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Market in Mobile Games?

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Is there a market in mobile games? ive read articles on the net saying that mobile games is the next best thing. Is there any numbers to prove it? Ive ask some of my gamer friends and argue on what is the importance of playing games in mobile coz mobile phones has limitations like battery power, speed and stuff thanks

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Yes there is absolutely a market for mobile phone games and it is only getting bigger. I can't offer you any figures right now but grab any TV/movies/games/entertainment/etc magazine flick through and see it how many different full pages adds there are for websites offering tones, graphics and java games. Look at how much they are charging for each game in relation to the ringtones etc. Here's something to help give you a picture: I distribute my own phone games for free via getjar.com and each game gets at least 200 downloads a day (obviously it would be less if I was charging but at the same it would also be more if I could afford these massive advertising schemes).
6 games * 200 downloads * 7 days * £4 = £33600 a week
Even after overheads that would still be a VERY nice profit.

While mobile phones are far more limited in their power than your console or pc they offer somethings that no other platform does
- a huge target audience that already has the hardware and isn't going away
- the ability to play games any time, any where
- direct, quick, easy downloads
- Java - you all know java and why it's good, write a game for one phone and easily adapted to another model

With this boom in phone games there has been a bit of a return to the golden age of the bedroom programmer where one skilled programmer could turn out a hit game on their own in a matter of weeks but this period is rapidly fading away again due to the big players taking interest and flooding the market with games based on big franchises (eg Splinter Cell, Driver 3) which the little guys simply cannot compete with (eg your 15 y/o and can only afford one game this week for your phone - do you buy the game that's sound original but you haven't heard off or do you buy Fifa 2004?).

If you want more proof, have a look at games industry recruitment sites and see just how many new jobs in the wireless market are appearing.

Okay so the kids aren't going to be trading in their Xbox for their Nokia but it is a booming industry. If you're thinking about getting it, my advice is do it now.

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The market for mobile games is growing fast as voices says..but when the market becomes saturated then games of quality will stand out more and more. Also remember, that the 3g game market will begin to pick up within the next 2 years (predicted to be mass-market in 2007),therefore, games will have to have more depth and will probably incorporate multiplayer/community aspects that the consoles/pc are enjoying at the moment. Interesting times are ahead for the mobile gaming industry and in the future a player will be able to play against/with anyone else the same game at the same time, regardless the device they are playing on.

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"I distribute my own phone games for free via getjar.com and each game gets at least 200 downloads a day (obviously it would be less if I was charging but at the same it would also be more if I could afford these massive advertising schemes)."

Just wanted to give you a clue on how different the figures can be if you charge money:
A friend of mine distributes an application (not a game though) through handango.
While the free demo is downloaded at a rate of 500 a day, the buy/demo ratio is around 1/1000. That is 1 buy for each 1000 downloads.

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By "mobile games", do you mean mobile non-console games (e.g. wireless, cell phone, etc.), mobile console games (e.g. GBA, DS, PSP) or both?

Here are a few public stats and sources for the non-console mobile games. When looking at any "numbers" on the mobile or fixed gaming industry, it is a good idea to make sure you know what is included (e.g. software only, hardware only, both, other).

===================
Quotes from In-Stat/MDR:

"There are currently 18.7 million wireless gamers in the U.S., up from 10.6 million in 2003. That figure will further increase to 27.3 million in 2005."

"7.9 percent of all U.S. subscribers will download a game onto their mobile phones in 2004"

Source 1
===================

Quote from Frost & Sullivan:
"European mobile gaming market from just under $800.79 million in 2002 to just below $7 billion in 2006"

Source 1
Source 2

===================

"Visiongain expects the market to grow rapidly from an estimated value of €1.2 billion in 2004 to over €8.38 billion in 2009."
*includes mobile console games (e.g. GBA)
Source 1
===================

"In 2002, the estimated total turnover of computer game markets was USD ~20 billions, out of which mobile games represented roughly ~USD 0.9 Bn"

"Strategy Analytics12 predicted that the mobile game market would grow to $7 billion by 2008."

"The ARC Group13 forecast that number of worldwide mobile game users will grow from 196 million in 2002 to 667 million in 2005."

"Informa Media Group14 has stated the mobile games segment of the videogames industry would comprise 11.7% by 2006."

