Mobile Gaming Revenue To Hit $4.5 Billion

Growth in emerging markets and a proliferation of mobile devices will be the key drivers, according to a Gartner report.
While some still picture mobile gaming as a game called "Snake," the market is quickly growing. Worldwide mobile gaming revenues should hit $4.5 billion this year, according to a new report from Gartner.

The report, titled "Dataquest Insight: The Outlook for Mobile Gaming," also estimates the market will have rapid growth. The market will have a compound annual growth rate of 10.2 % between 2007 and 2011, with global revenue reaching $6.3 billion in 2011.

"Although current consumer interest in, and usage of, mobile gaming is generally low, the potential for growth remains lucrative, with the market skewed toward lower-income segments, mobile workers, and smartphone and personal digital assistant users," said Tuong Huy Nguyen, principal analyst at Gartner, in a statement.

"As voice revenues decline, mobile operators need to find ways to offset this downward trend, and mobile gaming has considerable growth potential," Nguyen said. "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. Increased consumer uptake and new players, business models and devices will help further this market in the future."

One reason for the expected increase is the increased popularity of video games in general. As mobile phones become more sophisticated, the user experience becomes similar to what consumers already expect out of their games.

Another factor is that mobile gaming provides a relatively good value for the money. This will be especially significant as more emerging economies adopt cell phones.

"Emerging market operators should make the most of the demand for mobile games and the low personal computer penetration in these regions and push game sales as a viable, albeit imperfect, lower-cost substitute to PC and console games," said Madhusudan Gupta, senior analyst at Gartner.

The Asia/Pacific region is the largest mobile gaming market, with revenues forecasted to total $2.3 billion in 2008. That figure is expected to reach $3.4 billion in three years as Asian territories have a low PC penetration rate compared with that of mobile devices.

In Western Europe, the market is expected to grow from $701 million in 2008 to $862 million in 2011. For North America, the revenue should grow from $845 million to about $1.2 billion in 2011.

Cell phone manufacturers are noticing the growing demand for mobile gaming. Sony Ericsson recently unveiled a phone that lets users control games using built-in motion sensors, similar to the Nintendo Wii.

Apple will also make a big push for mobile gaming on its iPhone 3G. The upcoming application store combined with the device's graphics capability make the iPhone 3G a potent gaming machine.