Mobile gaming $

Following the publication of this article in Moconews, I had a call with Greg Ballard, CEO of mobile gaming company GLU.

Glu is adamant that despite a smaller size than EA Mobile or Gameloft, the company is very well placed in porting games on the balkanized mobile handset market. He righlty pointed out that if smaller in revenues, Glu has a scalable business and claimed to be ahead of its competitors in some regions of the world (n2 after EA in the US and after Gameloft in Latam, n1 in China and Australia). He also made the point that Tetris still represents a significant chunk of EA revenues. Having posted posted this comment about the Jamdat acquisition in December 2005, I have no other choice than to agree.

So, let me precise that my comment “the larger companies have economies of scales that their smaller rival doesn’t” mainly addresses the smaller players in the mobile gaming industry. Despite consolidation that took place over the last few years, this market is still very fragmented. Also, it is fair to point out that Gameloft’s developer/production/porting teams represent close to 90% of the workforce (and thousands of employees). But I am not a financial analyst so I can’t really make a call here.

However, I still believe that:

- EA and increasingly Gameloft (due to the fact that the company is part of the Ubisoft galaxy and that it started developing games for consoles) can develop synergies by licensing content on multiple platforms and not only for mobile. They also have their own IP rights, reducing the needs to pay royalties to the likes of Fox or Celador.

- GLU did not join the iPhone train yet, contrary to Gameloft. Building for new platforms and alternative distribution channels (iPhone, N-Gage, Android,…) is key. See here the reasons why.

- Some companies may be hurt in the decline, doesn’t mean all companies won’t do well, or that some parts of the mobile gaming sector won’t thrive. Indeed, there will be a slowdown due to the economic downturn (mainly because of longer handset renewal cycles and potentially because of the need to cut non-core telecom spending) particularly for traditional java games. It thus all the more important to develop for new platforms and to innovate (new merchandizing, biz models…)

Apple AppStore – Top Apps

Apple recently released its top downloaded applications on the AppStore since launch in July 08. No mention of the split here between apps downloaded on the iPhone and on the iPod touch.

Top 10 Free Downloads (Overall). My comments in italic

1-Pandora Radio (music, 2 million iPhone subs who spend 90 minutes listening on average)
2-Facebook (social networking)
3-Tap Tap Revenge (game)
4-Shazam (music)
5-Labyrinth Lite Edition (game)
6-Remote (entertaining app)
7-Google Earth (only launched 2 months ago)
8-Lightsaber Unleashed (cool and fun app, close to a game for Dark Vador fans…)
9-AIM (highlights the strength of AIM in the US vs Europe)
10-Urbanspoon

My first take:

- 2 music apps in the Top 5, highlighting the role of free in music today. I wonder what are the stats on iTunes. How does buying tracks on iTunes from the iPhone / iPod touch perform?
- lots of gaming / entertaining apps
- 2 social networking / IM apps in the top 10
- Where’s video???

Top Paid Apps (Overall):

1-Koi Pond
2-Texas Hold’em (game)
3-Moto Chaser (game)
4-Crash Bandicoot: Nitro Kart 3d (game)
5-Super Monkey Ball (game)
6-Cro-Mag Rally (game)
7-Enigmo (game)
8-Pocket Guitar
9-Recorder
10-iBeer

Well, doesn’t it speak for itself? The iPhone (and to a lesser extent the iPod) are gaming platforms. Beyond the great user experience, the good marketing catalyst and the need for game developers / publishers to look for new source of revenues, there is another explanation: it is easier to merchandize content on the iPhone than on operator decks. More on this here.

UPDATED: According to Macworld’s iPhone Central, Apple has purchased full-page ads in both the New York Times and the Wall Street Journal that include the news – in small print at the bottom of the ads – that the iTunes App Store has now distributed “over 300 million” iPhone apps from a total of “over 10,000″ titles available. I was initially skeptical that Apple could sustain such a high growth-rate since the beginning of the AppStore launch, back in July 2008. That’s really a significant number.