Big 3 Mobile Game Publisher Revenue Comparo 2010

Gameloft Quarterly Revenue Trend 2006 thru 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.

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.

Gameloft: Revenue & Net For The Last 2 Halves

Gameloft released its financial results for the first half of 2010, after teasing topline sales late last month. The points that caught my eye were...

1. Profitability seems to be ramping nicely, which isn't typical in the space
2. The company now sits on a stash of $33mil in cash
3. Emphasis on Java/BREW marketshare the company is gaining as competitors exit that space

All of which make me wonder what how much of Gameloft profitability is being generated from non-smartphone channels.

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.

Enterprise Values of 22 Public Mobile Entertainment Companies Aug 2010

Big 3 Mobile Game Publisher Revenue Comparo Q2 2010

Updated: Apple Still The Big Story In Gameloft's Earnings... But Not As Big As It Initially Appears

Gameloft issued a release last Wednesday outlining their top-line Q2 2010 performance. Revenue was up 14.7% over Q2 2009 to €33.60mil ($44.44mil), and for the first half of the year it was up 11%. That puts their revenues for the last 4 quarters at $169.95mil, at current exchange rates. North America held steady at 34% of revenue or $15mil, while Europe lost some ground to developing markets. Overall this looks like a solid result pending the release of comprehensive financials at the end of August.

The most amazing claim in the release is actually one made in error. The release states that "Gameloft has positioned itself as a leading game publisher on Apple's iPhone and iPad and has seen its sales on the AppStore grow by 113% during the second quarter of 2010." That initially led me (and others) to believe that their iOS revenue had spiked from €6.93mil in Q1 to €14.76mil in Q2... which would represent a whopping 44% of revenue. However, after contacting investor relations it turns out what they meant to say is that their iOS revenue has grown 113% since Q2 2009 and that the figure associated with iPhone, iPad, iPod touch is actually €7mil, or 21% of revenue... which is the same percentage they reported for Q1 2010.

Now that that's straightened out I'd be interested to hear what their revenue looks like on other smartphone platforms. Despite all the hype about Android, publishers keep telling me that paid app sales in that channel are still insignificant (attributable to Google Checkout, poor management of Android Market & OS fragmentation), and that the other smartphone platforms are barely worth mentioning. Meanwhile the carriers, at least in North America & Europe, are becoming less important with each passing quarter. For games publishers, this has got to be troubling... it's never a good thing when one distribution channel dominates the agenda of an industry. Unfortunately, for Gameloft et al, it appears that they're gonna have to be comfortable with a dependency on Apple, and the dangers inherent in that type of relationship, for the foreseeable future.

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.

Update June '10: Enterprise Values of 21 Public Mobile Entertainment Cos Including Motricity

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.

The Good The Bad & The Ugly In The Mobile Content Ecosystem May 2010

This segment, which covers my current perception of the state of select companies and business sectors in mobile entertainment, will be a recurring feature on Cabana Mobile. You'll notice dynamism in terms of the companies covered and where they fall within these categories, over time, as my inputs change. Let me know if you agree or disagree with my opinion... and tell me what other companies/categories you'd like to see on this list.

THE GOOD

• DeNA - Japanese powerhouse, fueled by the uber-successful Mobage-town social mobile games portal, has over $500mil in annual revenue, $125mil in profits and over $350mil in cash. These guys could roll-up several major western games publishers in a heartbeat if they were so inclined.
• Gameloft - the French publisher, always a high quality player, has been on its iPhone game from the start and now derives a full 21% of their revenues come from the AppStore... which is (for better or worse) the only game in town in terms of paid mobile content. Gameloft is proof that you can turn a super-tanker in rough seas.
• GAMEVIL - South Korean game publisher has 2 things going for it... great capabilities with micropayment model games in its home market and a focus on high-quality builds that are conducive to smartphones. These guys regularly deliver solid profits and have a market cap that must make many of their bigger competitors very envious.
• Millennial Media - It's no secret that I've always had a healthy level of skepticism about the value of the mobile ad networks. That said, there ain't no denying that the biggest, and one of the best managed, of the independents is in a super-sweet spot in light of Google's $750mil acquisition of AdMob and Apple's $275mil acquisition of much smaller Quattro. Rumors have been swirling for months that Microsoft is in the hunt.
• Firemint - smart, lean Australian games developer, turned iPhone publisher, is one of my favorite content success stories of the smartphone revolution. Flight Control and Real Racing have been true phenomena on both the iPhone & iPad. The big question is, of course... what's next?

THE BAD

• Glu Mobile - this quality mobile games publisher, that I once called the "barometer of the health of the mobile entertainment space", has been struggling to evolve from a carrier-focused, licensed IP based company, into a smartphone savvy developer of original game franchises. They're currently going through a painful right-sizing process and experiencing declining quarter over quarter revenues. Cash is a severe pain point and their market cap (under $40mil) is currently 11% of rival Gameloft's.
• Carrier Decks - remember way back when (2years ago) when Get It Now! and MEdia Mall (and their ilk) used to be like WalMart and Target for mobile content? Well unfortunately the smartphone revolution and Apple's retail smarts have shifted that paradigm... big time. Publishers now routinely report alarming declines in their carrier-based revenue. I doubt the tide will turn back, unless operators focus their efforts on curating and facilitating billing for paid Android apps... 'cause that's a growing mess they're in a position to fix.
• Motricity - back in January this veteran, Bellvue, WA based, carrier content platform management company made its intentions known to the SEC that it wanted to go public. Lots of folks in the industry were shocked by the timing, considering the the general state of the IPO market, current conditions in the carrier deck business, the very substantial losses Motricity has racked up over the last few years and the fact that 74% of its revenues come from 2 companies.

