I’m sipping a latte at Starbucks when an instant message arrives on my mobile phone. There’s a mobile game tournament starting soon with a $30 prize, and I’m invited to play. No computer necessary, just my phone. Thirty bucks will just about cover my Triple-Shot Venti No-Foam Latte, and I’ve got some time to spare, so I decide to play.

When I log into the tournament chat room, dozens of other gamers are already there, wirelessly connecting from around the globe – Thailand, India, England, Australia and countless other places that might not even have Starbucks, if such places exist. All these gamers got the same SMS I did, our message traveling via satellite to virtually every carrier in the world. We stop to chat briefly, handsets engaged momentarily in slow motion mobile chat, and then we play. My mobile gaming feng shui is weak, and I lose quickly. Some guy from Poland named “Zergus” takes the prize. I wonder how many lattes you can get in Poland for $30. I wonder what time it is in Poland and all the other places I’m connected to. Who’s playing me at 4 a.m. halfway around the world? I’m fascinated and intrigued by our unlikely communion in much the same way Texas Hold ‘Em addicts must be, as they sit in their dorm rooms, offices and Starbucks around the world. Unlike them, however, I flip my phone closed and am quickly on my way.

This all sounds like science fiction fantasy, but it’s happening right now. Cross-carrier communication problems and international access issues have not impeded the path of progress – the wireless global gaming network is up and running real-time tournaments already.

Who’s responsible for this revolution? EA? Microsoft? Xbox Live Mobile? Actually, it’s Nokia – courtesy of one of the most interesting acquisition and strategic redirection plays I’ve seen recently. Following on the heels of the much ballyhooed failure of its N-Gage game deck, Nokia has in the past year quietly transformed near debacle into sleeper strategy. Instead of focusing on one dedicated game gadget, it has started moving toward making all of its mobile phones into potential wireless gaming devices. It’s an audacious plan. And it just may change everything.

Why Nokia? Where did this come from? Where is it headed now?

Those who’ve been reading The Escapist from the beginning may remember my prediction in “The War at Hand” that Nokia’s new strategy will make it one of the most important companies in handheld gaming. Since then, I’ve been doing a bit of digging. It turns out our story began in Japan during the Dot Com boom of the 1990s and, ultimately, revolves around a small band of rebels from the former Sega.com.

What Dreams Were Cast
Back in the mid-’90s, Sega.com was the Xerox PARC of the online games industry: A pioneer with innovations never commercially utilized by its corporate parent. Originally known as Segasoft, a research and development division of the preeminent Sega of Japan games company, Sega.com led the vanguard in the multiplayer gaming world between 1997 and 2001. It created one of the first online game/community services (Heat.NET), launched the first massively multiplayer game capable of supporting one million players at a time (10Six), built the first gaming ISP (SegaNet), and supported the first online-enabled console (Sega Dreamcast) and first online console sports title (NFL 2K1). Sega.com entered the mobile gaming space in 2001.

In the end, after six chaotic years and facing overwhelming debt from other failing businesses, Sega of Japan decided to pull the plug on the promising but bankrupt Sega.com venture. And so, in March 2003, Sega.com was on the market for an acquirer.

It found one: Nokia.

Getting “N-Gaged” to Nokia
Nokia, the biggest phone maker in the world, was only a month away from launching its N-Gage game deck when it acquired the people and technology of Sega.com, in August 2003. Now known as the Nokia Network Games Solution Group, part of the larger Nokia games unit, the former Sega.com team designed and implemented the N-Gage Arena during 2003 and early 2004, and by spring 2004, its full community features were in place and the first community- oriented titles were being released.

If the team from Sega.com had more time to work on the community features before the N-Gage launched, N-Gage Arena might have matched the success of X-Box Live. They are similar platforms: Both are full-featured on-device online services with alerts, tournaments, game rankings, chat, message boards and play-matching – all the features that transform a hardware platform into a community. Interestingly, both are descended from the original Sega.com concept, architecture, features and policies. (Both the head of X-Box and its director of marketing came from the Sega family of companies.) But instead, N-Gage was now in danger and sinking fast.

In January 2005, Nokia handed the reins of its games unit to Gerard Wiener, the former COO of Sega.com. No stranger to tough battles, the Harvard-educated lawyer turned operations wizard had been the frontline commander during the two-year restructuring of Sega.com and head of Nokia Network Games Solution Group since the acquisition.

As Wiener jumped in to stabilize the Nokia games business, he reportedly stepped on some toes. He started by shifting focus away from North America and Europe. Instead, Wiener’s games division sold handsets in China, Thailand and India in droves – over a million in 12 months, which significantly beat the prior year’s total sales and exceeded all internal and external targets, insiders confirm. Publicly, Nokia is stating 2.4 million N-Gage handsets are in the field.

At the same time he pushed for increasing worldwide device sales, Wiener and the former Sega.com team were busy changing Nokia’s games unit’s entire business model. At E3 2005, Wiener announced a new strategy for Nokia’s game unit: N- Gage would move from a hardware device to a software platform operating on the family of Series 60 (Symbian) smartphones. At the same time, SNAP Mobile, a new, lighter-weight version of the proven Sega.com technology, would function as a software platform for connected gaming on mass market Java phones. Because both platforms offer connectivity for mobile gaming by plugging into the N-Gage Arena, the result is a connected mobile gaming community spanning a vast number of handsets worldwide.

The shift to a software-based strategy addresses needs in the mobile gaming space in a way never before brought to the market. Nokia plans to sell 25 million smartphones in the next 12 months, which means they will have a huge installed base of game-capable devices. Countless millions more can be connected via the Java-based SNAP Mobile. If every Nokia phone has a community launcher application that connects users to games, music, other entertainment and to each other, we are looking at a massively important development. In other words, Nokia’s games strategy suddenly has real backbone and potential.

To Be, or Not To Be
The real test for Nokia is whether it can follow through on its strategy. Even as I researched this article, rumors circulated that Wiener is moving to a position outside of games. Why this would occur is unclear. Wiener himself would not comment, but other sources indicated he is slated for a new strategic position not directly involved in the games business. That in itself is a cause for concern. Nokia can ill afford to lose the momentum he started.

There are some promising signs, such as rumors of talks with major third-party publishers and potential partnerships with Sun to promote the Java-based SNAP Mobile, but without some continuity at the helm, it’s easy to be worried about Nokia’s ability to stay on target. A recent embarrassing announcement by a high-ranking Nokia executive rekindled rumors of the demise of Nokia gaming and perhaps highlighted Nokia’s own confusion on gaming without Wiener to guide them.

Clearly, Nokia came a long way in the past year. Let’s hope those labors were not in vain. As they say, the jury is still out.

Max Steele is an enigma wrapped inside a riddle. When not actively being mysterious, he passes his time manipulating time and space to fit his plans for world domination.

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