Forecast: In-game purchase revenues to reach $4.8B in 2016

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Sales of in-game items will surge from $2.1 billion in 2011 to $4.8 billion in 2016, driven by a sharp increase in smartphone adoption and growing user comfort with the freemium revenue model, according to a new forecast issued by Juniper Research.

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The proportion of mobile gamers purchasing in-game items will grow as subscribers become more accustomed to the freemium concept, Juniper states. The firm anticipates the trend will be most pronounced in the social and casual genres, where consumers have grown to expect compelling mobile experiences for free or next to nothing. Another driver: The number of developers adopting the freemium model over the traditional pay-per-download approach, a trend driven by demand for free games and the large user base that results. In-game sales also reduce privacy, with all purchases verified via the developer's server.

"An increasing number of games developers are finding the in-game purchase model attractive simply because it provides easy answers," said report author Charlotte Miller in a statement. "Their piracy rate will drop and the game will see more downloads. However, while some games may generate significant revenues from in-game items, the model doesn't work with all games and developers have to tread a fine line between encouraging purchases and appearing to be exploitative."

Additional findings from the Juniper report:

  • Social and casual titles will account for the majority of mobile game downloads.
  • Game downloads on tablets will increase significantly, yielding over a third of mobile game revenues by 2016.
  • Mobile games revenues on feature phones will fall by 50 percent over the next five years.

For more:
- read this release

Related articles:
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Survey: Half of all App Store games generate less than $3K
Flurry: Freemium titles yield two-thirds of App Store gaming revenues
Flurry: iOS, Android games rake in $800M in 2010

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