A DFC Intelligence report forecasts the iOS platform will continue to dominate the mobile entertainment App market, with iOS game revenue forecasted to reach $9.7 billion by 2018.

APRIL 30, 2013 •  A recently released report published by DFC Intelligence forecasts that games and applications developed for the Apple iOS will continue to dominate the growing mobile entertainment market over the next few years. The report, The Global Market for Games and Entertainment Applications on Smartphone and Tablets, was produced using historical tracking data from Priori Data. The most popular application category, games, generated an estimated $3.6 billion on the iOS platform in 2012 and that figure is expected to reach $9.7 billion by 2018. This will surpass the record for mobile game software revenue on a single platform of $6.6 billion that was set by the Nintendo DS in 2008.

The growth of iOS content is expected to occur even as the sheer number of Android devices is expected to significantly outsell Apple devices. In 2018 the number of active Android smartphones is forecasted to be 829 million versus 265 million active iPhones (note this figure is not cumulative sales). Similar trends are expected to occur in the tablet market where the iPad will see application revenue grow even as market share declines. “With iOS, Apple has created a stable ecosystem that is consumer friendly and allows products to be used across multiple devices. For entertainment products this is essential to growing a stable base of paying consumers,” said DFC analyst David Cole.

The report also looks into Android devices with a focus on Google Play. Games on Google Play reached $900 million in 2012 and are expected to surpass $2.7 billion in 2018. “The Android market is fragmented with many proprietary hardware devices and application stores. Google Play is helping provide a standard ecosystem similar to the Apple AppStore. Google Play is showing solid growth but Apple is forecasted to be the leader in monetization.

Games are the most popular application for both smartphones and tablets. In 2012, 56% of applications downloaded for iPad were games, with the iPhone at 54%. By contrast, only 33% of Google Play applications were games. The challenge with the application market continues to be monetization. On iOS about 89% of application downloads were free to download with no upfront payment. However, many free applications offered a way for consumers to make a post download purchase. Consumers showed an increasing willingness to pay for applications they enjoy and thus 2012 showed a major revenue increase for mobile devices. For individual content providers the biggest barrier to monetization remains the issue of discoverability and simply getting consumers to try a specific product.

“2012 was a banner year for the app economy, especially on Apple platforms. With the growth of Google Play we are seeing Android also grow as a content platform. The App Store and Google Play have become the de facto platforms for mobile entertainment content, especially games. As consumer preferences mature, so must app market participants in order to stay abreast of future opportunities for growth. Continued success will require keeping a close eye on app activity to capitalize on trends before they become common knowledge,” said Priori Data CEO Patrick Kane.

The report presents 2012 download data for 26 leading countries as well as complete hardware and revenue forecasts through 2018. The U.S. remains the number one country for iOS applications, but iOS has truly become a global platform. Surprisingly Russia accounted for 5% of games downloaded on the iPad in 2012.

The report The Global Market for Games and Entertainment Applications on Smartphones and Tablets is 154 pages and includes complete application download results for 2012 by country as well as forecasts for hardware and game revenue through 2018. Forecasts are broken out for iPhone, iPad, Android phone and Android tablets.

Priori Data is a leading provider of app data and information services on the global app economy. Based in Berlin and in partnership with app search firm Xyologic, Priori maintains one of the largest independent databases of global app information, comprised of both publicly available information and proprietary metrics and statistics. Priori provides market intelligence reports, performs custom data projects, and engages in data partnerships with select third party organizations. Priori’s data is used by many of the premier names in the mobile industry to inform decision making in the app marketplace.