Data & Research

Social games to dominate as in-app purchase revenue doubles to $4.8 billion by 2016, reports Juniper Research

Social games to dominate as in-app purchase revenue doubles to $4.8 billion by 2016, reports Juniper Research
Rather than foretelling any great ground shift, more often than not industry projections published by research firms tend to paint a picture of more of the same.

Juniper Research's latest take on the mobile market, for instance, suggests the culture of free-to-play releases currently taking hold of the industry isn't going to go away.

Rather, as users become more acclimatised to the idea of in-app purchases, annual spending is going to surge.

In-app purchase power

Between now and 2016, Juniper believes revenue generated from purchases made in-game will more than double from $2.1 billion in 2011 to 4.8 billion in 2016.

It's a rise Juniper puts down to pure momentum.

As gamers become more comfortable with not paying for games up front, splashing out during play itself instead, so more developers currently delivering paid releases will be tempted into serving up freemium titles.

Juniper also maintains developers are quickly learning free releases have other benefits to offer, too.

Piracy play

"An increasing number of games developers are finding the in-game purchase model attractive simply because it provides easy answers,” said report author Charlotte Miller.

“Their piracy rate will drop and the game will see more downloads. However, while some games may generate significant revenues from in-game items, the model doesn't work with all games and developers have to tread a fine line between encouraging purchases and appearing to be exploitative."

Hand in hand with this in-app purchase revenue rise will be the increasing popularity of social and casual releases, with Juniper predicting they'll both "account for the lion's share of mobile games downloads" between now and 2016.

Games on feature phones will, in turn, decline over the next five years, while Juniper believes tablets will increasingly become a main port of call for many gamers.

The full white paper can downloaded from Juniper's website for £1,750.

With a fine eye for detail, Keith Andrew is fuelled by strong coffee, Kylie Minogue and the shapely curve of a san serif font.

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