Update: Top 10 Mobile Games Publishers WW November '10

Update #1 Nov 24 2010 @ 9:45pm: Based on feedback I've added Capcom to the list & moved Digital Chocolate up in the rankings, while moving Namco down a bit. I've elected to remove Artificial Life because only about 50% of their revenue can be attributed to mobile games. Please... I encourage more feedback in the interest of making this the definitive list.

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• Note that I've added Chinese mobile powerhouse KongZhong to the list... in recent quarters mobile games have become a much more significant portion of the their overall revenue, which is about $145mil over the past 4 quarters.
• Purely from a mobile games perspective, it could be argued that both Artificial Life & Digital Chocolate don't belong on this list, but I'm keeping them here for the time being, while their primary businesses are still mobile games. If current trends persist, Digital Chocolate will quickly evolve into a company that primarily derives revenue from social online gaming (Facebook games).
• Per a previous suggestion from Jon Jordan over at PocketGamer.biz, I'm considering adding Disney/Tapulous to the Top 10... but I'd need some independent confirmation that their combined worldwide mobile games business yields at least 20 something million dollars.
• Overall I'd suggest that the Top 10 are becoming less significant in terms of their contribution to mobile gaming revenue and even in terms of real dollars I've dropped their aggregate revenue to $715mil from $720mil just 3mos ago.

Recent Cabana Mobile Facebook Page Updates

I hope you guy are all following & LIKE the Cabana Mobile Facebook Page. For those of you who've been missing the fun 'cause you're snoozing at the keyboard, been too busy raising your next round or are conscientiously objecting to social networks (resistance is futile), that site includes all my blog posts & more quick commentary. It's like super-tweets about articles I find interesting and more brainfarts on the mobile/digital entertainment space in general. Check it out. Meanwhile here's a list of some recent posts...

10/16/2010 Re: Fast Company article Should Albums Cost $1.50?: "Consumer me loves the idea of a $1.50 album & MBA me sees the value of inefficiencies being taken out of the system across media as a result of consumer/OEM-centric digital distribution business models. That said, all of us vested in content should be wary of the rapid race to the bottom in terms of pricing. This will inevitably lead to less content being created, fewer risks being taken and the loss of thousands of jobs. Deflation is a dangerous spiral... once consumers begin to believe that content will be cheaper (or free) in the future, they get really good at keeping their wallets in their pockets."

10/15/2010 Re: Gameloft sizzle reel on YouTube: "Will the Samsung Galaxy Tab & the availability of quality game apps prove that the tablet market isn't only about iPad? What will the paid conversions on these impressive Gameloft's teaser apps look like if they rely on Google Checkout?"

10/15/2010 Re: Tweet from Google exec Mike Steib: "Perfect tweet to sum up Google's mobile business from Mike Steib: "$1B.""

10/15/2010 Re: Mobile Entertainment article Full Angry Birds Android game goes live on GetJar... for free!: "Interesting strategy. When a red-hot developer believes that the best path forward on Android is to give their trophy title away, sell some ads against it and figure out in-app monetization later, it really manifests the dire state of paid app monetization within Android Market. Frankly, I'm worried that this approach will just further contribute to price erosion in the overall mobile content space... but I'll be happy to be proved wrong by some mindblasting freemium success stories (outside Japan/Korea) in coming quarters. Meanwhile I'm getting the app for my Nexus One as soon as GetJar's site is back up."

10/14/2010 Re: PocketGamer.biz article Opinion: Why ngmoco is worth the $195 million DeNA might actually pay for it: "Perhaps DeNA isn't actually overpaying for ngmoco... what do you guys think?"

10/14/2010 Re: Business Insider SAI video interview with Gene Munster: "Piper Jaffray analyst Gene Munster stands by a 12-month price target of $390 for Apple and tells Business Insider that "Apple is in the best position of any technology company" for the next decade... assuming Jobs is at the helm."

10/14/2010 Re: The Register article When Dilbert came to Nokia: "Apparently the matrix organization structure that Nokia trumpeted for years played a large role in stifling product innovation..."

10/13/2010 Re: PocketGamer.biz article Opinion: The ten next best acquisitions in mobile gaming: "Nice opinion piece from Jon Jordan. I think Digital Chocolate is missing from this list... who else should be on the radar?

