Last in our series of posts rounding up the biggest mobile games industry stories of 2008.

December saw some interesting announcements in the ad-funded mobile games area, with operators finally revealing their plans to jump in.

T-Mobile UK launched its ad-funded T-Mobile Game Club service, working with UK firm Digistores to offer free mobile games to its customers. Meanwhile, Orange signed a deal with mobile ads firm AdInfuse to deploy advertising across a range of content types, including games.

Proof of the potential pitfalls of ads in mobile games came with Glu's iPhone title Space Monkey, which had adverts added and then swiftly removed when users who'd paid for the game complained - and started posting negative reviews on the App Store.

It was another gloomy month for Glu, in truth - the company announced plans for cost-cutting measures to save $13 million, including layoffs. Boss Greg Ballard said the cuts wouldn't hamper the publisher's investment in iPhone and Android, and also took a 25 per cent salary cut himself.

However, Glu ended the month on a positive note, shoring up its financial position with a new line of credit and a restructuring of earnout payments related to its acquisition of MIG earlier in the year.

Glu wasn't the only company to be laying off staff pre-Christmas - Hands-On Mobile announced its own round of redundancies, although claiming that they were positions no longer needed since divesting itself of its European and Asian divisions.

Some firms were making hay from the App Store still, though. It was revealed that Pangea Software was on course to trouser $5 million from its eight iPhone games in 2008, for example, while social games firm SGN trumpeted 4.5 million downloads of its free iPhone games.

iPhone gaming did get some negative press coverage in December though, with a tabloid scandal involving Underworld, a game that involved dealing drugs on your local street corner. Drugs charities and parents condemned it, although the game hadn't (and still hasn't at the time of writing) been released on the App Store.

Meanwhile, O2 UK launched its Litmus platform this month, which was a bit like the App Store, in that it was an open platform for developers to make their mobile apps and games available for consumers. It offered a potential new route onto the operator's portal for indie game developers.

However, the year ended on a worrying note, with some new research based on M:Metrics stats showing that the number of people paying to download mobile games dropped sharply in major European markets between August 2007 and September 2008.