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BizReport : Mobile Marketing : April 19, 2013

Monetization an uphill struggle for mobile game developers

Despite the huge rise in the number of gamers playing on a mobile device, mobile game developers face huge challenges when it comes to monetization, as a report from market research firm Interpret reveals.

by Helen Leggatt

Interpret's GameByte study found that the average mobile gamer, be it on smartphone or tablet, spends $0.92 per month on full game apps and $0.79 per month on in-game items.

Those figures are significantly lower than those for home consoles. GameByte found that players of traditional console games spent $10.40 a month on average.

Forty-eight million people in the U.S. play games on a mobile device, double the number that play free-to-play MMOs on desktop computers. MMO players spend around $3.25 each month.

"The average spend is so much weaker for mobile games that the two business models generate comparable revenues," said Jason Coston, senior analyst at Interpret.

Furthermore, the report says that mobile developers face an "uphill battle in converting players into paying users". Only 47% of mobile gamers paid for a full game in the six months to the survey, and just 21% paid for in-game items.

Earlier this year, UK-based Juniper Research released a report in which it forecast tablet owners will spend an estimated $3.03 billion on in-app purchases by 2016 - 10x the $301 million spent in 2012.

The huge increase will be driven, says Juniper, by the rapid adoption of tablets coupled with growing confidence in in-game and mobile spending. Furthermore, game developers are increasingly using virtual currencies to monetize games instead of a pay-per-download model or in-game item purchases.

According to Juniper research analyst and report author Siân Rowlands, only a small percentage of gamers actually make in-game purchases and, of those that do, the amount spent is typically very low, just a few dollars.

"It becomes apparent that there are a small proportion of consumers spending thousands annually on these virtual currencies, who subsidize the game for everyone else," commented Rowland.

Image via Shutterstock

Tags: console games, game market, mobile apps, mobile developers, mobile games, tablet shopping

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