Free-to-Play Market Reaches £216M in UK, £9.3B Globally By End Of '12

Free-to-play (FTP) video games, the up-and-coming "freemium" counterpart to the traditional game industry’s business model for development and distribution that already comprises more than half of the European marketplace, are now worth £216 million ($348 million) in the U.K. alone.

The report, from the research firm SuperData Research and reported by the European video game website MCV, found that funding will be generated through the sale of virtual goods in popular games such as Zynga’s (Nasdag: ZNGA) “FarmVille” and Riot Games’ "League of Legends."

The firm also predicted that the U.K.’s FTP market will continue to grow over the next three years, jumping 22.9 percent to £266.1 million by 2015.

In August, the average revenue per user (ARPU) for social games was £11.25 pence for social games and £11.64 pence for free-to-play massive multiplayer online games such as “Guild Wars 2” and “Star Wars: The Old Republic.” Other MMOs such as Activision Blizzard’s (Nasdaq: ATVI) “World of Warcraft” continue to charge flat monthly subscription fees to their users despite the fact that they continue to lose customers to their freemium rivals.

The report also noted that traditional retail video games -- boxed copies of games purchased in consumer electronic stores or online -- generated £812 million in sales in the year-to-date. That figure is expected to jump sharply in the next two months given the increase in software purchases made in time for the holidays.

Surprisingly, the rate of growth for free-to-play games in the U.K. is slower than the firm’s estimates for the expansion of the global market. The new report estimates that worldwide, free-to-play games will be worth £9.3 billion by 2013, jumping another 53.5 percent by 2015 to £14.23 billion.

Last week, Zynga made its first entrance into the U.K.’s growing online market. Fellow San Francisco-based casual game company Big Fish followed soon after with a new partnership with the online gambling startup Betable announced on Wednesday.