Publishers: App Store Revenues Beating Mobile Carrier Sales

Being the critics and iconoclasts we are, we like to draw attention to the App Store’s failings… but it’s just as important to tell the other side of the story. Although App Store might be a mess in some ways, it’s also relegated the traditional carrier sales model to (richly deserved) dinosaur status.

That’s the conclusion games publishers like Gameloft and Fishlabs have reached, anyway. mocoNews.net reports from the Mobile Games Forum in London that Gameloft is now making more money off of the App Store than it does from all of its carrier relationships combined–and Gameloft has best carrier distribution network in the business! Gonzague de Vallois, Gameloft’s SVP of Publishing, lauded the App Store’s extremely favorable 70-30 revenue split (most carrier deals are around 50-50, or even worse), as well as the ability to tweak game prices “on a daily basis, if necessary.”

Meanwhile, German publisher Fishlabs has killed its traditional Java publishing business entirely, since porting costs and unfavorable revenue splits have rendered it unprofitable. CEO Michael Schade said that his company makes more money on a 99 cent App Store game than it ever did trying to sell $5 Java games through carriers.

We think that these anecdotes are more of a testament to the carrier sales model’s stunning lack of efficiency than the App Store’s effectiveness. While de Vallois and Schade were busy raving about the App Store’s greatness, others at the conference discussed its pricing and quality problems. But credit where credit is due–the mobile content business owes Apple bigtime for putting the creaky old carrier model out of its misery.

[from mocoNews]