Income growth will lead to more virtual currency purchases, benefiting the industry
Los Angeles, CA (PRWEB) November 11, 2013
Since its development in 2007, the Social Network Game Development industry is continuing to quickly expand. Revenue is anticipated to grow an astounding 183.1% annually on average to $6.0 billion in the five years to 2013. According to IBISWorld Industry Analyst Dale Schmidt, “The surging adoption of the internet and social networks, including social networking websites and smartphones with connectivity to social networks, has driven revenue higher over the period.” Despite the recession, the Social Network Game Development industry grew out of an increase in leisure time, as many out-of-work individuals played social network games to pass the time. To further the gaming experience, consumers purchased virtual currency, which is a method of unlocking game features for enhanced playability. Since these purchases do not make significant dents in disposable income, and are small compared with buying a video game system from an electronics store, consumers often invest in virtual currency.
The industry's growth has been stimulated by the emergence of new markets, which have embraced social gaming. Social networks, and the accompanying technology, have placed gaming within reach of the average computer user. As such, consumers that have not played video games before began joining these games at accelerating rates. Women over 40 represent the fastest-growing segment, and these consumers began by simply participating in social games and eventually became regular users. “This trend will continue to benefit industry revenue during 2012, as women over 40 continue to join and new market segments embrace social gaming,” says Schmidt. Consequently, industry revenue is expected to grow 29.7% in 2013.
The industry will experience slow growth over the next five years. Social networks are beginning to charge more for virtual currency transactions, eating into industry costs. Since social networks are hosting these games, they are looking to generate more revenue due to the increased interest in social gaming. Nonetheless, several beneficial trends will keep the industry growing quickly, albeit at a slower rate than during the past five years. The surge in smartphone popularity and internet connections will continue, linking more people to social games and networks. Disposable income is also set to rise, which will result in more virtual currency purchases. As a result of these trends, IBISWorld projects that industry revenue will rise in the five years to 2018.
For more information, visit IBISWorld’s Social Network Game Development in the US industry report page.
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IBISWorld industry Report Key Topics
Companies in the Social Network Game Development industry develop video games played on a social network platform. This includes websites such as Facebook and smartphone applications. The games developed within this industry are free to play and do not require the user to own any software or console to participate. Companies earn revenue through the sale of virtual goods within a game and also via advertisements. The Social Network Game Development industry is a fairly new research area that was established in 2007.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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