updated 03:20 pm EST, Tue November 18, 2008
Non iPhone Gaming Hurt
Cellular carriers are effectively damaging their own business in mobile games by refusing to adopt a more iPhone-like business, a new study by Juniper Research says. Although the total value of the market is set to nearly double in the next five years from $5.4 billion to about $10 billion, game publishers producing Java titles and other typical mobile games are actively quitting their regular industry due to deals with providers that make it difficult or impossible to continue selling their usual games.
The carrier-run portals selling the games are said by Juniper analyst Dr. Windsor Holden to give too small a cut to the developers, forcing them to sell more games to generate meaningful income. They also often get poor placement and other marketing that leaves few buyers aware of games they might like, according to the report.
Dr. Holden suggests instead that carriers should follow Apple's model for the iPhone App Store, which gives the game publisher 70 percent of the app revenue regardless of a download's particular price. The difference is believed to be alluring to teams willing to sacrifice sheer sales volume for their actual income.
"The revenue share offered by Apple to games publishers is incredibly attractive," the researcher says. "The danger is that if operators do not respond with a similar business model, publishers faced with low margins may simply exit Java completely."
Apple is also known to take an uncharacteristic advertising approach to games on the App Store. As with iTunes music and video sales, the company doesn't accept paid placement and so often promotes apps based on their release dates, expected popularity and staff recommendations.
Besides following Apple's model more closely, Juniper also suggests turning away from ad-subsidized games and to drop the prices of using data outside of pre-packaged service to let gamers afford downloads.