Mobile Games Grow, Marketing Gets Harder

Here's some fun facts for you: Mobile games will take in more than $11 billion in revenue by 2015. That's about equal to the current take from console software, mind you. Given that console software sales have been shrinking for the last several years, rather than growing, it seems reasonable that mobile game revenues will overtake console games in the not too distant future. (Which kind of makes Activision's strategy of avoiding mobile and social games hard to figure out.)

More data: the majority of the revenue will be from in-app purchases. Though I wonder if advertising won't be close... it's going to be interesting to see how Android revenue numbers change as in-app purchasing takes hold in that market.

The real key to understanding all of this is that discoverability is still a problem. No, it's going to get much, much worse. Marketing gets tougher as time goes on in these crowded markets. We can hope that trusted sources will appear over time that can command a huge following (and thus become a prime place for marketers to advertise or promote), but so far that hasn't happened.

Mobile Games Changing The Market

Some interesting information on the demographics of mobile gamers comes from a recent study by Flurry (they provide analytics to mobile games). They looked at more than 60,000 users who play mobile social games (which means games ranging from EA's Pogo lineup to Words With Friends to Farmville), and here's some of what they found.

Mobile social gamers average 28 years old, about six years younger than console or PC gamers, and women make up 53% of the audience. There's a lot more data presented in the study, and it's worth a look if you're developing mobile social games.

It's still tough to get found, but at least social games have a built-in marketing mechanism where players tend to rope in more players. Of course, for that to work really well you have to have lots of players... which is the classic chicken-egg problem. If you can make it to a certain size, though, your audience will start to grow nicely of its own marketing.

GigaOm has some interesting thoughts on the meaning of this to advertisers and developers. It's a different demographic than traditional games, so it's a good place for advertisers to find consumers they don't reach with other games on other platforms. Best of all, mobile social gamers tend to have a lot of money and aren't adverse at all to spending it on virtual goods.

I do love Flurry and other analytics firms. Back in the stone age of game marketing (i.e., the 1980's) we just had to guess at demographics. Now we can get huge piles of data, and the problem has shifted to one of proper analysis of the data. You have to know enough to ask the right questions, and then know what to do with the answers. It's an exciting time, though, to be a marketer.

Mobile Game Revenues Doubling, In-Game Purchases Skyrocketing

Anyone who's been paying attention to the gaming industry has been aware that in-game purchases have become a big business. This report from Juniper (reported by TechCrunch) predicts the mobile game market revenues to pass $11 billion by 2015... which is more than double 2009 revenues. Not amazingly aggressive by some standards; I think growth may accelerate even more than they are claiming (especially if you think of tablets as "mobile game" platforms).

The interesting part is going to be played by in-game purchases. Juniper says that in-game purchases will be the primary source of revenue, overtaking pay-per-download, by 2013. That's two years away, baby. That freight train is moving fast.

Juniper also notes that discoverability is the big problem. Well, yeah, it's all about the marketing once you have a good game put together. There must be hundreds or thousands of good games languishing in obscurity in the App Store because you've never heard of them. As TechCrunch notes, "This is obviously an excellent opportunity for fledgling app discovery platforms such as Appsfire, Chomp, Mplayit, AppAware, Appolocious and, increasingly, StumbleUpon."

Just to back up Juniper's numbers, here's a report on GigaOm about the flourishing of the freemium model. If you look at the top-grossing 100 apps, 34 of them are free to download and make their money through in-app purchases. Analysts think in-app purchases account for 30% of the total App Store revenue. Which is pretty impressive when you consider that freemium apps are less than 2% of all apps in the app store.

Yeah, you read that right. Less than 2% of the apps generate 30% of the revenue. If you're planning on building a game app, and you're not seriously considering a freemium model, you need to reconsider.

Which all highlights how much more work Google has to do with Android. As this article mentions, while Android sales have passed up the iPhone in sheer units, and new Android apps appear at about the same rate as new iPhone apps, in-app purchases on the iPhone are 7 times the amount on Android. Google's got some serious work to do on their tools and the Android Market to close that gap.

Meanwhile, getting your app found is still the basic problem facing developers. More on that in another post.