Source 1 (pdf)
==================

"According to IDC, the wireless gaming market in Asia-Pacific, excluding Japan, is expected to grow at a compound annual growth rate (CAGR) of 40%, from $237.4 mln last year to $1.3 bln in 2008."

Source 1
===================

"Right now, the market is about $200 million in the U.S. and about $600 million in Europe, Mr. O'Driscoll says. In 2003, worldwide mobile game sales totaled $1.1 billion, according to British research firm Arc Group."

Source 1
===================

The global mobile phone gaming market more than doubled in 2003 to $587 million from a year earlier and is expected to grow six-fold to $3.8 billion in 2007, according to estimates from Informa Media Research in London.

Source 1
===================

"U.S. mobile-gaming revenues are projected to more than double from $91.3 million in 2003 to $203.8 million in 2004, according to tech consultancy In-Stat/MDR."

Source 1
===================

Ovum (July 2002) predicts that wireless gaming over a cellular network will be worth U.S. $4.4 billion worldwide by 2006.

Source 1
===================

"The number of US households playing cell phone games doubled to 16.3 million in 2004 versus 8.1 million a year ago."

"The mobile gaming market is expecting a 6-fold growth over the next five years for downloadable games, generating 82 percent of an $8 billion market."

"Mobile entertainment publishers are clearly back in vogue as the number of Java and BREW capable handsets rises from 186 million units this year to over 1 billion units in 2009."

"In the five months leading up to May 2004, Verizon Wireless customers have downloaded more than 12 million games."

"Nearly 70% of video gamers own a cell phone and 50% play games on their mobile devices."

Source 1
Source 1
===================

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Quote:
Original post by evelyn
Some good links there bulldog232 - thx.


No problem. Those were the public stats that were easiest to summarize. It would be nice if we used this thread (or at least this forum) to consolidate projections on the mobile console and non-console markets.

All: Please post links and/or references to publicly available stats/reports on the mobile gaming industry as follow ups (now and in the future).


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Guest Anonymous Poster
Hi there,

interesting discussion here !

At the moment I am programming Series60 games in my spare time (just like Adiash) and intend to sell them and eventually to make it a day job if this works.

So we have a problem... There is all this buzz about wireless gaming, billions of dollars, blablabla, and on the other side, we can hear on this forum that on Handango someone is selling one game (or application, whatever) every two days... How to make a living of it ???

Who does live of selling through Handango ? Are all people like me, doing this as a hobby in their spare time ? I am quite puzzled.
The problem with portals in my case (I have a very high quality game) is I will be lost between hundreds or thousands of poor games...

Does this also mean that if you want to make a day job of it, then forget about internet portals and you have to work with operators/publishers (which is hard to succeed at) ?

Adiash, your game looks cool (I knew Evious from mobilegd.com where I was recently in touch with Civax). Is Evious a full time activity ? Can you live of it ?

If someone can bring their knowledge, it would be much appreciated.

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AP - Mmmnn..can't tell you anything about getting sales through Handango etc., however, I can tell you that if you do want to make it your 'day job' then I would seriously look into the pros and cons of setting yourself up as a bona-fide games company. However, if you go down this route then a lot of your time will be taken up getting your biz plan together, market forecasts, financials, etc and contacting, keeping and developing relationships with publishers etc if you want to reap the rewards through your hard efforts. There's no harm in showing your game to potential publishers/portals etc - even if you only get advice on how you can go about getting your game out there, but I think you'd need to have a clear idea in what you want to do yourself. The market in mobile games is growing at a phenoemenal rate and there's no better time than now to get into it.

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Quote:
Original post by evelyn The market in mobile games is growing at a phenoemenal rate and there's no better time than now to get into it.


However the situation is suspisously similar to the high-tech bubble just before the burst...

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Quote:
Original post by serg3d
Quote:
Original post by evelyn The market in mobile games is growing at a phenoemenal rate and there's no better time than now to get into it.


However the situation is suspisously similar to the high-tech bubble just before the burst...


How is that? During the tech bubble, there were valuations and IPO funding for companies based on no revenues. There are substantial revenues already being seen in the mobile gaming industry.

Will the projected revenues for '08 and '09 actually happen? That is a question that can be argued and may have some "bubble" assumptions included in it.

