GCDC 2008: State of the European mobile games market panel

Do we need a dedicated mobile games trade association?

GCDC 2008: State of the European mobile games market panel
The next session at the GCDC conference's mobile track concerns the state of the European market, with a big panel of six people squeezed around a table at the front of the room.

The focus is on Europe, as you'd guess, including the question of whether there's a specific European mobile games market, or whether this is global. But also whether the mobile games industry is actually healthy on this side of the pond.

The first interesting point is made by Malte Behrmann from the EGDF – the European game developers federation – who says EU politicians are really keen on the idea of mobile games in terms of funding and supporting them – but don't understand why it's not taking off as fast as it could be.

Now Tommy Palm from Jadestone (who wasn't advertised on the panel) has interesting things to say. "It's very hard in the mobile games industry to make games that get the revenues back."

Now to Nick Malaperiman from Nokia – how European is Nokia when it comes to mobile games? He points out that Nokia works with several developers in Europe. "N-Gage is really focused in Europe, much more so than North America or Asia. That's where we're going to make most of the money. So we have a big focus here."

Alex Caccia from Ideaworks3D is one of those partner N-Gage developers, who points out that the big problem in Europe is that operators take a much larger revenue share for mobile game sales than anywhere else.

"Three quarters of our revenues come from Japan," he says. "The revenue share in Europe for developers should actually be higher than elsewhere, because we have the problem of fragmentation. The operator revenue share should be 15-20 per cent at most."

Michael Schade from Fishlabs is up next, who says that Nokia and Sony Ericsson are the two handset makers most focused on games, and points out that both have their base in Europe. He also says: "The big guys on the operator decks are fighting for market share, instead of helping the market to grow. So growing the industry is in the hands of the manufacturers in Europe."

Now Xavier Carillo-Costa from Digital Legends is up – it's the developer that's working with Nokia on N-Gage, but has also won plaudits for its debut iPhone title Krol when it was shown off earlier this year.

He's positive. "We're talking about devices nearly as capable as DS, we have a good install base, we're making games targeting a specific audience rather than just porting [from other platforms]. But something is missing there. Perhaps we should move the operators into publishing."

Will distribution move away from the operators eventually? Nokia's Malaperiman says handset preloads help, and says Nokia is looking at Java game distribution outside the operators. "But our hands are tied in terms of the revenue share operators are demanding," he says.

Playing the political game

Behrmann chips in again, and says the business models are all tied up with politics. "Many operators in Europe are still government-owned," he says. "You can set up a strategy saying it's important for Europe that mobile games takes off again, so the business models here need to make that happen."

That's it! The mobile games industry needs some ninja lobbyists in Brussels! Maybe EA Mobile, Gameloft and Glu should put their heads together to fund some. Behrmann is certainly saying that the mobile games industry should be lobbying the European Commission about this sort of thing.

"Mobile game developers have not been engaged in these kinds of activities than, say, PC developers," he says. "They have been focused on their own businesses, and not on these larger issues that affect their industry."

Schade again, who points out that daily business is enough of a struggle for many mobile developers, without getting involved in EU politics.

What about structural stuff? There's not always a clear division between developers and publishers in mobile, as there is for other games platforms, and so is that why the mobile guys don't get as involved in their regional games trade associations, which tend to be either developer or publisher focused.

Moderator Maarten de Noyons (of the IMG Awards) asks if this means there should be a dedicated mobile games industry trade body. Caccia thinks there should be, thanks to the unique technical and business challenges facing developers and publishers.

Carillo-Costa agrees, too. "We have very specific issues and they're very different, so an organisation that can address that would be very efficient."

Trade bodies: the road ahead?

Back to the subject of the opportunities and threats in Europe for mobile games. What else needs to happen, besides some kind of new trade association – a point the panel all seem to agree on.

It's fairly clear that this could be the next step for Noyons and the IMGAs – to try to go from an awards ceremony to a fully-fledged trade association. But then maybe existing bodies like the Mobile Entertainment Forum (MEF) would be interested in focusing more on games, too.

Behrmann warns against too many trade bodies all trying to lobby in Brussels. "It will be very difficult to represent the European industry when we have different communications, and at the end of the day we start fighting against each other in front of them!"

He says online games firms want their own trade body, and now mobile, too. "At the end of the day, it is not a good idea, because you have to fight against the film industry, the telecommunications industry, and others. It's hard to make the games industry more visible, if you don't have unity."

Does the industry need more openness? Nobody knows how many copies mobile games are selling?

On console, you can see how many copies Grand Theft Auto IV sold in the UK the week after its release, in published charts with numbers. In the UK, ELSPA has a mobile games chart that comes out two months late, and doesn't have any figures. How can mobile expect respect if nobody knows how much revenue it's making?

The panel agree, more openness is necessary. "Openness is really important, right down to a developer getting your royalties on time. Maybe it's a symptom of the industry just growing up. Look at operator revenues: 98 per cent of voice and 2 per cent is data, so they haven't set up the systems to provide the feedback we need. That will change."

Alistair Hill from M:Metrics chimes in from the audience, saying that his company is working with the GSM Association on having some kind of "census-level" data on mobile game sales.

Analyst David McQueen, from the audience, asks the panel where they see their business coming from – Europe or elsewhere? Caccia says "The rest of the world and Nokia" from Ideaworks3D's perspective.

Schade says a lot of revenue for Fishlabs' high-end 3D games comes from BREW carriers in the US, while Carillo-Costa says Digital Legends is mainly getting revenues from Europe, but that it's changing (it certainly will when Krol comes out for iPhone).

Schade has some stern words for the operators, who he thinks are driving the popularity of branded mobile games through their deck placement strategies.

"Without the help of handset manufacturers, there would be no talk of innovation and better quality in this industry," says Schade. "Without them, we would just talk about brands, and the price for those is going up and up and up. Market share is driving the big guys, but it can't work for us."

Caccia says it's important for mobile firms not to be "bullied" into promising game quality that isn't possible on mobile. "Don't be drawn into blue-skygazing that can't be done properly within the limitations of the platform," he says. "We've done it with one or two of our titles, making them too big or too complex or whatever."

Christopher Kassulke from HandyGames is in the audience, and says that prices of brand licences are actually going down, because there are fewer mobile firms able to pay the inflated prices.

"Mobile own-IP is selling better," he says. "A brand doesn't mean that it pays off at the end of the day."
Contributing Editor

Stuart is a freelance journalist and blogger who's been getting paid to write stuff since 1998. In that time, he's focused on topics ranging from Sega's Dreamcast console to robots. That's what you call versatility. (Or a short attention span.)