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Monday, June 30, 2014

Mobile Games Revenue will Reach $28.9 Billion by 2016

The digital video games industry has changed dramatically over the past decade. Historically, computers and game consoles were essentially the only devices to play games on. However, these devices have been supplemented by an array of alternative games channels in recent years.

Many mobile devices -- such as smartphones and tablets -- can also be used to play various types of games, encouraging those who perhaps would not normally play games to now begin.

By 2016, total revenues from mobile games will reach $28.9 billion – that's a growth of over 38 percent on the 2014 figure of $20.9 billion, according to the latest market study by Juniper Research.

The study findings highlight that in an effort to maximize their apps' potential, developers are turning their focus on increasing user lifetime value.

The new study found that with the domination of casual gamers playing free-to-play games, the game developer's approach has shifted from bulk acquisition of unique players.


Under the new strategy, which brings mobile analytics to the fore, developers are increasing lifetime value through analyzing, (re)engaging and monetizing users, allowing for higher overall returns on investment.

The study found that tablet users will spend more on in-game purchases and generate more revenues per device than smartphone users.

In turn, the enhanced performance and graphical capabilities of tablet games is resulting in accelerated migration from traditional portable gaming devices.

Gaming Devices Market Segmentation

Nevertheless, Juniper does not believe that increased gaming activity on smartphones and tablets will necessarily mark the end of this market.

Rather, dedicated gameplay hardware will continue to serve a niche gaming audience.

Meanwhile, software will embrace elements of mobile games as reflected by the introduction of PlayStation Now, which aims to let users play games through online streaming via a per-game or subscription basis.

Other findings from the market study include:

  • Over the forecast period, the emphasis in interactive entertainment will be on convenience, accessibility, and online streaming.
  • Rising disposable income levels accompanying increased smartphone adoption will spur increased in-game purchasing revenues across Latin American, Eastern European and Southeast Asian regions.
  • With app stores remaining the primary content discovery locations, storefront optimization will be enhanced to personalize the discovery process.