Note: The tech bubble was not all bad, many good and substantial companies (e.g. ebay, yahoo, amazon) had their start as a result of that bubble and many good technologies were created, but it did teach us (or should have taught us) to look at cash management and real revenues not just the "grand future".

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Mobile gaming is indeed on the rise. I myself have read a number of articles and it proves interesting reading.

For example, mobile gaming is a rising star in India’s fast-growing wireless business. Gaming is a key element in operators’ and content developers’ strategies to develop new, high-value wireless revenue streams, beyond basic voice services and simple text messaging.

Propelled by end-user demand, gaming is growing quickly as an increasing number of Indian consumers take advantage of wireless mobility to enjoy entertainment on the go.

The growth of this market sector has attracted publishers, developers, animators, musicians, and content providers, and is also stimulating the development of innovative business models. In-Stat/MDR expects that the Indian mobile gaming market will generate $26 million (US$) in revenue in 2004, and will increase to $336 million in annual revenue by 2009.


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Quote:
How is that? During the tech bubble, there were valuations and IPO funding for companies based on no revenues. There are substantial revenues already being seen in the mobile gaming industry.

Will the projected revenues for '08 and '09 actually happen? That is a question that can be argued and may have some "bubble" assumptions included in it.

Note: The tech bubble was not all bad, many good and substantial companies (e.g. ebay, yahoo, amazon) had their start as a result of that bubble and many good technologies were created, but it did teach us (or should have taught us) to look at cash management and real revenues not just the "grand future".


I think what he meant was that this may be another case of expectations being unable to match up to its hype.As with the dot.com boom,this could be another case where the market potential is being hyped up beyond the realm of rationality.With all these large figures being thrown about,i wonder how much is actually hype and how much is actually fact.Can't blame me for being cautious since the dot com boom took place less than a decade ago.

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If you have a look at Gameloft's press release in July they show Gameloft posted consolidated revenues of 4.7 million euros in the second quarter of 2004, up 123% compared to the previous year. Revenues for the first half of the year totaled 8.7 million euros, up 168% compared to 2003. Wireless gaming generated 94% of revenues in the first half of 2004 and grew by 239% compared to the same period in 2003. Internet revenues increased by 50% and accounted for 6% of total revenues in the first half of the year. Third quarter revenues:-
Gameloft posted consolidated sales of €5.5 million for the third quarter of fiscal year 2004, up by 108% over the previous year. For the first nine months of 2004, sales amounted to €14.2 million, representing a 141% increase. The wireless gaming business generated 93% of the revenues for the first nine months of the year and increased by 176% compared to the same period in 2003. Gameloft notably increased its market share in the United States, in a particularly dynamic environment. Internet sales accounted for 7% of total turnover, up by 57%.

Admitedly the developer only gets a percentage of these revenues (probably 40% net revenue) but the numbers are very good all the same.

[Edited by - evelyn on November 8, 2004 6:50:34 AM]

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The developer doesn't get a percentage of those revenues. In most cases, the developer is paid a flat fee for developing the game. If it's their own IP (which is becoming less and less likely as licenses are more and more in demand by carriers) then the license-holder will get a percentage.

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Original post by Starboy
The developer doesn't get a percentage of those revenues. In most cases, the developer is paid a flat fee for developing the game. If it's their own IP (which is becoming less and less likely as licenses are more and more in demand by carriers) then the license-holder will get a percentage.


Mostly untrue…

In most cases, the developer receives a percentage of revenues, and as opposed to the fixed gaming industry, mobile developers often receive a percentage based off of service provider (e.g. the telco) gross revenue – not net revenue.

For very basic games like Snake, tetris-like, pac-man-like, solitaire, developers will receive only a flat fee. While those were the first games that were seen on the market several years ago, and to a lesser extent today, the real “money” being seen in the mobile gaming industry is coming from more involved games. In these games, the developer almost always receives a percentage of revenue, unless they are fail in their negotiations or are simply trying to get their name out there.

You are correct though that license-holders of IP/brands/franchises/content suppliers also receive a percentage of revenue.

