Big 3 Mobile Game Publisher Revenue Comparo 2010

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.

Big 3 Mobile Game Publisher Revenue Comparo Q3 2010

EA Mobile:

• Saw both Q-on-Q & Y-on-Y revenue declines
• "Almost" offset losses in feature phone business with smartphone games in quarter
• Company revealed that Chillingo purchase was for $17mil in cash, with up to $12mil in earnouts... still seems like a pretty good deal to me

Gameloft:

• Strongest performer of the Big 3, realized both Q-on-Q & Y-on-Y growth
• Geographical mix was Europe 32.6%, North America 31.9%, Rest of World 35.5%
• North American & European revenue fell slightly from Q2. Makes me wonder which developing markets are driving growth... LatAm?
  
• Revenue relative to EA Mobile is benefiting from the strong Euro

Glu Mobile:

• Smartphone revs were $2.35mil, or 15% of total Q3 10... includes Android, Windows, RIM, iOS, Palm, Ovi, Symbian & in-game advertising
• As the company pushes its freemium persistent games agenda, it's emphasizing Daily Active User (DAU) & Monthly Active User (MAU) measurements a la Facebook apps
• Guiding Q4 revenue down even further, at between $14.0mil & $14.5mil, with a GAAP net loss between $7.0mil & $7.4mil. Clearly things are going to get harder still before they get easier
• 23% of revenue came from original IP... that number expected to increase
• Verizon accounted for 14% of revenue, China Mobile 11% & Apple almost 10%

Update: Top 20 Movie & TV iPhone Games By Revenue

Update Nov. 2, 2010: Based on some welcome feedback I've tweaked my model very slightly and added one major title to this list... EA Mobile's The Simpsons Arcade. As a result of this combination of changes, Sony's iZombieland has dropped out of the Top 20. Also, just a quick clarification, since it's come up several times... my model uses the estimated average price over an app's lifetime (not the current price, shown above) to calculate estimated revenue.

It's been about 11 months since I last looked at how movie & television based game titles were faring in the App Store... so I figured it was about time to update my spreadsheet. This time 'round I'm showing my estimate of the Top 20 performing paid iPhone titles currently available in the US instance of the store, sorted by total publisher revenue. I've elected to hide my current title-by-title revenue estimates, but what I will tell you is that I think they range from $600k up to about $3mil, and the average for the lot is about $1.3mil.

One of the most shocking things to note is that 9 out the 10 titles on my December 2009 list are still in this Top 20... and the Top 3 are exactly the same. There are a handful of new strong performers, including, on the film side, Avatar and Iron Man 2, both from Gameloft and Predators from Chillingo. From TV, the new stars are Family Guy and, in the biggest surprise on the list, Dexter from Marc Ecko Entertainment (who knew they made games, right?). But in general my take is that paid movie and TV game titles aren't playing a particularly important role in the App Store, and are certainly not the revenue stars of the show... as is evidenced by not one of them currently appearing in the Top 150 of Top Grossing Games. This clearly presents challenges to studio/network digital & licensing groups, who are undoubtedly saddled with unrealistic expectations about how their properties should be performing in a climate of smartphone exuberance.

As usual please let me know if I've missed any titles, and I'll make the appropriate changes.

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.

Ain't Price Erosion A Bitch?

Angry Birds is the current reigning champion of iOS Paid Apps. The simple, addictive game from Chillingo & Rovio has sold over 6.5mil copies in 8 months. This eclipses former App Store phenoms like Lima Sky's Doodle Jump, which hit 5mil in June, the Tap Tap franchise from Disney's Tapulous, that was allegedly pulling down between $500k and $1mil a month in late 2009, and Firemint's Flight Control, which realized 2mil downloads within 11 months of launch. No doubt, all amazing feats from great, small companies. Moreover, the impact these companies have had in terms of introducing mobile gaming (and apps in general) to a broad audience, and in perpetuating the cult of iPhone, cannot be overstated. Unfortunately, the economics of the very ecosystem they edify are conspiring to keep them small.

As PocketGamer reported yesterday, the average price of an iPhone game is now $1.24. We can all see that the Top Paid Apps chart is now dominated by 99¢ titles. Increasingly user reviews bash titles that are priced any higher, and perhaps to appease these consumers, publishers now run frequent, often endless price promotions. Let's face it, 99¢ is the price the user community has come to expect for most games. Apple, of course, fosters this scenario, as part of their reverse razorblade model in which they provide budget priced entertainment for their premium priced hardware.

