Tag: mobile content Page 10 of 12

Bye bye, fixed line…

On 03/03/2008

I mean, it’s nothing new as us mobilists knew it all along but now, alas, someone put their finger in the air and quantified it. So here goes: as early as next year, wireless phone users will outnumber landline users by 3 to 1. Impressive, huh?

Some more somewhat obvious findings are: rich nations are running out of non-users, and in some emerging markets, where rising personal incomes have made wireless affordable, that gap closes quickly, too. Even so, only half the world’s population uses mobile phones now. Most subscriber growth over the next five years will quite naturally come from India, China, parts of Asia, and Africa. I think the author might have forgotten Brazil…

And now, dear content lovers, comes the candy: the analysts say that “[f]irms must boost their average monthly revenue per user, or ARPU. Text-messaging has been the biggest moneymaker, along with ring tones and games. Music and video downloads are starting to catch on”. By 2011, U.S. carriers will garner 35% of service revenue from data products, more than twice the 2007 share, says the Telecommunications Industry Association.

But in emerging markets, non-voice services are growing, too: “Wireless companies need to evolve their business models because of the changing nature of the industry, not just penetration levels,” said Sureyya Ciliv, chief executive of Turkcell. “Communication and information technologies are converging globally.

From A to Zed in 1/2 billion dollars

By Volker

On 26/02/2008

This one leaves me a bit speechless: other than reporting the press blurb, there seems little to say but then, the press blurb is too large to ignore it. So here goes: :LaNetro Zed announced 2007 revenues of a cool $ 554 million with an even cooler $100 million profit (this last bit is only reported by ME; others mention that it actually does not report any profit). There you have it. Revenues from what? Don’t know. “Proper” US-GAAP revenue? Don’t know. Profitable or not? Don’t know. Everyone reports it, no one seems to know the details. A dilemma…

It is the usual crux with private companies: one never really gets the whole picture. On the other hand, I want to be fair: half a billion dollars in revenue is rather honourable by anyone’s count. So let’s try to dissect it:
– In early 2007, Zed bought a piece of Monstermob and, as part thereof, 9Squared. So this will account for quite a bit of the growth. But still! Zed claims to derive revenue from content 85% of which it owns outright. They do sound-alikes (or “original compositions”) rather than the real thing although 9Squared also licenses the SonyBMG and – recently – KOCH catalogues (for ringbacks). Their rationale for going “original” is compelling though: there isn’t enough money off-deck to pay for royalties, said their US CEO last autumn.
– In October 2007, 9Squared reported over 60m downloads to consumers through its BREW application catalog. “This includes real music ringtones, polyphonic ringtones and wallpapers from 9 Squared’s RealTone JukeBox, Univision Tonos, Alltel’s RealTone JukeBox for Celltop, RingTone JukeBox, mTat2 Wallpapers, Musica Real and GAC Country Ringtones.”
– Zed is an early runner on convergence: its Zed StatiOn combines desktop, online and mobile in one offering. Smart move, I’d say: capture the users wherever they are and hook them in with free services that stick (IM, etc). They hooked in MetaCafe into this, too.

In particular the amount of generic content utilised (which improves margins) is, in a content world driven by brands, brands, brands, a very interesting phenomenon – and no mean feat to pull off: to build a customer base (most of them tied into subscriptions, yes) based on unbranded, generic stuff shows that surrendering to the big brands (and their up-front) demands may not be the only way. If all is clean, then my call will be to the carriers: listen, there is a world out there… There is of course always the suspicion that a lot of the revenue might come from subscribers that cannot extricate themselves from nifty and well-crafted subscriptions and suffer a life of funding Zed’s success. Is that so? I don’t have the foggiest clue!

The whole unbranded thing has an interesting twist of course: if it is possible to get so many consumers into this, then – arguably – quality isn’t the big thing after all: Zed’s games don’t seem to rank high (at least I have never seen them rated by anyone of note) and, with a volume-driven business (on their website, Zed claimed to have more than 27,000 games available today), there is presumably little time to cater for high production values and highly polished games.

It is, in any event, a remarkable story: the ugly duckling into which Sonera sunk hundreds of millions, evolves as one of the powerhouses of mobile content. If only their guys would now get in touch and explain to me in a bit more depth how all this adds up… Hey, dear Zed people: drop me a note (volker [dot] hirsch [at] gmail [dot] com) and let me know how this works (OK, or at least get me a bit more insight on those numbers). Thanks!

How many handsets does a game need to support?

By Volker

On 25/02/2008

GDC Mobile co-founder and, I am honoured to say, my good friend Robert Tercek, came out with all guns blazing against the carriers’ demand for maximum handset coverage for mobile games that they allow to publish through their deck. Tercek called it a “lie” that operators basically insinuate that a game will run equally well on every handset, and he called mobile games publishers hypocrites as they moaned and whined about it but still play ball… Well, what else are they to do? Stop publishing games?

