nature of the markets, in a growing market you do expect consistent growth. Isuppli describes the third quarter performance and the fourth quarter outlook as “optimistic”, although Glu came in at the bottom range of its Q3 earnings and EA Mobile revised its full-year revenue down 11 percent. ISuppli still expects mobile gaming revenue to nearly triple by 2011 to $6.623 billion, up from $2.329 billion in 2006 and $2.854 billion this year. This is one of the more conservative predictions I’ve seen…for example, Juniper just sent out another press release reiterating its position that mobile games will generate $10.5 billion in 2009 — the figure for 2011 was $17.6 billion.

Isuppli expects to see developers innovate around mobile-specific features, namely mobility, connectivity, community and location awareness. It also goes against the current thinking that a focus on casual games will grow the mobile game market: “Because the current crop of mobile games is centered on casual players, one way to encourage a new demographic to play games on their mobile handsets would be to develop titles that support networked and/or multiplayer gaming. Allowing other users to play against and with their friends via wireless networks will encourage groups of gamers to adopt the platform quicker. These types of games also could reduce the churn-and-burn effect among targeted subscribers, an area of particular concern and importance for operators.” I agree with this sentiment — although I recognise it’s harder to do than to suggest.

Isuppli expects faster growth from mobile video — a compound annual growth rate of 71.7 percent from $977 million in 2006 to $14.570 billion in 2011. It expects mobile TV to be a catalyst for the expansion of the mobile video market, by making services such and video on demand and interactive viewing more appealing to consumers. The analyst does note barriers — including content availability, spectrum accessibility and uncertain business models — but claims “the earlier these obstacles are breached, the faster this segment can become the largest mobile content opportunity for operators and content providers”.

The Asia-Pacific premium mobile content market grew 57.4 percent to $5.98 billion in 2006 according to Frost & Sullivan, and is predicted to reach $22.38 billion by the end of 2012. Of the 2006 revenue, “an estimated 22.8 percent were revenues retained by mobile operators, while the remaining $4.62 billion were third-party content provider revenue share” reports Cellular News. Mobile music and video brought in $495 million in 2006 and is predicted to bring in $3.1 billion by 2012.

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