Mobile Gaming

Mobile Gaming
Un-Laming Phone Games

Allen Varney | 5 Dec 2006 11:01
Mobile Gaming - RSS 2.0

Selling Unplugged to Zamick, Eric became an advisor and strategist for mobile gaming firms such as Digital Chocolate, Kayak Interactive, (M)forma (now Hands-On Mobile), In-Fusio, Reaxion, Vindigo and Warner Music Group. He travels a lot: In mid-November, he visited Beijing, where he gave the keynote speech at the first China Mobile Game International Summit. When I finally connected with him, he had just returned to his Park Avenue apartment and was unspeakably jet-lagged. For Eric, that's basically normal.

What is he advising about nowadays? "They [mobile gaming publishers] generally want to know what the carriers are going for, what are the trends. ... One or two are concerned about M&A [mergers and acquisitions]. (I advised Centerscore on its sale to Vivendi Games earlier this year.) They all care about the carriers - which things sell well, strategies for deck placement, carrier network connectivity.

"It's a carrier world; the rest of us just live in it. We love the carriers' customer acquisition - we just wish they would share it more often." But carriers have little interest in catering to publishers' whims; "carriers measure their game revenue in tenths of a percent of their total income."

Even so, "mobile gaming worldwide was a $2 billion industry in 2005 - in the U.S., half a billion; in Europe maybe half a billion, probably slightly under; Asian markets over a billion, with Korea and Japan leading. It is arguably the second largest delivery medium for games, after consoles. Many well-funded new entrants are swarming into the market: Vivendi, EA, RealNetworks. Growth has slowed in the leading markets, but that's mostly a consequence of the law of large numbers: it's easier to have large percentage increases in a $50 million market than in a half-billion market."

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Even when not piling up frequent-flyer miles to China, Eric thinks in global terms.

• "Korea and, to an extent, Japan are playing in a different league from everyone else. They're much more advanced in technology, business models, value chain, you name it. In Japan, the dominant players are Bandai, Square Enix, Namco - the native players, who have best-selling games from other media like Pac-Man and Final Fantasy. Korea tends to do games that are highly consumable, with the market life of a mayfly, perhaps as little as four to six weeks. This is a barrier to entry for Western publishers; the games you introduce will cycle through the market far too soon for you to be ready with the next releases. In Japan and Korea, Western companies are trying to come in. But just as the experience of Japanese and Korean companies in America has been dismal - a handful of Japanese companies have achieved success in the U.S. market, usually after three years of failure - there has been no comparable U.S. success in the Japanese market, with a couple of notable exceptions like Tetris.

• "The BRIC countries are coming - Brazil, Russia, India, China. China is a huge potential market; though its mobile game numbers last year (2005) were not greater than US$30 million, there are 400 million mobile phone users. Almost everyone has tried to go into China, because it's 'going to be really, really big,' and discovered that the market has yet to produce really big revenue numbers. Also, the Chinese government has restricted foreign ownership. A further major issue with China is that less than half the handsets are game-capable. The per-capita income is below $10K annually, perhaps in the $6-7K range, as in India.

• "The Indian market is impressive, but they still have the remnants of the 'license Raj'; they're stuck in more red tape than even the Chinese market. India does have a more diverse and freewheeling mobile carrier environment - five or seven effective carriers, as opposed to China, which is basically an effective duopoly of China Mobile and China Unicom."

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