Forecast: In-app virtual goods sales to top $1B in 2012


Virtual goods purchased within mobile applications will generate revenues of $1 billion in 2012, quintupling in size over 2011 totals, according to a new forecast issued by market intelligence firm Strategy Analytics.

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Despite increasing developer and consumer interest in virtual goods, only Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG) have taken significant steps to capitalize on the trend, leveraging in-app merchandizing capabilities to fuel the continued growth of their respective mobile platforms. Strategy Analytics warns that competitors must move quickly into the virtual goods segment: At the current pace, Apple will control roughly 53 percent of paid download revenue marketshare in 2013, followed by Android at about 22 percent. Their rivals will be left to fight for the remaining 25 percent of the market.

"The introduction of tablets from Amazon and Barnes and Noble and a renewed push for Windows Phone ensure an intensifying battle for the third horse in the apps ecosystem race," said Strategy Analytics director of apps research Josh Martin in a prepared statement. "Unlike paid downloads that offer one time payment, virtual goods allow developers to earn recurring revenue from heavily used apps making the business opportunity appealing. Despite the importance of virtual goods, few platforms beyond the leaders have stepped up. Thus, Android and Apple may well dominate into the future."

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