Mobile gaming worth $10 billion by 2014

The rapid growth in apps games continues to drive the mobile gaming industry, with the total mobile games market on track to reach nearly US$10 billion worldwide by 2014, according to a new report from Futuresource Consulting. In 2010, the Apple App Store alone, excluding iPad, is forecast to generate around US$1.7 billion in games revenues globally, accounting for almost 30% of the total mobile gaming market.

Apple Apps: 30% of the total mobile gaming market

In comparison, traditional mobile games – mainly downloaded from mobile network operator stores – account for 60%, with other apps stores, in particular the Android market, representing the remaining 10%. “There is no doubt that paid-for apps games are leading the gaming charge,” said Patrik Pfandler, lead mobile analyst at Futuresource, “and our forecasts show apps-based gaming will account for more than 95% of total mobile gaming revenues by 2014 – that’s despite the glut of free apps games out there.

“The growth of in-apps payments is a key ingredient in the commercial success of apps gaming. In the short term we’ll see the rise of the ‘freemium’ business model, where the game is downloaded for free, but incorporates micro-transactions and virtual currencies, encouraging users to unlock additional features, new levels and premium content. In the longer run, we’re going to see ad-funded apps games start to gain more traction as well.

“The accelerating uptake of smartphones has been the primary driver in apps growth, with high quality touchscreens, powerful programmable processors, improved graphics and cameras, increased storage,  security firewalls, accelerometer and GPS all becoming standard and all making their contribution to an improved mobile gaming experience.”

Futuresource expects smartphone ownership to grow by 50% in 2010, achieving 270 million units worldwide, with the uptake being driven by the increased availability of devices, continued strong sales of iPhones and – more recently – a growing demand for Android-powered mobile handsets. And although the Android market currently lacks the variety of quality apps and games titles that can be found in the Apple App Store, Google’s mobile platform is rapidly gaining a share of the apps market, as more games developers and publishers begin to migrate across.

Blu-ray Discs to reach 2 billion by next year

Worldwide pre-recorded Blu-ray video disc production is on track to exceed 400 million units in 2010, an increase of nearly 60% compared with 2009, according to a new research report from Futuresource Consulting. When factoring in PS3 titles, overall production volumes are somewhat higher. “Moving forward we expect to see continued expansion in BD video production volumes, with our forecasts indicating that annual global output will reach two billion discs by 2014,” said Michael Boreham, senior consultant, Disc Manufacturing & Storage Media at Futuresource Consulting.

The Blu-ray replication industry has seen capacity utilization improve markedly during 2010. “As a result of this output expansion, BD capacity utilization will hit nearly 80% in the US during Q4 of this year and 75% in Europe,” said Boreham. “This is about as high as it can comfortably get, and given the continued market expansion expected over the next few years, which is being driven by growing player ownership and falling disc prices, the industry will need to invest further in 2011 to prevent peak quarter disc shortages.

“Production quantities are boosted by the continued pipeline fill and infrastructure requirements. Studios remain committed to maintaining inventory levels to ensure demand can be met in a growing market and retailers are keen to maintain a good level of copy depth in store, to strongly promote BD and eliminate out-of-stocks and lost sales.”

Fiona Hoy, a market analyst at Futuresource Consulting, added, “Bundling discs with hardware is also a factor, and the launch of 3D BD titles has added extra importance to this. As 3D is ideally suited to the BD delivery platform, this is clearly a long-term opportunity for the industry to further sustain consumer interest in packaged entertainment media. From 2012 we’re going to see very strong demand for 3D content, which will fuel additional growth. A number of bundled exclusives are already boosting demand from this sector, such as Avatar with Panasonic displays or How To Train Your Dragon with Samsung displays.”