Mobile game-makers spent their time at the world’s largest video-game conference trying to reconcile two very different bills of health.
A report issued by M:Metrics in advance of the Electronics Entertainment Expo earlier this month indicates mobile-gaming activity has been consistently flat during the past several months in the United States as well as two European markets. Less than 3 percent of all U.S. subscribers downloaded a game in March, according to the Seattle-based firm, as high prices and overall lack of interest conspired to squelch uptake.
But Telephia, a competing firm, painted a very different portrait in a report released during the show. The company said mobile gaming witnessed an astonishing 53-percent jump in downloads between January and March and 44-percent growth in the number of unique wireless game purchasers.
Some of the inconsistencies between the two reports can be explained by differing methodologies. M:Metrics conducts consumer surveys to measure data usage on mass-market phones, while Telephia uses “bill scraping,” examining monthly carrier statements.
Regardless, the differing findings created a buzz at E3, where publishers and developers were left to wonder: How healthy-or sick-is wireless gaming?
“That’s a pretty big discrepancy in data points” between the two firms, said Glu Mobile Chief Executive Officer Greg Ballard during a panel at the conference. Ballard took issue with some of Telephia’s specific claims, saying that Glu has “substantial disagreements” with the firm’s figures, but nevertheless claimed mobile gaming appears to healthy and getting stronger.
“This notion that the market has slowed down and gone flat is something I’ve been puzzling over,” he continued. “The reality is that our business is growing. I look around at some of our competitors, and apparently their business is growing.”
Indeed, a handful of other game-makers said they have seen increased revenues during the past few months. EA Mobile, which dominates U.S. wireless gaming with about 30-percent market share, has said it anticipates a 25-percent increase in growth this year. And smaller publishers like Namco Networks and InfoSpace Inc. also reported increased sales.
M:Metrics is quick to point out that profits may be on the rise even as downloads stagnate due to growth in subscription offerings, which carriers are increasingly seeing as a way to ease users into mobile games. Gamers may be paying a few dollars a month for a title they downloaded only once.
But some game publishers concede that while revenues may be increasing, the industry is falling substantially short of the sky-high forecasts of a year or two ago. Hands-On Mobile (formerly Mforma), an 800-employee publisher with firm traction in the space, laid off eight employees last year in an effort to cut costs. And U.K.-based publisher I-play recently borrowed $10 million after its pre-tax losses reportedly nearly doubled to $14 million last year.
“The growth has slowed,” said Trip Hawkins, founder of Digital Chocolate Inc., earlier this year.
Despite the contrasting viewpoints in the current state of the industry, though, there was no lack of enthusiasm for the prospects of mobile gaming at E3. While most game-makers and technology companies said M:Metrics’ dour report was likely accurate, all agreed the industry is just beginning to pick up steam. Carriers have begun working with publishers to help promote offerings to consumers as faster networks and gamer-friendly handsets are coming to market. And most insiders continue to tout next-generation features such as 3-D game-play, multiplayer functionality, location-enabled handsets and faster microprocessors in an effort to push their wares to both hardcore gamers and mass-market wireless users.
“Verizon [Wireless], for instance, has announced a huge increase in their gaming downloads as a result of high-speed EV-DO-networked 3-D games,” said Dave Ligon, senior product manager for Qualcomm CDMA Technologies. “We’re just now starting to see 3-D start to pick up. We’re just at the edge of that new technology coming on board.”
Another recent study from M:Metrics’ echoed that sentiment, finding that 3G users in Europe are about three times more likely to download a game than those using slower networks. But while much of the talk at E3 centered on ways to re-invigorate mobile gaming in the coming years, Glu’s Ballard insisted the industry is currently in the pink.
“I still can’t figure it out,” Ballard said of the M:Metrics study. “I don’t want to start finding solutions for problems that don’t exist.”
