Report: In-Game Purchases Will Drive Mobile Revenues To $11B By 2015

UK-based Juniper Research said Tuesday total end-user revenues for mobile games will hit $11 billion annually worldwide by 2015, nearly double the $6 billion recorded in 2009, driven by in-game purchases. By 2013, Juniper said, revenues from in-game purchases will overtake revenues from traditional pay-per-download games. Driving that growth for in-game purchases will be the in-app purchasing system on Apple iOS devices, the research firm said. Apple said last year that it would begin allowing developers to release games on the App Store that are free to download but supported by in-game buys. Companies like Ngmoco, which was acquired by Japanese social game company DeNA earlier this year for $400 million, helped lead a move toward microtransaction-based "freemium" games on the App Store with titles such as Eliminate and Touch Pets. Developers using this business model give the base game away for free, and offer add-on content such as levels, clothes or weapons for a fee. However, Juniper said that despite the expected growth of in-game purchase revenues, discoverability -- or users' ability to sift through the tens of thousands of games on the App Store to find the true gems -- will remain a hurdle for developers. Report author Daniel Ashdown said, "Discoverability can be a 'chicken and egg' problem: high downloads lead to prominence, but achieving a high number of downloads is largely dependent on already being prominent. Consequently, a small minority of games achieve very high downloads, whilst the vast majority achieve very small download figures."