Editor’s Note: Welcome to our weekly Reality Check column where C-level executives and advisory firms from across the mobile industry share unique insights and experiences.
It’s impossible to know what the next “Candy Crush” will be. It is even harder to predict the next five mobile gaming wildcards. In fact, the only future worth doubling down on is that certain games will inevitably have breakout power – and the house always wins. Therefore it stands to reason that if you can capture the mobile gamer, their choice of game doesn’t matter.
Mobile carriers have heard this message loud and clear and are rolling out branded gaming portals in full force. They cannot resist the opportunity therein to retain control of user experience and device real estate.
Meanwhile, carriers without their own app stores are missing a huge opportunity to make the most of their pipes. They’ve tried a number of methods to boost revenue in a world where non-essential voice calls are not just outmoded, they’re bad etiquette. In this darkening chaos, there lies one of the most promising revenue opportunities in years: to own mobile gaming the same way Steve Wynn owns Vegas.
Wired reporter Kevin Chou has suggested that games are now the single most important activity on mobile devices. Market research firm Newzoo predicts that smartphone and tablet gaming will reach $12.3 billion in revenue by the end of 2013. For smartphones, mobile gaming revenue will continue to grow at a yearly rate of 19% and by 2016 will reach $13.9 billion. That’s a lot of cash for operators to simply transport for free.
By owning the easiest method for consumers to discover, play and share games – a “third app store,” if you will – carriers will begin to recoup and exceed their revenue losses due to the decline of their feature phone business.
The trouble with traditional app stores
Stepping back for a moment, traditional app stores are home to millions of apps. They’re divided into endless categories such as news, comics, social, wellness, business, productivity and so on. Trying to find what you want is like going to Walmart to buy running shoes. You’ll find a pair eventually, but why not go to Foot Locker?
Furthermore, app emporiums offer little to no social features in the stores themselves, so discovery is painfully limited. Not being able to see what friends are buying partly contributes to the same apps appearing in the top 25 year after year.
Mobile carriers have recognized the same applies to mobile gaming and that the sooner they can offer customers a shortcut to the games they will love, the sooner they can have a stake in the next five blockbuster games. In short, they will attain the Holy Trinity of network monetization: higher engagement, increased brand value and decreased churn.
Gaming portals benefit the entire mobile gaming ecosystem
For consumers, the specialized game store offers a number of benefits. First off, it’s all focused towards gamers and was built with social features from the ground up. Gamers can easily find the games they want, they get specialized game recommendations based on the ones they already play, they can see what games their friends are playing and they can invite friends to play games with them. Even better, the best game portals offer frictionless billing, so that all in-game purchases go directly onto the phone bill.
The carrier gaming portal is better for developers, too. They can take advantage of easy discovery and extreme virality. With traditional app stores, the only way to get real traction is to have a game in the top 25, which is extremely competitive, or buy your way to the top – which can be very expensive. And then after the spending is done, your app is more then likely to fall back down the charts. However, on a branded carrier portal, developers benefit from the massive power of carriers’ marketing machines, with full mobile, digital, brick-and-mortar and traditional advertising to ensure awareness and a great overall experience.
In addition, the best white-labeled gaming platforms are OS-neutral, instantly growing a developer’s pool of potential customers by hundreds of millions. It’s no secret: the underlying premise of an OS-neutral publisher has been at play for some time. It’s fueling the evolution of HTML5 and has handily found its way to proof of concept with Amazon, for example, where Web apps are now discoverable and sold in the Amazon Appstore right next to native Android apps. Carriers have taken note.
To date, a majority of tier-one U.S. operators have already delivered customized carrier game stores to their customers. And now, the first generation of portal pre-loads are appearing on the hottest devices.
When operators become the proverbial “house,” it doesn’t matter what the hottest game is. If you’ve captured the gamer, you’ve already won the game.
Ron Czerny is founder and CEO of PlayPhone. Czerny’s vast experience in the games industry has allowed him to help establish PlayPhone’s dominance in the mobile social games industry and position the company to compete and thrive on a global scale.
