Mobile Games.

Overview

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- High Value Strategic Assessment
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This sixth edition of the mobile games report investigates a number of mobile games business models considering the opportunities for freemium content, including in-app purchases, as an alternative to the traditional pay-to-download approach.

Key forecasts include the number of users downloading mobile games, the number of downloads (both offstore and onstore) as well as end-user revenues (pay-per-download and in-game purchases) and mobile advertising expenditure revenues (adspend).

As part of a detailed strategy assessment the report analyses the decline in Java and BREW platforms in relation to the mass deployment of app stores, as well as considering the positive impact of handset development, and highlights challenges to further development of the market, such as, discoverability, and OS fragmentation.

Table of Contents

Executive Summary

1. The Mobile Games Industry

1.1 Introduction   
1.2 Development Platforms   
1.2.1 White Label   
1.2.2 Branded   
1.3 The Value Chain   
1.3.1 The Traditional Value Chain   
Figure 1.1: Traditional Value Chain of Mobile Games   
Figure 1.2: Mobile Games Value Web   
1.3.2 The App Store Value Chain   
Figure 1.3: App Store Value Chain   
1.4 Business Models   
1.4.1 Pay Per Download   
i. Pricing the App   
a. Case Study: Bolt Creative   
Product: Pocket God   
Figure 1.4: Bolt Creative\'s Pocket God   
1.4.2 Free to Download   
i. Advertising   
a. Case Study: GreyStripe   
b. Case Study: iAd (Apple)   
c. Case Study: AdMob (Google)   
ii. Marketing   
a. Case Study: Fishlabs   
Figure 1.5: Fishlab\'s Barclaycard-Branded Waterslide Extreme on the iPhone   
Figure 1.6: Fislabs\'s Volkswagen-Branded Games VW Polo (left) and VW Scirocco 24 Hour Cup (Right) on the iPhone   
1.4.3 Freemium   
i. Types of Freemium Games   
a. Lite Games   
b. In-Game Purchases   
ii. Freemium Billing Mechanisms   
Figure 1.7: In-App Purchases Via Store Kit   
1.5 Delivery Technology   
1.6 Genres   
1.6.1 Action   
Figure 1.8: Screenshots of Action Games on the Mobile   
Figure 1.9: iPhone Accelerometer   
1.6.2 Role-Playing Games   
Figure 1.10: Gamevil\'s RPG Zenonia on the iPhone   
Figure 1.11: 1000: Find \'Em All on the iPhone   
a. Case Study: Spacetime Studios\' Pocket Legends   
Figure 1.12: Pocket Legends on the iPhone   
1.6.3 Simulation   
Figure 1.13: Tamagotchi: Round the World on the iPhone   
1.6.4 Casual Games   
a. Case Study: Rovio\'s Angry Birds   
Figure 1.14: Rovio\'s Angry Birds on the iPhone   
1.6.5 Traditional Games   
Figure 1.15: Electronic Arts\' Monopoly (left) and The Game of Life Classic Edition (right) on the iPhone   
1.6.6 Excluded Genres   
1.7 Trends   
1.7.1 The Decline of Java and BREW   
Figure 1.16: Market Share of Non-iOS/Android Mobile Games Development Platforms Split by 8 Key Regions 2008-2010   
Table 1.1: Market Share of Non-iOS/Android Mobile Games Development Platforms Split by 8 Key Regions 2008-2010   
1.7.2 Simplified Value Chain Leads to an Egalitarian Food Chain   
1.7.3 Mobile Games Become Marketing Tools   
Table 1.2: Selected Brand/Product-Sponsored Games and Number of Downloads   
1.7.4 Freemium Games Aid Discoverability   
1.7.5 Improvements in Handset Technology Spur Game Development   
Table 1.3: Handset Technology Development of Selected Manufacturers and Models, 2008-2010   
1.7.6 User Demographic Shifts   
i. By Age   
Figure 1.17: Percentage of US Teenagers Who Have Played a Game on Their Cell Phone By Age (12-17)   
ii. By Gender   
iii. By Region   
Figure 1.18: Market Share of Mobile Users Who Download Mobile Games Split By 8 Key Regions 2007-2009   
Table 1.4: Market Share of Mobile Users Who Download Mobile Games Split by 8 Key Regions 2007-2009