10/13/2010 Re: Mobile Entertainment article The numbers behind DeNA's ngmoco acquisition: "‎$403mil buyout on $3.16mil 2009 revenues & net loss of $10.9mil (significantly lower than I had guessed). Am I missing something or this just stupid?"

10/12/2010 "Yahoo! has $1.2bil in the bank, their embattled CEO is due to take a big swing & they haven't done anything crazy in mobile for years... just sayin'"

10/12/2010 Re: TechCrunch article Kleiner Perkins Harvests Over $100 Million From Ngmoco Acquisition: "Things are about to get super-extra-frothy..."

10/12/2010 "Google has got to fix Android Market if publishers of quality paid apps are going to support (or continue to support) the platform... buzz at CTIA was that despite impressive market penetration Android is still almost meaningless to publishers from a revenue perspective. Anybody experiencing anything different?"

Top 25 Game Titles In Nokia's US Ovi Store

It's been a year since my last, somewhat snarky, look at the top paid game titles in the US version of Ovi Store. Clearly, during that time Nokia has been able to attract a more robust line-up of publishers to their platform. From what I can tell Gameloft, EA Mobile & Digital Chocolate are now each fielding about 40 paid titles on the service. Meanwhile, Glu Mobile & I-play each have about half that many, with the latter company seeing particularly strong performance in the US Top 25... perhaps a factor of their AppStore-esque pricing strategy. On that note, as we've seen across the spectrum in mobile gaming, price erosion is in full effect... with the average price of the Top 25 having dropped 33% from $4.03 to $2.71 in the last year. I must say, I was happy to see some lingering randomness from publishers I've never heard of, but by virtue of there being less of it, and in light of the myriad head-scratchers that pollute Android Market, this aspect of Ovi is much less amusing than it was a year ago.

Though Nokia recently touted that they're doing 2mil downloads a day through the Ovi stores worldwide, I feel pretty confident that;

1. very little of that activity is coming from the US market (I wouldn't fall down if I learned the Ukraine represented more downloads);
2. most of those downloads are free games (as is true across all smartphone app stores);
3. considering that no publishers are bragging publicly or privately about Ovi revenues, numbers are still small relative to other channels.

That said, with new talent at the helm at Nokia (and Ovi), more carrier billing integration and a slew of new games friendly devices on the horizon, we'll all be hearing about some boffo results everywhere, including the US, by September 2011... right?

btw - I put this data together on the web store, prior to selecting a handset... that way I figured I'd get the best result across devices.

Top 10 Mobile Games Publishers WW August 2010

All numbers are for the most recent 4 quarters for which I have data, at today's exchange rates.

In terms of non-public, guesstimated data, I've moved Chillingo onto this list... due to their boffo performance in the AppStore (see related post)... I'll move them up or down based on community feedback. I've also let Namco slip a bit as the PacMan franchise seems to cooling a bit in the new retail channels. I still have D'Choc hanging on by a thread. Granted, they've rolled a lot of iOS titles, but none appear to be rockstars and their new emphasis on Facebook games is a bit of a tell, right? Do you guys think ngmoco should be on this list? Please, please let me know your thoughts.

What Are Mobile Game Publishers Doing With Facebook Apps?

Dev Rank = developer's rank in terms of MAU across all Facebook apps. MAU = monthly active users. DAU = daily active users.

In light of all the insanity about Zynga and lots of rhetoric from mobile games publishers about diversifying into social gaming online (er... Facebook games), I decided to take a look at what the mobile guys were actually doing on Facebook. First, let me tell y'all that after spending far too long digging through titles, it's abundantly clear that that platform is jam-packed with even more cr'apps than Android Market. Fortunately, consumers clearly ignore most of this junk... but I'm sure it's damaged overall perception of the product on offer. Many of these are blatant infringements on other folks' IP... which makes me wonder if corporate grown-ups at content owners/creators are really paying enough attention. Also, I've gotta mention that the two sources of Facebook application information, AppData & Facebakers are pretty shoddy (but free). The former seems to have better data, but a super-clunky interface (e.g. search is useless), while the latter is slicker, but with more questionable data. The data here comes from AppData.

