Mobile Gaming Suffers Revenue DropMobile Gaming Suffers Revenue Drop

Mobile gaming manufacturers and publishers had a rough second quarter, according to iSuppli.

The market intelligence company reported that title publishers suffered a 9% revenue drop in the second quarter after they enjoyed 11% growth in the first quarter.

"While growth compared to the same period a year earlier was slightly positive, the second quarter dealt a significant blow to manufacturers that were expecting their profits to continue to rise," David Carnevale, VP of multimedia content and distribution for iSuppli, said in a prepared statement. "While the third quarter performance and the fourth quarter outlook appear optimistic, the pace of growth is slowing, causing great concern to content providers hoping to cash in on this market."

iSuppli said that the subscriber base for mobile games is small and consists mainly of casual players. It can be expanded if publishers and developers target the right demographic by developing titles that support networked and multiple player gaming, the company said

"Allowing other users to play against and with their friends via wireless networks will encourage groups of gamers to adopt the platform quicker," iSuppli explained in a report released this week. "These types of games also could reduce the churn-and-burn effect among targeted subscribers, an area of particular concern and importance for operators."

Gamers are likely to concentrate on areas that separate mobile gaming from traditional gaming, iSuppli said. That includes: mobility, connectivity, community, and location awareness.

Despite the decrease in growth, iSuppli predicts that mobile gaming revenue will almost triple in the next three years, growing to $6.6 billion, with a Compound Annual Growth Rate of 23.2% from $2.3 billion in 2006. And, mobile video is expected to produce more growth and increase revenue opportunities in the mobile sector, iSuppli said.