HOLLYWOOD, Calif. – Glu Mobile CEO Greg Ballard made a strong case for the mobile games business during his keynote here at the Games and Mobile Forum last Thursday.
Calling the business “underappreciated and unfairly criticized,” he took the audience through a history of the market and why he thinks it will continue to grow thanks to a series of major players that are introducing entirely new platforms that bring new capabilities into play.
Glu Mobile holds a 14% market share of the mobile games business, ranking second overall, he said, adding that the company ports 10 games to 10 different handset across the world every minute. “We sell games somewhere in the world every second,” he said.
“For those of us who’ve gotten to the top of the business, we think it’s a great business,” Ballard said.
Small piece of a big number
Many people say mobile games aren’t mass marketed yet because they only penetrate as little as 5% of all cellphones, he said, and even assuming it’s only reached that number, that still calculates to 165 million mobile gamers worldwide.
“The most recent data that I saw showed the number at 7 or 8%,” he said.
“If you look just at that as an installed base for a platform you have to be pretty impressed,” Ballard continued. “We think it’s a very big business and we think it’s only going to get bigger.”
Major companies that have proven innovative prowess before, such as Google Inc., Nokia Corp., and Apple Inc., have all entered the market in the last several months, he said.
“We think it’s going to change everything to be honest.”
Plenty of exciting new opportunities are going to come about quickly because of these new players, he said. The result will be nothing short of the “next wave of growth in the mobile business,” he added.
Hollywood shuffle
Ballard also talked about his company’s growing relationship with Hollywood, something it’s made a “specialty,” he said.
There’s been plenty of debate as to whether Hollywood’s licensing fees are crippling the mobile games business, but Ballard denied that was happening in a question-and-answer session following his speech.
The percentage of revenues paid to licensors has not gone up overall, he said, in fact it’s gone down a bit. But what has increased is the amount of money a games publisher like Glu Mobile must guarantee a studio up front.
Big titles carry a $3 million guarantee on average now, he said.
“When people say that costs have gone up, it’s certainly the case that guarantees have gone up,” he added.
Ad model up in the air
Finally, he was asked whether he saw much opportunity for an ad-supported model driving mobile games.
Calling the potential for ad-supported mobile games “way premature,” Ballard said the current model is doing well as it is.
“There’s not a broken model that we’re trying to fix,” he said. “Once you start giving things away for free the people perceive they’re worth nothing. And they’re not worth nothing, they’re worth a lot.”
He concluded by pointing out that the video games industry has been talking about ad-supported models for a decade and still, nothing’s come about.
