MOBILE GAMES FOCUS, PART 2: The app store 'PlayStation effect'

As operators and handset makers scramble to launch their own app store, we can draw parallels with the ‘traditional’ games industry of the 90s.

In 1993 gaming was a niche activity that few would admit to being a part of. The Sinclair Spectrum, Acorn and Amiga had introduced spotty youths to relatively low cost ‘arcade style’ gaming back in  the 80’s, but to be a gamer in the early 90s you had to know how to work a PC: it was expensive and a bit scary.

Buying a game meant checking minimum spec requirements, sound card compatibility and graphics card drivers before handing over the cash. The game never looked as good as the screenshots on the box because  you didn’t have enough RAM or the right graphics card.

A similar state of affairs blights the mobile games space. Recent stats said up to a third of mobile games downloaded by paying customers in the UK don’t work. It's no wonder penetration is still in single figures.

And then the iPhone came along and suddenly the  market exploded – just like it did when Sony launched the PlayStation in 1994. The iPhone is now arguably the lead platform for established mobile games publishers and newcomers. Tellingly, a recent survey by  Japanese middleware developer CRI revealed that 87 per cent of Japanese game  developers were interested in developing for the iPhone and the iPod Touch and  that almost a fifth had already released games on the platform.

The open nature of the  platform and easy submission process have encouraged true product innovation for the first time  in years. Simultaneous release in over 80 countries and daily sales reports have meant that even the smallest developer can be reactive  on price and take on the big boys. Meanwhile the likes of Gameloft and EA have quickly moved to make Apple’s device their primary  format, promising upwards of 30 new titles this year alone.

True, there are some issues around pricing that need to be resolved. But once Apple launches in-application billing, the cleverer publishers will nurture new consumer habits through charging for updates, upgrades and episodes – something operators in Europe have been talking about for years.

The only potential fly in the ointment is fragmentation. The web is alive with rumour of a new iPhone with beefier spec and even an iPhone aimed specifically at gaming.  However, Apple has told developers that all content needs to be 3.0 compatible in order to stand a chance of making it onto its App Store. It understands that compatibility is its key USP.

With all this in mind, it will be interesting to see if Vodafone’s new ‘uber platform’ will allow programmers to write an app which can run on any platform. If it does, and with the billing infrastructure in place, the platform could prove to be a weapon of mass mobile consumption. If it doesn’t, well it's just more fragmentation.

So where do we go from here? If we look back again at what happened to the games industry in the 90s, it might give us some pointers.

Back in ’93, Trip Hawkins’ 3DO console launched to a fanfare almost a year before PlayStation. Critics loved it, but despite heavy software support from EA, the high price point and a lack of new titles killed it. Insert your own N-Gage gag here.

Sony’s PlayStation was undeniably the runaway success of the 90s, but then Microsoft launched Xbox. Admittedly, it took some poor decisions by Sony to allow Microsoft to establish itself as a serious player, but Microsoft rarely gets anything right first time. The firm has been busy recruiting mobile personnel and would love to connect its growing  Xbox community with mobile gamers. Zune may have lost in round one to iPod,  but don’t be surprised if we see it make a comeback with a fresh, new games  twist.

And then there’s Google. The first Android handset was well received and the second version is likely to be better. It could spell the way forward for a new  breed of handset that is as much about data and connectivity as it is voice. 

Finally there are the operators, all under pressure to start taking downloadable games and apps more seriously in terms of revenue potential. They recognise that the iPhone isn’t actually a very good phone at all – but it is great if you want to send emails, play games, update your Facebook status and listen to  music. These are behaviours that Vodafone has now recognised among its 250m customers given the right device.

With universal flat rate or free data plans just around the corner, the last remaining hurdle is complexity. But is the mobile content industry ready and able to make this happen?

The PC space shows what's possible. Back in the early 90s, PCs were designed for people who wanted to do word processing, dabble in desktop publishing, and waste hours playing Solitaire. Now they’re primarily used to blog, Tweet, surf, play games and act as a central hub for music, video and social networking.

So are we about to enter a new age of connected mobile content, driven by unlimited data plans and cool devices?  The current mobile content landscape is on the brink of a seismic shift: things have to change. Handset manufacturers and operators must break with Java to build an ecosystem that’s  not reliant on the delivery of multiple variants and thousands of ports.

While operators continue to subsidise handsets and retain the billing relationship, they’ll always view the customer as theirs. As a result, they’ll invest mega bucks in protecting their territory - hence the issues around Nokia’s N-Gage for example . The smart money therefore is on operators launching a small range of iPhone spoilers: ‘bespoke’, feature rich handsets with all the functionality of the iPhone coupled with the added benefit of integrated operator billing and a flat rate data bundle. 

It worked for Vodafone at the beginning of this decade when it launched Vodafone Live! on the back of the Sharp GX-10 and there’s good reason to believe this strategy will work again in 2010. ...