The post App Store era laid bare.
What impact has Apple's App Store had on the mobile gaming activities of European mobile operators? Everything from revenue share to their own app store strategies was brought into focus at the Mobile Games Forum in London today.
Eric Hobson from Connect2Media kicked things off, with iPhone. "It's proved that we weren't deluded in attending this event year-on-year! If the planets aligned correctly and got all the things correct - the handsets, data tariffs, stores and games - consumers would buy mobile games."
Hobson thought this helps everyone in the industry - operators included. How? It's helped the operator games teams get resources for their bit of the business, and rise up the internal pecking order.
"Apple pushes the conversation in the direction that we want in terms of revenue shares too," said Hobson. "But there's no such thing as a free lunch. Fine, with Apple you get 70% [rev-share], but you still have to do a lot of promotion yourself. You have to ask yourself, 'would I give 20% more to Apple to get myself fully featured?"
Keith Adair from Oberon Media / I-play agreed that operators are raising their game as a direct result of iPhone's impact. He says that the operator games execs have understood for some time what's needed to improve their games offerings - but now have the clout and resources to start actually making it happen.
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"The bottom line is clear: Apple have proved beyond any reasonable doubt that consumers want to download gaming content onto their mobile device," he said.
Christopher Kassulke from HandyGames was also on the panel, and claimed that now is the "perfect time for independent developers", in the operator environment as well as on app stores. "The operators are calling us saying 'we need content', because the others are all moving to iPhone. J2ME is for us the most profitable business, and I have no competition at all compared to the iPhone."
He came back to Hobson's comment, about a 70% revenue share on the App Store sounding good, but that there are significant marketing costs to secure a hit. Against that backdrop, the 50% split offered by operators looks more appealing than it used to.
But Hobson outlined the fact that while Apple does a lot of good things with its platform, its "come one and all approach to content is going to be a killing zone for developers over the next 12 months as the 98% of developers who don't make money disappear and die."
He also suggested that Apple can learn from the operators, saying that its current 'Darwinian' approach to letting developers slug it out is tough on that 98%.
Adair said it's important to define how 'open' an open environment is. "The App Store is actually a closed environment because you're going into a closed store," he said.
He also claimed that "the operators have a significant opportunity here - we have some very experienced mobile content retailers who work in the operator environment".
In other words, if the operators can deliver an App Store-like experience on other high-end smartphone devices - especially Android, where they're able to launch their own stores - "we'll have a very exciting future... they could take significant market share in the smartphone environments".
Kassulke actually said the App Store and iPhone feels like the early J2ME days - "we have the same gold-rush". But he also came back to Android, where games can be sold directly, as well as through operators and Google's own Android Market.
Ingrid Silver from law firm Denton Wilde Sapte came back to Hobson's "Darwinian" quote - "perhaps this is a symptom of an industry that is growing and maturing. As a direct consequence of that, some players need to die. It goes from being a cottage industry to a fully-fledged environment that is necessarily going to lead to some dramatic consolidation."
She pointed to other industries like cinema and TV - "the number of successful players in those markets... we're still at a stage where mobile gaming is far too fragmented".
However, Adair pointed out that a lot of the creativity and innovation on iPhone is coming from the smaller developers - but that going forward, there may be even more of a role for the bigger publishers. "With the higher revenue share of Apple, and if that translates to the operator environment, there's an opportunity for developers and publishers to partner up."
Kassulke attacked the operators for the fact that there is "no innovation at all" being offered in games on their portals - something he put down to the lack of competition among developers and publishers. "That's very scary."
However, Hobson says there's a chance to pull some of the most innovative iPhone games onto other platforms - Connect2Media is releasing Edge through carrier channels. "I see the best of iPhone being pulled back into the traditional operator market, hopefully by people such as ourselves."
He also said attitudes are changing within operators when it comes to brands versus own-IP - they will support own-IP games like Edge, if they've been successful on another platform (i.e. iPhone).
Silver also talked about innovation in terms of mobile games hooking into other platforms or services - including advertising campaigns, alternate reality and other technologies. "Where is that innovation happening?"
What about Nokia and Ovi Store? Hobson said he thinks it will "come strong this year", but wondered which stores will win - publisher, handset manufacturers or operator stores?
With many handsets still sold on the open market, in some territories it will be the handset makers, he thought. "In some countries, Nokia absolutely dominates market share, so there's a huge opportunity for them."
"A huge opportunity, but they will fail," hit back Kassulke, saying that Nokia is not supporting games developers in the right way - "Have you tried to upload a game to Ovi Store? Good luck..."
We sense he may be getting a call from Nokia soon. And that was a wrap.