So what did I learn? Well, Zynga is still the undisputed king of gaming on this platform, with 49.5mil daily active users of its titles and 217.5mil monthly active users... and despite all the blah-blah not much is happening with the mobile games guys. The only once pure-play mobile publisher that appears to be creating a meaningful presence on Facebook is Digital Chocolate. EA, GameHouse (RealNetworks), PopCap & I-play are probably running these initiatives more as a function of their established online casual businesses, than what they do in mobile. Glu Mobile, which launched its first Facebook title, Atom Blast, last Fall has now apparently bailed entirely from the platform. Meanwhile Hands-On is leveraging its last piece of premium IP, under a pseudonym no less, to try make of a go of it. Is anyone aware of anything else going on out there with the mobile publishers?... let me know. The next question, of course is how much money D'Choc et al are making from this platform... any thoughts? I'm sure it's billions :-P

Select Game Publisher iPhone Stats

Sorry about the eye-chart, simply click on the image above to see a bigger version.

I compiled this little spreadsheet for kicks (and 'cause I haven't looked at the AppStore in awhile) based on iTunes data for all the major games publishers I could remember on a random Wednesday morning (let me know who I'm missing). These stats are for iPhone and iPod touch games only, not iPad and are for the US version of the store. BTW, I've heard a lot of folks whine that Apple will occasionally, indiscriminately erase Customer Ratings during version upgrades... making these numbers a poor indicator of App performance. OK, I'm not sure if that's true (and shame on Apple if it is), but if you believe it you can take those numbers with an appropriate grain of salt. That said, here are my initial observations based on this data:

• British publisher Chillingo (including its Clickgamer subsidiary) is a friggin' powerhouse!... with a plethora of titles and more than a couple superstars, they might well be generating more topline revenue than any other games publisher on this platform, right?
• Digital Chocolate has a large number of titles, but almost 50% are free and it doesn't look like their top paid title is a superstar
• The recently combined entity of ngmoco/Freeverse is a major player
• I bet Lima Sky is the most profitable iPhone games publisher... Tapulous & Ludia would be contenders but their 3rd party licensing costs have gotta be substantial
• At first blush, Disney's recent Tapulous buy looks pretty genius (Tap Tap is a juggernaut), but their success isn't exactly a fresh story and they do have some of the traits of a one (or two) hit wonder... we'll have to see
• The distinction between paid and free apps will become less meaningful as freemium products, featuring in-app purchases, become more the norm on the platform... but for now most free apps are simply barkers for their paid compadres
• Happy to see that I-play (which has been dead quiet in the press lately) is making a pretty decent go of it relative to some of its mid-tier, old-timer peers and that my favorite film-based license (Fast & Furious) is still their trophy title
• Firemint is awesome, but it's definitely time for their next big thing

Let me know what you all think.

Hypothetical SWOT Analysis For DeNA Roll-up of Glu Mobile, Hands-On & Digital Chocolate

As I've been blabbing about for months, the established publishers in the mid-tier of mobile games are languishing under the new smartphone app store paradigm, as the two biggest players (EA & Gameloft) have consolidated power, and nimble newcomers (Firemint, Lima Sky, Chillingo) have seized marketshare. The competitive advantages these guys once enjoyed (carrier sales teams, the ability to port to a thousand devices, licensing relationships), have become expensive burdens, and most lack the resources to make wholesale changes to their businesses. In light of this, I've often wondered if it would be feasible for a company, with some vision and cash, to roll-up a few of these guys in the interest of unseating the top players and creating a true smartphone games powerhouse. For fun, let's imagine a scenario wherein Japanese social mobile gaming powerhouse DeNA, with its $530mil in revenues, almost $400mil in cash & ambitions to put a stake in the ground outside Japan, considered buying Glu Mobile, Digital Chocolate and Hands-On Mobile (for like $100mil, right?). What would a SWOT analysis for this "Newco" look like?

