Tag: mobile games Page 9 of 17

Gamevil IPO

On 21/07/2009

Did you ever want to do an IPO under the radar? Do it in Korea as no one in the ignorant Western world will be able to read your prospectus (or, if you are in the US, S-1). Game maker Gamevil, which created one of my early favourite mobile games, NOM, and has shot to fame with its less quirky Baseball Superstars franchise, which topped 10m downloads, has apparently filed for an IPO as early as April of this year and will go public at the end of the month. Did anyone know? I couldn’t find anything…

Anyhow, Gamevil wants to raise c. $10m (12.6 bn KRW) on revenues of c. $12m (15.4 bn KRW) and profits of c. $4m (5.6 bn KRW).

The press release is fairly mum for the remainder. In particular does it not say how much of the entire share capital the 840,000 shares that it will put on offer represent.

Anyhow, I am extremely happy that the guys pull this off! Congratulations, folks!

The New Mobile Apps: Head in the Cloud!?

By Volker

On 12/07/2009

In 1

Everyone with an iPhone will by now have seen and “played” them: the first generation of multi-player games where most of the computing is done in the cloud, relieving the handset from such labourious tasks. This, according to new report, will soon (well, by 2014) be the norm and will in fact erase downloadable apps (games and other) as we know them today.

The huge advantage of this approach is that it would largely do away with the fragmentation nightmare of the handset market: multiple operating systems, a plethora of screen sizes, all sorts of “interesting” middle-ware solution imposed by either carriers (Sprint anyone?) or OEM to “tweak” an OS to their specs, with the sole result of making things even more cumbersome for developers. It is one reason why the Apple iPhone ecosystem thrives as it does: one OS, one model, one distribution channel, worldwide deployment. If the heavy-lifting is done in the cloud rather than on the handset, one can – presumably – do away with less complex front-ends reducing the work necessary to port the app to various handsets (and, no, please do not choose iMob as the benchmark!). Coding for the cloud would resemble web development rather than today’s mass market application development with armies of post-production and QA engineers filling offices (and overall development costs).

Another, easily overlooked, advantage is battery life: the more (and more complex) processes are computed on the phone hardware, the more the device will consume of the precious and scarce juice; battery life is better with cloud computing!

The obvious downside of mobile cloud computing is a blue sky: no cloud, no app. In posh tech lingo: intermittent network availability, which is to say that the app won’t work if you have no coverage (so no displacing downloadable apps in Oklahoma or on the Scottish isles then…). The aforementioned report suggests HTML 5 and its more sophisticated caching options as the solutions but I am fairly skeptical in that respect: you will not bring about the “unprecedented” sophistication with a little bit of cached data.

Anyway, the more likely scenario is an abundance of network availability by 2014 anyway: by then, large parts of our computing will be done over the air and LTE (and further evolved) networks will surely rule good parts of the world.

So, will it work? The report points out iPhone apps for the likes of Amazon, eBay, etc and, yes, for such apps I am sure it will work: they basically extend a front-end of a web service to a mobile device. The “app” is basically a client that facilitates input and serves as a crutch for the smaller screen where it is necessary to optimise the available data so as not to overburden the little available space with non-core information.

Will it work for more complex apps, in particular games? It will depend. On what? On the type of game of course! How many online racing games do you know? I mean really good ones. None? Ah… Why is that? Because not even the abundance of bandwidth and computing power available today gets to a game experience even close to the 50+ frames per second that the top iPhone racing games can do today (check out Firemint’s Real Racing!). The experience on next-gen consoles is even more astonishing. Need for Speed: Under Cover on XBox 360 or PS3? Woah! All these games require very serious hardware acceleration to convert the high-end graphics into smooth, fast, flowing action. And broadband networks aren’t good enough for that. Period.

For other games, turn-based card games, board games, the Sims, or indeed full-blown MMO, this is another story. These games may require a lot of data but the speed is not as important for good gameplay. So for this group (which is arguably the larger one), cloud computing will probably be the way forward. The opportunity exists in particular (and will be largely sufficient) for all “serious” business applications: these feed for the most part off server-side data sets already and a light mobile client (or browser?) is all they need to provide serious productivity boosts to the corporate world.

So will these run in a (mobile-optimised) browser or via (lighter) downloadable front-end apps? Due to the constraints of the small screen, I believe it will remain very beneficial to the UI and playability to have a specific front-end (and core graphics and processes) on your handset because it will optimise the user experience on a mobile device. To keep this bit as generic and light will be key. Otherwise, it would be porting hell all over again.

