I stumbled across an interesting piece of intelligence today, which looked at the development of virtual goods in the market place. According to this, median spend on virtual goods by users in North America has climbed a whopping 67% year-on-year to $50 p.a.
Equally interestingly, males are the largest spenders and, broken down by ethnics, Asians (26%) lead Hispanics (20%) by some margin over whites (11%).
So far (sic!), most virtual goods (how many? I don’t know) are purchased from stand-alone web-based games (World of Warcraft anyone?) but 31% had bought items in social networks (that would be the Zyngas and Playfishs of this world) with 29% in “network-based games” (what are they, I wonder). Facebook credits were used by 16% of buyers. Mobile? No word. It’s coming though: do bear in mind that there are 3x more mobile subscribers in the world than Internet users! And, yes, that’s true…
On 17 June, a wonderful conference opens its doors: organized by the formidable Rudy de Waele and his team, the beautiful city of Barcelona (but without the usual Mobile World Congress stress and with better weather than in February!) is host to Mobile 2.0 Europe.
You will find a great line-up of speakers from across the mobile ecosystem, which should allow for a wonderfully balanced overview of what’s going on. The organizers have lined up senior guys from the giants of the industry, such as:
- Nokia
- RIM
- Vodafone
- Opera
- Telefonica
- Orange
- PayPal Mobile
- Microsoft
But they then coupled them with the nimble and agile guys like us, so you will also find:
- Distimo (analytics)
- Scoreloop (yes, I will be speaking)
- The Astonishing Tribe (UI experts)
- W3C
- Future Platforms
- and more…
As if this wasn’t enough, the AppCircus will also stop at the event with an on-stage show of the best and brightest apps around.
Join us, it should be tremendous fun! The registration page is here.
According to a recent report, Android has zoomed past Apple in US smartphone OS share, taking the #2 spot with 28% behind Blackberry (36%) but now ahead of Apple iPhone OS with 21% (and, yes, I know that Apple somewhat lamely queried the accuracy of this). Be it as it is, Android is growing (and we all knew that, did we not?). According to Google’s CEO, Eric Schmidt, the company now sees 65,000 new phones being activated per day; this equates to a run rate of 23.7m for the year.
This is good news for handset manufacturers like HTC, Motorola and Samsung (all of who are shipping successful Android devices) as well as Google (which is fairly tightly embedded in the whole thing) but does it also reflect on the wider ecosystem of developers producing applications and services for the platform?
The main points that are usually mentioned are:
- Low overall numbers: Digital Chocolate’s CEO Trip Hawkins moaned the company sold less than 5,000 units of its hit game “Tower Bloxx” on Android Market, which was indicative for the lack of uptake. If that is so overall, may remain to be seen. I beg to take into a account that Android as a platform is fairly new and the overall install base is still smaller than its competitors.
- High price-sensitivity: according to an AdMob survey in January 2010, 12.6% of Android apps are paid vs. 20.4% on iPhone OS; the same survey revealed however that the average monthly spend was actually similar on Android ($8.36) and iPhone ($8.18) though higher on iPod Touch, which runs the iPhone OS, too ($11.39).
- Return policy: Google allows users to return an app for a full refund within 24 hours of purchase. This is seen particularly onerous for games (a lot of which can be played start to finish inside that time frame).
- Discovery: developers feel Google fell well short of Apple on this one. There is no possibility to discover apps from outside a mobile device (i.e. no iTunes) and Google has not really done anything in terms of marketing either (very much unlike Apple).
- Ease of purchase: I would like to add ease of use of the buying process. Registration with Google Checkout is a far, far cry from setting up an iTunes account. This will very likely change very, very soon as Google will add carrier-billing now that it decided to move distribution of its branded Google Nexus One from D2C web-only distribution to the usual carrier model.
So what about it? Let us not forget how young Android is – even compared to the adolescent iPhone. The platform launched from an install-base of zero some 18 months ago, with the HTC G1 being the only device out there – and available through a single US carrier, T-Mobile (with a market share around 12%). Whilst I do not want to take anything away from Apple’s superior accomplishments with the iPhone, the growth of Android is not too shabby either! And with a plethora of manufacturers deploying Android-based handsets now (cf. the growth numbers above), Android is likely to be powering into the fore even more (irrespective of whether or not the above stats on it overtaking iPhone OS in the US already being true).
Price-sensitivity is not actually as bad as people think: the aforementioned AdMob survey shows nigh identical average spending patterns. Personal impressions may again be hampered with by early experiences: be reminded that, initially, there were only free apps out there. They will surely still be hanging around, but will they also for much longer?
