No wonder people can’t agree on a cure for the mobile gaming industry. Some insiders don’t even think it’s sick.
There’s no question that the space-which just a couple of years ago was envisioned as the pace-setting genre of mobile content-has failed to live up to the hype. Studies consistently indicate that mobile gaming attracts between 3% and 4% of the more than 200 million domestic mobile subscribers. And market research firm iSuppli Corp. claims the space “may need a swift kick to the joystick” after a second quarter that saw revenues from title publishers plunge 9% sequentially-down drastically from an 11% growth rate in the first quarter.
Ad-supported
So publishers are looking to a host of ways to spur uptake. Developers are looking to technological solutions, integrating features such as cameras, touch screens and GPS functionality in their games. I-play, a U.K.-based publisher, is using video content to create a more immersive experience. Others are employing familiar console-type features such as 3-D graphics, multiplayer functionality and even online social networking-like communities.
Meanwhile, established publishers are beginning to expand their channels of distribution and lower-or eliminate-prices for their wares. The ad-subsidized mobile gaming space gained yet another backer last week as Vivendi Games Mobile said it will offer 10 of its titles free through Greystripe, a San Francisco-based distributor of free wireless titles.
The mobile division of Paris’ Vivendi Games said titles such as “After Dark Flying Toaster,” “Amy’s Hangman” and several “Garfield”-branded products would be available through Greystripe’s GameJump.com and other channels. Like other Greystripe offerings, the games will be “wrapped” in marketing messages that appear before and after each gaming session, allowing users to click the ad for more information.
Once a distribution channel only for lesser-known publishers, Greystripe has gained substantial traction in recent months as an alternative for high-profile game makers to leverage the long tail and monetize more venerable offerings. Hands-On Mobile last month became the first major mobile publisher to experiment with free games, agreeing to release several titles through Greystripe, and Konami has begun releasing some of its wares through the startup.
“We believe, just as there are multiple distribution models for traditional gaming platforms, there will be a similar outcome in the mobile space,” said Lou Fasulo of Vivendi Mobile. “We are pleased to partner with Greystripe because we share the same goal of growing awareness for mobile games and exploring new models of distribution that will protect the value of our popular titles and franchises.”
Opposition to free
But some publishers with solid footholds are opposing Greystripe and Hovr Inc., a fellow distributor of ad-subsidized games. While market research firms may suggest a stagnating market, some say, the industry is doing just fine by charging $5 or $10 for a mobile game.
“In general, I am not one of those who is nay-saying the market. I think it’s grown about what we have expected,” said Glu Mobile Inc. CEO Greg Ballard. “Every time we ask the question about pricing (in consumer surveys), we find that price is never the principle barrier for games. They don’t object to paying $7 for a game. .. To me, ad-supported games is solving the wrong problem.”
A closer look at recent statistics seems to support Ballard’s contention that the market is healthier than some believe. M:Metrics’ data indicates the number of mobile gamers in the United States has increased roughly 13% over the last year. And Gartner Inc. predicts end-user revenue from mobile gaming will grow from $717 million this year to $1.7 billion in 2011, echoing other analysts’ predictions that the maturing market will bear fruit over the next few years.
Of course, the dominant players in the market will hoard the lion’s share of that revenue. EA Mobile, Gameloft and Glu are well-positioned to take advantage thanks to strong carrier relationships, deep pockets and broad portfolios. Meanwhile, struggling developers and publishers are likely to take their chances by allowing Greystripe to wrap their games in ads and offer them to consumers free. And if the market continues to disappoint, even the biggest boys may make some titles available for no charge.
“I don’t want to say we would never do this,” Ballard allowed. “There may come a time when it’s the right thing to do.”
