A new report published today by Juniper Research forecasts that adspend on mobile games will increase tenfold over the next five years. By 2015, adspend on this platform will reach $894 million, up from $87 million in 2010, fuelled by increasing brand interest in mobile as an advertising channel, and apps – of which games are the dominant sector.
In the report, games such as Rovio’s Angry Birds are making a significant impact through offering full versions of their games free to end-users and funding them through in-game advertising. Opportunities in this area have been strengthened by the launch of key platforms designed to optimise the deployment of ads within applications, most notably Apple’s iAd in July 2010. Similarly, Juniper says it found that games are being successfully deployed as marketing tools by brands, such as, Barclaycard and Volkswagen, providing new revenue opportunities for developers, such as, Fishlabs and Firemint.
According to Mobile Games report author Daniel Ashdown, “Angry Birds has been a huge hit over the last year on the iPhone since its launch; but arguably its relative impact, in terms of downloads, has been bigger on Getjar and, more recently, on Android Market, as a result of offering the game free with ads. Users get a great game for free, but advertisers get significant product/brand exposure; the same is true of mobile games as marketing tools.”
Nevertheless, the report forecasts that, while growth in adspend on mobile games will be higher than end-user revenues, this latter business model will continue to be the primary source of revenue for players in the industry. By 2015, end-user revenues, which comprise those from pay-per-download and in-game purchases, will still be ten times higher than adspend, says Juniper.