Apple has always been extremely scrupulous on approval of applications on its platform. And whilst this may now be held against it every now and then (e.g. in the case of nipples or Pulitzer-price-winning political cartoons), it has helped it to uphold a fairly high standard of quality, which Android was lacking (initially) and which even led to “crap-filter” apps. One can however safely assume that this will change once the market size improves: Apple’s margins might be superior to everyone else in the world but that does not mean that the margins game developers can achieve with it are the same. With Android OS primed to expand at a much faster pace, the numbers will clearly speak for it, and – I would posit – that will bring more and more quality to the store, with the fads sinking fast.
Also, do not forget the big brands: they do not necessarily care for a small share of the audience only. Whilst Android was fledgling and just starting up, they may have held back but, ultimately, they are about reach, and Android is certainly bound to deliver that. I would therefore suggest that we will be seeing an influx of large brands (gaming and otherwise) onto the Android platform very soon, and this will also help user orientation as to what to go for and what not.
The discovery of apps will also be helped by the more open nature of Android. There have been a number of announcement for curated stores by carriers (e.g. Vodafone, Orange, Verizon Wireless, Sprint, etc.), and these will certainly not be allowing a free for all! Besides that, the app store model does per se pose some challenges on developers: the more successful a platform (and/or store) is, the harder it is to be discovered. One might need to look for other solutions in that respect…
The billing side of things is bound to improve, too. With carrier-billing around the corner (cf. supra), this will get easier and better. And also easier and better than it is on the iPhone: charges will simply appear on your carrier bill (smart pipe anyone?). Besides that, the business models for games are undergoing significant changes anyhow: Freemium takes centre-stage, and so it should: the model allows people to try a game out and be charged for it only when they know that a) they like it, b) what they are being charged for (e.g. that coveted sword, a couple of precious lives, or that cool background theme).
Remains the return policy. I have been raising this with Google, and it must be pointed out that similar things exist on the iPhone (they’re just “better” hidden). So besides the obvious (Google’s good intentions came back to haunt them), it is also time to think of new business models (cf. Freemium). It is not something constrained to Android: transparency requires you to deliver value. If you do, there are good and transparent means to monetize that value; and users will follow.
So, yes, there is game in Android. If you don’t believe it now, just wait for it! 
The UK arm of Orange, the France Telecom-owned operator that is merging with T-Mobile’s UK bit, today offered a lot of news on the mobile games side. They made an announcement on the introduction of not less than 3 different gaming services that they will be launching over the next couple of weeks:
- Playtomo is a social gaming service to be used within the users’ social networks (e.g. Facebook; no others were mentioned). Users can download the app (?) from Orange’s portal and then share scores etc on the social network of choice. It sounds a little like a “posh Facebook Connect” solution (and this is not meant derogatory at all!). Friends can be invited from any UK network operator.
- Games Zone is a subscription-service where “just” £5 per month buy you two games and a 20% discount on all others. It also offers “exclusive competitions”.
- The third offering is a little unclear to me: Orange will launch the aptly called “Orange iPhone Games” offering, which will feature games that are “designed specifically or published by Orange for iPhone customers”. They say it will include a variety of game genres as well as the aforementioned Playtomo. Now, this one, I am not sure about… Orange clearly looks to bolstering their brand (or, perhaps, use their brand as a lever to lift otherwise unbranded games into the limelight) but this seems like a tough proposition. It is an interesting one, too, though as it would seem the first time an operator steps into the ring as a publisher amongst many. Watch this space…
The really uplifting thing about this is that Orange clearly recognises the significance of games to their overall offering and playful interaction is – as I have often pointed out – likely to be a driver for interaction between people in the mid- and long-term.
Finally: do you think this gives any hint as to which brand will survive the merger of the Orange and T-Mobile UK operations?
I know, I know, there’s a ton of conferences out there at the moment but this one has some real goodies to offer. The Social Media World Forum packs a lot of stuff into one by running no less than five different streams (next to mobile, this is the general one, enterprise social media, social TV, and cloud computing). There is a Facebook Developer Garage to go with it, too.
It’s running on 15/16 March in London (Olympia).
I’ll be speaking on mobile & social, making a case for the gaming side of things but there are some others, too… Companies sending top-level speakers include:
- Mercedes Benz
- Mars
- Mattel
- Orange
- Vodafone
- Yahoo!
- Cisco
- IKEA
- DHL
- StudiVZ
- Netlog
- CBS
- BBC
- Fremantle
- Endemol
- Beck’s
- Lufthansa
- Shell
- ING
- Marks & Spencer
- Virgin Atlantic
- TalkTalk
- bebo
- Ecademy
I actually feel quite small now! Come along, it should be inspiring and entertaining. Tweet me @vhirsch to meet for a chat.
