N-Gage 1.0 Was A Taco, N-Gage 2.0 Is Toast

Mobile Entertainment & mocoNews both had good stories today covering Nokia's confirmation of what mobile games publishers had been buzzing about for months, and that I had anticipated back in July (truly the worst kept secret in mobile entertainment)... that the second iteration of Nokia's N-Gage (the SDK and services iteration) was well and truly dead. The plan is to roll all of the Finnish handset manufacturer's mobile games retail initiatives into the "dynamite" Ovi app store that you're all enjoying. The good news for Nokia is that they lost all their credibility with games publishers and content owners on this initiative a long time ago. The bad news is that they're not going to get many more chances to convince those stakeholders that they have the chops to play a meaningful role in the development of the mobile content business. Nokia desperately needs to start executing on services.

Nokia Dis-N-Gage-ing Vancouver Games Studio

Develop is reporting that Nokia is eliminating 100 jobs and shuttering the Canadian game development facility that was once the center of the Finnish handset manufacturer's gaming ambitions...going back to N-Gage 1.0 (the "taco") era. While it's no secret that Nokia is in the process of major headcount reduction WW, and it is widely rumored to be abandoning N-Gage 2.0 (the platform & game download service) in favor of making Ovi the destination for all its App/content initiatives, it's unclear whether this move signals that they are getting out of game development altogether. My guess is that they are...and that they will leave it up to 3rd party developer/publishers to fill Ovi's shelves with quality games. What Nokia needs to focus on in the short-term is clarifying to those publishers what platforms they are supporting (is N-Gage still viable?) and convincing them that Ovi is going to be a consumer destination that they should care about.

Glu Mobile 2008 Earnings...Hoping For a Less Sticky 2009

I look forward to Glu Mobile's (GLUU) quarterly earnings calls like kids look forward to Christmas. Because they are one of the larger public mobile pure-play companies the calls are a great barometer of the overall state of the mobile games business and always feature lots of valuable mobile business data points. Moreover, I think all of us vested in the health of the market for mobile games based on entertainment IP desperately want to Glu Mobile to succeed. Here are the key take-aways:

2008

• Q4 2008 Rev = $21.6 mil Net Loss = 37.8 mil
• FY 2008 Rev = $89.8 mil Net Loss = 107 mil (ouch!)
• 34% increase in Revs over 2007
• Top 4 carriers = 42% of Revs, Verizon was a whopping 23%
• Non-carrier business (iPhone, Android, N-Gage) was insignificant in 2008
• 54% North America 27% EMEA 19% Rest of World (10% China)

2009

• Q1 2009 Estimate Rev = $18 mil to 18.5 mil Estimated Net Loss =$6.7 mil to $7.1 mil
• FY 2009 Estimated Rev = $76 mil (15% decrease!) Estimated Net Loss = $16.6 mil to $19.6 mil
• $19.2 mil in cash on hand at end of FY 2008
• Plan is to be Cash Flow Positive in 2009 (Profitability is clearly off the table)
• 75% - 80% of IP for 2009 games will be licensed...big movie titles for 2009 are Watchmen & Ice Age 3
• Glu Mobile will release fewer titles in 2009 than 2008 (more like 2007 volume)
• The Dark Knight: Batmobile (co-Published with WB) got as far as 8th place in the iTunes App Store giving Glu Mobile the ability to model Rev potential of a Top 10 title in that channel
• 30% to 40% of Glu Mobile's development capability is focused on iPhone, N-Gage and Android
• Headcount is currently 560

DATA NUGGETS (all this is from Glu Mobile's perspective)

• The global economic downturn is hurting mobile games business as consumers curtail new handset purchases (most games purchases happen in first 90days of ownership)
• Consumers are migrating to Smartphones (see Cabana's Trend Watch)
• 17 mil iPhones Worldwide (additionally iPod Touch is a factor in App Store games). iPhone has the highest tie ratio to games purchases of all handsets (2nd is BlackBerry Pearl)
• Richer merchandising environment in iTunes App Store means non-established brands can flourish
• iPhone App Store is allowing smaller publishers enter the business, but ultimately larger companies that stay focused on the platform will consolidate market share (as happened on carrier decks)
• Executives at the carriers are paying more attention games due to there success on iPhone, but this is not yet being reflected in marketing initiatives

Blogosphere Specularumorizing About Nokia App Store

According to this Techcrunch post citing sources, that cite other obscure Russian sources, there is some thought that Nokia (NOK) will announce a Symbian-based applications store for its devices at the 2009 Mobile World Congress (Feb 16-19) in Barcelona. This doesn't seem too far-fetched given their overall Ovi strategy which already includes a music store (launched in UK late 2007), N-Gage 2.0 (opened April 2008) and a planned movie store. Oh yeah, and the fact that some California outfit is said to be having success with something similar. If this is true, the success of the initiative will be, as it always is with Nokia, all about executing on the user interface, marketing and device integration. If they do launch this applications store it's critical that they find a slick way to integrate all the Ovi experiences so it makes sense to real human, consumer folks beyond the walls of the Powerpoint Palace in Espoo.

Nokia N-Gage Top 5 Titles of 2008 - PocketGamer

PocketGamer is pleasantly surprised that a homegrown Nokia game (not Tetris!) took top spot. Cabana agrees - Tetris is great, but the mo'games space needs to evolve beyond it.

1. Hooked On: Creatures of the Deep (Nokia)

2. Tetris (EA Mobile)

3. Asphalt 3: Street Rules (Gameloft)

4. World Series of Poker (Glu Mobile)

5. FIFA 08 (EA Mobile)