Tuesday, June 30, 2009

Sonic Boom Wants A Bigger Bight of the Apple

Manhattan-based publisher Sonic Boom announced today that it has partnered with Canadian game developer Bight Games to realize their ambition to become a bigger player in the iTunes App Store. This major gaming push is no surprise given that the company recently hired some of the best & brightest from now extinct Vivendi Games Mobile to shepherd their content and publishing strategies. Sonic Boom will launch 3 new Bight titles over the next couple of weeks...doubling its Paid App offerings. The first, which will launch today, is a PocketGamer Silver Award winning brain-training number game called Big Top 10 ($0.99)...this will be followed by Puzzlings ($4.99), a cool looking avatar-based puzzler, and Kill All Bugs ($3.99), a tower defense insect battler. With 6 paid titles in the App Store Sonic will have more titles in play than Capcom, Konami or Hands-On....for now, at least. As I outlined in a post yesterday many established publishers (companies that pre-date the iPhone) are aggressively pushing content into the App Store, and those that have pushed the hardest seem to be reaping the rewards...if not from a financial perspective, at least from an industry perception perspective. As we all know, Apple continues to dominate mindshare in the mobile content space and those who aren't yet participating on their platform are definitely planning to be in short order.

Thursday, June 25, 2009

First iPorn App Bares Itself Briefly

Apple giveth nudity and Apple (in short order) taketh it away...at least in the App Store. According to both Gizmodo & TechCrunch the first iPhone App to feature topless models has been removed from the service. The $1.99 "Hottest Girls" App was developed by Allen Leung and launched on the App Store on Wednesday (despite a May 29 "release date"). According to reviews the App is nothing more than very rudimentary photo gallery. Hottest Girls was given Apple's new 17+ rating (part of OS 3.0 parental controls), and many thought that its approval was an indication that Apple was getting comfortable with adult content...perhaps explaining the real meaning of the S in 3G S. All joking aside, the revenue potential from adult Apps for developer/publishers with access to premium content (e.g. Twistbox) could be substantial if Apple supports it.

No surprise...the story has twist. According to Wired the developer is claiming that the App is only temporarily "sold out" and that he voluntarily removed it to upgrade his server capacity....and that it will soon make an encore for your salacious viewing pleasure. We'll see about that...Apple has shown itself to be pretty prudish in the past and my guess is that they got spooked by outrage from family media watchdogs like the UK group covered in today's Daily Mail article.

I'm very interested to see how this plays out and to understand Apple's official stance on adult content...purely from a civil liberties & business standpoint, dontchaknow.

btw -- for those of you concerned about a dearth of nudity on your iPhone it's time to get more comfortable with an application called Safari.

Wednesday, June 24, 2009

Could Warner Bros Be Eyeing Glu?

A MobileGamesBlog.com post today advanced this theory as an extension of rumors in the console blogosphere that the studio is in the process of creating a mega-gaming company and is about to buy UK publisher Codemasters. The thought is that Glu Mobile has had strategic partnerships with both Warner Bros & Codemasters since early 2007, which would make Glu a natural mobile component of the aforementioned gaming behemoth...and the recent run-up in Glu's stock has indicated to many that an acquisition is imminent. Interesting...like it. Frankly, despite the recent run-up, Glu's marketcap is still only ~$35mil...which could make an acquisition a relatively inexpensive way for WB to get a lot of mobile production and distribution capability very quickly. If the Warner Bros mega-games company rumor is true its success or failure will hinge upon how the studio structures the company...to be successful the business will definitely need to have the autonomy/authority to continue to create original titles, acquire 3rd party IP and, perhaps most importantly, reject film titles that are not appropriate for gaming.

Tuesday, June 23, 2009

Monday, June 22, 2009

Beaucoup Bucks Bet Browsers Buy with Boku

It's always been my contention that many pioneers in the mobile content space are refugees of the dotcom bust who recognized that mobile had an inherent benefit over online...an established billing relationship with consumers that could facilitate microtransactions. The initial (and, for most, the continuing appeal) was the ability to sell consumers content on the device, for the device. However, subsequent regional innovations like Sonera's Mobile Pay, which let Helsinki teens buy a Coke from a vending machine via premium SMS way back in 2000 & Sony's FeliCa NFC technology, deployed by NTT DoCoMo in 2004, that gave busy Tokyo businessmen the ability to purchase a subway ticket with a wave of their mobiles, soon had pundits predicting the imminent demise of the leather wallet. In typical mobile fashion things didn't happen that fast...in fact they kinda stalled.