Strengths (Internal)

• Combined annual revenue of ~$125mil puts Newco within striking distance of Gameloft
• 98 Paid iPhone Apps featuring quality franchise titles like Deer Hunter, Glyder, World Poker Tour, Kitten Cannon, Brick Breaker & Tower Bloxx
• Interesting leadership potential... The icon: Trip Hawkins & the upstart: Niccolo de Masi
• All global HQs are in Northern California
• Studios in Finland, China & US
• Global distribution capability
• Healthy balance of original & licensed IP

Weaknesses (Internal)

• Cash... DeNA would have to fix that
• Re-branding would be required, none of these brands is perceived as a winner or has meaningful consumer cache... plus there's no combination that doesn't sound X-rated
• With over 500 employees... there would need to be some downsizing/consolidation
• $20+million in debt
• Reconciling investors & boards won't be a job for the faint of heart
• Scale sometimes leads to inertia

Opportunities (External)

• Unify all games with OpenFeint's social gaming/app discovery platform (in which DeNA has a 20% stake)
• Build in-app purchases into as many titles as possible to maximize longterm revenue potential
• Historic carrier relationships might become valuable again as Verizon, AT&T, et al take a larger role in managing Android Market
• Take all components of Newco private, clean 'em up and then spin it back out as an IPO when market conditions improve
• Take cue from Zynga in terms of marketing on social, new & traditional media

Threats (External)

• Platform consolidation and platform dependency (when Apple changes the rules, it hurts)
• Continued price erosion
• Competition with other forms of gaming & entertainment for consumer discretionary dollars
• New, well financed, market entrants

I'm sure Newco would appreciate your unpaid consulting, in form of comments. I'll add to and adjust this over the next few days based on your input and my own random inspiration (brain farts).

Less Rush, More Rollercoaster for Digital Chocolate

Wow, what a difference a day makes...

Yesterday MobileGamesBlog reported that Trip Hawkins' mobile (and now social network) games publishing company Digital Chocolate had "secured several millions of dollars" in financing from Bridge Capital Holding and had upped their longtime studio chief Ilkka Paananen to President of the company (UPDATE: apparently Trip had announced this promotion back in February on his OMG Blog). The story indicated that this was an equity investment on top of the $43.8mil the company had received previously... which to my mind represented a meaningful market driven endorsement of the viability of the company and its prospects for growth. Big industry news for several reasons: 1) funding has hardly been flowing into the mobile games space; 2) insider buzz (driven in part by the company's recent, atypical, quietness in the press) is that Digital Chocolate has been struggling, like many of their mid-tier peers; 3) folks like and respect Paananen (founder of games studio Sumea in 1999, acquired by D'Choc in 2004) and his elevation seemed like a super-smart move to bolster management ranks and provide counter-balance to the venerable, but notoriously mavericky Hawkins as the company prepared for growth. All good stuff. After reading the story, I asked in a tweet (as I am wont to do),"at what valuation... anybody know?" and sent Paananen a congratulatory IM... to which he didn't respond.

Well the picture painted this morning in Mobile Entertainment's coverage of the story, and MobileGamesBlog's followup, may explain why I didn't hear back. Apparently the funding is actually a "multi-million dollar revolving line of credit" to be used for "general corporate purposes"... which sounds a lot more like a cash lifeline than an endorsement. To make matters worse, it now turns out that Paananen will not be taking a larger roll going forward, but instead will be leaving the company. I don't think either pieces of news, or how the messaging was managed, bodes particularly well for the company... and I suspect industry buzz may turn even more negative.

Of course this situation begs the question, what is the path forward for Digital Chocolate and the other key players in the struggling mid-tier of mobile gaming... specifically Glu Mobile, Hands-On & I-Play? I must say I'm pretty skeptical about them all piling into Facebook gaming... which is the popular strategy du jour. I have an idea that I'll share in an upcoming post.

Top 10 Mobile Games Publishers WW February 2010

As always, let me know if I'm missing something or if you think I have incorrect data.

Latest iPhone Games Analysis Courtesy of HandyGames

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.

