There are reports and there are reports. From the latter category, we are being enlightened with the latest growth predictions for Android and they come out at a whopping 900% for 2009, compared to “only” 79% for the iPhone. The report does not hide the fact that the calculatory basis may not be fully comparable as it is expanding from a low base.
Tag: iPod
A recent article discussed the rise and rise of the iPod Touch (that’s the iPhone without the phone). It apparently surged to the top of Amazon‘s sales charts, and mobile ad firm AdMob reports that ads served to the device more than tripled between November and December to 292m. This growth is said to even shadow growth of iPhone ads served and is being called, well, unprecedented. People are said to shun the forced marriage with AT&T’s long-term phone plan that come with the iPhone. Makes you think (if you’re an operator).
And whilst one could argue about the pound-for-pound comparison of pure touchscreen vs devices with gamepads for certain types of games, the huge upside Apple has created is the hassle-free and easy distribution model for games: a DS developer needs to buy the cartridges (and pay for them up-front), find retailers, and then sell. This means huge cash outlay and very significant commercial risk over and above the development cost, making for a much less risky business model. And as to the input: some of the accelerometer-powered racing games are significantly better to control than with any game pad.“Whether you chose to play on your DS or listen to music on your iPod, we’re already in the same competitive space for time.”
Following the iTunes success story, we could see it coming, I guess, and indeed after a mere 3 months of going live the mother of all black turtlenecks informs us that the Apple App Store rocketed past 100m downloads for iPhone and iPod. Impressive numbers! And another example how simplicity and a good eye for ease of use wins the day: put applications (games are apparently leading the pack, too, with no less than 700 of them [that’s nearly 25% of the total available]!) into one place where a) people can find them and b) it is easy to download, install and run them, and you are on to a winner (operators, listen to this!).
- There are 3,000 apps on the App Store, 600 of which are for free. Now, for what percentage of downloads these 20% are responsible for, we are not being told though…
- 90% of the apps are priced at less than $10 (this will include the 20% free ones, I guess). However nothing is said if it is $9.99 that is the prevalent price point or perhaps $0.99 a pop.
The App Store certainly is a success for Apple (in particular considering the relatively low number of devices that access the store, and this deserves our unreserved applause! The only thing is: it might just be that 90% of the downloads were of the unpaid kind and another 8% of the less-than-$3.00 kind, and that would mean that it is actually not such a great success for the developers hoping to make a buck from it (rather than only showing off the funky logo on investor presentations).
I know, I know, I know: it is all a bit tiring and I just wrote about the iPhone vs Blackberry thingee a couple of weeks ago but there is a nice new piece by one of my favourite columnists on this, namely the NY Times’ David Pogue. He considers the software update (nick-named iPhone 2.0) as more significant as the phone itself as it opens the thing up into 2 dimensions:
1. An attack on the enterprise market with MS Exchange support, push-e-mail and everything else RIM‘s Blackberry, Palm‘s Treo and all the others already have (although Pogue also readily concedes that the absence of a QWERTY keyboard might mar its success a bit; see here for Apple’s intro on it)
2. the awakening of a mobile phone as a true multi-purpose entertainment device (through the introduction of the developer programme and release of the iPhone’s SDK – which, incidentally – also extends to the iPod Touch).
Now, I have covered the first point but the let the latter one on the wayside. And, one could say, rightly so: all existing phones, J2ME, BREW, i-mode and all, have had – more or less – readily available SDK’s for (wireless industry’s) eons. And did it make it a mass market tool? No, it did not. Also today with all the super-powerful phones around, only a (growing) fraction of users actually make use of these things. Why should this change with the iPhone? Well, possibly for the same reasons that made the iPod such a success – in conjunction with iTunes that was.
What Apple managed with the iPod was two things: it brought a device to the market that even my mum could use (and she is rather technophobic) and it provided a clear-cut, transparent, easy-to-use retail model for the contents to be meant to be stored and played on that thing, and that was iTunes.
Now, incidentally, these two challenges are indeed the very ones mobile content often faces today: intuitive UI on mobile phones is still only to be found rarely (“the application you are trying to download is untrusted. Do you want to continue?”) and the retail space is cluttered and dominated by companies who excelled in building highly evolved technical networks but have rarely sparkled with superior consumer understanding. Apple is good at both…
Number 3 would then be discovery and here Apple’s novel business model with tight integration and control may actually bear rich fruit: because of the huge amount of influence (and commercial participation) Apple apparently retains with its chosen carrier partners, it is much easier for it to guarantee the placement of the app store on its phones. Other OEMs have a much harder battle at hand there: carriers routinely request that any number of applications, games, etc are being removed for phones they order; because of the huge power the large carriers have (in most countries handsets are subsidised by the carrier), OEMs struggle to assert themselves (although Nokia seems to be making at least some headway with its Ovi portal; see e.g. here and here). For Apple this is a home-run though, which is a significant advantage.
