Over 90% of mobile game revenues generated by in-app purchases

A new study from market research company Newzoo reveals that the vast majority of revenues from mobile games are generated by in-game purchases.

by Helen Leggatt

The U.S. mobile gaming market has grown considerably, from 75 million to 101 million mobile gamers. Of those 101 million, 69% play games on smartphones, with 21% gaming on a tablet.

The vast majority of games being played aren't being paid for upfront but are instead relying on micro-transactions from within the game.

A whopping 91% of revenues from both Android and iOS games in the U.S. come from micro-transactions made within games as opposed to a one-off fee for downloading, according to Newzoo.

Their study of 17,000 mobile gamers found that in-game revenues were higher in the U.S. than in Europe where in-app purchases account for 73% in Germany and 87% in France.

In the U.S. iOS games were found to generate around five times more revenues than those on Android. In March this year, among the 200 top-grossing games at both Google Play and the App Store combined, 84% of revenues were attributed to iOS games.

"When analyzing Apple's successful monetization, there is one dominant factor outside of differences in audience demographics and preferences: Apple requires users to connect their credit card information directly to their account, thus creating a seamless purchase experience," said Peter Warman, CEO at Newzoo.

Tags: Android, Apple, in-app payments, iOS, micro-transactions, mobile games, research