Mobile Games Market Plays Toward $8B

Online staff -- 8/26/2004

Over the next five years there will be an expected six-fold growth with downloadable games generating 82 percent of the $8 billion market, Strategy Analytics said in a report this week.

The report, "Carrier Retail Channels Control $8 Billion Mobile Game Opportunity," focuses on wireless Internet applications and the mobile games market.

Mobile entertainment publishers are clearly back in vogue as the number of Java and BREW capable handsets rises from 186 million units this year to over 1 billion units in 2009, the firm said.

"We are beginning to see carriers and games companies announce greater levels of usage of these handsets for downloading games," Nitesh Patel, senior analyst, said in a statement. "For example, in the five months leading up to May 2004, Verizon Wireless customers have downloaded more than 12 million games."

Strategy Analytics expects that active users of downloadable games will grow from 32 million this year to reach 220 million in 2009. "Confidence in the sector is beginning to increase significantly," Patel added. "The past four months has seen a flow of private finance into the coffers of leading mobile games distributors, the likes of which has not been seen since the halcyon days of the late 1990's."

The firm went on to report that although the revenues of leading publishers such as JAMDAT and Gameloft are currently little more than rounding errors when compared with the sales figures of large, established video game publishers like Electronic Arts and Atari, the potential for growth is high.

"With scale, distribution agreements, brand licensing and management expertise playing an increasing role in mobile games publishing, some leading firms have emerged whose basis for competition is sufficiently robust to be considered lower risk and worthwhile of VC investment," David Kerr, VP of the Strategy Analytics global wireless practice, said. "Insights into carrier distribution strategies, competitor benchmarking and the potential threat from emerging platforms for multiplayer and three-dimensional games are critical to survival."

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