Some Predictions For 2010

• The Nexus One and myriad other Android devices will launch with varying degrees of fanfare, but the Google devices in aggregate and the Android Market will continue to pale in the shadow of iPhone/iTunes as a consumer event due to inconsistent marketing, klugy app billing and OS fragmentation

• Mobile marketing will graduate from the experimental stage, and become a core strategy component for several enlightened global brands

• Several established mobile games publishers will either be acquired or file for bankruptcy protection... companies that could be in play during 2010 include: Hands-On Mobile, I-Play, Twistbox, Digital Chocolate and perhaps Glu Mobile

• Apple will finally strike a deal with Adobe that will allow iPhone users to access content built in Flash through the browser, creating a boon for Hulu, Vevo, YouTube, MovieClips, et al

• Apple will make eBooks and eMagazines available through iTunes for their upcoming tablet... but they will also be available for iPhone and touch

• Nokia will scrap it's Comes With Music offering, will continue to struggle to make Ovi a meaningful consumer proposition and will see declining market share as it gets squeezed by Apple, RIM and Android devices on the smartphone front and by low cost Chinese manufacturers in developing markets

• LTE & WiMax services will continue to roll out slowly, but 4G won't be a significant consumer event during 2010

• Google Googles will move beyond Android and quickly establish itself as the world's most popular augmented reality application... leaving companies like Layar & GetFugu in its dust

• The current Top 5 companies in my Cabana Mobile Entertainment Top 20 by Revenue (Zed, Index Mobile, UMG Mobile, MobiTV & Buongiorno) will all see mobile revenues decline during 2010. Smaller App-focused publishers will see the greatest revenue gains

• Carrier-based App stores will make consumers yawn, but on a positive note they'll benefit the coffers of several advertising and identity/design agencies

• An application developer, a credit card company and a major retailer will collaborate to launch the first commercial in-store mobile transaction service in the US

More to follow throughout the day...

Updated: Top 10 Mobile Games Publishers WW

Artificial Life Issues Artificial iPhone Hype

Artificial Life (ALIF) put out one of those classic, cryptic mobile entertainment, performance-oriented, press releases on Wednesday... trumpeting their great success on iPhone. You know, the kind of document that despite the intention of the issuer, ultimately prompts many more questions than it answers. If this business is ever going to be taken seriously there needs to be much less of this sorta hype-massaging nonsense and much more transparency about numbers. For goodness sake Artificial Life, just tell us how much money you've made on iPhone in the last year.

The biggest problem with these releases is that they selectively blend Free App and Paid App download numbers. Our friends at D'Choc are masters of this form of obfuscation. If one wasn't paying attention, and assumed Artificial Life was only talking about Paid App downloads, one might determine that they made $6mil (after Apple share) from iPhone/iPod touch Apps over the last 12 months... based on their 21 Apps being downloaded an average of 220k times each, at an average price of $1.86 (based on their current US Paid App iPhone assortment). That would be about 22% of their $27.5mil of 2008 revenue... impressive, right? Unfortunately, that's preposterous considering Glu Mobile (which has 75% more Paid Apps live currently) disclosed on their quarterly conference call yesterday that they only made 2.5% or $500k of their Q3 2009 revenue from all new distribution channels, including Apple.

You'll notice in the release that Artificial Life uses variations of "download" and "sell" interchangeably to yield maximum dramatic effect. My favorite example is, "The number of iPhone game downloads is approximately equivalent to 37.8% of the overall number of games sold by the Company so far in 2009." I think what this actually means is that the combination of all Free and Paid App downloads of Artificial Life titles on iTunes is equal to 37.8% of total paid game downloads on all platforms during the period... which is much less impressive, but much more meaningless ;-). I'm also pretty confident that Artificial Life's claim that its "best selling game was downloaded close to 1.8 million times" on iTunes includes both downloads of the Paid App and the associated free teaser App. Btw - if anyone thinks I'm wrong, please let me know.

I think there are only three valuable pieces of information to take away from this release: 1) high quality iPhone App development takes Artificial Life 3 to 4 months, 2) the US is still the biggest individual iPhone App market by far for these guys, but overall the World ex US is bigger, and 3) this industry needs to stop with all this thimblerig reporting, and embrace the disclosure of real, comparable performance metrics, so that cynics like me don't assume everyone's business is smaller than they're making it seem.

Top 10 Mobile Games Publishers WW

Here's my latest update to this list. You'll notice, based on my recent post estimating Digital Chocolate's numbers, that I've moved them up the list and increased the total revenue estimate of the Top 10.

As always, your feedback is welcome and encouraged.

Does App Store Claim Make Digital Chocolate A $35mil Publisher?

