November 17, 2012

US audiences for mobile games are growing rapidly, while audiences for more mature categories such as social and online casual gaming are expected to grow more modestly in the next few years, according to a new eMarketer report, “Gaming for Marketers: Let the Mobile Games Begin.” As a result, advertising in mobile will expand faster than in other venues.

Social gaming revenues will also grow thanks to momentum in virtual goods monetization and advertising, but growth in social will be less spectacular than in mobile. At the same time, the pillars of the old guard—sales of packaged video games and console units—will show signs of contraction.

A survey by Frank N. Magid Associates indicated that game playing topped the list of mobile content activities among US tablet owners in June 2012, with 59% of respondents having done this activity. Mobile gaming was also one of the top activities among smartphone owners.

To support mobile, social and online casual games, the video game industry is continuing to evolve toward free, platform-agnostic games supported by a combination of advertising and virtual goods revenue.

US mobile gaming revenue will come from a combination of paid downloads, in-game purchases of virtual goods and in-game advertising. Advertising will contribute the least throughout the forecast period, while in-game purchases will trade places with downloads to become the top-generating revenue category in 2013 and beyond.

Advertising also represents a small portion of the social gaming economy compared with virtual goods, the largest contributor.

Still, social, mobile and online casual games present a growing range of options for brand participation. Marketers are tapping into gamers’ appetites for free play through branded virtual goods, opt-in videos, activity-based ads, product placements, sponsorships, custom games, advergames, interstitials and traditional in-game ads, which can be inserted statically or dynamically.

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