Since I still work in this industry, I would not perhaps put it that harshly as Rob did but the question is indeed if the network operators’ rationale (“we need to provide for the best possible user experience for every one of our users”) stands true when it comes to this. After all: if you offer a full music track for download, your phone needs to be able to support MP3; an old battered brick that only plays monophonic ringtones won’t do. To put it into slightly starker contrast still: it would be like an ISP would prevent a web publisher from putting a site live only because there are a lot of PCs out there that do not have the right software support. Or if the Germans would not allow any car to be imported into Germany unless its engine software was geared to allowing a top speed of min 200 mph because otherwise the user could be disappointed with the driving experience on the Autobahn.

Is the assumption that someone who has an old T610 would actually expect to be able to play a modern-day 3D racing game on his battered old handset really correct? If I drive a 10-year-old little Twingo, I know that I will not go 200 mph, Autobahn or not. And I will certainly not blame it on the operator of those roads.

If I want Vista Premium or Leopard, I need the machine to support it. And that is an informed decision I need to make. The operators’ approach may have been understandable a few years ago: mobile was a very, very new platform and people had not actually got round to the idea that one could actually do more with one’s mobile phone than making phone calls when away from a fixed-line phone. However, this has changed very quickly very much: even my 80-year-old neighbours now communicate via SMS with their kin. I believe it is safe to assume that the consumers of the year 2008 can very well distinguish between a low-end and a high-end phone and will actually appreciate the difference in performance without blaming their operator for a sub-par one when their phone happens to be a sub-par one. Time for change then, folks!

The constraints of having to support hundreds of handsets impacts the mobile games sector manifold: it makes it prohibitively expensive to develop and publish games with porting costs often being equal or even higher than the actual development. The effect is less innovation (how can you dare trying something new if you have to expend so much money before you even get it in front of a consumer?) but also less usage: it is often more of the same as developers try to minimize their cost by re-using engines (Gameloft has used the same basic side-scrolling engine for at least 20 games to date; highly polished and constantly evolving though, to be perfectly fair to them) and running risk-averse design philosophies where they try to stay as close to a proven hit as possible. This will however not drive consumers to get back for more.

I am however doubtful if operators will come to terms with this in the near term, and, let’s face it, they are not the originators of this platform mess: isn’t it more often the handset manufacturers that fiddle around with screen sizes that differ for more or less every device, that take great pride in running a gazillion different operating systems only to be slightly different to the other guy, that allocate soft keys rather randomly and occasionally swap the green and red call/end call keys from one side of the keypad to the other? Just imagine this last bit on a computer keyboard: is now on your left… try get going with that… Add to that the – yes, they’re here still – operators and their specific demands for this, that and the other, and the fragmentation does indeed create an economic landscape that is very hard to navigate.

This is one to the OEMs and the operators alike: get down to business, compete on the strengths of your devices and services and not on some OS and other software tweaks where the upside to the consumer is, if distinguishable at all, minimal.

In the interim, it would indeed be upon the operators to start trusting the good judgment of their customers in the hardware they hold in their hands better and start dropping those old devices from their requirements that will manage to screw up even the best game.

The prosecution rests… 😉

The State of Play…

By Volker

On 22/02/2008

This week (nearly everyone) trecked out to San Francisco for the Game Developers Conference (no, not me), and we therefore could hear and read a lot about where gaming, specifically also mobile gaming, is these days. So what is the state of play? Varied, it seems:

On-deck/off-deck was addressed: Kristian Segerstrale, formerly of Macrospace/Glu, now fresh start-up entrepreneur with his Playfish offering described the current landscape rather neatly: “Competitive development, Ogopolistic publishers, but monopolistic retail.” (This was – unsurprisingly – seconded by Nokia‘s multimedia guru, Anssi Vanjoki). Segerstrale damned the economics of the space with carriers syphoning off 30-40% for billing when the same can be had for a few points from Google check-out, Paypal, etc. He went on to predict that it will be the carriers’ doom to stick to that model and painted a bright future. I quite agree with him on this, mainly for two reasons: 1) the move into flat-rate data plans for mobiles; these will take away the fear of people browsing outside the constraints of the carrier that they will face huge bills, and – to some extents connected to the first point – 2) the fall of the walled gardens. This will mean that a whole new playing field is opening: consumers will no longer be constrained to buy games (and, for that matter, any other content) on their carrier deck where choice has been limited and innovation not always prevailing but anywhere on the whole wide web.

Such a development would arguably also clean up with another of these quirky carrier specifics, namely content discovery. On one of GDC’s panel discussions it was noted that, “[w]hen shopping on the deck, it is easy to know what an application does based on its name. However games are much harder to sell based on a 17-character title. There is no description and no ability to preview a game (such as viewing a trailer) before downloading. In the discussion, the example of Amazon was used to describe the kind of preview and recommendation system that needs to develop for mobile games.” True enough…

On the market as a whole, others, namely some of the money-men, were less buoyant: Mitch Lasky, formerly of Jamdat, now a VC with Benchmark Capital, warned that finding an exit in the next 2 years would be tough as the industry was “in the midst of a multi-year transition”, whatever that is supposed to mean. He is of course right in that the sector is consolidating, and 2007 was a tough year for most in the mobile game space (more on that below).