But we’ll get there! Just watch out!

Greg Ballard gets unglu’ed

By Volker

On 09/07/2009

In 1

Now, I am rarely (ever?) writing about personnel changes but this one probably deserves a note: Greg Ballard, Glu Mobile‘s CEO, is stepping down.

Here’s a man (and a company) on whom many in the sector have an opinion: Ballard leaves a lot of burned cash, big losses, huge inflation of license fees offered to rights owners, etc, etc. The comments on some blogs are not all complementary However, this is also the man (and the company) that went from what many perceived as an ailing publisher (back then when they were Sorrent) that bought other ailing publishers (first Macrospace, then iFone), were in the ropes a couple of times (ahead of their IPO, late last year) and yet so far always managed to pull through. And not only that: coming from a contested group of publishers that fought for the #3 behind EA Mobile and Gameloft, Glu now is firmly occupying that spot.

Is it healthy? Not (yet?). Is it all good? Is it to stay? That’s a tough question and I would need to gaze into a crystal ball I do not possess. Glu had started to pull back on cost (anecdotally, they “re-sized” fairly significantly; Hong Kong sea-front office closed, posh London location shrunk, …). As per their CFO, “the company remains committed to being cash flow positive from operations during FY09”. There you have it.

Anyway, I wish Greg well!

AR: the next acronym to watch out for?

By Volker

On 06/07/2009

In 1

AR stands for Augmented Reality and it is one of the dreams of game developers: merge the virtual and real worlds in a game and explore new horizons. This has been a pretty futuristic feature until recently: shown off at trade shows but never really seeing the (commercial) limelight. And even in the brave new world of the iPhone, it doesn’t fly – yet.

A dozen or so AR game developers have now launched an initiative to make Apple allow them to manipulate live video feeds (which they need to in order to run their games). The respective API is currently missing (developers are not allowed to use private APIs under Apple’s publishing guidelines). They threaten to otherwise go to Android. Hmm…

So far, AR games are few and far between and they haven’t really left the scholarly confines of Georgia Tech and other ivory towers, simply because there is no market for them as yet. Many people place their faith for the next big thing in mobile gaming on AR but because the necessary parameters (video feeds eat lots of bandwidth) have not been met, they cannot really capitalize on their wares. Go here for a good overview of the status quo (featuring the Georgia Tech apps and others).

So, is it there yet? I’d like it to but I doubt it: it is not only Apple but – possibly more importantly – the carriers: what do they have to gain if a few people consume a disproportionately high amount of bandwidth to play their games? Very little under the current costing framework of the industry. Little short-term chances I would therefore say… A pity that!

Game Aggregators: New World Order

By Volker

On 02/07/2009

In 1, Deals

The times they are a-changing. Everyone has realized this by now (or so we should think). The question therefore is not so much will there be change but how will it look like.

Some of the weakest links in the mobile games value chain would be, it appears, the aggregators. Why is that? Because they do have the least defensible position: they do not own IP, they do not hold unique positions, they do not produce anything, they seem to be at the mercy of both of the groups they are partnering with: game developers to continue granting them distribution rights to their games, network operators and other distribution outlets to continue allowing them to use their channels to get to the end users. As if this would not be enough, now has arisen a creature that seemingly does away with all these middle-men anyway. It is called app store. So is it all doom then for games aggregators? There is a report out (too expensive for me to buy) that would seem to suggest as much, or so we are told.

The argument, in short, is that, with an OEM app store the number of distribution channels that any one developer/publisher needs to reach is drastically reduced (there are maybe 10 meaningful handset manufacturers in the market vs 300+ carriers and other distributors). Even the littlest companies have (or should have) the resource to deal with 10 partners; chapter closed.

Really?

The above works with a number of simple but crucial assumptions, and the boldest is this: carriers will happily let OEM take over the content real estate. Will they now? There are ample signs to doubt this. The giants of the space do not appear to be giving up, in the contrary: Vodafone has already announced its own app store – across handset brands (!) – and it is about to tighten its links with both China Mobile and Verizon Wireless (in the latter of which it holds a large stake). So what will all the OEMs (all with their own app store of course) do when carriers accounting for nearly half of the world’s subscribers wave them off? Cave in? You bet!

Anyway, does this change the game for aggregators? I believe it does and here’s why:

Carriers have traditionally struggled (with exceptions) to run an efficient, customer-friendly content offering. We have therefore seen an increasing trend to outsource the “decks” to third parties, which are – what? -, yes, aggregators.