2. The Market for Mobile Games: Downloads

2.1 Introduction   
2.2 Methodology   
Figure 2.1: Bottom-Up Methodology for Derivation of Onstore Mobile Game Adoption, Usage and PPD (Pay-Per-Download) Revenues   
Figure 2.2: Bottom-Up Methodology for Derivation of Offstore Adoption, Usage and PPD (Pay-Per-Download) Revenues   
2.3 Global Mobile Subscriber Forecast   
Figure 2.3: Global Mobile Subscriber Forecast (m) Split by 8 Key Regions 2009-2015   
Table 2.1: Global Mobile Subscriber Forecast (m) Split by 8 Key Regions 2009-2015   
2.4 Mobile Games Users and Usage   
Table 2.2: Percentage of Mobile Users Who Download Mobile Games Split by 8 Key Regions 2009-2015   
Figure 2.4: Number of Mobile Users (m) Who Download Mobile Games Split by 8 Key Regions 2009-2015   
Table 2.3: Number of Mobile Users (m) Who Download Mobile Games Split by 8 Key Regions 2009-2015   
2.5 The Retail Market for Onstore Mobile Games   
2.5.1 Onstore Users and Usage   
Table 2.4: Percentage of Mobile Game Downloaders (m) who Download via App Stores Split by 8 Key Regions 2009-2015   
Figure 2.5: Number of Mobile Game Downloaders (m) who Download via App Stores Split by 8 Key Regions 2009-2015   
Table 2.5: Number of Mobile Game Downloaders (m) who Download via App Stores Split by 8 Key Regions 2009-2015   
Figure 2.6: Average Number of Onstore Mobile Game Downloads per User per Year Split by 8 Key Regions 2009-2015   
Table 2.6: Average Number of Onstore Mobile Game Downloads per User per Year Split by 8 Key Regions 2009-2015   
Figure 2.7: Total Number of Onstore Mobile Game Downloads (m) per Year Split by 8 Key Regions 2009-2015   
Table 2.7: Total Number of Onstore Mobile Game Downloads (m) per Year Split by 8 Key Regions 2009-2015   
2.5.2 Retail Value of Onstore Mobile Games   
Table 2.8: Percentage of Onstore Mobile Game Downloads which are Paid For Split by 8 Key Regions 2009-2015   
Figure 2.8: Number of Onstore Mobile Game Downloads (m) which are Paid for Split by 8 Key Regions 2009-2015   
Table 2.9: Number of Onstore Mobile Game Downloads (m) which are Paid for Split by 8 Key Regions 2009-2015   
Table 2.10: Average Price ($) of Onstore Mobile Game Downloads Split by 8 Key Regions 2009-2015   
Figure 2.9: Retail Value ($m) of Onstore Mobile Games Split by 8 Key Regions 2009-2015   
Table 2.11: Retail Value ($m) of Onstore Mobile Games Split By 8 Key Regions 2009-2015   
2.6 The Retail Market for Offstore Mobile Games   
2.6.1 Offstore Users and Usage   
Table 2.12: Percentage of Mobile Game Downloaders who Download Offstore Split by 8 Key Regions 2009-2015   
Figure 2.10: Number of Mobile Game Downloaders (m) Who Download Offstore Split 8 Key Regions 2009-2015   
Table 2.13: Number of Mobile Game Downloaders (m) Who Download Offstore Split by 8 Key Regions 2009-2015   
Figure 2.11: Average Number of Offstore Game Downloads per User per Year Split by 8 Key Regions 2009-2015   
Table 2.14: Average Number of Offstore Game Downloads per User per Year Split by 8 Key Regions 2009-2015   
Figure 2.12: Total Number of Offstore Game Downloads per Year (m) Split by 8 Key Regions 2009-2015   
Table 2.15: Total Number of Offstore Game Downloads per Year (m) Split by 8 Key Regions 2009-2015   
2.6.2 Retail Value of Offstore Mobile Games   
Table 2.16: Percentage of Offstore Game Downloads Which are Paid For Split by 8 Key Regions 2009-2015   
Figure 2.13: Number of Offstore Game Downloads (m) Which are Paid for Split by 8 Key Regions 2009-2015   
Table 2.17: Number of Offstore Game Downloads (m) Which are Paid for Split by 8 Key Regions 2009-2015   
Table 2.18: Price ($) per Download of Offstore Mobile Games Split by 8 Key Regions 2009-2015   
Figure 2.14: Retail Value ($m) of Offstore Mobile Games Split by 8 Key Regions 2009-2015   
Table 2.19: Retail Value ($m) of Offstore Mobile Games Split by 8 Key Regions 2009-2015   
2.7 Total Retail Market for Mobile Games   
2.7.1 Games Usage Levels   
Figure 2.15: Total Mobile Games Downloads (m) Per Year Split by 8 Key Regions 2009-2015   
Table 2.20: Total Mobile Games Downloads (m) Per Year Split by 8 Key Regions 2009-2015   
Figure 2.16: Total Mobile Games Downloads (m) Split by Onstore/Offstore 2009-2015   
Table 2.21: Total Mobile Games Downloads (m) Split by Onstore/Offstore 2009-2015   
2.7.2 Games Retail Revenues   
Table 2.22: Total Download Revenues ($m) of Mobile Games Split by 8 Key Regions 2009-2015   
Figure 2.17: Total Download Revenue ($m) of Mobile Games Split by 8 Key Regions 2009-2015   
Figure 2.18: Total Download Revenues ($m) of Mobile Games Split by Onstore/Offstore 2009-2015   
Table  2.23: Total Download Revenues ($m) of Mobile Games Split by Onstore/Offstore 2009-2015

