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NewZoo Report: More than Half of All App Revenue is Coming From Games



newzoo spend

“In 2012, two out of every three dollars spent on tablets and smartphones was spent on games.”

That’s a very startling statistic, but according to NewZoo, a marketing research company specializing in the gaming industry, there’s plenty of money to be made in the business as long as you’re on the mobile side.

On the console side, things aren’t looking so good. XBox and Playstation are struggling to stay relevant as more and more consumers trade in their single-purpose, wired devices in favor of more portable options. But on the mobile side, NewZoo’s latest Mobile Games Trend Report shows that even though free games still rule, an increasing number of mobile users are willing to pay to play.

Here in the US, 33% of mobile gamers have laid out some cash. The UK does even better with 38% while Italy and Australia come in at 35%.

Let’s look at the numbers versus where we were last year:

newzoo game growthThe US saw a 34% increase in mobile gamers and a 35% increase in gamers who pay. The really crazy number — mobile gamers increased their time spent by 69%! I’d be appalled, if it wasn’t for the fact that I’m part of that number. A year ago, I might have played a round of Angry Birds a couple of times a week, but now I crack open an iPad game almost every day. And once I get started on Bejeweled, I’m in for at least 20 minutes.

I used to think of mobile games as a waste of time, but now I see them as a way to relax while I transition from work mode to non-work mode (which is trickier than you might think when you work from home.)

Which leads me to another interesting fact from this report: mobile gamers are split almost evenly between men and women, but when it comes to paying for the privileged, 61% of those are men.

And if you love demographics, you’ll love this one:

5,800,000 female mobile gamers who pay to play, shop at CVS.

I’m not sure what you can do with that information, but there it is. Use it to spark conversation over dinner tonight.

NewZoo says that service is the key to getting players to pay. You have to hook them with a free game then slip in paid upgrades and bonuses at a rate that is enticing but doesn’t frustrate the free player. It’s a very tricky wire to walk. I’ve played games that wouldn’t let me get past the first level without paying (delete) and ones that offered a cheat for a price (maybe, if I’m desperate). But the best games are the ones that I enjoy so much, I want to pay for additional levels. Those are rare, but when I find them, I hit the buy button.

Do you ever pay to play?