Well mobile payments are hot, hot, hot once again. According to a story in MocoNews last week (subsequently picked up by NYT) mobile payment startup Boku has raised $13mil in 2 rounds from Khosla Ventures, Index Ventures and Benchmark Capital to buy 2 existing companies, Paymo (est 2007) & UK-based Mobillcash, to get access to their combined networks of 1.6bil customers WW (really?) and become the standard for mobile payments. Boku hopes to become a ubiquitous payment option on websites alongside credit cards, PayPal, etc. -- click, mobile number, reply to the text and you're on the road to a $1k mobile bill. They believe that their "Pay By Mobile" option will appeal to the credit challenged (kids with mobile phones...yikes!) and could become the default option for impulse purchases (which tend to get canceled after 2nd thought during the credit card entry process). Boku makes money by taking a small fee per transaction...which of course will be in addition to the (non-small...like 50%) fee the carriers will take for use of their billing systems, the financial risk and managing customer service issues. So here's the catch...because of those carrier fees mobile payments aren't currently viable for purchasing anything other than virtual goods (think new kicks for your Second Life avatar). Clearly Boku (and it's investors) are banking that the carriers will see the benefit of lowering their fees to participate in a broader opportunity transacting real stuff. In the meantime I think they should focus on helping Facebook with their struggling business model...I think a shockingly large number of folks would be happy to ignore another $1.99 fee on their mobile bills for the ability to play Mafia Wars.

Thursday, June 18, 2009

Penny Pushers Stuck on Glu...and Then Not?

I'm getting more comfortable with the idea that penny stock speculators were responsible for driving up the price of Glu Mobile (GLUU) stock this week.

Wednesday, June 17, 2009

Updated!: PCWorld WRONGO! about iPhone OS 3.0 Being Delayed Until Tomorrow

Early in the day a PCWorld article citing Apple's website in Singapore caused a flurry of concern when it claimed that the release had been delayed until tomorrow. After searching for verification I discovered first from MobileCrunch and then from buddies in the US & UK that all was right in the world...3.0 is here!

iTunes App Store Top 100 Paid App Quick Stats

Avg. Price Top 100 Apps = $2.93
Avg. Price Top 50 Apps = $2.63
Avg. Price Top 10 Apps = $2.39
Avg. Time in App Store for a Top 10 Title = 42.4 days
Oldest Title in Top 100 = #22 iBeer (Updated) $0.99, which launched Jun 29, 2008
Highest Priced Title in Top 10 = The Sims 3 $9.99 which launched May 29, 2009

Tuesday, June 16, 2009

Hot Glu...Speculation About Stock Run Intensifies

Mobile & financial blogs have jumped all over the Glu Mobile (GLUU) stock story that I first highlighted last Friday. The stock was up again sharply yesterday, rising to a high of $1.66 before settling at $1.49 (levels not seen since last October)...despite a broad sell-off on the US markets. That's an 86% jump in the last week and it's moving higher again today in early trading! A key catalyst for all the excitement is the company's silence about the matter...so of course anyone who cares has their own theory. Here's a sampling and some reasons I think these are not the right answers:

  • Hasbro (seems out of their comfort zone...though, they've embraced other tangential businesses, e.g. films)
  • Activision Blizzard (not sure how this make sense after they dissolved Vivendi Games Mobile)
  • EA Mobile (they're still trying to justify their $680mil Jamdat acquisition from 2005)
Industry Dynamics:
  • Better devices & better app platforms are making the mobile games space attractive/lucrative again (perhaps, but there is more competition than ever & price erosion is squeezing margins)
Company Performance:
  • The company has a bunch of high-profile licenses, including that for the highly anticipated "Transformers: Revenge of the Fallen", that will give it a competitive advantage (I know from experience, particularly in terms of movie licenses, there is no direct correlation between boxoffice & the success of a mobile game)
  • The company has better positioned its production resources to create games for smartphone app store platforms (sure, them & everyone else...including top rivals EA & Gameloft)
So, here are my top 2 theories...for what they're worth:
  1. Penny stock speculators smell a little bit of quality here and are driving the price up...and if so it will crash and burn very quickly
  2. The company is about to be purchased by another major player in the mobile space who is not currently a player in games...I'm thinking someone like Zed, who has been on an acquisition binge recently.

