It's easy for forget how tricky digital game distribution can be, even on the App Store.

Sure, small developers can find their niche with a well placed or lucky hit, while mobile publishers can ensure success by releasing a lot of games and using licences.

Companies who don't release a lot of games, and who aren't completely committed to mobile platforms typically find it difficult to generate either enough volume or enough profit per release to make it worth their while however, especially taking into account their higher cost base.

C for effort

The most recent example is Capcom, which released weak Q2 2010 financials, with sales down 2.4 percent to $218 million and profits down 90 percent to $25 million.

The main reason was said to be the softness of the US and European console markets, particularly in terms of sales of Lost Planet 2.

Capcom pointed out the rapid growth of network games and new devices such as smartphones and devices like iPad as an area it would be targeting in future.

But it wasn't very enthused about its Q2 performance on the App Store.

It commented sales of Resident Evil 4 iPad Edition - which reviewed terribly - had 'increased gradually' while Phoenix Wright: Ace Attorney and Street Fighter IV - which reviewed much better - had only 'achieved their projected sales'.

The bottomline is even the likes of Gameloft and EA Mobile only generate circa $20 million in App Store sales per quarter, and, at the moment at least, that's nowhere near enough to balance the fluctuating revenues of the big console publishers.

[source: Fingergaming]