Android gaming is moving up to the next level, with smaller publishers such as Glu Mobile and Zoo Entertainment threatening to zap larger players including Electronic Arts (EA).
“The larger players have not seen the need yet to embrace (Android) — the revenues do not yet justify the investment put into the Android market,” stated analyst Jack Kent at industry research firm IHS Screen Digest.
“The top performing apps on the Android market often come from very small, sort of one-man-team developers rather than huge players,” stated Kent.
Google Inc-owned Android is a software platform for mobile devices, and its source code is free for all, allowing developers to easily alter and build new apps for it.
Games from the Zoo stable include Hello Kitty and Chicken Blaster, while Glu’s offerings include Gun Bros and Toyshop Adventures.
Unlike video game consoles, the barriers for entry to mobile gaming are low, and developers can be more innovative as it can cost just a few hundred dollars to get started, stated Lewis Ward, analyst at industry researcher IDC.
IDC predicts total global mobile phone game software revenue will grow 8.1 percent this year. That could mean a market worth around $4.8 billion.
However, developing games for Apple Inc is considered more lucrative given the iTunes store, which is a one-stop shop for all applications.
Android’s open approach means there will be multiple apps stores for users to access applications and games, though this has proved to be confusing for some customers, stated industry consultant Justin Smith at Inside Networks.
The Android market webstore, which Google launched earlier this month, aimed to improve that user experience.
“As with every publisher, we have been generating far more revenue from Apple in 2010,” stated Niccolo de Masi, CEO of Glu Mobile.
“That’s primarily because the billing as well as the store front have been a more successful and efficient experience than Android,” he added, noting, however, that Android is catching up.
“What we are seeing for 2011 is the alignment of the stars for Android,” stated Jason Loia, chief operating officer of privately-held Digital Chocolate Inc.
“It’s faster now to download apps, and now with the solving of all the billing issues … we think the market is ripe to enter in a huge way.”
IHS estimates that games account for half or more of all downloads on the Apple platform, while on Android, it’s between a third and a half.
The research firm sees 2 billion game downloads on Android this year, and more than 4 billion on Apple.
With an increasing number of Android devices installed, larger publishers are expected to begin seriously looking at opportunities in Android.
But they face unique challenges. “The challenge for (larger players), particularly on Android, are the $1 knock-off games,” stated IDC’s Ward.
“For example, EA owns rights to Tetris, but there are 40 knock-offs of Tetris-like games. The challenge for them is, are they going to sue a 5-man company?…
“… It’s like a 50-headed Hydra. Even if they did crush one, by the time they bring it to conclusion in three years, there are four other companies doing the same thing with a 1 percent difference,” Ward said.
Game cloning is more prevalent on the Android platform due to its open source nature. Even when larger players enter this market, the smaller publishers are unlikely to be knocked out — as long as they attract users with free content or funded content — where players pay for levels or virtual goods.
With a host of smaller players, the larger brands have plenty of opportunity for add-on acquisitions. “There are a lot of start-up firms with one or two games that are trying to get that home run so they can be acquired,” stated Tavis McCourt, an analyst at Morgan Keegan. Ultimately, the larger challenge for the smaller players is not about developing games or fending off predators.
“The challenge is more about how to make sure your games are sticky, how to make sure your users are coming back and how to make sure they are spending money on such games,” stated ThinkEquity analyst Atul Bagga.
(Reporting by Jennifer Robin Raj and Siddharth Cavale in Bangalore)
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Submited at Monday, February 14th, 2011 at 2:00 pm on Mobile Games by admin
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