Industry Forecasts

Industry Forecasts, Research, Resource
We love hearing good news about the In-App Purchase market growing bigger so we were very excited to hear about the new research from Gartner .
For those of you who aren’t familiar with this type of company, Gartner is a research firm that tries to predict how different markets will preform over the next year. Their projections usually come true and many companies and financial institutes really on their reports for making big decisions.
The last year was a pivotal one in terms of the mobile app market. This year In-App Purchase not only proved to be a viable model but actually proved to be the fastest growing area in the mobile industry. Gartner’s report is the first one to reflect that change so it’s interesting to see what they came up with.
Here are some interesting predictions made by the report:
  • The number of app downloads in 2013 will reach 102 Billion
  • 90% of the downloads will be for free apps.
  • By 2017 Gartner expect the annual app downloads number to reach 268 Billion
  • The expected revenue generated by mobile apps in 2017 is expected to be $77 Billion
  • Out of that total revenue, In-App Purchase revenues are expected to be 48% or $36 Billion
  • The advertising revenues in mobile apps are expected to grow drastically from $1.85 Billions in 2013 to over $10 Billions in 2017
We put the numbers on a chart to illustrate how big the growth in this market is:
App Market Growth
You might also find the detailed revenue numbers useful. Here are the figures projected by Gartner for the next few years:
a table of in app purchase sales and revenue
The report also provides detailed app download forecast in the table below:
Table 1. Mobile App Store Downloads, Worldwide, 2010-2016 (Millions of Downloads)
Free Downloads
Paid-for Downloads
Total Downloads
Free Downloads %
Source: Gartner (September 2013)
As expected, free apps will continue to dominate the market in the next years. If you are considering making a mobile game these days, what the growth in the numbers should tell you is that you still have a very good shot of making it. Markets that are growing quickly present more opportunities for small players and challenges for the bigger ones. The trick is to look for the sections that grow really quickly and try to innovate within them. Let’s see which section is growing at the quickest rates in the chart below.
App Market Growth worlwide, in millions of dollars
The obvious response is that the place to be these days is a free app with In-App Purchases. If you are making an app like that, you are in the right place. SOOMLA has many other resources for free to play design, In-App Purchase coding examples and more. Feel free to explore and let us know what else you need.
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Industry Forecasts, Research, Tips and Advice
As a company who strongly believe in the democratization of mobile game development we are constantly looking for signs that indie developers are winning. Traditionally the video games industry was controlled by giant corporations that didn’t leave room for anyone else. Mobile games changed all that and these days any small studio can make a game and what is most important is that they can make it to the top 25 as well. The next big hit can be yours so don’t stop believing.
Want some more data? First of all you should look at what it means to rank in the top 25? According to research firm Distimo, the top 50 app is being downloaded 23K times per day. We are interested in games (not all apps) so here is the data:
  • 1st place ~ 72K installs/day
  • 10th place ~ 47K installs/day
  • 25th place ~ 20K installs/day
So who made it to the top 25 downloaded games? Some titles are familiar names like: Where is my water 2, Grand theft auto and Candy crush saga but along with them there are 11 games by small developers. The charts can be quite dynamic but we could count 8-15 indie titles in the iOS top 25 of pretty consistently and over 15 in Android. Here is a snapshot from September 18th 2013.

the top 25 most installed mobile games list


Another interesting conclusion one can make by combining these numbers is that the top 200 free games only account for less than 10% of the total downloads. Please check my math:
  • Each top 200 games average 10K installs/day
  • Total game installs for top 200 games is 2M/day
  • In a full year that’s 730M
  • Total game installs/year for iOS is estimated at 8B

The number of 8B game app installs is based on these 3 articles:

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Industry Forecasts, Research

We were excited to realize that more and more game developers are looking for a off the shelf store-front solution for their mobile game. The search trend on Google for the term In App Purchase Store clearly shows that.

In App Purchase Store trends in a chart provided by google
SOOMLA offers a solution exactly to this problem but solving the problem is not enough. We need mobile game developers to know that In-App Purchase Stores can be easily created using our platform. Help us spread the word by sharing this post.
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There has been a lot of talk recently about game funding. On one hand, venture capital firms still have bad taste from seeing giants like Zynga struggling to show consistent success in mobile. On the other hand, publishers have had trouble turning their market presence into success for their 3rd party titles. If you look at the top 25 charts, there are no ‘publisher games’ in there.
Does the VC model fit the volatile gaming industry?
Is the publisher model still relevant in the world of digital distribution?
Will we see a new model for funding games?

