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Friday, February 26, 2010
Thursday, February 25, 2010
Wednesday, February 24, 2010
Late last week, following myriad announcements on the subject being excreted out of MWC, I asked y'all the question... "Which new mobile OS excites you most?" Clearly this question got everyone real excited (not). Nonetheless, the results show that the crew from Redmond may still have some mobile mojo goin' on. Hey, Microsoft's video looked bitchin'... but as folks once said, the proof will be in the pudding and, as I say (using a made-up word), the proof will be in its consumerization. Does the 2nd most popular choice (none are interesting) indicate that you guys think that OS proliferation is a bad thing in general and/or that iPhone, BB, Ovi and Android pretty much have it handled? Or does it mean I just need to ask more interesting questions?
Monday, February 22, 2010
Friday, February 19, 2010
Seoul-based mobile games publisher GAMEVIL announced stellar earnings last week and I just gotta say that despite it being an unpopular choice *I called it* when I picked them as the Q4 revenue growth star in my recent poll (assuming no surprises from Artificial Life). Me and the other guy who voted for them are getting some crazy sick prizes, suckas! (a large boba tea and Rain's latest album).
The publicly traded company (063080.KQ) realized $7.95mil in Q4 revenue, which is a 54% gain over Q4 2008 and $4.08mil in net profit, which is 84% growth QonQ. For the full year 2009 their revenue and net were $21.33mil and $10.29mil respectively. In one year these guys have blown right past some original gaming gangstas like Capcom, I-play, THQ & Hands-On... and are gaining fast on their bigger South Korean competitor, Com2uS ($27.75mil 2009 revenue). The prominently placed line in their press release claiming they're “the first mobile game company in Korea to surpass 10 billion KRW in Net Profit” is clearly a dig at their cross-town rival (which had half GAMEVIL's profit). Actually GAMEVIL might be closer in size to Com2uS (as well as D'Choc & Artificial Life) than the numbers let on, because they only include a portion of the earnings from their profitable GAMEVIL USA, Inc. OpCo... which has 5 well received Paid titles (notably Baseball Superstars & ZENONIA) in the US App Store. For the following reasons I think these guys are really well positioned for growth...
- a powerful base in their technologically advanced, game-crazy home market;
- a studio that creates very high-quality, award winning games, conducive to smartphones;
- demonstrated competence in the new OEM app stores and;
- (this is key) lots of experience generating revenue from in-app purchases in Korea... which should give them an advantage as this develops into a significant component of app revenue streams in the West
Wow, Digital Chocolate continues to be really active in the iTunes App Store... but I must say that they don't seem to be getting a particularly good ROI on their volume of titles. It would be interesting to hear some updated numbers from them... Trip and crew have been uncharacteristically quiet recently.
btw - You can see Parts 1 & 2 of this analysis, from September 2009, here.
Tuesday, February 16, 2010
- Cash continues to be a scarce resource, the company had $2.3mil in the bank as of Dec 31, 2009
- Mandalay Media (MNDL) claims key contributors to falling revenue are "a very challenging European sales environment", the loss of a "significant on-deck advertising management agreement", "tighter regulatory restrictions" of off-deck adult content in the UK and "lower (games) revenues from U.S. carriers"
- The company reduced the costs attributed to licensing IP by 50% in the last 9mos of 2009, compared with to the same period in 2008
- The company has substantially cut development headcount/costs
- The company continues to renegotiate payments and covenants associated with a ~$20k debt obligation it has with a small cap fund called ValueAct, with the latest twist being that payments are postponed until July 31st and the minimum cash covenant has been temporarily reduced to $1.6mil until March 10, 2010... and $4mil thereafter (until the next renegotiation)
- Adult content continues to dominate revenues (see below), accounting for 88% in the last 9mos of the year and 89% in the last 3mos
Friday, February 12, 2010
- iPhone performance is the success driver at the moment
- Android, Ovi, WinMo & BlackBerry are still super-tiny businesses
- The carrier-based feature phone gaming business is declining much more rapidly than anyone had anticipated
- Publishers are scrambling to add social networking features to their games
- It's inadvisable to go through a protracted CEO search/transition during a paradigm shift in your industry
- No one talks about their China strategy anymore
- Zynga and Playfish envy is pervasive... everyone wants a piece of the Facebook game app action
- Margins are still razor thin to non-existent
- There's a lot of exuberance around new revenue streams from iPad games
- Overall, the mobile games business is flat
Feel free to add your own in the comments...
O'Reilly Radar published a post yesterday with the results of an analysis of the US iTunes App Store by Senior Analyst Ben Lorica. Among other things, he looked at which publishers (with over 10 titles) had the highest success rate getting their titles onto the Top 100 Paid Apps list. The list is dominated by games publishers, with Gameloft and EA Mobile performing the best. It is somewhat ironic that Lorica labels the chart Most Efficient iPhone Developers... because Gameloft, while an awesome publisher, is usually considered famously inefficient... with their 4k or so employees contributing to a $42k rev/emp/yr figure, that's surely one of the worst in the business.