3. The Market for Mobile Games: In-Game Purchases

3.1 Introduction   
3.2 Methodology   
Figure 3.1: Bottom Up Methodology for Derivation of Onstore/Offstore End-User Mobile Games Revenues   
3.3 The Market for In-Game Purchases for Onstore Games   
3.3.1 Onstore Users and Usage   
Table 3.1: Percentage of Onstore Downloaded Games That Include In-Game Purchases Split by 8 Key Regions 2009-2015   
Figure 3.2: Number of Onstore Downloaded Games (m) That Include In-Game Purchases Split by 8 Key Regions 2009-2015   
Table 3.2: Number of Onstore Downloaded Games (m) That Include In-Game Purchases Split by 8 Key Regions 2009-2015   
Figure 3.3: Average Number of In-Game Purchases Per Onstore Upselling Download Split by 8 Key Regions 2009-2015   
Table 3.3: Average Number of In-Game Purchases Per Onstore Upselling Download Split by 8 Key Regions 2009-2015   
Figure 3.4: Total Number of Onstore In-Game Purchases (m) Split by 8 Key Regions 2009-2015   
Table 3.4: Total Number of Onstore In-Game Purchases (m) Split by 8 Key Regions 2009-2015   
3.3.2 In-Game Purchase Revenues for Onstore Games   
Table 3.5: Price ($) Per In-Game Purchase for Onstore Downloads Split by 8 Key Regions 2009-2015   
Figure 3.5: In-Game Purchase Revenues ($m) from Onstore Downloads Split by 8 Key Regions 2009-2015   
Table 3.6: In-Game Purchase Revenues ($m) from Onstore Downloads Split by 8 Key Regions 2009-2015   
3.4 The Market for In-Game Purchases for Offstore Games   
3.4.1 Offstore Users and Usage   
Table 3.7: Percentage of Offstore Downloaded Games That Include In-Game Purchases Split by 8 Key Regions 2009-2015   
Figure 3.6: Number of Offstore Downloaded Games That Include In-Game Purchases Split by 8 Key Regions 2009-2015   
Table 3.8: Number of Offstore Downloaded Games That Include In-Game Purchases Split by 8 Key Regions 2009-2015   
Figure 3.7: Average Number of In-Game Purchases Per Offstore Upselling Download Split by 8 Key Regions 2009-2015   
Table 3.9: Average Number of In-Game Purchases Per Offstore Upselling Download Split by 8 Key Regions 2009-2015   
Figure 3.8: Total Number of Offstore In-Game Purchases (m) Split by 8 Key Regions 2009-2015   
Table 3.10: Total Number of Offstore In-Game Purchases (m) Split by 8 Key Regions 2009-2015   
3.4.2 In-Game Purchase Revenues for  Offstore Games   
Table 3.11: Average Price ($) per In-Game Purchase from Offstore Downloads Split by 8 Key Regions 2009-2015   
Figure 3.9: In-Game Purchase Revenues ($m) from Offstore Downloads Split by 8 Key Regions 2009-2015   
Table 3.12: In-Game Purchase Revenues ($m) from Offstore Downloads Split by 8 Key Regions 2009-2015   
3.5 Total Market for In-Game Purchases   
Figure 3.10: Total In-Game Purchase Revenues ($m) Split by 8 Key Regions 2009-2015   
Table 3.13: Total In-Game Purchase Revenues ($m) Split by 8 Key Regions 2009-2015   
Figure 3.11: Total In-Game Purchase Revenues ($m) Split by Onstore/Offstore 2009-2015   
Table 3.14: Total In-Game Purchase Revenues ($m) Split by Onstore/Offstore 2009-2015   
3.6 Total End User Market for Mobile Games   
3.6.1 The Implications of the App Store Model   
Figure 3.12: Mobile Games End-User Revenues Split by PPD (Pay-Per-Download) and In-Game Purchases 2009-2015   
Table 3.15: Mobile Games End-User Revenues Split by PPD (Pay-Per-Download) and In-Game Purchases 2009-2015   
Figure 3.13: Mobile Games End-User Revenues (PPD and In-Game Purchases) ($m) Split by Onstore/Offstore 2009-2015   
Table 3.16: Mobile Games End-User Revenues (PPD and In-Game Purchases) ($m) Split by Onstore/Offstore 2009-2015