These are the question that everyone is trying to answer.
What Do Game Developers Say
  • There is still a need for a partner to handle the commercial elements: funding, distribution, expertise and a bundle of tools and services that can accelerate the project and revenue. Out of all these, funding is the most important to developers.
  • Distribution only deals can work only for international markets that have a specific advantage to a local partner. The publishers’ ability to cross promote titles in his successful games is limited and most 3rd party titles end up ‘on the bench’ after a short period of time. At the same time, local markets that require special expertise are easier to tackle with a partner. A good example of that is the Chinese market.
  • The two main flows of standard publisher deals for free 2 play games:
    • The revenue split model kills the ability to acquire users. On every dollar made via IAP, 30 cents goes to Apple/Google and the rest is split between the developer and the publisher. It means that even with an ARPU of $2, buying users at $1/user is not profitable for either side.
    • In deals that have an advance for the developer, that advance is taken from the game revenues in the first few months. In free 2 play games, these months are critical and the developer needs to tweak the game and listen to customer feedback but he can’t focus on that as the deal starves him.
  • Equity deals have their own problems:
    • You give away a part of the company, including all the titles that will come in the future.
    • Venture Capital firms are a better fit when the studio has a special formula for making hit games. However, if your studio is focused on creating unique IP (content IP) there will be misalignment of interests in the long term.
Bottom line, both models have fundamental flaws. There might be a room for new funding methods but until we see new ones the best option might be to stomach it and publish games on your own.
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Industry Forecasts

I don’t know about you but every time I hear about the possibility of using my iPhone or android device as a game controller for a game that plays on TV, I get really excited. The concept is not new. In fact, I’m quite sure that you already thought about it yourself even before it had a name. It’s just so intuitive.

designing a game for the big screen requires more work compared to designing for a phone.

One might ask himself how is it possible that we don’t see many games like that given the huge potential. Well, there are still a few challenges that make it a bit harder then it seems initially. Just to pick a few, designing a game for the big screen requires more work compared to designing for a phone. The chances of a given house hold to have both a smartphone and a SmartTV is not that big at the moment. In addition, the development tools are not there yet especially given the cross platform requirement.

This is why I got really excited when I saw Unity is making a big move in the right direction with the new 4.1 version. Unity is in the perfect position to move this market forward. They are the leader in cross platform game development so game developers can use a single platform to develop a game that will be compatible with a large number of TV sets and devices. While Unity is already one of the quickest ways to design great games for mobile, the new feature extends the same capabilities into games that use an iPhone or iPad as a controller.

The market for TV games is far bigger compared to mobile games or iPad games but until recently the barriers to enter the market were very high. Google and Apple are reducing the entry barriers on the hardware side and If unity will keep this line and commit to this market, the opportunities for quick game developers could be significant.

Another question that will be interesting to see is the monetization model. Given the dominance of In-App Purchase in recent years for both social, online and mobile games, it’s safe to assume that it will stay dominant in this market as well. How does an In-App Purchase store looks like on two screens? That is still something developers will have to figure out.

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Industry Forecasts

Amazon recently announced the launch of a global coin allowing game developers for the kindle fire to recognize it as a form of payment for in app purchases. This is not a new idea, far from it. One might remember that Facebook discontinued a similar service by the name of Facebook credits or Playspan’s credits before that. On the other hand, when have you seen Amazon launching a service and fails? That hardly happens.


While history might suggest Amazon is likely to fail, the reality is that amazon has all the tools to make this work. More then anything else, a meta credit system like the one amazon is launching is about bringing new money into the game. Imagine a scenario in which a grandmother wants to give a present to her grand kid. This is very hard to achieve with any sort of in app payment that requires the both of them to take action at the same time and decide in advance where they are going to spend the gift. The global coin solution acts in this situation very much like a gift card that can be used in various stores. This is one area where amazon brings specific expertise.

In addition the commerce giant has proven success in marketing digital products and specifically gift cards. One can imagine a how amazon can fit this product in their usual sales tools. For example, a kid could add the Amazon coins to his amazon wishlist. Another example would be recommending the Amazon coin as a complementing item to a kindle fire purchase. Last example but maybe the most interesting one is Amazon’s ability to use the global coin as a reward mechanism for loyal customers who buy consumer electronics or other type of products at the amazon store and will be more likely to buy at due to the reward. This practice in already in place by offer wall providers such as TapJoy but there is no doubt that Amazon could do a much better job with this being on both the mobile device side as well as the retail side of the equation.

These are all tools that amazon have proven success with and have refined over the years. From this reason, what might look like a gamble at first sight might actually be a very well thought of strategic move which can pay high dividends to the company.

From the developers perspective  services like this one are blessed as they improve monetization. So on that front as well, you can notice a series of tools amazon have launched to help game developers get more from the amazon platform. Amazon needs to work harder compared to Google an Apple to attract developers attention and the their strategy is creating a more complete eco-system and tools.

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SOOMLA - An In-app Purchase Store and Virtual Goods Economy Solution for Mobile Game Developers of Free to Play Games