Stuart Dredge posted an interview last Friday on Mobile Entertainment with Trip Hawkins, in which the Digital Chocolate CEO pontificated about the state on the mobile games industry. Great read, but due to my ongoing obsession with valuing the size of this business and that of its individual companies, I must say I fixated on one particular statement. Hawkins said, "suddenly Apple has one handset, we put out a handful of games, and voila – it's suddenly 20-25% of our business.” Wow, that's a pretty big chunk of business and impressive considering Hawkins' own admission earlier this year that they were a latecomer to the platform. So how much money is this and how big is Digital Chocolate?

When I did an analysis of Gameloft's iPhone (inc. iPod touch) business in early September, following their claim to have sold 6mil games on the platform, I estimated that their games had sold at an average price of $3.75... which yields $15.75mil back to Gameloft, or 9% of their revenue for the last 4 quarters. Now Gameloft was not a latecomer to the platform and they have been one of the better publishers at maintaining higher price points for their product, so I think we can comfortably assume that D'Choc's iPhone business is quite a bit smaller than that... right? Currently, Digital Chocolate has 35 paid game titles in the App Store, with an average price of $2.08. Typically their prices have been 20-30% lower than those of Gameloft, which currently has a average App Store price of $3.06. Today Gameloft has 5 titles in Top 100 Paid Apps (out of their 41 Paid Apps), and Digital Chocolate has none, but that's somewhat of an anomaly. Digital Chocolate titles have consistently performed pretty well, and as you can see from my June 29th App Store survey they had 3 in the Top 100 at a time when Gameloft also had 5, with many fewer titles in the store. That said, given the average pricing differential, Top 100 performance and slower ramp-up I think that Digital Chocolate's App Store business over the last year is, being generous, about 50% of Gameloft's... let's call it $8mil in revenue. I can get to the same number if I make some fair assumptions about Hawkins' other claim in the ME interview... that they're "a few weeks away" from 40mil downloads on the platform. If 10% of those downloads are paid and their blended average price is $2.80 (75% of Gameloft's), that's very close to $8mil (after Apple's share). OK, so if that platform represents 22.5% of their overall business, then Digital Chocolate is a $35.5mil publisher. According to my Top 10 Mobile Games Publishers list, that would put them in Capcom territory... and makes them bigger than both I-Play and Artificial Life. Do you guys think that's right? If so, I'll update my list accordingly.

Ovi Store US Top 25 Paid Mobile Games

I have to admit something. I ♥ Nokia. I think they make a lot of cool devices (likey N-series a lot), I admire their willingness to experiment and I've met legions of smart, charming people (whose names I can't pronounce) from the company. Now this admission may come as a surprise to y'all given my propensity to regularly take the stuffing out of them in my posts. Well, that's only because I believe that Nokia is failing to live up to its potential in terms of the content services they've created and in terms of their current US marketshare. Let's call it tough love.

OK, now that that's out of the way... as you've probably noticed I've recently been running a series of surveys of the top mobile games titles in the various app stores. Thursday evening I decided to take a gander at Nokia's Ovi Store. I told the online version of the store that my handset was an N95, figuring I'd go with a top-end handset that's been around for a while (one for which I knew there were lots of available games). Within the store I selected Games > Most Popular > Paid. If I had to use one word to describe the result it would have to be... random! To begin with, how is it possible in the US version of this store that the 7th & 8th most popular titles are cricket games? Also, why are the top-tier publishers so poorly represented (EA...Tetris....Bueller)? These guys have games available on the site (Gameloft has 43), but with a couple of exceptions (notably PopCap's Bejeweled), they're not showing up on the top of the Most Popular list. Three of the most prominently featured companies are names I've literally never come across before, like Kooky Panda (#2 game), Mobi2Fun (5 games!) and ZingMagic (10 games!)... and most of their titles look kinda bootleg (though Omar Sharif Bridge has gotta be the shiznit). I have three theories about what's going on here: 1) The numbers are so small that ranking is meaningless; 2) Everyone who owns an N95 in the US is a cricket-mad expat that wants to play cards with Omar Sharif; 3) Data fail. Any other theories out there?

Digital Chocolate Set To Announce Groundbreaking Virtual Goods Platform?

