The mobile gaming business is poised to top $12 billion in worldwide revenues this year and it's only getting bigger, according to a report from analytics firm App Annie and International Data Corporation. The two companies released their findings at E3 last week.
The companies believe that in 2012, there were 800 million portable devices used for gaming, including tablets, smartphones, and dedicated gaming handhelds like the PlayStation Vita and 3DS. By the end of next year, IDC and App Annie expect that to jump to 1.2 billion devices. While they expect tablets and smartphones to take up a larger market share, the actual installed user base for gaming handhelds is expected to hold more or less steady.
The revenue mix for portable gaming is also changing, with microtransactions making up more than half of the market's revenues this year. App Annie and IDC put the in-app purchase model behind 51 percent of this year's portable revenues, with pre-paid options (either for handheld games or premium mobile titles) accounting for 44 percent, with the remaining slice of the pie accounted for by advertising. In 2012, the group believes microtransactions accounted for about 40 percent of total portable gaming revenue.
The report showed clear momentum for mobile and tablet gaming, but there was also a hint of optimism for dedicated gaming handhelds. IDC and App Annie expect 2014 to see portables like the 3DS and Vita finally reverse a trend of falling average revenue per user, projecting a jump from a low under $15 this year to somewhere in the $19 range by the end of 2014. Smartphone and tablet average revenue per user is projected to be down slightly, but still north of $10.
Finally, the report identified some key growth markets for the mobile business. On iOS, the US, Japan, and China saw significant gains in the first quarter of 2013, while Japan and South Korea posted "astonishing" growth for Android revenues in the same time frame.
Data for the report was pulled from App Annie's analytics software, which is currently used by more than 190,000 apps and more than 80 percent of the top 100 highest grossing iOS publishers.