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Mobile gaming revenue rising

Jared Heng | July 2, 2008
A leading research firm forecasts a boost in mobile gaming revenue this year.

SINGAPORE, 2 July 2008 -- Mobile gaming is set to carve out a niche market for itself, despite currently lagging in popularity behind other value-added entertainment services like music, according to Gartner.

The research firm expects global mobile gaming revenue to reach US$4.5 billion in 2008, up 16.1 per cent from US$3.9 billion in 2007.

Good market potential

"Although current consumer interest in, and usage of, mobile gaming is generally low, the potential for market growth remains lucrative, says Gartner's principal analyst Tuong Huy Nguyen. The market is skewed towards lower-income segments, mobile workers, and smartphone and personal digital assistant users."

Nguyen attributes the healthy growth rate to the fact that mobile gaming provides good value for money. He adds that consumers, especially those in emerging economies where console and PC penetrations are lower, can enjoy a mobile game repeatedly for a relatively small price.

Game publishers and mobile operators are also getting better at working together and becoming more active in the mobile gaming space," Nguyen says.

Responding to demand

According to Gartner, global mobile gaming revenue will register a compound annual growth rate of 10.2 percent between 2007 and 2011, with worldwide end-user spending reaching US$6.3 billion in 2011.

"Mobile operators must maximise customer profiles and devices by tailoring marketing to individual consumer segments," says Jessica Ekholm, another principal analyst at Gartner.

Ekholm adds that such operators should target smartphone users with more-sophisticated mobile games and lower-income users with discounted or advertising-subsidised games. Differentiated service offerings such as 'pay per game' may also encourage usage.

Popularity in Asia-Pacific

Gartner notes that the Asia-Pacific (including Japan) is currently the largest regional market for mobile gaming, with end-user spending forecast to jump from US$2.3 billion in 2008 to US$3.4 billion by 2011.

The research firm's projection is not surprising, given that PC penetration in emerging Asian markets is low compared with that of mobile devices.

India generated some US$80 million in total mobile gaming revenue in 2007, and the figure is forecast to reach US$450 million by 2012, Gartner says. The country is also expected to account the most for total mobile gaming revenue in Asia.

Demand in other regions

Gartner expects the western European and North American mobile gaming markets to be worth US$701 million and US$845 million respectively in 2008. The figures are forecast to reach US$862 million and US$1.2 billion respectively in 2011.

With more North American users than western European users adopting mobile data services, the gap between both regions' mobile gaming revenues should widen from 2008 to 2011, Gartner says.

"Mobile gaming has evolved from being a bundled freebie to a stand-alone value-added service, as well as a growing source of data revenue for operators and publishers alike, says Nguyen. Increased consumer uptake and new industry participants, business models and devices will help further this market in the future."


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