Earlier this year I was at an informal seminar where Nokia's "Executive Více President and General Manager of Multimedia" (whoa, that's a pretty long title!) Anssi Vanjoki, a really great guy by the way, discussed what the retail chain for mobile content could look like in the future. One possible scenario he outlined was that operators do not have a god-given role to distribute mobile content. He suggested that content companies should think out of the box, and dissect this value chain to cut out the links not absolutely necessary to reach the customer. Or even better, create new value chains based on selected links from previous chains (nice metaphore, huh?).
Looks like he may have given a sneak preview of what was about to come from Nokia. The N-Gage game deck was not even close to being a success, with the slightly better looking N-Gage QD doing almost as badly (I personally liked the QD as it offered good controls etc for gaming, but that’s just me). One reason for this failure was that games were sold in a traditional retail manner, i.e. in stores. No, I don’t see a lot of people paying 20, 30 or 40 Euros in a shop for a game for their mobile phones.
Enters Nokia’s new distribution twist for N-Gage games: Online sales
Nothing too revolutionary it may seem, but if people can try the games before they buy them, and they can do this on-line or OTA (Over-The-Air), things become more interesting and likely to take off.
Yesterday’s gossip from Nokia publishing’s Greg Sauter about the future of high-end games from Nokia adds fuel to the discussion. If Nokia’s Play application will enable any S60 user to run N-Gage quality games, we are suddenly looking at a rather large potential customer base.
By the way, I don’t see how they will be able offer N-Gage games for S60 phones already on the market, so it may be restricted to new models.
Another company working along the same theme is gaming giant Electronic Arts (EA). Most people have at least heard of EA, and for good reasons. USD 3.1 billion revenue, 6500 employees, games like FIFA Soccer, The Sims, Need for Speed, Tiger Woods golf etc. And now they are moving into mobile, which in itself is a strong indicator that they view the mobile gaming market mature enough to spend time, money and effort on.
EA’s strong position in console games gives them a unique position to challenge the operators’ role in the revenue chain for mobile games (a role where some operators take a 70% part of the revenue share. Outrageous, yes indeed). EA’s move is to build on their huge base of console and PC gamers, and the fact that these people are used to using the Internet to play against each other, chatting, get information and updates to their games.
Combine this with EA’s exceptionally strong game brands and they may very well succeed in their ambition to sell mobile games directly to the consumers through the Internet.
An interesting question is whether smaller actors can do the same as EA.. Is it possible for a small content developer or publisher to by-pass the operators and get any significant product volumes to market? Does anyone have any examples of such companies/products?
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