Strategy Analytics finds mobile app gaming companies poised for record second half

Games represented 81% of the top grossing apps on iPhone in China

Boston, MA - July 9, 2015 – According to the Q2 Strategy Analytics Quarterly Category Tracker, mobile gaming apps continue to show strength globally with smaller Q2 declines in the US and UK than last year. Emerging categories such as Travel and Health & Fitness need to find revenue through alternative business models.

Gaming companies appear poised to generate record breaking revenue in the second half of the year – if trends hold from the past. Mobile gaming continued to experience seasonal Q2 declines but in the U.S. specifically those declines still placed gaming at a higher percentage of top grossing apps than in the year ago quarter. While the gaming category continues to decline as a percentage of the top free and paid apps its strength is clearly 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 following combination of factors will see mobile gaming grow in the second half:

· Larger global installed base of iPhones

· Increase in spend on applications

· Smaller seasonal declines than in the past

Gaming’s strength is global with only modest seasonal declines from Q1 to Q2 in Germany, China and Brazil. If growth trends hold, gaming could come to represent 78% of the top grossing apps in the US in Q3. While other categories – such as Finance, Productivity and Education rise – 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.

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According to Joshua Martin , Chief Researcher of the Application Strategy group, “Despite the enormous growth of the apps market – which we forecast to exceed 100B 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.”


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