Study: 135 Million Americans Play Digital Games

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The number of Americans playing at least one hour of digital games per month has doubled in the past three years, according to a new study from research firm Parks Associates, whose data also show that increasing mobile-device usage and the boom in online social gaming account for most of this growth.

According to the study, “Trends in Digital Gaming: Free-to-Play, Social, and Mobile Games,” the number of Americans playing casual games increased from 56 million in 2008 to 135 million last year. Eighty percent of that group utilizes games that are free to play through computer downloads or by logging into Facebook. Desktop computers and laptops remain the most popular gaming platforms, just ahead of gaming consoles such as Microsoft’s (NASDAQ:MSFT) Xbox 360.

Mobile device gaming grew as mobile technology and game availability improved. Last year, 17% of gamers reported downloading games to a smartphone, up from 7% in 2008. Those numbers are misleading, however, since mobile-application stores, notably Apple’s (NASDAQ:AAPL) App Store and Google’s (NASDAQ:GOOG) Android Market, didn’t exist until mid-2008 or later. Creation of these markets made casual mobile gaming much easier for the general user. And while free-to-play games are abundant, many applications are available for a small fee, and popular paid games tend to carry a low price tag of 99 cents.

Seventy-one percent of adults who own tablets and 79% of teenage tablet owners use the device for gaming, the study shows. This group likely will grow after the fall release of Windows 8, an operating system designed to work on tablets.

The Facebook factor

Free-to-play games available on Facebook are predicted to grow in popularity, and the revenue they generate is expected to increase, in the coming years. These games monetize through a combination of advertising and in-game transactions. Parks Associates found, for example, that while only 5% to 10% of social gamers make in-game purchases of virtual goods, the amount they spend is on par with in-game purchases made by gamers playing on consoles. Facebook gamers spend an average $29 per month while casual players spend $24 to $27 per month.

Social games lack the earnings cap that can inhibit console titles. Players typically purchase a console title in one transaction and receive the complete game. Casual-gaming giant Zynga’s (NASDAQ:ZNGA) FarmVille and its free-to-play brethren, meanwhile, are able to adjust in-game purchase opportunities according to data research, seasonal events, and customer demand. The problem is that users need to show up in large numbers for the small percentage of purchasers to make a meaningful financial impact.

Zynga has recently faced daily active user (DAU) issues as some of its newer titles attracted smaller audiences than the company’s past offerings. Quick production turnarounds and the ability to advertise within previously established titles provide Zynga with more wiggle room than afforded to console game companies, but it appears that social gaming may already have experienced its boom.

The Parks Associates study predicts that digital gaming will increase over the next several years. Mobile games will likely account for most of the increase as late adopters purchase mobile devices and application-store inventories continue to grow. Digital gaming, in other words, is an industry built for longevity.


Article printed from InvestorPlace Media, https://investorplace.com/2012/02/study-135-million-americans-play-digital-games-goog-aapl-msft-znga/.

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