D'Choc CEO Trip Hawkins is delivering the keynote to kickoff Engage! Expo in San Jose next week entitled "A New Approach To Virtual Goods." Organizers promise he will "announce and explain a new game service that gives a virtual item 'platform power' across a variety of games, networks and devices." I'm eager to hear the full details... anyone out there going to this conference?

The idea that one could purchase a virtual item (a weapon or an outfit for your avatar) within one game and use it in a host of other games would be unique in mobile and ostensibly compelling for Hawkins' "omni" gamers (casual, social, time constrained) that he believes dominate the mobile games market. Based on the success with this form of monetization on mobile in certain Asian markets, particularly South Korea (enuring to the benefit of publishers like Gamevil), the financial opportunity of such a platform could be substantial. There's been a lot of industry buzz about this in the Europe/Americas... and microtransactions for virtual goods within Apps was one of the most highly touted features of iPhone OS 3.0... but I still haven't seen any groundbreaking implementations outside of Asia. Perhaps that's about to change.

Updated Top 10 Mobile Games Publishers Worldwide

If The Top 10 Generate $700mil Can Mobile Games Really Be A $5.4bil Business?

Back in March FierceMobileContent and others reported that widely respected telecoms & media analyst Juniper Research had estimated that the worldwide mobile games market had reached $5.4bil in 2008. That's crazy good, right?....or, perhaps it's just crazy.

As I've mentioned recently, I'm generally pretty cynical about big numbers from analysts, pundits, etc...especially when they just don't feel right. As part of the process of digging into this further I recently put together a Top 10 list of mobile games publishers worldwide. It's missing some numbers and the order may need some tweaking (audience participation, please), but I'm very confident about the Top 3, and pretty sure that Namco and G-Mode belong on this list. There could be a place for Capcom Mobile or maybe Konami, but I have no good data on their mobile operations... and I think I may be being generous to Hands-On (which has kinda dropped off the radar recently). Anyway, here's what I came up with (#s are annual revs or 4 most recent quarters):

My feeling is, that if I fill in the blanks here, that the total revenue for the Top 10 comes out to about $700mil. Soon after this list (and some of the companies I mentioned above) the revenue drop-off is pretty steep, with a bunch of companies generating low single digit $millions. If I make a small leap and assume that this group of industry leaders represents 70% of the wholesale revenue in the business...then the wholesale (before distribution channel) value is $1bil. If publishers are keeping 60% of the retail (consumer) price blended across all distribution platforms then the retail mobile games business is worth close to $1.7bil...not anywhere close to $5.4bil. Even if this group represented 30% of worldwide wholesale revenue (which is absurd!) the business would still be over a billion dollars short of the Juniper estimate. (As usual, let me know if there's something I'm missing!)

So what's my point here? I believe that those of us who are vested in mobile entertainment have an obligation to aggressively scrutinize the numbers associated with it, in the interest of clarity and accuracy. It's impossible to properly assess the opportunities in its various sectors (like games), or measure success within them, without proper industry metrics. Hyperbole and froth have not helped this business...in fact they've exacerbated the numerous (too numerous for a young business) boom and bust cycles we've all experienced since the late 90s and fueled substantial skepticism about mobile entertainment amongst those who are generally motivated to invest capital or intellectual property in new media.

Like Water For Digital Chocolate

The mobile space suffered from a drought of interesting stories in the latter half of last week...plus I was outta town at a wedding. But Monday morning has turned out to be pretty interesting. My favorite story so far is typically sensational fare from our friends at Digital Chocolate. PocketGamer reported this morning about a post on CEO Trip Hawkins' blog that company employees had a run in with (notoriously corrupt) police in the Northern Mexico town of Mexicali. The group, which was scoping out a new D'Choc operation there, was handcuffed, aggressively interrogated and then let go. The big news here is that Trip is alleging that the whole incident was the result of a false tip suggesting the group was involved in a drug deal (no laughing matter in Mexico right now) from a mobile gaming competitor that already has operation in Mexico. This sounds a little bit like conspiracy theory paranoia to me (and I hope to God it's not a publicity stunt)...but if it's true, it would be a very serious matter that should result in some form of industry (if not criminal) sanction against the perpetrator. I'll update as this story develops...