Wednesday, February 10, 2010
Tuesday, February 9, 2010
So I was just asking myself, what the heck ever happened to the highly anticipated venture that former CBS mobilistas Cyriac Roeding and Jeff Sellinger were putting together?... ya know, MOBshop. The stealth venture, fueled by $2.5mil of Kleiner Perkins & Reid Hoffman money, was the source of lotsa frothy excitement early last summer and curiously my posts about it ended up being among the most popular ever (which ain't no big thing). So I can only blame too much Christmas wassail for not realizing that the company emerged from stealth mode in December and is now called Shopkick. As Cyriac explains in the video below, the big idea behind the company is making the offline shopping experience interactive with mobile phones (guess my speculation wasn't too far off target). Apparently Shopkick will not be a destination nor an application itself, but more of an enabler of a series of divergent branded initiatives, based on the aforementioned big idea.
Their first project is called CauseWorld, which is an iPhone (and soon to be Android) App that allows consumers to donate earned virtual currency (called karmas) to a variety of charities (e.g American Red Cross). The virtual transaction facilitates a real cash donation from founding corporate sponsors Citi and Kraft Foods. Consumers earn karmas by checking into participating retail locations through the iPhone App, a la Foursquare or Gowalla. Considering the CauseWorld App already has over 13k user ratings in just over a month, and that they're overwhelmingly positive, I'd say it's a pretty successful first outing for Shopkick. I think these guys are on to something and I like that they seem to be focusing on great user experiences (and blue chip partnerships), rather than screwing around with not ready for prime-time technology, like augmented reality. I look forward to seeing their next product... and I promise, this time, it won't be in the market for a month before I notice.
Inspired by my January 5th post, in which I advanced a theory about why Niccolo de Masi jumped ship from Hands-On Mobile to Glu Mobile (GLUU), I asked readers the question: "Will GLU Mobile & Hands-On Mobile Combine In 2010?" The poll only ran for 5 days because I wanted to close it in advance of Glu Mobile's earnings call tomorrow. Based on comments I received (on and offline) to my original post, I guess I'm not entirely surprised to see that a 63% majority of responders believe that this deal is not going to happen, while 37% indicated that it would. I did not vote in this poll, but I do still think a deal makes sense and probably should happen if Hands-On still has some cash in the bank.
Monday, February 8, 2010
EA Mobile's last 19 calendar quarters in millions
Electronic Arts Inc. (ERTS) reported fiscal Q3 2010 earnings after the bell today.... that's calendar year Q4 2009 for the rest of us. EA Mobile's revenue for the quarter was $56mil, on a GAAP basis, which represents a 14% increase over Q4 2008. The full calendar year came in at $206mil for the mobile games group, which is a 14.4% increase over 2008. Overall the result looks substantially stronger than that of #2 player Gameloft, who reported last week. Perhaps the responders to last week's poll are on to something...
Sunday, February 7, 2010
Friday, February 5, 2010
Following a couple of weeks of speculation amongst industry insiders, the disposition of mobile games developer, and dev/porting tools provider, Javaground became much clearer on Thursday following an email the Irvine, CA based company distributed to key partners. The frankly worded correspondence explains that they're being forced into a fire sale of all of their intellectual property, assets and its 7 member technical team by a creditor, who apparently intends to keep them for itself, if they're unable to fetch over $2mil for the lot within 10 days. The IP in question is Javaground's patent pending Xpress Suite solution, which they claim allows many tier 1 publishers to streamline their development processes by virtue of allowing them to easily port Java code to iPhone, BREW, Android, Flash, etc.
Javaground, founded in Belgium in 2001, has developed titles for a bevy of major publishers over the last few years and has a very good reputation in the industry. Their biggest partner by far has been Sony Pictures Digital, with whom they've worked on notable titles like Jeopardy, Wheel of Fortune, Quantum of Solace and Angels & Demons... many for the iPhone. I think this points out the immensely competitive and financially challenging environment in which mobile content companies continue to operate... and that even highly regarded companies, who have made the smartphone app store transition, aren't necessarily immune from financial crisis. Perhaps naively, I had hoped that once we got through the hell of 2009 the creditor clampdown would ease and that companies would be given longer leashes to realize profitability... but it's not looking that way and my conviction now is that 2010 will be another year of winnowing. That said, I hope Javaground can quickly find a friendly buyer and keep up the good work.
