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Who is playing (and paying for) mobile games?

Picture the average gamer. If you think in stereotypes, the image that just popped into your head probably involved a sunshine-deprived nerd clutching an Xbox controller and frantically killing whatever was attacking him in his favourite first person shooter. But what about the smartphone user who spends her spare time flinging birds at pigs and smashes through 10 levels of Cut the Rope while waiting for the bus? Or the Farmville addict who occasionally picks up his or her iPad to play Words with Friends? The gamers, and the gaming industry, are changing.

It’s no longer a case of popping off to the store, paying once for a game and heading home to get started. Now games can be downloaded whenever, played on the move, and paid for upfront, via subscriptions or funded by advertising or in-app purchases. It’s a market that is already taking off: tablet gamers spent a reported US$301-million worldwide last year — and that figure is predicted to hit US$3.03-billion by 2016.

According to a report by Juniper Research, the shift towards more casual mobile gaming is upon us, as people who wouldn’t ever think to buy a full-on console are happily downloading games for their smart devices. It’s impacting the monetization of the games, as developers are now finding more ways to cash in and integrate opportunities for spending real-life (or virtual) currency in the game play.

While the amount of money spent on in-app purchases on tablets is growing, the iPads, Galaxy Tabs and Nexus 7s of the world aren’t making developers the most money (yet). The study predicts that smartphones will continue to be the main device for buying items in the game for a while, and that the amount of cash spent in smartphone games will hit US$6-billion by 2016. Increasingly, gamers in the Far East, China and North America are dominating the expenditure race — they’re the markets predicted to account for over 86% of in-game purchase revenue on tablets in 2016.

ingame purchase revenue

But which types of games are making money — and how? The report found that free casino style games are starting to make more money from in-app purchases, even though the game doesn’t require that you play for real money. Games such as Slotomania, Poker by Zynga and Texas Poker are seeing a sharp increase in the number of users coughing up cash for chips and other items — in some instances spending as much as US$100 in a single transaction, so they can continue to play for hours without interruptions.

But it’s those big spenders who are bankrolling the apps for the rest of the users who want it all to be free. As Juniper’s Si├ón Rowlands points out, “When we consider that only a small amount of gamers actually make in-game purchases, and those that do typically only spend a few dollars, it becomes apparent that there are a small proportion of consumers spending thousands annually on these virtual currencies, who subsidise the game for everyone else.”

In-app purchases aren’t the only way to monetize though — game makers may require a once-off fee, subsidise their expenditure with advertising or brand sponsorship, or offer a free ‘lite’ version of the app which gives users a taste of the game, but requires some monetary input to advance beyond a few limited levels.

Interestingly, the nature of the mobile device is impacting how much time (and money) people are willing to spend on mobile games. For instance, the study found that tablet users generally play games at home when they have more time to really get into a lengthy gaming session. Because the WiFi-only versions of tablets are generally cheaper than the 3G/4G-enabled ones, these tablet owners are also happy to spend more money and time on games, because they can connect to home or public WiFi without worrying about paying additional data charges.

Author | Lauren Granger

Lauren Granger
While studying towards her Bachelor of Journalism degree at Rhodes University, Lauren gave into her fascination with everything digital. As she was more interested in creeping tech sites and Twitter than she was in picking up one of those printed things called 'newspapers', she decided to specialise in... More

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