Friday, June 12, 2009

Glu Stock Gets Unstuck...Rises 52% This Week

Glu Mobile's (GLUU) stock price has really taken a beating over the last couple of years, peaking at $13.95 in July 2007 & trading as low as $0.22 last November. As a result, and because it one of the few public pure-play mobile games publishers (and the only US one), it has become the poster child of a troubled business. But the stock price has been on the rise over the last couple of weeks and it really took off this week, opening at $0.80 on Monday and closing at $1.22 today...perhaps fueled by high hopes for their "Transformers: Revenge of the Fallen" mobile game, whichlaunched on US carriers on Tuesday (iPhone should be imminent). It also might have something to do with presentations they made earlier in the week at the Needhan & UBS technology conferences. I'm going to do some more digging and post updates.

btw 1 -- the stock is up to $1.26 in after hours trading, as of this post time.
btw 2 -- just to keep this in context, Glu's market cap is still only $36mil or 40% of 2008 revenues...so this should only be considered a small "green shoot".

Wednesday, June 10, 2009

Cabana Mobile Entertainment Top 20 by Revenue

Revenues are in US$ and are based on latest annual reports or industry estimates. The range of revenue on this list goes from a low of ~$50mil to a high of ~$550mil. Total revenue for the Top 20 is ~$4bil.

Please let me know if you think I'm missing a company or if you think I might have the order wrong.

Tuesday, June 9, 2009

FLO TV Going D2C

Apparently even stalwart carrier partners like Qualcomm (QCOM) are beginning to realize that AT&T Mobility, Verizon Wireless, et al aren't necessarily the hottest retailers of content to consumers. According to an article in Telephony the FLO TV mobile video unit will begin augmenting their carrier wholesale business by marketing the service directly to consumers for use with in-vehicle entertainment systems and a variety of other portable wi-fi enabled devices (e.g. netbooks, smartphones, connected gaming systems, etc.). Qualcomm is, it would seem, trying to get FLO-enabled receivers embedded in a broad range of new consumer electronic devices and building plug-in receiver accessories for existing products...probably, in part, to compete with upcoming WiMax video initiatives.

As mentioned in previous posts, FLO TV gives users a high quality mobile TV viewing experience, with full length (though old school linear) programming from NBCU, CBS, MTV Networks, Fox, ESPN, etc...but has gotten very limited traction due to partner operators' seeming indifference to the product (very few handsets support it) & lack of reasonable geographic coverage. The latter issue should be resolved as they pick up a bunch of network spectrum immediately after the broadcast TV digital transition on June 12th, and obviously this D2C initiative is an attempt to fix the former.

Now the big question...is a company deeply rooted in the technology infrastructure business like Qualcomm going to be any better of a retailer of this mobile entertainment product than the operators? Let's hope so. I recommend they use Apple, as opposed to say...Nokia, as a benchmark.

Who Would You Do...3G[s] or N97 or Pre?

Here's some key specs on the hottest smartphone celebs on the market...Pre released last Saturday, iPhone 3g[s] announced yesterday, N97 goes on sale in the US today (click to enlarge the image). I've highlighted the objective winner in each category. Let me know if y'all notice any errors or omissions.

Monday, June 8, 2009

New iPhone 3Gs Announced...Available June 19

I followed multiple live blogs starting at 10am PST today...the best were Gizmodo, Engadget (thanks for the image) and MacRumors.com. My inner geek really enjoyed the live commentary on multiple liveblogs (and viewer comments about those liveblogs) on Bwana.TV (through Justin.TV)...funny.

