Even a cursory glance at the App Store home page will tell you games are a big driver of both free and paid app downloads. As of Tuesday, games make up all of the top 10 free apps, half of both the top paid titles and six of the 10 highest-grossing ones. Even a classic like Monopoly has renewed cachet as an app, hitting no. 3 on the top-grossing list.
Underscoring how the iPhone (and iPod touch) has become a gaming platform in its own right, the device last year accounted for 5% of U.S. video game sales, or about $500 million, according to new data from mobile analytics firm Flurry. The revenue estimate is based on sales of paid apps only.
"While the downturn in the economy may have dampened sales of the more expensive console games category, there is no denying that iPhone has generated substantial revenue and entered strongly into a mature industry," stated the Flurry report. The device has also taken share from both console and games on portable players, like the Sony PSP.
The iPhone's growing role in gaming hasn't been lost on companies that monetize social games online. Offerpal Media's acquisition of Tapjoy, announced Tuesday, effectively gives the large offers network a mobile monetization arm and deeper connection to the iPhone.
Tapjoy's platform allows developers to monetize titles through ads and sales of in-app virtual goods. It also lets them add users by paying people in virtual currency to install their other apps. Expect Offerpal competitors to follow its expansion into monetizing iPhone and Android apps.
Another big incentive is the iPad's imminent arrival. Even if the tablet device turns out to be nothing more than a big iPod touch, that's not necessarily a bad thing where games are concerned. "With the iPad featuring a larger screen and more processing power, games on the tablet take a step closer to PC and console gaming. Unless the other major video game platform providers (i.e., Sony, Nintendo and Microsoft) respond accordingly, Apple could continue to roll up video game market share," according to Flurry.
At a minimum of $500, the iPad would be a much pricier portable game player than the (subsidized) iPhone, iPod or Sony PSP. Even so, it could still add at least incrementally to Apple's share of video game sales while creating new opportunities for developers and marketers. It's game on for Apple competitors.