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starboy - if the developer is in a position to develop a game prior to selling thru a prospective publisher then they will get a split of the revenues. This can and does happen. Our company has developed its first mobile game which is due for launch this month; we will get 40% net revenue from the publisher. The developer doesn't neccessarily have to take a flat-fee to develop a licensed game - it will depend on the relationship held by the two parties and what they both want to achieve with the game. Our next game will be a licensed game which means, for us, some money up-front and the rest as a revenue split. When we have a 2nd team set-up, one will be developing licensed games while the other team will be developing our own games, therefore, 2 income streams coming from %net revenues in 2nd Q 2005. It perhaps is not the way some/most mobile developers take to grow their company but it is the route we are taking to grow ours. There is still room in the market to create original games although they must be of high-quality once the market becomes saturated.

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there are a number of articles which provide forecasts,
showing the projections for the growth of mobile gaming.
Here is the growth for the US and India

here are the links.

www.instat.com/press.asp?ID=1077&sku=IN0401659MCD

www.instat.com/r/nrep/2004/IN0402439AW.htm

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Just to clarify some things for those of you thinking of getting into this business, a net revenue deal with a publisher (e.g. 40% net revenue) usually means that the developer gets 40% of what the publisher gets for game sales after distributors and retailer take their big cut. Also some deals might have publishers giving 40% after expenses (e.g. marketing costs) but try to avoid these deals.

What the publisher gets depends on how the publisher distributes the game. The publisher usually sells the games to retailers such as ringtones companies (who advertise in magazines), operators, or other distributors using web portals. In most cases the publisher is then lucky to get from 5% to 25% of the selling price of the game. For instance a game could sell for 4.50 (GBP), the publisher could get 0.60 (GBP), leaving the developer with 0.24 (GBP). The publisher could also sell to other publishers leaving a diminishing amount left to the developer as more and more middlemen take their cut. This example is for UK prices where game prices are quite high, if the game is sold in other parts of the world where prices are lower (rest of europe, US) or much lower (far east) then the return to the developer is even less.

Whilst 40% sounds like a good percentage, it isn't so great in terms of percentage of the money that the public pay for the game. There's a lot of middlemen taking their chunks of the money, perhaps some taking more than they really deserve. It might provide a viable income but your exclusive publisher is really got to put a lot of effort into exploiting your game on a worldwide basis. Other options are to seek publishers and distributors yourself on non-exclusive deals.

And then there's the marketing and branding issues. Unfortunately it looks like the way the market is going is for branded content, that's mainly what the operators are interested in putting in front of their customers and that's what the ringtone companies are more confident in investing in advertising for. Branded games usually put the publisher in a stronger position to negotiate a slightly better deal (share) with operators/retailers too. So unbranded games developed by developers have got their competition cut out, which is why some developers take the wise option and work with publishers on branded games (upfront money is better, but less revenue share if any, no IP - intellectual property - and no branding gained).

So why don't developers make a deal direct with a film company and create a branded game for the next blockbuster film? Because its too expensive. It can cost from 75000 to 150000 (USD) and upwards in an upfront payment to the licensor and you still have to revenue share with the licensor. Gameloft are in the fortunate position of having brands already available to them from their parent company UBISoft in the form of console titles (e.g. Splinter Cell), plus they have the money to invest in IP licensing, which is one reason why they're doing so well, and one reason why more and more big publishers are getting into mobile to exploit their licenses.

Then there's market saturation to think about, how often is a potential buyer going to see your game if they're looking at games from a retailer who has 100 or more games for their phone (especially if they have to browser from one web page to another, no search, using web or WAP browser).

Sorry to put a downer on this hype but the market isn't as great as its made out to be by some people - that's certainly my experience. If it is a lucrative market then as usual it is the big players (e.g. operators, brand owners, etc) that will get the best share of that money, not the small players. Also consider that some companies that announce that the next new market is worth so many billion in such and such a year are usually either trying to sell you a report (which people/companies looking for get rich quick reports will buy), or trying to get you to attend/exhibit at an expensive conference, or trying to get you to support their new market.

Bottom line IMHO, is that it is possible to make some money in this market but if you want to make your own games, then unless you're very clever you'll just be making pocket money. My company obviously hasn't been very clever since we're only making pocket out of our games so far! If you plan for making pocket money with your own mobile games, and supplement this income with better income from other work (e.g. working on branded games for your publisher) then your company has a better chance of surviving and perhaps working on your own more lucrative games in the future.

