The market for mobile gaming is set to be worth a massive $10 billion (£6.3 billion) by 2014, according to a new report.

The market forecast for the mobile gaming industry comes courtesy of a new Futuresource Consulting report which, unsurprisingly, predicts rapid growth over the next three years in mobile phone gaming.

In-app payments are key

Apple's App Store, not including iPad sales, is forecast to generate $1.7 billion in revenue this year, which is around 30 per cent of total spend in mobile games market in 2010.

Futursource also claims that in-apps payments is one of the key factors in the growing revenues being generated by gaming on mobiles.

"There is no doubt that paid-for apps games are leading the gaming charge," said Patrik Pfandler, Lead Mobile Analyst at Futuresource.

"Our forecasts show apps-based gaming will account for more than 95% of total mobile gaming revenues by 2014 – that's despite the glut of free apps games out there.

"The growth of in-apps payments is a key ingredient in the commercial success of apps gaming.

"In the short term we'll see the rise of the 'freemium' business model, where the game is downloaded for free, but incorporates micro-transactions and virtual currencies, encouraging users to unlock additional features, new levels and premium content.

"In the longer run, we're going to see ad-funded apps games start to gain more traction as well."

The rapid growth of the smartphone market is the primary reason for the explosion in the market for mobile games and apps, "with high quality touchscreens, powerful programmable processors, improved graphics and cameras, increased storage, accelerometer and GPS all becoming standard and all making their contribution to an improved mobile gaming experience."