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Mobile Gaming Market to Reach $23 Billion by 2017

The mobile gaming market continues to be a high-growth opportunity. International Data Corporation (IDC) released the findings from its latest market study, a comprehensive assessment of the current state and future direction of smartphone, tablet, and gaming-optimized handheld (GOH) hardware and software.

Their forecast details the outlook for Apple, Google Android, Microsoft, Nintendo, Sony, and a wide range of game software developers and publishers from a mobile device and portable gaming perspective through 2017.

The GOH market category -- typified by the Nintendo's 3DS and Sony's PlayStation Vita -- has recently been overshadowed by gaming-capable smartphones and media tablets and this trend is likely to continue.

IDC research shows, for example, that the number of paying smartphone and tablet gamers will surpass the number of paying GOH gamers worldwide in 2013 and rise at a rapid rate through 2017.

The number of GOH bundles shipped, meanwhile, should fall at an average of nearly 7 percent per year over the next five years.

Apparently, the installed base of GOH devices is now being overwhelmed by the adoption of smartphones and tablets that are used for primarily casual gaming.

If there's a silver lining for devices like the 3DS and Vita it's that the GOH category should lead in a crucial sales metric through 2017: average revenue per user (ARPU).

Total mobile and portable gaming revenue, including digital and packaged game software, GOH hardware bundles, and direct advertising revenue going to platform suppliers and game developers or publishers, is forecast to approach $23 billion in 2017.

"Android remains quite fragmented but the platform is on its way to becoming a massively popular gaming platform within the Asia-Pacific market in particular," said Lewis Ward, research manager at IDC.

In order for Nintendo's and Sony's gaming-optimized handhelds to remain ahead of smartphones and tablets on key metrics -- such as ARPU -- these companies and their game card developer and publisher partners will have to redouble their efforts in a number of respects.

IDC believes that digital distribution has reached an inflection point in mobile and portable gaming, and future success will largely boil down to finding a unique balance of freemium business model excellence and that ability to deliver compelling social experiences.

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