Mobile Games to Be Worth US$9 Billion by 2008

New analysis from Frost & Sullivan, has said that revenues from wireless games totaled US$436.4 million in 2001. Steady growth for messaging-based, web-based and downloadable mobile gaming could push total revenues to US$9.34 billion in 2008.

Before this sector can realize its full potential, market participants will have to implement micro-billing systems. As consumers are apprehensive about making over-the-air payments with credit cards for mobile services, network operators will need to use billing-on-behalf-of-others (BOBO) techniques to collect revenues for content providers.

"Most network operators in North America and Europe will have to work hard to implement micro-billing systems for third-party content," says Frost & Sullivan Research Analyst Kshitij Moghe. "Although they recognize the importance of the BOBO model, few had the mechanism in place at the end of 2001."

Until these secure systems are installed, consumers are likely to stay away from mobile gaming. Naturally, operators will have to convince them to pay to play.

"Network operators will face an uphill challenge in getting consumers to pay for premium mobile content such as games," says Moghe. "The Internet model of free content has become well engraved in consumer attitudes, especially in North America."

Many Internet content providers have shown how difficult it can be to persuade users to pay for information and entertainment services. The question is whether mobile operators will fare any better. Since the launch of the mobile Internet, network operators have given away content for free, requiring customers to pay only for airtime. To convince users to pay for content, operators will have to make it compelling and facilitate easy billing.'"

Posted to the site on 4th July 2002