OXFORD, United Kingdom-If you believe the latest predictions from the handset manufacturers and market research firms, then mobile gaming is set to become a major business for mobile operators.
Nokia is actively attempting to pull together the various technologies, content providers and operators to make the industry a reality, while Forrester Research predicted in three years, 45 percent of mobile subscribers in Europe will regularly pay to play games on their mobiles.
Not to be left out, Ovum forecasted global spending on mobile games will total 4.4 billion euro (US$4.3 billion) by 2006, and Frost & Sullivan claimed the industry could push total revenues to an astonishing 12.8 billion euros (US$12.5 billion) by 2008.
Putting this enthusiastic thinking to one side, mobile gaming is being seen by a growing number of operators as both a mechanism to drive data revenues and to learn the hard lessons of providing attractive content-an education that will be vital for the success of third-generation (3G) services.
However, a fundamental issue that appears unresolved is what share of any operator-generated games revenues will be passed on to content developers and providers. Turner Broadcasting, part of the giant AOL Time Warner, is interested in making its comprehensive library of content available to cell-phone operators, but it admits it does not understand the wireless world or how it can get its premium brands to potential consumers.
“We believe the key elements to making this a success are branded content and how this is packaged. Many of the principles established in the TV world should be true for wireless,” said Casey Harwood, Turner’s commercial director for the United Kingdom. “Also, there needs to be an equitable sharing of operator revenues to justify our investment in this area.”
U.S. operator AT&T Wireless also admitted its confusion. “We’re considering almost any idea,” said its business development manager, Scott Edison. “Presently, we’re looking to developers to set the price and host their own games. We would expect a one-time download price for each game of between US$1 to US$5, of which the content provider would receive 80 percent. Our involvement would only be to test the game and then provide the billing.”
Vodafone, which plans to launch its Java-based games service via its Vizzavi portal sometime this year, has a different approach. “There is a huge investment requirement in back-end systems to host the content, and we believe starting with a revenue split of 50:50 will work for both parties,” said a Vizzavi executive. “However, multiplayer games have been hyped too much. There is too much latency in the networks to provide an acceptable service, and we must move to align platforms across all our territories.”
Real players
While other operators consider their plans, MmO2 launched its Games Arcade service in the United Kingdom, a month ahead of rolling it out across Europe. Steve Embling, the company’s games product manager, maintained that mobile gaming is fundamental to MmO2’s mobile data strategy, as is multimedia messaging service (MMS) and short message service (SMS).
“We’re aiming, with the Java-enabled Nokia 3410 handset, at about 1 percent to 2 percent of our customer base,” Embling said. “The actual download experience is very easy and we spent much time internally ensuring the customer has the best experience possible within the parameters we had to work with. With the Nokia 3410, by holding down one button, the user is taken straight into the O2 Games arcade-you can’t get much slicker than that.”
However, the MmO2 games service currently only supports the Nokia 3410 device. “Presently, we need to check that a user’s cell phone can support our games offering. Content is developed on a per-device basis, so our gateway detects which device is attempting to access the games arcade, and if it’s not supported, a message is sent detailing this, and suggesting some alternative. As we begin to support more devices-and we’re now aligning our handset strategy to ensure that all devices will be capable of running our games-then this issue will disappear,” added Embling.
On the potential rewards, MmO2 is staying away from the market research forecasts. “We expect games revenues will be minimal to start. But we see the number of games downloads absolutely tied to the level of Java-enabled devices in the marketplace. So as this penetration increases, revenues will follow this upward curve. In the next 12 to 18 months we should see the start of substantial revenues, and by the middle of next year, we would expect revenues to be several million euro per month.”
Where those involved within the industry do agree is on the importance of evolving the product in terms of what is being offered to the customer. Most of what is currently available are the classic first-generation PC games-Pac-Man, Asteroids and others. However, in the near term, users will expect to see new games appearing on a monthly basis. MmO2 plans to make three to four new games available each month, together with added functionality, such as letting users upload their highest score to a central database. This could be followed with some form of online multiplayer function, albeit primitive compared with today’s PC gaming world.
As a side note, a new Greek law has banned all playing of electronic games, including mobile games. A judge has already declared the law unconstitutional, making it highly likely the law will be repealed.
Accepting that mobile gaming has all the rough edges of a new industry, those gambling on its future sincerely hope that it will track the success of SMS and ring tones, and not the Wireless Application Protocol (WAP). GW