Here's a link which provides another non-rosy view of the market:
wireless game review article

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Quote:
Original post by bulldog232
Mostly untrue…

In most cases, the developer receives a percentage of revenues, and as opposed to the fixed gaming industry, mobile developers often receive a percentage based off of service provider (e.g. the telco) gross revenue – not net revenue.



Nope. In most cases the developer receives a flat fee, not a royalty.

Quote:

For very basic games like Snake, tetris-like, pac-man-like, solitaire, developers will receive only a flat fee. While those were the first games that were seen on the market several years ago, and to a lesser extent today, the real “money” being seen in the mobile gaming industry is coming from more involved games. In these games, the developer almost always receives a percentage of revenue, unless they are fail in their negotiations or are simply trying to get their name out there.


No, they don't almost always receive royalties. Only the licensor of the property will receive the royalty - the developer will almost always receive a flat dev fee.

Quote:

You are correct though that license-holders of IP/brands/franchises/content suppliers also receive a percentage of revenue.

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Original post by evelyn
starboy - if the developer is in a position to develop a game prior to selling thru a prospective publisher then they will get a split of the revenues. This can and does happen. Our company has developed its first mobile game which is due for launch this month; we will get 40% net revenue from the publisher. The developer doesn't neccessarily have to take a flat-fee to develop a licensed game - it will depend on the relationship held by the two parties and what they both want to achieve with the game. Our next game will be a licensed game which means, for us, some money up-front and the rest as a revenue split. When we have a 2nd team set-up, one will be developing licensed games while the other team will be developing our own games, therefore, 2 income streams coming from %net revenues in 2nd Q 2005. It perhaps is not the way some/most mobile developers take to grow their company but it is the route we are taking to grow ours. There is still room in the market to create original games although they must be of high-quality once the market becomes saturated.


As I said before - if it's your property then you are the licensor and you'll get a split. With the bigger publishers though (Mforma, THQ Wireless, Sorrent, MobileScope) the days of them doing deals on unbranded games are slowly coming to a close. Nowadays, they will usually acquire IP themselves and then find a developer to create the game for a flat fee, no royalty. I'd be very surprised if you told me that you are getting a royalty share on a license you don't own yourselves, particularly if it's with one of the big publishers.

Good luck with your game, hope you do well from it.

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Original post by Starboy
Nowadays, they will usually acquire IP themselves and then find a developer to create the game for a flat fee, no royalty. I'd be very surprised if you told me that you are getting a royalty share on a license you don't own yourselves, particularly if it's with one of the big publishers.


I guess that some of the smaller publishers, who are experimenting with licensed property on mobiles for the first time, might want to share the risk. They've already paid a vast sum upfront for the licence, so they may not also want to pay the developer the full flat fee for developing the game, offering instead a partial payment and royalty deal.

Another instance where the developer might get a royalty on a licensed game as well as a flat fee, is if they develop it re-using their own existing technology (e.g. an engine) which has its own licensing/royalty scheme.

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Original post by abstractworlds

I guess that some of the smaller publishers, who are experimenting with licensed property on mobiles for the first time, might want to share the risk. They've already paid a vast sum upfront for the licence, so they may not also want to pay the developer the full flat fee for developing the game, offering instead a partial payment and royalty deal.

Another instance where the developer might get a royalty on a licensed game as well as a flat fee, is if they develop it re-using their own existing technology (e.g. an engine) which has its own licensing/royalty scheme.


Yeah, the smaller publishers may well do that, I was mainly talking about the bigger players in the publishing space right now...

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From the discussions above, does anyone get the feeling that the commercial mobile game market is currently going the same way as the console/pc market?

If so, then this is a pity since I had originally hoped that the mobile market would go the same way as the casual gamers market (e.g. realarcade) since this seemed to make more sense to me with more similar customer bases and customer profiles etc.

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Original post by abstractworlds
From the discussions above, does anyone get the feeling that the commercial mobile game market is currently going the same way as the console/pc market?

If so, then this is a pity since I had originally hoped that the mobile market would go the same way as the casual gamers market (e.g. realarcade) since this seemed to make more sense to me with more similar customer bases and customer profiles etc.


I think it going in neither direction. IMO it will be something new - with location based games, a lot of server-side staff etc. But I'm not overly otimistic about small developers. Though the small-scale location-specific games can be of no interest to operators /publishers - kinde of like payed CS servers. Because it's not clear what the market will be it's hard to tell there the niche for small developers will be...

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