Thursday, February 4, 2010
THQ Inc. (THQI) reported their fiscal Q3 2010 (calendar Q4 2009) earnings this morning and surprised some analysts with a small profit. However, as you can see from the chart above (calendar quarters in millions) the once substantial mobile unit, THQ Wireless, continued to see its business shrink... and its $2.29mil now only represents 0.64% of THQ's quarterly revenues from all platforms. Total mobile revenue for calendar 2009 was $14.8mil, which puts them a notch below companies like Capcom, I-Play and Hands-On in my estimates. That's a long bumpy descent from the $30mil level they were at in 2006. But that might all be about to change according to a story at PocketGamer.biz, which reports that the company is in the process of realigning itself to focus on digital distribution channels like X-Box Live Arcade... and more interestingly for y'all, iPhone & iPad. I like that idea in principle, but it's hardly original... and we've heard similar refrains from THQ in the past. Let's see if they can commit this time and find ways to leverage their unique access to high-quality IP (e.g. Star Wars) to create some competitive advantage. What do you guys think?
Wednesday, February 3, 2010
The results of my week long readers poll are in. I asked y'all the hard-hitting question, "Which mobile games publisher will show the strongest Q4 09 over Q4 08 revenue growth?" (and had the 5 public mobile games companies on the above chart as options)... and here's how you voted. Clearly readers believe the #1 mobile games player is firing on all cylinders and is gonna extend its lead over Gameloft (which reported 7% growth yesterday... if we cut them some slack). We'll know a lot more about how good you guys are next week when EA and Glu Mobile report earnings. Check back here for my follow-up. For the record, I voted for GAMEVIL.
Btw... just so you know, EA's fiscal quarters don't match calendar quarters, so the last calendar quarter of the year is their fiscal Q3 2010. This poll assumed calendar Q4 for all companies.
Btw2... if you didn't vote this time, be sure to participate in the next poll starting tomorrow.
Tuesday, February 2, 2010
The world's 2nd largest mobile games publisher, Paris-based Gameloft (GFT), released preliminary FY & Q4 2009 earnings today. Here are the highlights:
Revenues last 16 quarters in millions.
- FY 2009 revenues were up 11% to $170mil... pure mobile games growth was 12%
- Q4 2009 revenues were down 6% to $44mil, which the company attributes to their "withdrawal from boxed games in January 2009 and to the drop in the dollar. On a like for like basis, sales in the last quarter of 2009 were up 7%." Hmm... for sure this messes with my mobile publisher poll.
- iPhone revenues for FY 2009 were $24.5mil or 14.4% of overall revenues. Interestingly this lines up pretty well with my ratings-based estimate on Jan 6th derived from the disclosure that they had sold 10mil games through the App Store since launch. At that time I estimated the total revenue generated by their games was about $38mil, which after Apple's share (30%) is almost $27mil in 18mos.
- iPhone revenues in Q4 2009 were $9.75mil or 40% of total 2009 iPhone sales. That means iPhone sales accounted for 22% of Gameloft's worldwide mobile games sales in Q4
- 39% of revenues came from Europe, 32% from North America, 29% rest of world
Gameloft is clearly an iPhone superstar, and as they've been fond of pointing out recently, they're very well positioned to leverage that success on to the iPad. Good stuff and overall I'd characterize their 2009 results as pretty solid (pending a look at all the numbers in March). However, I do have ecosystem concerns now that they've basically confirmed what we all suspected... that Apple is the dominant retail channel in mobile games space and the operator portal business is becoming less & less relevant. I think this is ultimately a dangerous thing for publishers (ask the music guys) and they should all be encouraging Android, Ovi and BlackBerry to get their butts in gear, so that they can provide some viable competition.
Italian mobile personalization & services goliath Buongiorno (BIT:BNG) reported preliminary FY 2009 numbers this morning and the results were very much in line my predictions for this ol' skool playa. Full year revenues were down 18% compared with 2008 and Q4 2009 period was down 27% compared with Q4 2008. In dollars, they brought the year in at $360mil, which should keep them in the #5 slot on my Top 20 mobile entertainment companies by revenue.
Monday, February 1, 2010
Michigan based iPhone and iPod accessory maker Mophie is on the verge of solving one of the biggest complaints in the Japanese market about the iPhone, according to a story on Electonista. Over 60mil Japanese handsets support Sony's RFID-based, stored-value, mobile payment standard known as FeliCa, which allows consumers from Sapporo to Nagasaki to buy train tickets and iced-coffees with the waive of a handset over a ubiquitous smart terminal. The iPhone, which after some early disappointment is now the top-selling smartphone in the market, doesn't support this feature and it doesn't look like Apple has any plans to put the Sony chip under its hood anytime soon. But never fear, it looks like Mophie has solved the problem by embedding the chip in an "intelligent case" that works in conjunction with a downloadable App... cool workaround! According to the story the product will be in the market by Spring.
I have two takeaways from this story. 1) I continue to be jealous/frustrated that the US is lagging so far behind Japan (amongst others) in the practical implementation of mobile payments specifically and RFID/NFC based payment systems in general. Though I'll hand it to MasterCard for giving it a go with PayPass; and 2) it woke me up to some bitchin' things Mophie's doing with intelligent cases, including a FLO TV enabling product called the Juice Pack and a credit card reader called Marketplace.