Carriers are unlikely to concede defeat over the content side, not necessarily because they fear losing out on a lot of revenue (given their fairly average performance, SMS, voice, data, etc will outsell content as a source of revenue very, very significantly) but because of the strategic value of content as well as the unpredictability of its future impact: bear in mind that the emotional attachment to beloved brands, i.e. affinity (Transformers, Ice Age, Playboy, Tiger Woods, …), will remain higher than that to a network operator, and please do not take offense if you are working for one. Do not be mistaken: carriers are being trusted but they are not being loved. There is just not as much emotional attachment to a cellular network as there is to a rodent in love with an acorn…

Carriers do not have to give this piece up either (they call the shots on what goes onto a handset: see an example), they are not even losing money (they even gain: every cent earned through content sales is a cent more than carriers get from the iPhone app store sales…).

However, what carriers do have to do is catch up with the state of the art in selling, and that means an app store. However, it can also be a carrier-operated/driven app store.

An app store, too, does not however solve the dilemma of having to manage a huge amount of content in a way to allow the consumer a choice. One must not throw everything onto a big pile and let them pick out what they believe they like; this type of sales does not register too well: it is time-consuming, intransparent, messy, not good. So one needs someone to manage it. In comes the aggregator.

Or does it?

Aggregators that went around collecting content in a bucket only to throw it against the next wall to see what sticks are likely to struggle (or have died already: RIP Telcogames et al). However, aggregators that actually provide content management as a service to operators thrive (not exclusively on games, mind you). All the big guns in the space, Fox Mobile (f/k/a Jamba), Arvato Mobile, Buongiorno and recently Zed (through its acquisition of Player X) run riot in the space and bid hard for every deal that comes up (and lots of them do!) and gobble up the market. More on the classic D2C side, Thumbplay grew tremendously in the US, SendMe Mobile seems to go from strength to strength, and a lot of smaller ones, such as Rayfusion, etc. seem to more just hang in there, too. Why do they? Because the features that make an aggregator excellent – managing a wealth of content well – are the exact features carriers would look for when outsourcing their struggling content units. And because it is an aggregator’s core business model, they are really good at this, which is crucial in a low-margin business: be efficient or die.

Marketing and promotion is another point. We already see aggregation-type businesses become forces on Apple’s app store, such as Chillingo (from my very own town!). They publish well over 100 games and thrive on iPhone developers capitulating before the challenge to get noticed amongst the more than 50,000 apps currently available. Chillingo can provide marketing and promotion and make sure that a developer’s product gets not only live but noticed, too. It is very likely that there will be others in this space very, very soon.

So what seems to change is not the viability of being an aggregator but the aggregator’s service to their customers (the carriers!): whereas it may previously have been sufficient to use the “bucket against the wall” tactic, they now have to become better in providing a subtle selection without too much restriction. People will normally welcome a structured environment with pre-selected choices. Just make it a) easy and b) don’t limit randomly or indeed too much. And now get going! 😉

Disclaimer: I hold an indirect interest in Rayfusion.

Vodafone's App Store: Bigger than Apple?

By Volker

On 18/05/2009

In OEM

It was only a question of time before the first carriers would release themselves from the iPhone-imposed stare and come out all action, and the biggest of them all (by sales), Vodafone, has now raised the curtains on its very own app store. It is the biggest app store to date: Vodafone has more than 289m customers who will – eventually – all be able to access the store (which makes it a cool 8x or so larger than Apple’s). Unlike on Apple’s App Store, you also do not need a credit card (which, however, you are likely to have anyway when you can afford an iPhone) whereas Vodafone, being a carrier, will bill to their customer’s phone bills directly. Very, very cool, huh?

So imagine the power of an app that would go live on Vodafone’s carriers all at once. But before we get carried away, let’s have a look at the numbers:

Orange UK (in its recently released Digital Media Index; see here) suggested that 4.87% of its users downloaded one game in 2008 (770,000 downloads p.a./ 15.8m users) but this is without an app store but with the traditional catalogue-style offerings.

For Vodafone Group, this would equate to 38,500 downloads per day (289m x 4.87% / 365). If (or when) it includes this offering beyond its own 27 local carriers to its 40 network partners (including Verizon Wireless!), one would be looking at North of 1bn users and, hence, 100,000+ downloads per day. Now, with an app store, this should – theoretically – be further boosted, let’s say doubled, arriving at 200,000 downloads per day.

