Gaming companies could generate record breaking revenue in the second half of the year, if trends hold from the past, while app categories like travel and health & fitness need to find revenue through alternative business models, a Strategy Analytics report revealed.
Although the gaming category continues to decline as a percentage of the top free and paid apps, its strength is being driven by in-app purchasing of virtual goods – a revenue model that gaming companies have exploited and others have failed to truly benefit from, the report observed.
The study predicts that a larger global installed base of iPhones, an increase in spend on apps and smaller seasonal declines than in the past will see mobile gaming grow in the second half of the year.
Mobile gaming apps continue to show strength globally and experienced smaller Q2 declines in the US and UK than last year.
In the US, those declines still placed gaming at a higher percentage of top grossing apps than a year ago.
Gaming’s strength is global with only modest seasonal declines from Q1 to Q2 in Germany, China and Brazil (click image below to enlarge).
If growth trends hold, gaming could come to represent 78 per cent of the top grossing apps in the US in Q3.
“The ability to drive revenue continues to rest with gaming companies that have used the freemium model to dominate the top grossing charts across the globe. Companies that want more revenue will need to leverage alternative business models to succeed,” the report added.
According to Joshua Martin, chief researcher, “Despite the enormous growth of the apps market – which we forecast to exceed 100 billion downloads in 2015 – there are fewer and fewer companies and fewer and fewer categories sharing in that revenue.”
“Companies should view apps as an indirect revenue driver and develop strategies in support of that objective. While some companies face challenges ahead, one thing is for certain – it’s good to be a gaming company right now,” he suggested.