Social Networks Go Mobile with Handset Makers

A game-changing development reported by BusinessWeek that social networks like Facebook and MySpace are side-stepping mobile phone carriers and striking deals directly with manufacturers to be featured on BlackBerrys and iPhones and in cell phones from INQ and Nokia  (NOK)

Case in point: Facebook struck a deal to become a featured social network on a low-priced cell phone due this year from INQ, a London-based subsidiary of Hutchison Whampoa. The company has integrated Facebook into every facet of its upcoming phone, INQ1, to be released in Britain and Australia by Christmas. The phone’s address book displays contacts logged into Facebook; its camera posts pictures directly to the social networking site; and its home screen shows photos loaded by friends onto the site.

The social networks did begin working with the mobile carriers since the past year, e.g., Facebook was featured on 100 portals in more than 50 countries, however, the rate of adoption was lower than they desired.

Better integration with handsets can dramatically increase user engagement with a mobile site. A year ago, Research In Motion (RIMM) released a Facebook application especially designed for BlackBerry devices. The app lets subscribers more easily use their handsets to befriend and interact with fellow Facebook users. One in 10 BlackBerry users now has the application, says Facebook Mobile Manager Henri Moissinac.

The mobile social networks present a new medium for game developers. The real challenge is that most of the  games available on social networks are not mobile-ready. This means  they are built using technologies meant for the Internet and cannot be run as-is without a significant conversion effort for the mobile platforms .

jgc

Technorati Tags: Mobile gaming, FaceBook, MySpace, Nokia, Blackberry, Apple, iPhone, INQ, BusinessWeek

Mobile games for casual gaming – requirements

Smart phone and Internet-enables phones from Nokia, Apple and Samsung (LG) are becoming ubiquitous with their users routinely accessing data, applications, e-mail and schedules over the Internet. Apple has sold about 10 million iPhones, Nokia’s global presence and distribution gives it the potential to reach 10X as many users as Apple.  Mobile games represent up to 50 percent of all downloads, while just 18 months ago, the share of mobile games was 35 percent of all downloaded content. Smart phones offer a very attractive opportunity for game developers and the apparent business requirements seem to be fairly straightforward:

1. Consumers need a easy way to find and download games.
2. Consumers should be able to download and play, try and buy, interesting games for any of their smart phones.
3. The games should be simple to learn and fun to play.
4. It would be nice if users could share their enjoyment of playing a mobile game as they would on Facebook or another social network

Today there is no easy way to find and download games. Nokia has launched the N-gage gaming service for Nokia N-gage phone users, however, its adoption has been poor to date. Apple’s iTunes store is a great example of a successful business model.

Games are a key driver for telecom carriers for increasing data and service revenues from users. As mobile voice revenue is decreasing, mobile operators are continuing to search for mobile data applications to increase revenue.  While game developers can establish distribution relationships with them, the revenue split is usually very steep.

The game should be portable across all phone hardware (Nokia, Apple, Samsung, Moto), mobile OS (Symbian, Apple, Windows Mobile) and phone application frameworks, to ensure the best return on investment for the game developer. Flash Lite and J2ME are attractive technologies that offer portability for building the games

jgc

Technorati Tags: mobile gaming, smart phone, Nokia, N-gage, Apple, iPhone, Samsung, LG, Facebook, J2ME, Flash, Flash Lite, Windows Mobile

The rise of casual games

What are casual games?

Casual games are video games developed as a fun pastime with the general public and families as their target audience. They are easy to learn and play. The games are platform agnostic, meaning they can be played via the Internet, PC and Macintosh computers, Xbox, PlayStation, Nintendo DS, Wii and even mobile phones and PDA. They are nonviolent, arcade-style games that involve puzzles, words, board and card games, game show and trivia. Popular games are Mahjong, Tetris, Solitaire, Bejeweled, Cake Mania, Mystery Case Files, and Luxor.

Statistics from the Casual Gaming Industry

Hare are some interesting reports from the Casual Games Association, RealArcade and Microsoft games (2006 Summary Report, 2007 Summary Report)

Size

200 million people worldwide play casual games via the Internet. Yankee group estimates this number to rise to 700 million by 2010.