The only relief would then be that Nokia would still appear to be selling the amount of handsets Apple sells in a year within one week or so. Still…
EA‘s Travis Boatman, VP Worldwide Studios, recently commented about the adverse effects Apple’s iPhone would have on the sales of mobile games. He moaned that, whilst the device was good, “it’s a replacement for someone who had a Razr before. They still want their content but there’s no distribution platform in place so there’s a negative impact on the industry.”
Now, is that short-termism or the understandable fear of someone who oversees classic game development studios of being replaced by something else, namely online games. Because this is in fact what the iPhone is promising: a replication of the web on mobile. One could say, it’s the entry of mobile 2.0. Online games on desktops became prevalent with the ascent of broadband and data flatrates. This is exactly the environment quite a few people predict for mobile, too. And whilst it was “World of Warcraft” et al that gave the EA’s of this world the shivers on PCs, it is now the iPhone – but not because it’s the iPhone but because it is the first device that, due to its intrinsically different approach (OS, touchscreen), focuses solely and only on the web as the fulfillment medium of content dreams.
Someone then also smartly noted that “[t]he problem of transferring games to new phones has actually plagued the mobile gaming industry since its inception. When users upgrade to a new phone, they most often can’t bring a game that they bought for their old phone along with them.” And the market data seems to confirm the challenges the industry faces: the percentage of mobile phone users who have ever bought a mobile game increased from 10 percent in 2005 to just 12 percent in 2007; that’s not much…
Moving from downloadable games (or other content items) to ones that can be played (or consumed) online reduces the complexity to users enormously. Due to bandwidth challenges, there are some constraints as to what can be played with a certain level of satisfaction online and what can’t: as a rule, everything turn-based, casual puzzles, etc would appear to be adaptable, heavier, more action-related games can’t. However, is this any different on the desktop or, for that matter, the console? Has anyone ever heard of online versions of Call of Duty or EA FIFA? No, because they would not translate in such a constrained environment. Now, Tetris (published on Apple’s iPod by, guess what, EA), Zuma, Luxor, Bejewelled, Poker, on the other hand, provide a rather splendid user experience even when played online and, lo and behold, they are predominantly found as online games on the desktop, too.
The same applies to other content sectors, too: prior to YouTube, the consumption of video via desktop was niche. One might watch a DVD on a long-ish train ride but who in their right mind would download shorter clips to watch them later (well, maybe with the exception of certain post-watershed offerings)? YouTube came and made it easy to consume AND operated in an environment dominated by an economical usage ecosphere, i.e. data flat rates and sufficient bandwidth, and off it went.
For EA (and any other mobile games publisher) this may mean that, in the mid term (i.e. once now pertinent issues such as data charges, bandwidth constraints, etc have been tackled), users will go online on their mobiles, too, to play such casual titles. However, fans of more intense genres will continue to download. The challenge is therefore not so much someone like Apple and any of their products but the current distribution and commercial environment (namely regarding billing) that would appear to slow down take-up. So, yet again, the finger points to the operators who, from their position understandably (why would they be reduced to a bit pipe if they don’t have to?), are in the way of turning mobile into a media consumption channel like any other. The front is however getting diluted: more and more operators throw their data plans into the open and offer more generous plans to users (led by 3 who even offer dedicated Skype mobile phones with the respective data plan to come with it).
And what will EA do? Well, continue to publish games which only make sense when played on dedicated devices. Oh, and they will probably release the Sims as an online version… Not so bad then…
One is a leading content provider for the niche smartphone market, the other a leading games developer for the niche smartphone market (Palm, Windows Mobile, Blackberry, etc), now they will become the leading content publisher for the niche but quickly growing smartphone market. Enter the reported acquisition of Astraware by Handmark.
Handmark publishes smartphone versions of e.g. Tetris and Scrabble and also runs the Pocket Express mobile news service. Astraware does the same for Bejewelled, Zuma and Chuzzle but also has a sizable portfolio of generic games and applications. They also have their coding hands in iPod games. As a lot of high-end smartphone stuff is retailed through shops where Handmark has a decent footprint, the two should improve margins on Astraware titles immediately. Presumably their distribution footprints for the remainder (e.g. is Astraware a Microsoft Gold Partner and embeds lots on Windows Mobile devices) also provide for some synergies.
Unfortunately nothing was reported on deal terms but, on the merits, this makes sense. Good luck, guys!