Video Games & Mobile Games
The mobile games sector, which currently generates approximately $2 billion in annual sales, appears poised to contribute significantly to overall computer and video game sales in the next few years. Thanks in part to Apple’s wildly popular iPhone, mobile games have received a burst of fresh attention that is focused on producing innovative new technologies and creative new products. In fact, according to communications market researcher TMNG, mobiles games will grow at an annual compound rate of nearly 25 percent through 2012.
A New Platform Emerges
The mobile game genre essentially began in the early 1990s when calculator producers, such as Texas Instruments, began to embed the now ubiquitous Snake game in their devices. The pixilated reptile that grew in size while gliding through a tiny maze so captivated users that Nokia decided in 1997 to become the first mobile phone provider to include a game in one of its models. In the years since, an estimated 350 million mobile phones have offered Snake as a standard feature.
With Snake’s popularity as inspiration, several companies began to work on technology, informally known as WAP, which would enable mobile phones to transfer game-related data via a remote server. While the early results proved too primitive to attract many adapters, gamers and developers alike began to understand the possibilities for fast action and multiplayer mobile-based games.
The new millennium ushered in to the mobile games sector an abundance of grand ideas, funding – thanks to eager venture capitalists – and new publishers and developers. With many mobile phones featuring color screens for the first time, the enthusiasm was not unfounded. Plus, select phones even began to support a version of the popular Java programming language. Together, the developments served to greatly expedite mobile games’ sophistication. The free-for-all environment meant, however, that the sector’s numerous start-up companies supported a variety of incompatible technologies. Progress suffered as a result.
Even so, mobile games had reached a stage in development where major game publishers needed to decide how to incorporate the new platform into their business plans; the sector no longer would be the domain of small, independent game companies alone. While a few companies launched a mobile games division, most publishers simply opted to license out their most successful titles. After all, gamers already had available to them the portable devices that the major console manufacturers provided.
Different issues have continued to plague mobile games in recent years. The proliferation of 3D games two years ago, in particular, highlighted the discrepancies in the sector’s products. With every mobile phone offering slightly different capabilities, game developers and publishers quickly learned that enhanced graphics wouldn’t work on certain phones. As a result, companies ended up investing significant time and resources in “porting” a small number of games for the specifications of individual phones. The focus, therefore, remained on adapting old titles rather than on creating new games.
Mobile Games Turn a Corner
While such problems still hamper mobile games’ evolution, Apple’s iPhone has changed the playing field in a significant, exciting way. The iPhone, as ngmoco’s Stephanie Morgan pointed out during the 2009 South by Southwest Festival, allows for higher-quality games than most mobile phones and has created a “wide-open” market for third-party titles. This marketplace, where the barrier to entry for developers is low and games cost relatively little money for consumers, exists predominantly in Apple’s online App Store. The App Store has revolutionized the sector in establishing an easily-accessed direct connection between developers and consumers that bypasses publishers and phone operators.
Consumers have taken full advantage of the new access, downloading more than 1.5 billion apps over slightly more than one year. According to Apple, the App Store now has over 65,000 apps from the 100,000 developers that participate in the iPhone Developer Program. While mobile games represent only a portion of the apps downloaded, the extent to which Apple’s new technology has galvanized the sector is unmistakable. Every type of gamer, from the most devoted to the most casual, regularly has new entertainment options available at his or her fingertips. “The App Store is like nothing the industry has ever seen before in both scale and quality,” said Apple CEO Steve Jobs. “It is going to be very hard for others to catch up.”
Game developers have exhibited similar enthusiasm, primarily in their quest to push the envelope further by bringing popular new console gaming trends, such as microtransactions and in-game advertising, to mobile phones. For example, downloadable content, perhaps the most lucrative microtransaction, empowers developers to tempt gamers with new additions, such as levels and missions, to their favorite games. Such trends, if harnessed effectively, will enable companies to generate revenue after a consumer initially purchases a given title.
A Bright Future
At the end of 2009, 4.6 billion people worldwide subscribed to mobile phone service, up from one billion in 2002. The mobile games sector owes its bright future to the strong technology habits that these people, particularly the teenagers among them, have developed.
According to the Entertainment Software Association’s 2010 Essential Facts about the Computer and Video Game Industry, 42 percent of U.S. heads of households report playing games on wireless devices, up from 20 percent in 2002. The Pew Internet and American Life Project, meanwhile, found that 48 percent of U.S. teens play games on a cell phone or PDA. Combined with 71 percent of teens ages 12-14 playing games on a portable gaming device, the mobile games sector looks likely to enjoy a large consumer base in the coming years.
Mobile game publishers, which now include a variety of organizations and companies from other industries, already have demonstrated an eagerness to embrace a wider audience and explore the potential that mobile games offer. The U.S. State Department, for example, invested $415,000 in X-Life, a mobile game for Middle Easterners designed to teach them about the English language and American history and culture. The State Department hopes that “e-diplomacy might spread cross-cultural understanding between the U.S. and countries in the Middle East and Persian Gulf.
Even major companies such as Disney, Viacom, USA Network, and Burger King have launched mobile games in an effort to engage their respective target audiences. Burger King’s multi-level BK City game hopes to increase customer acquisition and retention for the fast-food chain. "I think we hope to get brand recognition and we hope that the people who are downloading these games are apt to visit Burger King,” said company spokeswoman Heather Krasnow.
The enterprising business model that now characterizes the mobile games sector has set the stage for additional innovations in the years to come. Analysts anticipate that the next generation of mobile games likely will include more multiplayer titles, in-game advertising, and downloadable content. With major game publishers once again rethinking their relationships with the sector, mobile games will play no small role in the computer and video game industry’s continued evolution.
Go Figure
- 4.6 billion - Mobile phone subscribers worldwide at the end of 2009, compared with one billion in 2002.
- 350 million - The estimated number of mobile phones that have offered the first mobile phone game, Snake, as a standard feature.
- 42 - The percentage of heads of households who report playing games on wireless devices, up from 20 percent in 2002.
- 24.6 - The mobile games industry’s predicted annual compound growth rate through 2012, according to communications market research firm TMNG.
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