U.S. Mobile Game Revenues Expected to Double in 2011

U.S. mobile game revenue has started accelerating, fueled by new game publishers coming into the space and the ability to make more than 99 cents per download through the rise of the free-to-play business model.

A report by SNL Kagan said it expects U.S. mobile game revenues to top $1.53 billion this year, which is nearly double revenues in 2010. At that amount, the mobile industry will make up about 7.7 percent of the $20 billion U.S. games market.

Looking further out, SNL Kagan anticipates mobile game revenues to top $7.81 billion in the next decade.

The author, John Fletcher, identified this year’s fourth quarter as a key turning point as consumers download new apps after receiving a smartphone as a gift during the holiday season. During the final three months of the year, he expects U.S. mobile game publishers to generate more than $439.4 million, up 62 percent from $271.7 million in the prior-year period.

He said the revenue growth is being driven by the free-to-play model, which enables publishers to make more than if they were charging 99 cents. While only a few customers actually make in-app purchases, they easily outspend the number of people willing to spend 99 cents on a game they don’t know if they will enjoy.

As the freemium model prevails, he expects newcomers, including Zynga, will make a dent in the space by the fourth quarter. However, Fletcher anticipates incumbent companies, like Electronic Arts and Gameloft, will continue to dominate.

Here’s a list of the Top 10 based on estimated fourth-quarter revenues:

1. EA Mobile
2. Gameloft
3. Ngmoco (owned by DeNA)
4. Rovio Mobile
5. Glu Mobile
6. Capcom
7. Zynga (acquired Newtoy)
8. Sony Pictures Mobile
9. Namco Bandai
10. MocoSpace


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— From the fact sheet for a fake product entitled Useless Plasticbox 1.2 (an actual empty plastic box) placed in L.A.-area Best Buy stores by an artist called Plastic Jesus