New Magid Report Finds U.S. 2010 Market for Mobile Virtual Goods to be Estimated at $168M

BURLINGAME, CA & NEW YORK, NY – Jun 22, 2010 – Virtual goods purchased on smartphones are a new emerging market in the United States. Who is actually buying them and how much they’re spending, however, has not been completely understood. Today, Frank N. Magid Associates and mobile social gaming network OpenFeint are shedding some light on the subject by providing the first-ever estimate on how much Americans are currently spending on virtual goods.

According to the study, Magid Media Futures 2010 Wireless and Consumers, Americans spent $168 million on mobile virtual goods in the last year. Magid estimates that over 70 million Americans now own smartphones – that’s 23 percent of the population. With 45 percent of those smartphone owners playing mobile games and 16 percent of those spending an average of $41 per year on in-game virtual goods, the market has already exceeded $168 million.

“The market for virtual goods has already exploded in web-based games like Zynga’s Farmville, and we’re just now starting to see this trend in the mobile space,” said Steve Lin, VP Operations of Aurora Feint. “In just the last few months we’ve seen amazing interest from our game developers in building mobile social games with virtual goods. Our internal numbers reflect the study in that free-to-play models will be the dominant pricing structure in the future.”


With 55 percent of smartphone gamers interested in buying virtual goods, the market is poised for strong growth as more virtual goods-based games enter the market. The study also shed more light on who is likely to play games on smartphones. Compared to the general population, smartphone gamers skew male and are between 18 and 34 years of age.

Smartphone gamers are active consumers of multiple games, downloading 14 games on average per year. Of these games, recipients paid money for 4 games and obtained 10 for free meaning that consumer pay for mobile games at a 2:5 ratio vs. downloading free games. As expected, Americans are most likely to review application store rankings to find games, but are also likely to rely on word of mouth and the suggestions of their friends.

“Everybody knows free-to-play social gaming models on PC platforms have been making a killing but mobile virtual goods aren’t as well understood,” said Mike Vorhaus, President, Magid Advisors. “With almost 20 percent of smartphone gamers already making purchases, there’s a lot of room for the market to keep taking off as smartphones continue to increase in popularity.”

This is the first half of a two-part study that will be released this Summer.

For more information on the mobile virtual goods industry or Aurora Feint, please contact Ken Johnston at ken@vscconsulting.com. Aurora Feint partnered with Frank N. Magid Associates, Inc. www.magid.com to conduct and analyze the mobile virtual goods studies.

About Aurora Feint, Inc.
Aurora Feint, Inc.’s software development kit, OpenFeint, allows game publishers to implement services which enable mobile social gaming. With over 25 million registered users and a presence in over 2,000 games, OpenFeint is the first and largest social gaming platform for the iPhone. Aurora Feint is backed by DeNA Inc.

There’s a new eMarketer  report Social Gaming: Virtual Crops Yield Real Profits that talks about the size of the growing social games market. It’s estimated that in the U.S. that the market will be worth $2.183 Billion in 2012:

  • Direct paying users generated $340 Million in 2009, which is estimated to grow to $1.191 Billion in 2012
  • Offers generated $324 Million in 2009, which is estimated to grow to $868 Million in 2012
  • Advertising to players of social games generated $62 Million in 2009, which is estimated to grow to $124 Million in 2012

The Entertainment Software Association (ESA) released it’s annual Essential Facts About the Computer and Video Game Industry covering the U.S. market, this week. You can download the report here. Some of the key points are below:

  • The average game player is 34 years old
  • The average game buyer is 40 years old
  • 26% of gamers were over 50 in 2010
  • 67 % of U.S. Households play computer and video games
  • 62% of gamers play with others
  • 40% of game players are female
  • 48% of all games sold are rated ‘E’ for Everyone by the Entertainment Software Rating Board
  • 64% of parents believe games are a positive part of their children’s lives
  • 76% of parents believe that the parental controls available in all new video game consoles are useful
  • 42% of Americans play games on wireless devices such as cell phones or PDAs

Newzoo recently released a report on gamers in North America and Europe. Here are the key data points from what they released there is a huge market of more than 290 million game players across North America and Europe:

Players per country

  • USA – 183,500,000
  • UK – 31,300,000
  • GER – 35,500,000
  • FR – 25,400,000
  • NL – 9,300,000
  • BE – 4,700,000

Consoles

  • USA – $15,140,000,000
  • UK – £2,390,000,000
  • GER – €1,540,000,000
  • FR – €2,430,000,000
  • NL – €315,000,000
  • BE – €310,000,000

PC games

  • USA -$4,150,000,000
  • UK – £740,000,000
  • GER – €1,320,000,000
  • FR – €690,000,000
  • NL – €170,000,000
  • BE – € 150,000,000

Game portals

  • USA – $2,780,000,000
  • UK – £270,000,000
  • GER – €430,000,000
  • FR – €190,000,000
  • NL – €55,000,000
  • BE – €60,000,000

Mobile devices

  • USA – $1,100,000,000
  • UK – £190,000,000
  • GER – €180,000,000
  • FR – €100,000,000
  • NL – €10,000,000
  • BE – €10,000,000

MMOs

  • USA – $2,120,000,000
  • UK – £190,000,000
  • GER – €180,000,000
  • FR – €160,000,000
  • NL – €45,000,000
  • BE – €40,000,000

The Full Industry Report is available at: www.gameindustry.com for €299.