After many rumours and ominous statements that it was “reviewing its activities” Namco Bandai confirmed today that EA Mobile will thenceforth act as its distributor for mobile games outside the US and outside any app store.
After Taito and Eidos, EA Mobile just gobbled up another major distribution deal and the exodus from J2ME games distributed via carriers continues. It also means that EA’s dominance over the operator decks has just increased a little more yet again. It had estimated (back in June) that its 2009 mobile revenues would reach $185m (although this arguably includes Apple’s and other people’s app stores as well as embeds).
What is worrying is that this cements the oligopoly of games distribution in all major markets. EA Mobile, Gameloft occupy the top 2 slots very comfortably with Glu an equally comfortable but distant third. I-Play, Digital Chocolate, Real and Connect 2 Media are fighting for place and Xendex, Handy Games and a few others seek (and sometimes find) niches to prosper. THQ Wireless, Vivendi Games Mobile have departed. Player X found a new home under the mighty wings of Zed. And then? If the above companies all manage to maintain a healthy business, this might be enough; there are silverback gorillas in every market segment. If not though, this might become a doomed sub-sector; the limelight would then be on the (failed) ecosystem operators tried to build: overly fragmented with everyone of them wanting it just so and just their way rather than agreeing on a largely unified structure and processes pressed margins from a system that has been tough from the outset (handset fragmentation and international spread mean fairly high cost per capita anyway).
The accumulation of external properties arguably also mean that EA will need to run a business that is almost a combination of a publisher and an aggregator (with its very own challenges). The issue of shelf position (will they give Tetris and the Sims undue preference over Space Invaders, Pac-Man and Cooking Mama?), the commercials of their own deals (they anecdotally paid Hasbro a handsome sum), and the generally dominant position will all come into play and it is inconceivable (well, is it really?) that their partners will continue to play ball.
It might of course only be a brief interregnum on the way to an app store world. Smartphones are very much on the rise and, in that world, such stores seem to rule. Apple has taken the lead, Android followed suit and new stores are springing up almost by the day, which also includes operator-led ones: Orange already has one, Verizon Wireless has announced one (mobile web-based) and so has Vodafone (which might actually be bigger than Apples) as well as many others. The OEM all do the same (even though some carriers want to disallow them): Nokia Ovi, Blackberry App World, Sony Ericsson, LG, Samsung, you name them, they have it. The question of course is if that might mean the same thing all over again: will they again want it all just so? Will they again have it just their way so that a user would have the unique flavour of operator X on handset Y in this unique way, meaning that – again – thousands of SKUs would be required to service them? Groundhog Day? I hope not!
Image credit: http://www.antitrustreview.com/files/2007/07/files51lsaydhrsl.-ss500-.jpg
rashmi23w
After a series of flip flops EA finally seems to be getting its act together