Ironically, back in the much maligned carrier deck era, the economics were actually better for top-tier games. Circa 2006/2007 the average blended global wholesale price (after carrier) for a triple-A Java/BREW title, including monthly re-ups, was about $2.25. That's more than 3X the 70¢ Chillingo, Lima Sky et al are seeing from each of their downloads post Apple. And it's not like hit games weren't doing boffo download numbers back then... in fact less competition, recurring subscriptions (in the US) and some politics conspired to create mega-blockbusters on a scale (considering the addressable user base) we may never see again. Of course, the all time king is Tetris, which has allegedly been sold over 100mil times in its various mobile incarnations... yielding at least $200mil for EA Mobile and its predecessor companies. On the lower end of the Java-era hit spectrum was the Fast & Furious franchise, which I-play openly claimed had sold 13 million units by the dawn of the iPhone era... which meant something like $30mil for the publisher if my math is correct. Then there are franchises like Namco's Pac-Man and PopCap's Bejeweled that sat between these two... closer to the Tetris end. At today's App Store prices, Chillingo would have to sell 40mil copies of Angry Birds to be in the league with these Java/BREW era revenue stars, and over 300mil to be the new Tetris. Even considering the the cost savings afforded by slicker development environments and not having to port, I'm confident that today's hit titles are far less profitable than those of the pre-iPhone era.

So, the consequence of current smartphone platforms being more democratic, and their owners being price agnostic, is that publishers not only have a significantly more difficult time manufacturing hits (in the fog of 10s of thousands of titles), but thanks to price erosion, those hits are less meaningful to their bottom lines. These dynamics, along with the added complexity of the freemium model, will further escalate a frenzied state of competition without price differentiation amongst publishers... virtually ensuring that none will amass enough wealth to aggressively scale their businesses, and that many will be forced to exit altogether. Meanwhile, it's better news for consumers, who continue to get more for less, and the hardware and network guys, who are laughing all the way to the bank.

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.

Big 3 Mobile Game Publisher Revenue Comparo Q2 2010

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.

Verizon Top 10 New Titles For 2010... So far

Well it's E3 time again, and while mobile games publishers & industry pundits continue to perseverate about the iPhone, Verizon Wireless took the opportunity to remind the world that they keep on keepin' on. Apparently their deck still has over 350 games, and lest you believe it's still all about Tetris, Bejeweled & PacMan (which it kinda is) they issued a release highlighting their Top 10 NEW titles for the 1st half of 2010. Shout out to 2 of my favorite small publishers, GOSUB 60 & Sonic Boom for making the list... I hope this is translating into decent downloads/revenue. Hey, while most publishers manically pile their games on top the 10s of thousands of others in the App Store or into the difficult to monetize anarchy that's Android Market, I think it's a legit, smart and potentially lucrative counter programming strategy for some to focus on the carrier decks... where the addressable user bases are still substantial, billing mechanisms work, stores are uncluttered/edited, price points are high and recurring subscriptions endure.

Big 3 Mobile Game Publisher Revenue Comparo

Stories I'm Watching From The Road

I'm traveling on business with a client, so I haven't had a chance to work on a post for the last couple of days. I'll have some new stuff by the end of the week. In the meantime, here are the stories that have caught my attention this week:

• EA Mobile posted another strong quarter ($55mil) & fiscal year ($212mil), reinforcing their revenue leadership position mobile gaming (mocoNews story)
• GAMEVIL continues to be red, red hot & profitable (earnings release). Glu Mobile execs must fantasize about this South Korean game publisher's financial statements
• Nokia continues to obsess over their own structure and re-orgs for the 2nd time in 6mos (Mobile Entertainment story), losing one-time heir apparent Rick Simonson in the process (NY Times story)

Top 25 Companies In Mobile Entertainment

As always I welcome feedback and dialogue! Please let me know if I'm missing any companies or if you think that my numbers and/or rank order are incorrect. btw - revenue numbers for private companies, or divisions of companies, that haven't publicly disclosed numbers have been left blank intentionally (for now).

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.

Graph: Big 3 Publisher Revenues Last 12 Qtrs

$mils, €/$= 1.363

Who's Most Successful Getting Paid Apps in the Top 100?

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.

Big 3 Mobile Game Publisher Revenues Q408 to Q409

Top Mobile Games Publisher EA Mobile Exceeds $200mil in 2009

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...

Readers Think EA Mobile Rocked The 4th Quarter

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.

Is The US Worth $540mil To Mobile Game Publishers?

SNL Kagan teased a study that they released today entitled “Economics of Mobile Games," in which they claim the US mobile games market accounted for $540mil in publisher revenue in 2009. The full report (which I'm sure I can't afford) apparently ranks the Top 21 game publishers by US revenue. It would be awesome to have this, but most of us will have to make do with the Top 4 included in their release. Above I've lined up the data they've shared with my last 4 quarters through Q3 2009 for that same Top 4... which includes my (perhaps inflated) $90mil estimate for Namco's mobile business. I've also compared SNLK's total US market size estimate to my latest WW publisher revenue estimate of $1.136bil (which assumes my Top 10 revenue estimate of $795mil equals 70% of total publisher revenue). Let me know what you guys think.

btw - did you notice that they make no mention of Snackable's claimed $85mil in revenue?