Tag: mobile games Page 14 of 17

How many handsets does a game need to support?

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…

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.

Super-Glu!?

It is the conference season, so I am falling a little behind but this is one that needs to be recorded here: The good folks from Glu announced that they would acquire AIM-listed 3D games specialist Superscape for $36 million (which however includes $11m in cash Superscape is still having in its savings account). On $7.2m revenue for the 6 months ending July 2007, this would equate to a revenue multiple of c. 1.7 (based on flat sales and a purchase price from which the cash at hand is deducted) which should be substantially higher than Glu’s c. 0.6 (awaiting the announcement of their 2007 results).

Glu has been hit brutally following their announcement of their Q3 results, falling from somewhere around $10.40 per share to $4.19 tonight based on worse than expected growth and earnings. They had recently announced expansion into China – a market with numbing growth numbers but also hard commercial parameters – through the up to $40m acquisition of MIG, which however failed to help their share price.

Now, Superscape adds market share in more familiar pastures, namely in the US where 98.4% of its revenue are generated, and this may well have been the main reason for the buy: it will cement Glu’s position in this key market. I am however not sure if there is more to this deal than that because the remaining parameters of Superscape do not look too good: the company focussed on the niche 3D sector, which did not fly as predicted (or should one say demanded) by the carriers. It is loss-making (and has been for a while if not forever). It grows less than Glu (as remarked by an analyst (report courtesy of MoCoNews).

Even if the deal rationale was synergies (reducing headcount as all they would really need from Superscape is their Moscow development facilities [which are a rather impressive operation as I could learn a few years back during a visit] and shut down their US and possibly UK offices), one would have to ask if this was the right deal. Superscape lost more than $2.8m on $7.2m revenue, so it is rather questionable if they could swing this into profitability quickly. I would posit that Glu would be rather capable of fighting for revenue and market share if it would not have to look at cost (their roster of titles is pretty impressive and they have been on an aggressive growth path), so would they not have been better advised to look for a profit-boosting acquisition as this seems to be their Achilles heel? Prove me wrong, Greg, please!

News Flash (Lite)

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…

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…

Handmark gets its hands on Astraware

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!

Even Gameloft can fail, apparently: disconnects Connect

Mobile games giant Gameloft, the one company in the space that seemed immune to failure, apparently shuts down its Gameloft Connect D2C service. Gameloft had started this as a iTunes-style application with all the bells and whistles: it was a downloadable PC application that allowed users to browse Gameloft’s catalogue online and bypass bandwidth restrictions (and billing charges) of mobile networks by utilising the computer’s bandwidth. Games could be loaded via a PC-handset connection and activated by SMS.

However, now it seems to only signify that direct-to-consumer propositions for mobile games are a tough business. They may have wanted too much: mobile games are a very real business but they seem to be too niche still to justify a full-blown integrated product like this, in particular when it is not a one-stop shop but only provides access to one publisher’s catalogue (even if such a good one such as Gameloft’s). A real pity that!

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