Editor’s Note: Welcome to a new weekly feature at RCRNews.com, Analyst Angle. We’ve collected a group of the industry’s leading analysts to give their outlook on the hot topics in the wireless industry. In the coming weeks look for columns from Current Analysis’ Peter Jarich, Ovum’s Roger Entner and Strategy Analytics’ Chris Ambrosio.
By Seamus McAteer, senior analyst for M:Metrics
M:Metrics has been tracking the U.S. mobile medium since November 2004. Year-over-year comparisons in markets for ringtones and mobile games show that while the number of purchasers of tones grew by about 20 percent, the number of subscribers actively downloading new games remained relatively flat. The high-level metrics regarding content consumption mask underlying trends that point to a rapidly shifting market in terms of content and consumers that is being defined by an older female demographic.
The number of subscribers downloading polyphonic ringtones fell by about 15 percent, held up by the active promotion of distributors that earn higher margins on polyphonic products. However, the number downloading master-tones grew by a whopping 91 percent to become the majority in the market in an August 2006 survey. While the number of active game downloaders remained relatively flat, the number of people reportedly playing a downloaded title in a month expanded by about 15 percent. Higher prices for games and an expanded number of active game subscriptions yield a market that has expanded by about 30 percent in terms of revenue year over year.
Of particular note is the shifting demographic profile for active mobile content consumers. The number of females consuming ringtones and games grew by 27 percent and 21 percent, respectively, year over year. Corresponding numbers for males were growth of 15.4 percent in males downloading ringtones and a decline of 11.3 percent in the number of males downloading games. Females now account for a clear majority, or 55 percent, of ringtone purchasers. While males still have a higher propensity to download games, the ratio of male to female game downloaders has dropped from 61 percent male in 2005 to 54 percent male in 2006.
While much of the focus of the mobile entertainment sector has been on seeking to engage over-stimulated teens and young adults, it is clearly evident that growth in the market is coming from older demographic groups. While starting from a smaller base, the 35-to-44-year-old segment has had the highest growth for games and ringtones. Consumption among teens has lagged, with the number of teen ringtone purchasers remaining relatively flat, while teens engaged in downloading games fell by a whopping 30 percent.
As the market for mobile gaming begins to shift older and more gender neutral, it more closely resembles the market for online Web-based gaming defined by venues such as Pogo, Yahoo, AOL, and MSN than the market for console games. The titles of the top game titles reinforces this view as the usual coterie of Tetris, card and retro titles have been joined by PC online hits such as Zuma and Sims, which have made it into the top 15 title list.
While companies in the mobile games sector will be heartened by the broadening of the market and growing revenue, the fact that teens are apparently being turned off is less than encouraging. The success of casual games may be partly self-fulfilling in a market where placement in an end cap such as Top Sellers is the determinant of success. The advent of a broader demographic adds fuel to the argument that new modes of discovery that relies on search and deck personalization.
As a precursor to a more dynamic personalized merchandizing, carriers can go some way by offering fewer logical starting points. For example, we see three broad clusters of mobile games that appeal to different groups: console games, which have an obvious appeal to a young male demographic; games based on trivia and chance, which appeal to a broad demographic; and puzzle and skill oriented titles, which tend to have particular appeal for women.
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