4. The Market for Mobile Games: Advertising

4.1 Introduction   
4.2 Methodology   
Figure 4.1: Methodology for Determining Games-Derived Mobile Adspend, Cost per Click-through Based Model   
4.3 The Market for Mobile Games Adspend   
4.3.1 Ad Exposure Levels   
Table 4.1: Percentage of Games Downloads Featuring In-Game Advertising Split by 8 Key Regions 2009-2015   
Figure 4.2: Number of Games Downloads (m) Featuring In-Game Advertising Split by 8 Key Regions, 2009-2015   
Table 4.2: Number of Games Downloads (m) Featuring In-Game Advertising Split by 8 Key Regions 2009-2015   
Figure 4.3: Number of Advertisements Viewed per Download per Year Split by 8 Key Regions, 2009-2015   
Table 4.3: Number of Advertisements Viewed per Download per Year Split By 8 Key Regions 2009-2015   
Figure 4.4: Total Ads Viewed (m) Split by 8 Key Regions 2009-2015   
Table 4.4: Total Ads Viewed (m) Split by 8 Key Regions 2009-2015   
4.3.2 Response Rates   
Table 4.5: Response Rates to Ads Viewed (Clickthroughs) in Mobile Games Split by 8 Key Regions 2009-2015   
Figure 4.5: Total Responses to Ads Viewed (Click Throughs) in Mobile Games Split by 8 Key Regions 2009-2015   
Table 4.6: Total Responses to Ads Viewed (Click Throughs) in Mobile Games Split by 8 Key Regions 2009-2015   
4.3.3 Ad Pricing and Total AdSpend   
Table 4.7: Cost Per Clickthrough (CPC) within Mobile Games Split by 8 Key Regions 2009-2015   
Figure 4.6: Total AdSpend ($m) on Mobile Games Split by 8 Key Regions 2009-2015   
Table 4.8: Total AdSpend ($m) on Mobile Games Split by 8 Key Regions 2009-2015

5. Hurdles and Regulations

5.1 Hurdles   
Table 5.1: Hurdles to Development in the Mobile Games Market   
5.1.1 App Store Crowding   
5.1.2 Tiered Data Pricing   
5.1.3 OS Fragmentation   
5.1.4 Network Coverage   
5.1.5 Freemium Games   
5.1.6 Piracy   
5.2 Content Regulation   
Table 5.2: Apple\'s iTunes Applications Ratings   
Figure 5.1: iPhone Parental Controls

