PocketGamer.biz: 10 Mobile Gaming Trends Sept 2010

Updated: Name That Claim!

On the heels of the massive popularity of the "Name That Balance Sheet!" game a couple of weeks ago, it's time to play everyone's other favorite game, "Name That Claim!" Be the first to correctly identify the mobile entertainment company associated with the claims on the website screen grab above and, if you happen to be at the Redwood Room in SF on the nights of Oct 6th or 7th, 2010 while I'm at that venue, you'll be entitled to one (1) overpriced Vodka Redbull and a few minutes of my blether. No rainchecks, no cash value, no substitutions. Answer must be submitted in comments below before 6PM Pacific Time today (Sept 27, 2010).

Top 5 Paid Game Downloads for iOS as of Sept 2010

As usual, please let me know if I've missed any titles here or if I don't have the most updated figures... obviously these numbers are pretty dynamic and I've noticed that these self-reported downloads don't always get picked up by outlets in a timely manner. I'd be interested to see numbers (broken out for iOS) for titles like Monopoly and Tetris, which I imagine could be in league with these guys. If I can collect enough additional data, I'll re-do this as a Top 10 list. Please note that these are straightforward Paid App downloads and do not take into account freemium, or paid with upsell models, which in the case of franchises like Tap Tap from Tapulous can be significant... allegedly yielding up to $1mil a month at the end of last year.

BTW - do you guys think this means that the most any publisher has ever made from any one title in the App Store, using the paid app model, is $8.4mil ($2.99 x 4mil x 70%)?

US & Japanese Mobile Activity Compared

This represents a comparison of comScore's MobiLens data for the US market released September 15, 2010 and data for the Japanese market released September 22, 2010. The areas of major difference in behavior are 1) text messaging, which is a relatively recent phenomenon in Japan, where e-mail is the preferred form of mobile-to-mobile communication (54% usage); and 2) browser usage, which has been popular in Japan for over a decade and for a long time was more widely used than the online internet (it may still be). In terms of app usage, the gap is closing very quickly and I suspect we'll see parity sometime next year. One stat from the Japanese market, that's interesting (and not on this spreadsheet, because I don't have an apples to apples comparison) is mobile video consumption. Apparently 22% of Japanese mobile users watched TV and/or video on their mobile phones... which has to be substantially higher than in the US, where I believe usage is under 10% (a little help?).

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.

Mo'gossip: Casio G'zOne Rock... Hideous Love Child of G-shock & Pontiac Aztek?

Gartner Mobile OS Market Share Forecast Through 2014

Click here to read Gartner's release associated with this table.

Name That Balance Sheet!

It's time to play everyone's favorite game... "Name That Balance Sheet!" Click on the image above, identify the mobile company associated with this balance sheet recently filed with the SEC, and submit your answer as a comment to this post. If you answer correctly by 6pm PDT Friday September 10, 2010 you'll be entered for a chance to win a supermarket sushi lunch with me at the Ralphs of your choice in Glendale, CA (or something nicer if you're paying), at my convenience, sometime in the next 6 months. Travel and accommodations are not included... and no, you can't get the party platter (maximum retail value is $8.99). If history is an indicator, very few will enter, probably no one will win.

Samsung's Galaxy Tab Looks Kinda Badass

• Android 2.2
• Video calling
• Google Maps Navigation embedded
• Flash Player 10.1
• and you can hold it in one hand

...take that iPad

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.

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.

The Beginning of Think Different

Thanks to Pekka Parnanen for pointing me to this great video from the beginning of Steve Jobs' reinvention of Apple, soon after regaining control in 1997. I'm not an Apple fanboy (and don't use an iPhone), but I have no end of respect for this company, its products and its market savvy... and I think most of it is attributable to the singular vision of Mr. Jobs. I would go on to propose that Apple has emerged as the most important force in terms "consumerizing" the mobile entertainment products many of us worked on, in relative obscurity, for years (I expect some arguments) and that the mobile revolution they've spawned is a corollary of Think Different. BTW - the ad Jobs introduces in this video still gives me goosebumps.

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.

Battle For So.Korea: GAMEVIL vs Com2uS Q2 2010

Enterprise Values of 22 Public Mobile Entertainment Companies Aug 2010

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

US Carrier Metrics Compared Q2 2010

The Big 4 carriers represent over 92% of US wireless subscriber connections.

I've highlighted the top performer in each category. Note Sprint's Data ARPU number is in italics because it's from last quarter... for some reason they chose not to break out Data ARPU for Q2 2010 (hmmm).

For fun, take a look at how these numbers compare with Q4 2008.

DeNA's Path To Ascendancy

Revenue by calendar quarters, $mils, $/¥=85.26

Japanese powerhouse DeNA reported fiscal Q1/calendar Q2 2010 operating results earlier this month. This company is on a revenue rocket ride... fueled by the home market popularity of its Moba-ge-town mobile social gaming platform. The only mobile entertainment company in the world who purports to be in the same league as DeNA, in terms of revenue, is the private Spanish personalization publisher Zed... who bragged to the press that they'd realized $870mil in turnover during 2008. I must say I was typically skeptical at the time, and Zed has been dead silent on the earnings front for more than a year. I'm confident, based on their current trajectory, that DeNA will have a significantly bigger business than Zed by the end of this year, if they don't already.

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.