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.

Anders Evju Joins PlayPhone To Head New Social Gaming Initiative

Destination & white-label mobile content shop purveyor, PlayPhone, announced this morning that industry veteran, and all-around great guy, Anders Evju has joined the company to lead its new mobile social gaming platform initiative. Evju is now SVP & General Manager of the PlayPhone Social business unit, which is charged with creating new mobile gaming communities, across mobile operating systems, leveraging the power of gamers' social graphs. PlayPhone Social will allow users to play multi-player games, post scores to leader-boards and earn virtual credit rewards for inviting their Facebook, Twitter, et al friends to join the fun. The platform SDK will give developers the ability to monetize applications using micro-transactions and subscription features. It will also integrate with leading ad networks, and support multiple payment methods, including Premium SMS, Credit Cards and PayPal.

Evju joins PlayPhone after a long, distinguished career with I-play & Oberon Media. He had been at I-play (known then as Digital Bridges) since 2000, where he served as general manager of the Americas. He played a critical role in that company's substantial growth during the middle part of the decade, by fostering powerful relationships with all the major US operators. From personal experience I know that much of the blockbuster success of The Fast & The Furious mobile games franchise, which realized over 15mil paid downloads prior to the iPhone era, was the result of his adept stewardship of the property in the US market. Soon after I-play's sale to Oberon Media in 2007, Evju took over management of that company's global online games operations.

Good thing for PlayPhone that they've got a solid guy in place, because this initiative will not be without its challenges. There are more than a handful of social gaming SDKs currently vying for developers' attentions, including publisher fielded offerings like ngmoco's Plus+, Chillingo's Crystal and AuroraFeint's OpenFeint as well as standalone products like Scoreloop. In addition, for many developers the social features provided by distribution channels, like Apple's Game Center, may be enough... granted those offerings don't work across operating systems. That said, I wish Anders & PlayPhone the very best of luck and look forward to seeing them do some disruptive stuff that will set them apart in this market space.

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.

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

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 Movie/TV Games For iPhone By Revenue?

Here's my stab at the Top 10 movie or TV based mobile games for iPhone and iPod touch, ranked by my latest guesstimate of the revenue that they've generated from inception to date... based on my notion that 1% of game downloaders post a review. In the spreadsheet above EAP = Estimated Average Price over the lifetime of the game on the iTunes platform, which I inferred from price movements listed on Appshopper.com. PubRev? = Publisher Revenue (caveated) which is calculated by multiplying EAP x Rvws/1% x 70% (publisher share of retail). Let me know if you think this is accurate and how well you think this model explains the performance of other iTunes App titles.

Assuming the data above is correct, it points to the value of publishers maintaining a higher price point for Apps. As you can see, Star Wars: The Force Unleashed is basically tied for the most revenue with The Price Is Right despite having 43% fewer downloads than the game show title... because it's retail price has been 75% higher on average. Actually, I must say, I was pleasantly surprised to see how much price testing publishers are doing on the platform. With a couple of exceptions, the price of each title on this list has changed (up & down) more than 3 times since launch.

By the way, it looks like Montreal based Ludia, which currently is only publishing 2 Paid Apps on the platform, made a solid bet with Fremantle's The Price Is Right.

Updated: Top 10 Mobile Games Publishers WW

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.

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.

New iTunes Paid App Top 100 Quick Stats

Average Price Top 100 App = $3.16 +7.85% from my Jun 17 survey

Average Days in Store Top 100 App = 99

note: if you remove the outlier $69.99 MobileNavigator App, Avg Price = $2.48 (-15.36% from my Jun 17 survey)

Average Price Top 50 App = $1.95 (-25.86% from my Jun 17 survey)

Average Days in Store Top 50 App = 91

Average Price Top 25 App = $1.47 (not covered in my Jun 17 survey)

Average Days in Store Top 25 App = 76

Average Price Top 10 App = $1.09 (-57.39% from my Jun 17 survey)

Average Days in Store Top 10 App = 47

Clearly price erosion is alive and well on the platform...and it's becoming more acute amongst top performing Apps. As I was running through the numbers I was struck by the fact that there currently isn't one established mobile games publisher with a title in the Top 10! Of this group PopCap has the highest ranked title with "Bejeweled 2" at #14. This motivated me to create a new spreadsheet highlighting how these guys are stacking up in the Top 100 today...

EA Mobile is clearly the most on top of its game (punny) right now vis-a-vis the major publishers on the App Store...with Gameloft & D'Choc in hot pursuit. Glu Mobile = MIA.

More Mobile Mezze Please

• Firemint takes top 2 games titles & I-Play is top publisher in PocketGamer.biz's iPhone Quality Index for Q2 2009.
• Apple posts boffo earnings fueled by the iPhone...which sold 5.2mil units in the quarter. Apple mentions on their earnings call that they are having trouble keeping up with demand for the iPhone 3Gs. In typical style their guidance for the back half of the year was tepid.
• Mobile Streams PLC 1H Revs fall 23% on the same day that Finance Director James Colquhoun announces resignation
• WGWorld.com announces (and I have confirmed) that quality So. Korean mobile game developer/publisher GAMEVIL is going public on the KOSDAQ at the end of July

Which Established Mobile Games Publishers Are Most Aggressive on iTunes App Store?

Are These The Top 20 Mobile Entertainment Companies By Revenue?

I think so...but I could be wrong. Who am I missing? Anyone on this list who shouldn't be there? Any issues with the order? I'll adjust and re-post based on feedback.

btw -- this list obviously includes mobile entertainment divisions of companies that are not exclusively involved in mobile or mobile entertainment. Also it does not include the mobile operators or divisions of traditional entertainment companies, such as the studios, networks & music companies.

Artificial Life | The New Hotness In Mobile Games?

Artificial Life (ALIF) reported super-strong Q1 2009 earnings yesterday. The LA/HK based mobile games and applications publisher announced that they had ~3.5mil java/BREW + 1.2mil App Store downloads in the quarter...making it their biggest earnings quarter ever (significant since these guys pre-date the Moto StarTAC).

Revs = $7.1mil ^71% from Q1 2008

Net = $2.7mil ^9% from Q1 2008

The company was particularly excited about the iPhone App Store (like everyone else) where they currently have 3 paid and 2 free Apps. 3 titles are promo Apps...2 for Red Bull and 1 for BMW. A mixture of free and paid games/apps tied to major brands is the sweet spot for these guys. My guess is that not all of these titles are licensed in the classic sense...in some instances they are probably being paid as a marketing vendor (which isn't a bad model in the current environment).

I've gotta admit that I was (as is my nature) super-skeptical about these guys and some of their licensing/promo relationship choices...Braveheart, Tokio Hotel, Red Bull, etc. They seemed like a fluffy mobile marketing company (the type that approach studios/networks daily). But looking at their numbers (and some of their game reviews) I am happy to concede that I was wrong. These guys are on the fast-track to becoming a revenue leader in the 2nd tier of mobile game publishers, which features companies like I-play, Hands-On Mobile & Digital Chocolate...and to becoming more profitable than any mobile game publisher in the 1st, 2nd or any other tier!!! Sweet!...love to see some energy/excitement in the mobile games category.