So here's what was announced:
  • Ability to access AT&T's newest HSPA 7.2mbps network
  • Enhanced processor loads Apps 2x to 3x faster
  • 3mp camera with auto focus & low light compensation
  • Video capture @ 30fps & basic editing tools
  • Voice controls for phone features & iTunes content
  • MMS...though AT&T not supporting until the end of Summer (lame)
  • Digital compass
  • Turn-by-turn GPS navigation
  • Nike+ support
  • Remote find & data wipe feature (kinda cool)
  • Tethering (iPhone can be used as a data connect card)...except AT&T not supporting
  • Better battery life
  • 16gb version $199
  • 32gb version $299
  • Old iPhone 3G 8gb repriced to $99

Here's some rumored stuff that didn't happen:

  • No new form factor
  • No OLED display
  • No front-facing camera for video conferencing
  • No matte finish (who cares)
  • No Steve Jobs appearance
Overall I think Apple did a pretty good job of meeting industry expectations. The 3Gs is definitely an evolutionary (as opposed to revolutionary) product...but together with the new OS and a more & more robust App Store it should continue to be the hottest handset on the market. In addition, pricing the year old 8gb 3G at $99 will make iPhone an option for a broader audience. Sorry Pre.

Wednesday, June 3, 2009

MobiTV On Track To Generate Over $400mil In 2009

Silicon Alley Insider reported today that MobiTv, Inc. has grown it's monthly subscribers to more than 7mil. The Emeryville, CA based mobile streaming video pioneer has been building their base (in partnership with carriers) since 1999...and recently has seen some impressive growth with 2mil adds in the last 6mos. As the article points out this still only represents 3% of US subscribers, but it's a heck of a lot better than the numbers hyped broadcast technology competitors like FLO TV are seeing. Moreover at $9.99 per sub they're likely going to see over $800mil at retail in 2009, or between $400mil & $500mil in revenue...which would propel them into the Top 5 of all mobile content companies worldwide.

Tuesday, June 2, 2009

UPDATED: Is Tetris #1 Mobile Game Ever With 70mil Units & $100mil WW?

According to a VentureBeat story yesterday, covering the broad history of everyone's favorite puzzle game, there have been 70mil mobile phone versions of Tetris sold Worldwide by publisher EA Mobile, and its predecessor companies Jamdat (purchased Dec 2005 for $680mil) & Blue Lava (purchased by Jamdat Apr 2005 for $137mil), since it's launch on Sprint in August 2002. The VentureBeat story goes on to claim that Tetris still accounts for 10% of all mobile game purchases (wow!...more on this below). Based on the aggregate download information my estimate is that the title has probably generated just over $100mil each for the publisher & mobile operators (70mil x $2.99 x 50%). Does anybody think my (or VentureBeat's) numbers are wrong?...does anybody think any other mobile game has bigger numbers? If not, how do we feel about this being mobile gaming's benchmark? Is there any title (or franchise) that has the potential to be the next Tetris?
btw - if you believe the 10% claim then industry analysts (like Gartner & Juniper) must be greatly overestimating the size of the Worldwide market for mobile games...which most have between $4.5bil & $5.5bil for 2008. At 10% that would mean that Tetris would have generated $500mil in retail revenue or a bit over $250mil for EA. Wrong! Not only is that significantly more than Tetris has ever generated for its publishers lifetime, it's about 140% of EA Mobile's total 2008 Revenue (oops!). So assuming the analysts are wrong & the 10% is correct, and if Tetris generates (aggressively) 33% of EA Mobile's $181mil in 2008 revenues ($60mil or $120mil retail) then the entire 2008 mobile games market may really be worth just over $1bil.

Mo'Bullet Snacks

  • Mobile Industry cognoscenti continue to discuss the catastrophic launch of Nokia's Ovi Store
  • Verizon Wireless announces it will start supporting Java for smartphones on its network
  • KongZhong (KONG) hits 52 week high & announces new focus on mobile games
  • Twistbox/Mandalay Media (MNDL) CFO Jay Wolfe steps down abruptly & is replaced by Russell Burke
  • Multiple reports about depleted inventories of the current iPhone model fan rumors/speculation that Apple will announce a new model next week
  • D7 demo of the Palm Pre, the announcement of iTunes support & concerns over June 6th launch-day inventory levels further enhance the hotness factor of this device
  • Mobile Streams (MOS) continues to enhance it's porn portfolio with the launch of new UK D2C site Porncasa.mobi