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.

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.

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.

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.

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?

If The App Store Rocks So Hard Why Are So Many Game Publishers Hurting?

As we all know and as was reinforced in spades by Monday's boffo earnings report... Apple has rapidly and radically revolutionized the mobile content industry with the iTunes App Store. In just 20 months the "fruit company from Cupertino" has created the mobile retail ecosystem that Nokia and the rest of us have been dreaming about since Y2k. There have been beneficiaries of the post-carrier app store revolution (besides Apple) in mobile gaming, which continues to be the biggest category. Notables include some great, small developers like Firemint, which has now sold 2mil copies of its Flight Control game and Lima Sky which is nearing that number with Doodle Jump. But, even some of the big players are claiming great success... Namco has just claimed 23mil App Store downloads, 3 weeks ago Gameloft claimed it had sold 10mil iPhone games and it's no secret that EA Mobile is the biggest App retailer of all. In many respects this should be the glory days of the mobile games space... so why is it then that many established publishers are suffering financially, and that some former luminaries might not survive 2010?

Here are some key factors in my opinion:

Content Clutter: Sure, the App Store is a great platform, but it's a cluttered mess, with over 140k Apps currently competing for the attention of iPhone and iPod touch customers. With very limited promotional real estate it's extremely difficult to create a breakout hit unless Apple has your back or a publisher has the marketing resources to fund substantial off channel promotion.

Price Erosion: As a corollary to the point above, the way many publishers are electing to compete is on price. While you'll see the occasional game as high as $9.99 inevitably the price begins to slip. Unless a game is exceptional, it's difficult to move product above $4.99 and as we all know many of the best sellers are 99¢. If you troll through the ratings comments you'll see that consumers increasingly believe that the price of a game on the platform should be 99¢. For quality publishers who traditionally spend 6-figures on game development (and licenses) that price point makes it exceptionally difficult to realize ROI.

The Carrier Channel's Diminished Importance: Although the majority of mobile game publisher revenues are still coming from carrier decks on Java/BREW feature phones, everybody knows that the consumers with the highest propensity to buy premium content, including games, are abandoning those platforms as quickly as they can get out of their contracts. This sea change is resulting in many publishers seeing 20% year-on-year declines in their Java/BREW revenues. Rapidly, the ability to push product through that klugy channel, by way of having strong relationships with key carrier personnel and having the ability to port games to hundreds of handsets, is shifting from being a competitive advantage, with strong barriers to entry, to being a relatively expensive liability.

Goodbye Recurring Subscriptions: It's a dirty, but poorly kept secret that lots of Java/BREW publishers adored the US carrier channels because of their embrace of the recurring subscription model. You know, buy the game for $9.99 or subscribe for $4.99 per month... which consumers think is such a deal 'til they realize (or don't), when they replace their handset in 15mos, that they spent $74.85 on a game they played 4 times. Publishers are seeing a whole lot less of this scenario, and it's associated lucre, as even the most gullible gamers move to smartphone platforms... where this model doesn't exist. Sure Apple has introduced in-game purchases, which facilitates the up-sell potential of virtual goods, etc. within Apps... but that relies on active decisions by purchasers and will only benefit those publishers that invest in making that a compelling proposition. The "sleeper" subscription model that benefited many game publishers for years is disappearing and those publishers that haven't factored that into their plans and found a way to compensate are going to have a rude awakening.

As a consequence of these factors, my feeling is that the greatest beneficiaries of the smartphone, app store revolution will be small, super-nimble, high-quality developers who elect to move up the value chain and publish to these more democratic platforms. I also believe that the very biggest publishers can survive the transition, and even flourish, by virtue of deep pockets, big brands, big marketing and close, trusted OEM relationships. The many publishers in-between are destined to be victims of this paradigm shift, I'm afraid, unless they learn to behave like their smaller competitors or consolidate into a bigger one.

Cabana Mobile Entertainment Top 20 by Revenue

€/$=1.4849

? = best estimate

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.

