Video games have become a big business on our smallest mobile devices. According to a report issued by eMarketer, more than half of all US mobile phone users — roughly 125.9 million people or 39.8 percent of the total US population — will play games on mobile phones this year. The recent explosion of users is projected to result in US mobile gaming revenues growing to $1.78 billion in 2013.
While the recent growth for the mobile gaming industry is impressive, it’s nothing new. The mobile gaming market has grown exponentially over the last few years, with revenues increasing at triple-digit rates in both 2012 and 2011. However, according to eMarketer the continued growth isn’t expected to slow down anytime soon, with revenues expected to reach $3.77 billion by 2017.
In 2013, the largest share of revenues is projected to come from the download of games themselves, with in-game purchases accounting for slightly less. Ad revenues on the other hand are expected to relatively low accounting for $297 million this year, though ad revenue did show the fastest revenues grew the fastest last year and are expected to the same in 2013.
With ad revenues from mobile games continuing to grow it’s expected to make up a bigger portion of revenues in 2014, though in-game purchases will likely outgrow ad revenue between 2014 and 2017. In 2017 eMarketer projects that in-game purchases will account for nearly half of all mobile gaming revenues in the US, with ad revenue accounting for 17.4 percent.
Even after already capturing half of all US mobile users, the mobile gaming is expected to continue to grow at a rapid rate. With most games being free or costing only a few dollars the low cost barrier, has made it easy for users to adopt mobile games. Additionally, the convenience of access through their inherent portability also makes mobile gaming easy to pick up. These combine factors are expected to help the mobile games market grow to 73.5 percent of all mobile users by 2017.
As the mobile games market continues to grow, so does the number of competitors. A number of new products have entered the market targeting the mobile gaming demographic. The most notable among them are likely Nvidia’s new Project Shield handheld console and kickstarter success Ouya. While both products aim to put their own spin on mobile gaming, they also fail to offer what current handsets already provide consumers, accessibility. Part of why the mobile gaming industry has grown rapidly over the last few years is the low barrier to entry, the games are cheap and users already own a device to play them. Perhaps there is room for these competitors to further complement the gaming habits of these new mobile gamers, but it’s unlikely that either product will manage to steal a substantial portion of mobile gaming’s market share.