Mobile Gaming under the Spotlight

The impending launch of handsets and game titles will support steady growth in mobile gaming markets across Europe. Inherent challenges such as the fact that gaming is a niche market application, the complications of super-distribution, and effective billing mechanisms, as well as high porting costs will, however, cause growth to be steady rather than overtly exponential.
So says Frost & Sullivan, in its latest analysis of European Mobile Gaming Markets, European Mobile Gaming Markets, 2003-2012. The report is part of the Mobile and Wireless Subscription, which also includes research in the following markets: European Mobile Music Markets, European Mobile Video and DVB-H Markets, Mobile TV and DRM markets. 
The report finds that European Mobile Gaming Markets will earn revenues of 850 million euros in 2006 and estimates that this will reach 2,400 million euros in 2012.
The future of gaming will be determined by the type of mobile devices available to customers and the quality of games delivered onto these handsets says Frost & Sullivan ICT Industry Manager Pranab Mookken. The processing capabilities and screen sizes available on Smartphones and PDAs, combined with quality 2D and 3D games will be key to promoting the growth of mobile gaming in Europe.

Off-portal storefronts combined with super-distribution will be the most important sales channel for the mobile games markets, the analyst believes. With gaming being all about competing with other players in a real time gaming environment, there will be a compelling need to ensure interoperability between devices and applications.
While operators will attempt to create awareness and educate customers with embedded offerings, the market will grow and mature only with the variety offered by large off-portal storefronts who play the role of discounted super-markets.
Super-distribution capability will drive the small but high-value segment within the mobile gaming market, generating higher revenues for the entire industry says  Mookken. The creation of communities using IMS and other IP-based ecosystems is already supporting enhanced games usage.
However, due to mobile gaming being a niche market in general, steady and not exponential growth is being projected.
Not everyone likes to play games, therefore the gaming market is a niche market  explains Mookken. Operators and the industry should understand that while there is scope for higher usage, the varied circumstances that users find themselves in during the course of a day is likely to limit the number of subscribers who will purchase a game.
The 80:20 rule inevitably applies to this market as well, the report states. The mobile device is currently best suited for casual gaming, and while the current trend shows a rise in game plays on mobile handset devices, this is a reflection of the use of embedded games, therefore not translating directly into revenues for the market. Frost & Sullivan sees this trend is likely to persist in the future as well.
At the same time, high porting costs are further increasing the cost of game development in a market already fraught with risk. Porting costs are often as expensive as the cost of game development, therefore adding to the cost of the game to the consumer. Besides, high porting costs means that publishers and even operators cannot often make the game available to as many devices as they would like it to be compatible with.
The need is to create, innovative purchase mechanisms, while incentivising mobile gaming services for customers, through marketing and promotional bundles with other content applications - driving non-gamers, or casual gamers using only embedded content, to see some value in purchasing mobile gaming advises Mookken. Handset manufacturers and game developers need to work closely to limit the number of APIs, screen sizes and other software and hardware which are often barriers to game deployment.
To order a virtual brochure, which provides manufacturers, end users, and other industry participants with an overview of the report, send an email to sparthasarathy@frost.comwith your full name, company name, title, telephone number, e-mail address, city, county/state, and country.