In-app purchasing revenue will top pay-per-download in 2012

Analysts are confident that revenue generated from mobile application in-app purchases will surpass pay-per-download income this year. However, tentative or slow industry buy-in threatens to hamper this growth because the market remains limited to a small percentage of loyal gamers who engage in in-app purchasing.

ABI Research, through its recently published "Mobile Application Business Models" industry report, said it does not expect to see increases in the percentage of mobile gamers making in-app purchases and, therefore, mobile developers should create applications that will fully realize the potential of this revenue stream.

The report holds Google responsible for impeding any growth in-app purchasing would have achieved in the market by now. Up until last July, it did not enable in-app purchasing on Android Market and, even now, only offers it in 17 countries, most of which are in Europe. Pay-per-download is only available in limited territories as well but subscription billing is not offered at all.

Despite Google’s tentative behavior, ABI Research still expects in-app purchases, pay-per-download, subscriptions, and in-app advertising to grow from $8.5 billion in 2011 to $46 billion in 2016.

"Mobile Application Business Models" is a component of ABI Research's Mobile Applications Research Service. For more information, go to www.abiresearch.com.