THE UGLY

• GetFugu - when your stock price is under a penny, you have to take a bridge loan for $170k & after 6 months your one app has only 333 mostly poor ratings in the AppStore, that's kinda ugly. Even the micro-cap day trader crowd is way over it. It's hard to believe that this company will survive the summer.
• NeuMedia (f/k/a Mandalay Media) - the owner of Twistbox & AMV has always had an identity crisis; is it an adult entertainment or a games company? Recent exec & board defections and a cash-balance triggered notice of default indicate to me that they may not have to struggle with this issue too much longer.
• Off-Deck Mobile Portals - before the smartphone revolution this was a red hot space, with power-players like Thumbplay, Flycell & Jamba/Jamster vending recurring ringtone & graphics subscriptions, to under-supervised kids. After paying $120 bucks over a year for those 3 Young Jeezy tones and a blingy pot leaf screensaver, most suckers (or their parents) got a clue.

THE QUESTION MARKS

• Zed - the Spanish personalization giant has been like The Borg for the last couple of years, sucking up companies left & right, and diversifying into myriad content plays... including TV production. Though privately held, they used to brag about being the biggest mobile content company in the world, claiming revenues over $800mil!... but I haven't heard a lot of bragging recently.
• Buongiorno - this Italian mobile personalization & services goliath still has revenues in the $300mil range, but their revenue has been on a downward trajectory as the company's content offerings get a little long on the tooth and it tries to figure out how to be relevant in a smartphone world.
• Index - this longtime Japanese content powerhouse, whose mobile group is perennially in my Top 5 by revenue, seems to be faltering a bit. Their one time bid to be a global player, by virtue of a North American & European buying spree, flamed out and now they're fighting to stay relevant in a home market where the iPhone and Android are gaining traction.
• Android Paid Apps - as I alluded to earlier, this is a mess. Considering how quickly Android handsets (and soon to be tablets) are proliferating across carriers, this should be a huge opportunity. However, Google's disinterest in managing their store & consumer resistance to setting up Google Checkout accounts, have really stifled Android's paid app potential. I think it'll be up to the carriers to fix this problem.
• Ovi - Considering Nokia's 2.7% marketshare in the US this won't be a factor here for a long time. In the rest of the world there's more hope, especially considering some recently promising download numbers, and the appointment of industry vet Bryan Biniak (a guy who I know understands content) to run Ovi Publish. Frankly I'm more bullish on Ovi now than anytime in the last year.
• Augmented Reality - Boy, I was really excited about this space for awhile, particularly apps like Layar... but I'm definitely not feelin' it right now. AR still seems more like a novelty than a necessity.

Updated Enterprise Values of 15 Public Mobile Entertainment Companies

What a difference a week makes. I'm already updating this spreadsheet with some new data. Here are some notable changes:

• Buongiorno posted Q1 2010 earnings
• Velti filed updated earnings with the SEC as part of their bid to go public on the NASDAQ (they're currently listed on LSE)... their numbers are pretty impressive (more on that soon)
• Mandalay Media, parent of Twistbox & AMV, changed its name to NeuMedia, Inc. & announced a notice of default related to a cash balance provision from a key creditor
• ROK Entertainment's stock is down over 50% today (guessing they'll be more news to follow). Btw - did y'all know the biggest shareholder in ROK is the DeJoria family, which controls the Paul Mitchell salon product empire? Always thought the guy in the ads was Paul Mitchell... but that's actually John Paul DeJoria (Mitchell was his founding partner). Anyhoo, probably hasn't been a great investment no matter how you cut & color it

Gameloft Gets Some App Store Promo Love

Wow! Gameloft got one of the six rotating feature "bricks" at the top of the iTunes App Store. That's some pretty sexy real estate for publishers trying to break through the insane clutter of Apps in the store. What's fascinating is that Gameloft elected to tag the ad with it's company name and link to their catalog of iPhone & iPad titles. Clearly they must believe (or want to test the theory) that Gameloft has become a recognizable endorser brand with consumers who buy games... and not just folks who attend MWC & CTIA. Hmm, I wonder if that's really the case. I've always considered the games business analogous to the film business with respect to marketing... wherein the emphasis is always on the title, because it's assumed that the consumer is generally agnostic about the company releasing it. What do you guys think?

Big 3 Mobile Game Publisher Revenue Comparo

Latest Enterprise Values of 15 Public Mobile Entertainment Companies

• Data for Velti & ROK Entertainment should be taken with a grain of salt, since they haven't released financials in recent quarters
• It looks like a couple of these companies should consider giving their cash back to the investors, and calling it a day. Some of them shouldn't be public at all (and are barely going concerns)
• I think the shining stars of this lot are the mobile games publishers Gameloft, GAMEVIL & Com2uS
• I look forward to adding Motricity into the mix, once (if?) they go public
• Let me know your thoughts on this and if there are any other public mobile entertainment companies I should be tracking