iOS and Android gaming capture increased market share

Posted by Trent Nouveau

During 2010, iOS and Android game sales increased their share from 5% to 8%  within the U.S. video game market, as revenue jumped from $500 million to more than $800 million.

Meanwhile, smartphone and tablet game revenue surpassed the U.S. PC game category (worth an estimated $700 million) for the first time.

"Overall, total U.S. game revenue from 2009 to 2010 is relatively flat, totaling $10.4 billion and $10.7 billion, respectively," explained Flurry Analytics researcher Peter Farago.

"However, while console game revenue increased slightly, from about $7.4 billion in 2009 to $7.8 billion in 2010, the combination of declines in portable gaming software and a jump in smart-device app sales has squeezed the portable game category down from 24% market share in 2009 to just 16% in 2010."

According to Farago, prolific installed base gains by Apple and Android devices, low priced games (including a very robust free-to-play model enabled by in-app purchases) and seamless digital distribution is driving "potent" industry disruption.

As such, the video game industry is expected to witness "continued and significant" smart-device game growth, which is likely to be fueled by the iPad 2, Verizon iPhone, iPhone 5 and the relentless expansion of Android devices by leading OEMs across all major U.S. carriers.

Indeed, Wedbush Morgan analyst Michael Pachter recently confirmed that the "onslaught of $1 games [will] continue" and predicted Nintendo and Sony would be forced to share the market with Apple and Android.