EA Mobile To Handle Namco's Carrier Channel Publishing Outside US & Asia

Following a flurry of reports, rumors and speculation from industry trades and blogs (including this one) yesterday about the future of Namco's mobile games publishing business, EA Mobile issued a press release today announcing that it had signed a distribution deal with the Japanese games titan for Europe, Russia, India, Latin America, South Africa, New Zealand and Australia that begins Nov 1st. For now it looks like Namco will retain control of US/Canada, Asia ex India and Africa ex South Africa. In addition, and very significantly, Namco will continue to control its own distribution Worldwide through smartphone app stores (e.g. iTunes, BB App World, Android, Ovi, etc.). This seems like a very smart move by Namco, as it will allow them to focus their attention on those channels that show the most promise for growth and provide the highest reward for innovation.... and feed those smartphone initiatives with mailbox money from EA. For EA Mobile, this should be a good move, since they'll theoretically be leveraging their existing infrastructure in those territories to push a broader selection of high-quality titles. However, it'll take some creative dancing to keep Namco happy, while making sure that these distributed titles don't cannibalize EA's own in these markets, while ensuring they don't get too distracted from their own smartphone strategy.

Is Namco About To Abandon Mobile Publishing?

Both Mobile Entertainment and MobileGamesBlog.com are reporting this morning that Namco Bandai has it's mobile games operations in Europe under review, indicated that it may soon be assigning a distribution partner and have confirmed that there will be layoffs. This comes as a bit of surprise considering that Namco just began ramping-up their European operations in January 2008 with the appointment of industry veteran Barry O'Neill as President of Namco Bandai Networks Europe. That said all the major games publishers seem to be struggling to find solid footing in Europe, where alternative distribution channels like the App Store have had less impact than in the US and where the carriers' deck strategies have been in a constant state of upheaval. It's unclear how this might impact mobile operations in the Americas or Asia (if at all), but my guess is that if Namco decides to subcontract distribution, they'll do it everywhere outside of Japan. Also, as I reported here last month, Namco's US VP of Strategy & Planning Jason Ford recently left the company to become the Head of Games for Handmark. Hmmm.... actually Handmark would be an interesting potential distribution partner for Namco's games. Let's see how this plays out.

Cabana Mobile Entertainment Top 20 by Revenue

All numbers are in US$ based on annual reports or last 4 quarters.

As usual, please comment with any suggested changes.

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.

Mobile Game Mavericks On The Move

Three veteran luminaries of the mobile games business, and three people that make this a great space to work in, have made professional moves in the last couple of weeks...

1) On August 3rd industry journalist and thought leader Stuart Dredge left popular games news source PocketGamer.biz in order to contribute his freelance talent to UK mag/website Mobile Entertainment. Previously he was at Informa, where he was lead reporter for the analytical newsletter Mobile Games Analyst. Stuart is, without doubt, the most highly regarded journalist in the mobile games business.




2) On August 7th Qualcomm's gaming BREWmeister and ubiquitous industry panelist Mike Yuen left the company after an 8 year career to join Zeebo (a company Qualcomm funded with Brazil's Tectoy) to become its SVP of worldwide content & services. Zeebo has developed a low priced console for the developing world that uses OTA distribution and leverages Qualcomm's BREW technology and protocols. Mike is a clear thinker, great guy, games enthusiast and, perhaps most importantly, super-helpful at navigating companies through the often labyrinthine world of Qualcomm.


3) Today it was announced that Jason Ford, who was at Namco for the last 3 years, has joined re-emergent Kansas City based developer/publisher Handmark as its VP of Games. Ford is probably best known in the industry for his 5 year tenure at Sprint, where he was an almost legendary, obsessively quality focused, not-that-shy about sharing an opinion, general manager of that operator's game deck when it was a dataARPU superstar. When the book is written about the development of mobile entertainment there will be a chapter about Jason Ford.

Let's Do The Time Warp Again: Top 10 Games At The Big 3 US Carriers

I was beginning to feel that the mobile industry's (as well as my own) obsession with the iPhone was getting positively unhealthy...so I decided to take a look at what was going with mobile games in the US carrier "app stores." Wow, so much has changed in the last year...not! The following list is based upon the Most Popular or Top Selling titles on the respective carrier websites. Unfortunately T-Mo USA requires a log-in to see this data...so they won't be included for the moment (a little help please). While putting this together I must admit that I had a bit of a chuckle, at Verizon Wireless's expense, when I noticed they still attribute all their EA Mobile titles to Jamdat....which EA bought way back in late 2005 (and which ceased to exist as a brand shortly thereafter). But as you can see, this anachronism almost seems appropriate...

Updated Cabana Mobile Entertainment Top 20 by Revenue

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