Between 2008 and 2011, 40 app stores were created, and Apple’s market share dropped from 81% to 57% in three years, in terms of download volume. However, Apple remains the leader and is even gaining 2 points in market share at the beginning of 2011. In catalog volume, Apple’s App Store and Google’s Android Market are neck and neck. Google should, in all likelihood, overtake the Cupertino firm after August 2011, according to a study by Resaerch2Guidance. The two competitors should offer 425,000 applications during this period.

At the last score, dating from early June 2011, the Apple App Store had more than 380,000 applications and Android Market 295,000. The IHS iSppli research firm estimates that the sales of the four largest mobile application stores (App Store, Android Market, Ovi Store and BlackBerry App World) will increase by 77.7% this year, to reach 3.8 billion USD. The Apple App Store has 77% market share, with an estimated turnover of 2.91 billion USD, which is up 63.4% from the 1.78 billion USD generated in 2010. The successful marketing of the iPad allows Apple to keep its competitors at a distance for a while longer. Given the success of tablets with the public (more than 50 million of these terminals could be sold in 2011 – high hypothesis), there is no doubt that Apple’s strategy, based on the complementarity of screens, will be duplicated and is already being replicated.

Thus, in order to extend its leadership, it is condemned to pursue this strategy, and why not soon in the direction of the connected TV set. Google Android Market is experiencing spectacular growth (+295% in 2010), but this movement is not accompanied by such significant growth in its revenues, which, for IHS iSppli, should not exceed USD 426 million in 2011. Google has yet to improve the representativeness of the paid applications on its store. In June 2011, it had more than 134,000 free applications, compared with 122,000 on the Apple App Store. The offer of content on Appstores must grow, and the organization of the offer must also improve.

There are a few avenues to be followed at different levels:

  • The development and enrichment of marketing tools, which could help to better differentiate the offering, provided that there is human and/or financial investment on the part of content developers/publishers.
  • The social character of the contents and the community: they are now one of the key factors of success of an application on the Web. They are also triggering elements in the act of purchasing a video game. But games on mobile platforms are still today, for economic, technical, and usage reasons, many single-player and asynchronous multiplayer games, and even more rarely massively synchronous multiplayer games. This is a recently opened path that will take smartphone gaming to another growth stage.
  • The volume of the paid catalog is at the heart of Apple’s strategy. It must become a strong and privileged axis for its competitors. But the balance between paid and free games is difficult to achieve without going through draconian regulation, which is not always well accepted by players and developers.
  • The birth of exclusive titles on smartphones: a path that is hardly used today on smartphones. It has long been one of the aspects of the consoles’ strategy.
  • How to access content: the “Try before buy” principle, which is very popular with gamers, is not yet sufficiently emphasized by app stores, or even by developers for that matter. Some of them offer a free and limited version of a full paid game. But this is not systematic.

Players and market: flourishing prospects

Number of gamers

The success of smartphones and their immersive and intuitive features is one of the main reasons why consumers are attracted to video games. Games are easily able to take advantage of a technological feature to give it a playful character and dress it up in a “fun” universe. In fact, gaming is the most popular category of application on app stores for cell phones or tablets. As a result, it is not surprising that the annual growth rate in the number of players is constantly increasing. Nevertheless, its pace has entered a phase of the slowdown.

However, between 2011 and 2015, this segment of the gaming market will gain more than 240 million players worldwide and reach 950 million. It is in Asia/Pacific that the number of new players will be the most significant: +170 million over the period.

Average Revenue Per User (ARPU)

The ARPU video game in 2011 is around 7.3 EUR on average in the world. It is expected to grow over the study period and could reach nearly 4 EUR in four years. It would reach 11.2 EUR in 2015.

Market

The cell phone gaming market (smartphone + traditional phone) is expected to reach EUR 5.2 billion in 2011, multiplied by 2 in the space of five years. According to IDATE, it should be the most dynamic segment of the video game market between 2011 and 2012. Its growth rate should be around 29% in 2011 and 23% in 2012. Until 2013, it will remain the fourth largest segment in terms of market value behind home consoles, online and handheld consoles. If the latter segment runs out of steam, it is expected to occupy third place in the following year.

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