And then came the mobile gaming heavyweights from Gameloft and claimed that there had not been a Christmas in 2007. How’s that for a bleak outlook? The mighty Frenchmen’ President & CEO, Michel Guillemot compared that to a transition (is this a theme?) between console platforms: before the new one is really in, no one will buy a game anymore. Now, with all due respect, I do not believe that the slump of the mobile games market that many seemed to have been experiencing is hardware-driven. I would rather blame it on the choking hold the severely flawed business model in the space (see above) and actually increasing scarcity of deck space due to carriers reducing the number of slots available.

This last bit specifically was stoically conceded by Glu’s Jill Braff: she said one had to understand the way carriers operate (and, yes, from their perspective I think I do) and then “work in the system”. That might all be fine and dandy for the few who manage to place it. It does not, however, grow the market, educate consumers (and retailers) or gets games to that next level. I mean, on 5-8% take-up on downloadable mobile games, you are talking about a niche. Shouldn’t Ms Brasff rather be pondering on how to break that mold and make mobile gaming a true mass market phenomenon? Getting your head down, sighing and “work in the system” might not actually be an approach that helps that.

The gordian knot will only be cut if the distribution funnel opens up: this does not necessarily mean that carriers will lose the war but they will have to change their approach — eventually. Just imagine an ISP trying to dictate what game you’d be allowed to access. There used to be one, you say? True enough: the old AOL model. And where are they now when it comes to access? The iron curtain fell, the walled gardens on the Internet fell, and they will fall on mobile, too.

News Flash (Lite)

By Volker

On 18/01/2008

A while ago, I blogged about a cool new site French company Mobitween had launched, namely on user-generated games. Now, the good folks are a bridgehead in mobile Flash (they had their fingers in the code more or less from day 1). So, where is Flash Lite today?

Here’s the install base numbers as recently released:

From just over 14% to 23% in a year (yes, I know, this is based on a flat 2 bn handsets out there)… In any event, that is rather respectable, don’t you think?

Flash has the great advantage that its graphics are vector-based and therefore scalable. This means that most of the porting nightmare that contributes to 30-50% of the cost of mobile games, etc would fall away. Nice thought… It would make the whole commercial model of mobile games dramatically rosier. And it appears to be gaining traction: e.g. does Adobe make Flash Lite available on Verizon phones (and I’ve been told – confidentially – of one publisher having recorded more than 2m Flash game downloads on there already).

Flash is particularly good for casual games, which is, as everyone close(-ish) to mobile games knows, all the hype for the (small) mobile screen, and rightly so, as it is normally easier to adapt a casual game to the screen limitations (not even starting to talk about processing power) that are inherent to mobile phones. A natural fit, huh? Just look what Mobitween and their users have come up with! And I don’t even get started on Atom/Shockwave (read an interview here) and all the others out there…

Is it then that we only need to wait until Flash Lite (finally) reaches the mass market? On the web, Flash hurt Sun‘s Java badly. Will the same happen on mobile? Or will Sun be smarter this time, and make sure that its currently dominant position will be reinforced by making it easier for developers to publish on their platform? The jury is out…

EA, the iPhone and Mobile 2.0 in general…

By Volker

On 11/01/2008

In OEM

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…

Yahoo follows suit: presents development platform for mobile

By Volker

On 07/01/2008

After all the buzz in the back-end of last year over the Google-led Open Handset Alliance and their Android OS, Yahoo! has now presented its own view on how to reduce the complexity within the mobile landscape by announcing a development platform for “mobile internet applications”.

It is, alas, not the full bag of tricks: Unlike Android, which is of course basically an OS, the Yahoo! scheme only foresees tools to allow the creation of widgets to run under the company’s Yahoo! Go mobile service or in any mobile web browser. This means that “mobile internet applications” in Yahoo speak do not include “classic” mobile applications (developed in J2ME, BREW, Symbian, etc, and then downloaded to a user’s phone), and the latter will not benefit from the initiative.

The question (and this may well be one of the big ones for 2008) is therefore if the (short) age of downloadable applications is already dawning. Because, unlike the Internet, mobile is a cluttered space with a gazillion operating systems and middleware layers on even more different devices competing for market share. Ease to port applications at least across handsets and ideally also across operating systems is therefore the crucial factor. Only if downloadable applications (including indeed a software package like Yahoo! Go) really are displaced by the mobile internet proper would this change.

Commentators note that Yahoo! Go is not normally available on handsets as most tier-1 operators will (and apparently each and every US carrier currently does) simply remove pre-installed applications prior to delivery to customers. However, this does not seem to matter too much as far as the new initiative is concerned as it is said to run on every browser, too. It may take away from discovery and therefore usage so this is where it appears to chip away on the benefits: Whilst the Yahoo! move would seem the much less complex initiative compared to Google’s attempts to take on the OS heavyweights, it comes at the cost of lower usability for users and also less actual benefit for developers: why would you develop for that platform if visibility, discovery, usage and therefore commercial reward are foggy at best?

I’m not convinced (yet).