In 2007, the world wide connected casual games industry had revenues in excess of $2.25 billion on mobile, PC, Mac and Xbox LIVE Arcade platforms

Demographics

It is interesting to note that women are not onlythe pre-dominant casual game players but also pre-dominant paying customers for casual games

Gaming Demographic	% Who Play	% Who Also Buy
Female	51%	74%
Male	49%	26%
Over 35 years	62%	72%
Under 35 years	38%	28%

Major Publishers:

1. Big Fish Games, Seattle, Washington
2. Electronic Arts Casual Entertainment Group, Redwood Shores, California
3. Funkitron, Boston, Massachusetts
4. GameHouse, Seattle, Washington
5. iWin, San Francisco, California
6. Microsoft Casual Games, Redmond, Washington
7. MumboJumbo, Dallas, Texas
8. Oberon Media Seattle, Washington & NYC
9. PlayFirst, San Francisco, California
10. PopCap Games, Seattle, Washington
11. RealArcade, Seattle, Washington
12. Sandlot Games, Bothell, Washington
13. Zylom, Amsterdam, The Netherlands

Zynga

Zynga specializes in casual games you can play with your friends on social networks. Some of its hits include Texas Hold’Em (with four million hands of poker played daily), Attack, and Scramble. Al told, they attract 2.9 daily active users across Facebook, MySpace, and other social networks. On Facebook alone, Zynga’s games have 1.6 million daily active users (right behind Slide, RockYou, and SA Ventures).

In conclusion

200 million casual game players on the Internet in 2007 rising to 700 million in 2010, with 1.6 million on Zynga alone today. These are staggeringly large numbers. Add mobile phones to this mix and the market opportunity is HUGE!

Dude, how do we monetize this?

(*Starry-eyed*) Sumit

Technorati Tags: online gaming, mobile gaming, gaming revenue, Casual Games Association, game monetization

How can I make money? Who will pay?

This question is top of mind for every entrepreneur who starts a new business and every developer who has written a game for the Internet or mobile phones. The business model can be quite daunting for a game development company  that has yet to become a recognized brand and command the power to negotiate favorable distribution deals.

Console games

The nature of console gaming has changed irrevocably with the introduction of the Wii, although there are several popular titles available currently for the Xbox and the Sony Playstation also. The cost of entry and the risk for developing console games is very high for new entrants; the large software game publishers own the distribution channel and keep a sizeable chunk of any profits. Since the past couple of years, the market focus for gaming has shifted away from PCs and proprietary consoles to the Internet and mobile phones.

Internet games

Internet gaming has become a global social phenomenon thanks to the popularity of social networks, particularly Facebook, the subsequent growth of Orkut, and of late, Hi5. The Internet games are typically far simpler than their console counterparts so the cost of entry for a developer is low. However, the games are distributed through game portals such as Yahoo games, which is the 800 pound gorilla, Zenga, which promotes its games on social networks, and Zapak. These portals usually purchase the game outright for a few hundred dollars and host it as their branded product. There are other portals that sell games on the Internet and share the revenue with the developer. Of late, public consumer packaged goods companies e.g., Coca Cola, and retailers such as Wal mart have also been purchasing and hosting games on their sites to drive traffic.

Mobile phone games

The mobile phone is an emerging gaming platform thanks to the growth of the web-enabled phones and smart phones. The games have to be customized for these resource-constrained environments since their screen sizes are small and the amount of processing power and memory are limited. The cell phone carriers, e.g., Vodafone, T-Mobile, AT&T, Apple have a stranglehold on the distribution channel, since games can only be downloaded through their networks on to the phone. The revenue share can be very steep starting at 30% in Apple’s case to as high as 80% for the carriers.  

The business problem

The question then is how does a game developer make money from his invention? What are the revenue models that work consistently and return significant profit margins to the developer?

What do you think?

jgc

Technorati Tags: online gaming, mobile gaming, gaming revenue