Home Mobile Game Prices Decline, but Revenue Up

Mobile Game Prices Decline, but Revenue Up

According to a new report from analytics firm Distimo, the average selling price for iPhone games has declined by 28% over the last year. However, the revenue generated by the most successful freemium games has increased by a factor of 10. The increase is due to the popularity of in-app purchases, which are now used in 35% of the 300 most popular games in the iPhone App Store.

Average Selling Price for Games Drops on iTunes

Distimo found that gaming is still a hugely popular category on iTunes, accounting for 72% of the downloads from the top 300 paid iPhone apps, and 56% of the top 300 free apps in June.

Over the past year, the average selling price within this category of mobile application has declined from $2.01 in June 2010, down 28% to $1.44 as of last month.

Freemium Games Now Generating Revenue

Only one year ago, freemium games were still somewhat of an experiment, generating just 8% of the total revenue. But by June 2011, 52% of all the revenue of the top grossing games is generated by freemium offerings. In addition, the revenue for the top 200 grossing games on iTunes has increased by 79% year-over-year, a tenfold increase from June 2010.

Freemium games’ use of virtual currencies is one of the main reasons for the increased popularity and revenue. During the first 6 months of 2011, games with virtual currencies increased from 24% to 35%.

Small Group Dominates Top Publishers

There are a small number of publishers currently dominating the top gaming downloads list on iTunes. Over 50% of the downloads among the 300 most popular paid games come from just 10 publishers, for example. These 10 publishers account for 27% of all top 300 free game downloads and 54% of all top paid game downloads.

That said, getting into this elite group doesn’t necessarily mean you have to be a big development shop. Indie developers can take inspiration from one name on the list: Andreas Illiger. Using just one game (Tiny Wings), he edged out Gameloft, Disney and SEGA for a spot on the top 10 paid game publishers list.

But joining him on the list will not be easy, especially for newcomers. Distimo found that it’s easier for new publishers of free games to become successful than it is for publishers of paid games. 685 free games published by 443 publishers had a top 300 game position during June, while only 504 paid games published by 249 publishers had a top 300 game position during the same time.

Games Popular Across Mobile Platforms

While much of the report was focused on iTunes App Store trends, Distimo did note that the popularity of games is not limited to Apple mobile devices alone – it’s an industry-wide trend. The only exception is BlackBerry App World, where the “themes” category is more popular. However, if you look only at BlackBerry PlayBook (tablet) apps, games wins again.

And in the Windows Phone Marketplace, the growth of games has been the largest: 149% from January to June 2011. But only in iTuns and third-party app store GetJar has the growth of games been higher than all the other categories combined.

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