6. Key Players in the Mobile Games Industry

6.1 Introduction   
6.2 Selected Developers and Publishers   
6.2.1 Activision   
Table 6.1: Activision Blizzard\'s Net Revenues ($m) 2005-2009   
Figure 6.1: Activision\'s Crash Bandicoot Nitro Kart 3D on the iPhone   
6.2.2 Com2uS   
Table 6.1: Com2uS Total Revenue, Operating Income and Net Income ($m) 2007-2009   
Figure 6.2: Com2uS\' Homerun Battle 3D on the iPhone   
6.2.3 Digital Chocolate   
Figure 6.3: Digital Chocolate\'s Crazy Catapult Penguin on the iPhone   
6.2.4 Electronic Arts (EA)   
Table 6.2: Electronic Arts, Inc. Global Net Revenues ($m) Split By Category (Total Console, PC, Total Wireless, Mobile & Licensing) 2008-2010   
Figure 6.4: Screenshot of EA Mobile\'s Madden NFL 11   
Table 6.3: Top 10 Grossing Games on Apple\'s App Store 2009   
Table 6.4: Electronic Arts\' Mobile Games on Apple\'s App Store Chart of the Top 100 Paid Apps, 18th November 2010   
6.2.5 Firemint   
Figure 6.6 Flight Control Sales By Week, w/c 23 March 2009 to w/c 18 January 2010   
Figure 6.5: Firemint\'s Flight Control (left) and Real Racing (right) on the iPhone   
6.2.6 Fishlabs   
Figure 6.8: Fishlabs\' Galaxy On Fire (left) and Galaxy on Fire 2 (right) on the iPhone   
6.2.7 Gameloft   
Table 6.4: Gameloft Net Sales ($m) 2005-9M 2010   
Figure 6.9: The Oregon Trail (left) and Asphalt 5 HD (right) on the iPhone   
Table 6.5: Top-Rated Games on Apple\'s App Store, 2009   
6.2.8 Gamevil   
Table 6.6: Gamevil\'s Sales ($m) 2008-9M 2010   
Table 6.7: Gamevil\'s Game Prices ($) and Ratings/Downloads Split By Store (App Store, Android Market) 18th November 2010   
Figure 6.11: Baseball Superstars 2010 (left) and Soccer Superstars (right) on the iPhone   
6.2.9 Glu Mobile   
Table 6.12: Glu Mobile\'s Revenues ($m) 2008-9M 2010   
Figure 6.12: Glu Mobile\'s Deer Hunter 3D (left) and Super KO Boxing 2 (right) on the iPhone   
6.2.10 Take-Two Interactive Solutions (2K Games and Rockstar Games)   
Table 6.8: Take-Two Interactive Solutions Inc. Net Revenue ($m) and Net Income ($m) 2005-2009   
Figure 6.13: 2K Games\' Civilisation Revolution (left) on Apple\'s iPhone and Rockstar Games\' Grand Theft Auto: Chinatown Wars HD (right) on Apple\'s iPad   
6.3 Key Distributors: Apple, GetJar, Google, and Nokia   
Figure 6.14: Global App Downloads to Mobile Handsets (m) Split By Storefront (Android Market, App Store, GetJar, Ovi, Other)   
Table 6.9: Global App Downloads to Mobile Handsets (m) Split By Storefront (Android Market, App Store, GetJar, Ovi, Other) 2008-2010   
6.3.1 Apple   
Table 6.9 Apple Inc. Revenue and Net Income ($bn) 2005-2009 (FYE September 30)   
Table 6.10: Evolution of Apple\'s iPhone   
6.3.2 Google   
Table 6.11: Google Inc. Revenue ($bn) Split By Type of Revenue (Total Advertising, Web Sites, Network Web Sites, Licensing and Other Revenues) 2005-2009   
Figure 6.15: Google\'s Android Market   
6.3.3 Nokia   
Table 6.12: Nokia\'s Net Sales ($m) 2005 to Q3 2010   
Figure 6.16: Nokia\'s Ovi Store Payment Options By Country   
6.3.4 GetJar   
6.3.5 Operators   
i. Operator App Stores   
a. OHA (Open Handset Alliance)   
b. WAC (Wholesale Application Community) and JIL (Joint Innovation Lab)

Glossary

Companies Referenced

Activision, AdMob (Google), Apple, AT & T, Barclaycard, Bolt Creative, Capybara, Com2uS, Connect2Media, Digital Chocolate, Electronic Arts, Finblade, Firemint, Fishlabs, Gameloft, Gamevil, GetJar, Glu Mobile, Google, Greystripe, Handango, HTC, iAd (Apple), LG, Microsoft, Motorola, Nintendo, Nokia, Oracle, Qualcomm, Rovio, Samsung, Sony Ericsson, Spacetime Studios, Symbian, Take-Two Interactive Solutions, Vodafone, Volkswagen.