Mobile gaming–by which I mean your ability to download and play games on a basic feature phone–has been a technological reality for about ten years and commercially viable for about six or seven, depending on who you ask. That’s a pretty long time, at least by the standards of electronic entertainment. On the console side, it spans the distance between the PlayStation 1 and the PlayStation 3; the entire arc of Microsoft’s plan to build a profitable video games division; four increasingly controversial Grand Theft Autos; and Nintendo’s heroic cycle from fading also-ran to casual gaming juggernaut. Heck, casual gaming itself had barely crept onto the radar back then. Everyone was too busy arranging the furniture in their Sim’s house to realize that they were giving birth to a vibrant new industry segment.
I’m not going to assert that mobile gaming hasn’t made any progress over that time. That’s patently untrue: the revenues have grown, the games have improved, and the devices are far more capable than they used to be. I will say, however, that mobile gaming’s progress hasn’t been remotely commensurate to the rest of the video games industry. It’s easy to see why. Creativity in design has been squashed by the realities of the carrier-driven marketplace, where there is little room for experimentation. Unbranded games, or games with interesting new kinds of gameplay, don’t often sell well enough to justify their development costs, because publishers have to churn out literally hundreds of versions of a single game to hit a sufficient segment of the marketplace. Further, most consumers simply don’t care about mobile games (this goes triple for actual gamers, which is part of why GameSpot Mobile failed). Even those who do can’t figure out which games to buy, or how to obtain them. It’s no wonder that market penetration has stagnated in the single digits for years.
Mobile gaming has been right on the verge of going mainstream and realizing its enormous promise for about, oh, five years now, and I’m as guilty as anyone for spreading the hype. I’ve written that same article in 2004, 2005, 2006, and 2007: I mean it this time! Well, I think I have one more such article left in me, and I am absolutely ecstatic that it’s be the last one I’ll ever have to write. 2008 is the year of mobile gaming… but not the mobile gaming we’re used to. iPhone gaming kicked down “traditional” mobile gaming’s door and took the joint over about two months ago.
Don’t worry, folks: old-timey mobile gaming on feature phones is still very much alive and pseudo-flourishing, chalking up a few more hundreds of thousands of sales of Bejeweled, Pac-Man, and Tetris sold every month. But in the public consciousness, in the gamer’s imagination, and in business analysts’ minds, iPhone gaming is now firmly ensconced in the prime position that feature phone gaming never really managed to occupy.
Consider the anecdotal evidence. IGN Wireless, one of the very best mobile games review sites, hasn’t reviewed a single feature-phone game since the iPhone came out (not that I can possibly blame them). The unofficial hot topic at the Seattle Casual Connect conference in July was iPhone gaming, leaving mobile gaming and even super-trendy Facebook gaming in the dust. And I know for a fact that the mobile games publisher I worked for until just recently, Vivendi Games Mobile, believes that the iPhone is the real deal, and is betting accordingly (VGM’s Crash Bandicoot Nitro Kart 3D has been an enormous hit on the App Store).
Now consider the numbers. Officially, Apple expects to sell 10 million iPhone 3Gs by the end of 2008. Given that the company moved a million units in the first three days after launch (through excruciatingly horrible retail bottlenecks!), that doesn’t seem like it’s going to be a problem. In fact, according to this Businessweek article, Apple is ramping up production to 45 million iPhones by the end of 2009. Analysts expect them to sell between 36 million and 58 million units over that time. And don’t forget the 6 million iPhone 2Gs Apple’s already sold, although some percentage of that number has been taken out of circulation as users have upgraded to 3Gs.
Those are not insubstantial numbers, even on the low end. By comparison, Nintendo has sold around 77 million DS units worldwide over the product’s four-year history. Sony’s PSP is at about 41 million over three and a half years. In short, the iPhone looks as though it is headed towards a global install base that would do a portable games console proud.
One counterargument here is that the iPhone is not a portable games console, and should not be viewed as such. Fair enough. It’s a mobile computing platform that does all kinds of nifty non-gaming stuff, too; I agree that nobody’s going to buy it just to play games (nobody other than me, anyway). It’s not alone in this respect. The Sony PSP and Nintendo DS have been moving steadily in the mobile computing direction for some time. You can surf the net and buy multimedia on the PSP. The DS’s web browser costs $30, and in Japan, there’s DS software available for everything from learning languages to boosting your empathy. And don’t get me started on all the multimedia stuff on the XBox, the Wii, and the PS3. The age of dedicated games consoles is in the rear-view mirror.
Fine, say the feature phone game guys, but you’re still missing a couple zeros on your install base numbers, because smartphones like the iPhone only accounted for a small fraction of the 1.28 BILLION projected global mobile phone sales in 2008. The feature phone market dwarfs the smartphone market, and it will for some time, so aren’t we getting a little hot and bothered over this anthill-sized segment? Nope. Remember that mobile game penetration on feature phones is somewhere between 5-10%; we don’t have much data on where it is on the iPhone yet, but it is certainly several times that. Also recall that hitting a substantial percentage of those 1.28 billion phones involves producing hundreds or thousands of versions of the same game, instead of the iPhone’s single version, and then going through dozens of carriers, turning the launch of a single game into a logistical problem on the order of the Normandy invasion. Then factor in Apple’s 30% rev share, versus the 50% or more that mobile carriers take, and you can start to see why the iPhone looks pretty decent from a cost/benefit standpoint.
The game publishers on the App store seem to agree. For instance, Sega’s Super Monkey Ball, a top-selling iPhone game, took down $3 million in about 20 days. It’s not just the big boys having all the fun, either; the iPhone has also been fertile territory for smaller indie developers. At the time of writing, 6 of the top 10 paid iPhone games are from indie studios and “dude in a basement” operations. The App Store’s recommendation-based merchandising system, as well as Apple’s open acceptance process, introduces a healthy measure of parity for non-branded games and original gameplay mechanics. Conversely, the traditional mobile games industry is dominated by about a dozen enormous publishers. The little guys are long gone.
I am realistic enough to know that iPhone gaming hasn’t sealed the deal yet. It’s still very much in a formative stage, and lots of things could change for the worse. Mobile carriers don’t have much in the way of direct competition between their games services, but the App Store has no real competition at all; I’m not sure the jailbreak scene counts, although some would disagree. If Apple decided to restrict access to the App Store at some point in the future, it could construct the mother of all walled gardens. Steve Jobs’ confirmation of Apple’s ability to remotely wipe any App with a “kill switch” is an important reminder of who’s really in charge. Remember also that Apple publishes its own games now, and it has control over some of the storefront in the App Store (the “What We’re Playing” section, for example). And all of this is aside from the major technical issues that have plagued the 3G/App Store launch.
Nevertheless, the iPhone is the inflection point. It’s changed mobile forever. From here on out, you’re going to see all the other phone manufacturers tripping over each other to introduce iPhone knockoffs, and those unlucky carriers that don’t sell the iPhone pushing them like crazy. You’ll see smartphone adoption, mobile internet usage, and mobile content consumption shoot through the roof, across the board. You’ll watch as Best Buy sells the things by the millions. And I’m pretty sure you’ll be playing some major gaming franchises on the iPhone before too long.
Pull up a chair and join us at STP to watch the festivities. It’s going to be wild.