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Mobile gaming revenue to pass $4,5bn

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Worldwide mobile gaming revenue is on track to total $4,5-billion in 2008, a 16,1% increase from 2007 revenue of $3,9-billion.

According to Gartner, while mobile gaming revenue will continue to lag behind other value-added entertainment services – such as music and adult content – the market still has much potential.
"Although current consumer interest in, and usage of, mobile gaming is generally low, the potential for growth remains lucrative, with the market skewed toward lower-income segments, mobile workers and smartphone and personal digital assistant (PDA) users," says Tuong Huy Nguyen, principal analyst at Gartner.
"The fact that mobile gaming provides good value for the money is one reason for the healthy growth rate," he adds. "For a relatively small sum, consumers can enjoy a game over and over again, which is particularly relevant in emerging economies where penetration of consoles and PCs is lower.
"Video games in their original versions (on PCs or consoles) represent a form of entertainment recognised across a wide population, while portable consoles have also taken the market a step towards gaming on a mobile device. Finally, game publishers and mobile operators are getting better at working together and becoming more active in the mobile gaming space."
Gartner predicts that mobile gaming revenue will experience a compound annual growth rate of 10,2% between 2007 and 2011 with worldwide end user spending reaching $6,3 billion in 2011. Analysts said mobile operators and other game providers should build usage by offering game demos or advertising-funded games.
"Mobile operators must maximise customer profiles and devices by tailoring marketing to individual consumer segments," says Jessica Ekholm, principal analyst at Gartner. "These operators should target smartphone users with more-sophisticated mobile games and lower-income users with discounted or advertising-subsidised games, or even differentiated service offerings such as 'pay per game' in order to increase usage."
The Asia/Pacific region (including Japan) represents by far the largest market for mobile gaming, with end-user spending forecast to total $2,3-billion in 2008 and reach $3,4-billion by 2011. The mobile-game market has outshone the PC and console game market in the emerging territories of Asia largely because of the low penetration of PCs compared with that of mobile devices.
India is expected to lead among Asian countries in terms of total mobile gaming revenue generated, with the 2007 figure at approximately $80-million. This is forecast to reach $450- million by 2012.
"Emerging market operators should make the most of the demand for mobile games and the low PC penetration in these regions and push game sales as a viable, albeit imperfect, lower-cost substitute to PC and console games," says Madhusudan Gupta, senior analyst at Gartner.'
The mobile gaming market in Western Europe is expected to grow from $701-million in 2008 to $862-million by 2011. The North American market is projected to grow from $845-million to approximately $1,2-billion in 2011.
The gap between North American and Western European mobile-gaming revenues is expected to widen over the forecast period as more users in North America
adopt mobile data services in general.
"As voice revenues decline, mobile operators need to find ways to offset this downward trend, and mobile gaming has considerable growth potential," says Nguyen. "Mobile gaming has evolved from being a bundled freebie to a stand-alone value-added service, as well as a growing source of data revenue
for operators and publishers alike. Increased consumer uptake and new players, business models and devices will help further this market in the
future."