Mobile-gaming revenue to hit $11.4 billion in 2014

Mobile-gaming revenue is on the rise. Will Android and iPhone continue to dominate?

Gaming on cell phones has long promised to be an important revenue generator for mobile carriers and game developers, but it took quite awhile for it to drive real revenue in the U.S. But worldwide, especially in Asia, mobile gaming has been emerging as an important revenue generator for a number of years.

Worldwide mobile gaming revenue
Worldwide mobile-gaming revenue eMarketer

Last week, research firm Gartner predicted that worldwide mobile-game revenue will grow 19 percent, reaching $5.6 billion in 2010 with an expectation to more than double to $11.4 billion in 2014.

Mobile gaming is a very broad classification which also includes new and interesting possibilities in relation to location, such as Foursquare, and new technology areas such as augmented reality (AR) which is just starting to see venture investment, such as with the newly funded AR game company Ogmento.

Gartner estimates that 70 percent to 80 percent of all mobile consumer applications downloaded are mobile games and that 60 percent to 70 percent of these downloaded games are free (often trial versions.) The firm expects this trend to continue for the next two to three years.

This market revenue growth is reliant on a number of factors including:

  • Continued smartphone sales growth
  • New distribution points, such as app stores for Android games, that are just starting to emerge
  • Accessibility of mobile games in emerging markets
  • Growing availability of micropayments
  • Direct billing via service providers

It's not that there weren't (or aren't) other mobile devices to play games on, but a big shift occurred with Apple's packaging of the iPhone (especially in light of the touch screen) along with the App Store (in all of its walled garden glory), which made mobile-phone games far more consumable than what had previously been offered by carriers.

And for those who loathe Apple's approach, the model is being tweaked in Android-land to offer more open alternatives to the sales and distribution models.

There is little doubt that mobile gaming will continue to grow, the big question in my mind is when Android game options will eclipse those of the iPhone, and if there is a market opportunity for any other platform. It would seem that we are down to a two-horse race for mobile-gaming dominance in the U.S. Is it too late for another entrant?

About the author

Dave Rosenberg has more than 15 years of technology and marketing experience that spans from Bell Labs to startup IPOs to open-source and cloud software companies. He is CEO and founder of Nodeable, co-founder of MuleSoft, and managing director for Hardy Way. He is an adviser to DataStax, IT Database, and Puppet Labs.

 

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