How does this compare with everyone’s darling/nemesis (delete as appropriate), the iPhone: I had previously calculated that Apple’s app store sees some 4,000 per minute or 5.7m per day… This however includes all those free downloads (about 22% of all apps are for free), so let’s say the ratio is 1 paid: for 40 free (which is on the high end of assumptions) or 1:15. This would equate to 144,000 to 380,000 paid downloads per day. So Vodafone’s 200,000 wouldn’t look completely out of order, would it?

There’s even more: Vodafone’s decision to bill to the phone bill is only one potential booster since it minimizes friction for the user (Apple: credit card/iTunes account, Blackberry: PayPal, Nokia Ovi: a mix?, etc). The other – and longer-term potentially even bigger one – is geo-awareness: since Vodafone owns the network, it knows where any of “its” users’ mobile is at any given time. Now link app usage with geographical location and you could be on to something fairly unique. There is little in the market so far but then: had Apple run its campaign of “bettering life’s little problems” in June 2008, it would have looked fairly bleak, too!

So: huge potential but where are the pitfalls?

There’s UI and handset fragmentation, if I dare say so. Even though it probably hurts by now, let me repeat: Apple has one model and one deployment method and it nailed content discovery (not perfectly but better than anyone else). Job done. Vodafone has hundreds of handsets on its “to be supported” list. Some are like the Porsche’s of their trade (“first available on s60 devices“; ooooh), others are the equivalent to a pedal-powered toy car. The costs for developers to support all these is significant, the cost of management is arguably, too.

Most importantly though, it takes the simplicity and thus ease of use out of the game. And I would posit that this is a big contributor to the (Apple) app store’s success: simplicity from entry (ingest an app into the store), management (price, etc) to consumption (download and active use). This will be a tough one for Vodafone to overcome, and it is indeed the one point where OEMs have much better opportunities to “get it right”. That the relationship between carriers and OEMs is not always without strain has only recently been proven again, sooooo: the jury is probably still out on that one.

Having said this, Vodafone is better positioned than most carriers though because of its sheer size and footprint. Smaller carriers might struggle to offer developers similar incentives to support their respective offering because they don’t scale as well.

For Vodafone, I am concerned that the multi-level complexities they have to deal with (number of handsets x number of operating companies x number of languages x all additional info [geographical and otherwise]) might pose a strain on its ability to roll out quickly and decisively. It might not be as huge and life-changing as Apple’s app store but it would certainly lift the “mainstream” of app downloads to whole new level. I am an optimist, so, come on, Voda!

Orange UK: Mobile Broadband Roars!

By Volker

On 14/05/2009

Orange UK, one of the large carriers in the country with 15.8m mobile subscribers, has released its “Fifth Digital Media Index”, containing a set of interesting numbers on the data uptake on their network, and it makes for intriguing reading!

The carrier recorded a whopping 4,125% (!) increase in data use over dongles using their mobile network in the last 12 months with dongle subscriptions growing by 504%. Data use from handset increased by 108% and that, I might add, without the help of the iPhone (which is exclusive to O2 in the UK). The increase from dongles will be connected to a big push this offering has seen in the UK (as in other countries) over the past period. Carriers have been and are promoting these aggressively, helping uptake of mobile broadband significantly.

Here are some highlights from the report:

Music and video downloads increased both by 38%.
Games only grew by 8% (but at least they grew; anecdotally, some other carriers recorded sometimes dramatic drops in take-up) to a total of 770,000 downloaded games, which equates to a market share of 23% of all UK games downloads (the total UK games market would hence be 3.35m downloads for the year with Orange claiming top spot). From the top 10 downloaded games in 2008, 8 were part of the carrier’s embed programme, which shows – again – that users appear more comfortable if they can try it out before (embedded games normally are trial versions).
Social network use over mobile increased by 129% in page impressions per month and 48% in unique users. The monthly average number of pages per user was 397. In terms of popularity of social networks, Orange’s Mark Watt-Jones (@MWJ) fed us additional bits via the Twittersphere: Facebook dominates, Bebo is significant, MySpace less so and Twitter grows very quickly (what was the Oprah moment in the UK?)
An average of 386,000 GB of data have been transferred via dongles and handsets per month.
Mobile search grew by 120% with 45% of the results being “off-portal”, i.e. outside Orange’s domains.
Good old SMS still looking good, too: 19% growth with 1.7bn sent every month.

Another key point Mark brought us via Twitter: 99% of access to social network sites came from non-smartphones. This is quite noteworthy indeed as it arguably shows that mobile data usage now transcends beyond the power users on sophisticated handsets and also that content leads the uptake: give people compelling content, and they’ll use it. Mobile data for the masses seems to have arrived!