Gaming: In-App Purchases To Overtake Download Revenues On Sales Of $11bn

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Credit: Rovio

It’s no secret that gaming is one of the most popular, and money-spinning, forms of mobile content in the market, whether they are casual games for basic devices, or high-end titles that utilize all the advantages of the latest smartphone technology, or a simple flock of angry birds. But some believe there will be much more to come, in terms of how money will be made from them. While today the majority of gaming revenues are coming from the traditional pay-per-download model, by 2013 that will shift to in-game purchasing, says Juniper Research.

Juniper believes that by 2015 mobile games revenues will be around $11 billion, nearly double the total revenues from gaming in 2009.

Apple (NSDQ: AAPL) has been driving the market for mobile games, says Jupiter, both in terms of giving developers a platform that is quick and easy to develop on – Objective-C – and also because of its support of the in-app billing model.

Juniper is betting big on in-app billing and the “fremium” model for games: their argument is that the increasing number of titles in the market will mean that publishers will need to, more and more, give games away just to get their foot in the door with players. Once involved in the game, in-app purchases could be used to buy advancing levels of difficulty, or accessories for playing the game, or access to other features such as multiplayer modes. This model is increasingly getting used by other kinds of content publishers as well to get users engaged in their products.

In its report, out today, Juniper picks up on another important issue: discoverability of games, which is getting increasingly difficult as more games flood the market. But with several aggregators in the market already such as Scoreloop, Game Trail and Chomp, and more like TeePee vying to get into this area, these may end up getting as lost as the long tail of games themselves.

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