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MGF 2010: How Apple gave mobile operators a kick up the backside

And what they're going to do about it
MGF 2010: How Apple gave mobile operators a kick up the backside
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How about a panel talk with the title; Implications of the change in business and revenue share models in Europe for the mobile games industry?

Actually, it turned out to be a interesting comparison of how the Apple App Store compared to other mobile platforms...

Q: What's the situation now in the traditional mobile gaming market?

Keith Adair, head of international marketing and sales, Oberon/I-play

Operators have woken up over the past 18 months and asked why Apple has been so successful in a business they've struggled with for 5 years. Now we have big split between the mobile market and the iPhone market. The bottomline is Apple has proved consumers want to download content. We need to get operators to extend this to their audience.

Christopher Kassulke, CEO HandyGames

It's a perfect time for independent publishers such as us. Now operators call us for content because so many mobile developers have moved to iPhone. For us, J2ME is the most profitable business, not iPhone.

But I don't think you can compare Apple with the operator app stores. Operators are panicking that they have missed something. There is a lot of pressure from their senior management. They have to take mobile games seriously now.

Ingrid Silver, partner technology, media and telecomms, Denton Wilde Sapte

The industry is in a state of flux. Operators are panicky because they can see gaming is popular and it has the ability to deliver engagement with customers, which makes its valuable in lots of different ways. And it all comes back to who owns the customer.

Eric Hobson, CEO, Connect2Media

But Apple's App Store can be quite ugly. Launching games with the operators, you should be able to make money, but with Apple, if you're not in top 25, you don't make money. The reality is the success rate is about 2 percent and it's better than that with operators. Not everything Apple does is fantastic. The App Store is going to be killing zone for developers in 2010. There are things that Apple could learn from operators. The Darwinian situation at the moment is brutal. It's a high failure rate. It's a harsh world.

Keith Adair: The App Store is a closed environment and that's one of the reasons it's successful. It's not a portal with news and other features etc. If operators can match it, I think they, and we, have a great opportunity. We know Android Market isn't great but Google will be big this year so and it's not a walled garden so if operators can deliver in terms of their app store on their Android handsets with features such as wifi download and billing, we all have a great future.

Christopher Kassulke: iPhone is like the J2ME of the early days. It's a gold rush that's now coming to an end. Android is not one market place. You can sell direct, or via operators. It's not controlled like Apple, which is great because one day Apple could suddenly change the rules.

Ingrid Silver: In terms of the Darwinian theme, maybe some players need to die as the industry becomes mature? This is what happens in consolidation. Maybe we need to get of stuff. Mobile gaming is too fragmented at the moment.

Eric Hobson: VC money keeps sectors afloat for awhile so it's inevitable that consolidation will happen. But you also get rebirth. A big companies will fragment into many small companies. It's what creative media industries do.

Keith Adair: If we see better revenue share in the operator space then there will be enough money for innovative developers to work with publishers.

Eric Hobson: If you're one of the last men standing in J2ME space, you can be profitable but my bet is that the operator business isn't dead, not on the success of specific platforms. I think some operators will farm out their games side but the larger operators will be back.

Christopher Kassulke: But the operator portals are terrible. There's no innovation there.

Eric Hobson: We're pulling iPhone games back through to operators and J2ME. We're doing that with Edge and we intend to do more of it.

Christopher Kassulke: We act as an aggregator for smaller developers but we have arguments with them about our cut of the 50 percent we get from operators. They look at the App Store and the 70 percent share they could get going alone. But 70 percent of nothing is nothing.