Revenue from mobile games set to soar

05-12-2002

by Andrew McLindon

Revenues from mobile games in Western Europe will grow ten-fold over the next three years to EUR3 billion, according to a new report.

Telecom advisors Analysys said that revenues generated from downloadable games will increase from EUR255 million to over EUR3 billion by 2005 and will outstrip those from ringtones, which are currently the biggest money-spinner in the mobile content and entertainment services area.

"Ringtones, logos and other personalisation services have formed the backbone of mobile content and entertainment services to date, with an estimated market value of EUR1.2 billion across Western Europe in 2002," noted principal analyst Katrina Bond, author of the report.

But, Bond added, the growth in the personalisation market is slowing rapidly, while downloadable games, which she said are a logical extension of personalisation services, are just taking off.

Up until very recently, most games on mobile phones have been text-based or were embedded in the handset, such as "Snake" on Nokia handsets. However, the advent of mobile phones such as the Nokia 7650 that have colour screens and are Java-enabled has seen mobile operators make more sophisticated and graphically rich games available for download.

These kinds of games have been available in Japan over NTT DoCoMo's i-mode and have proven to be very popular. By end of October 2002, over 40 percent of the 35.2 million i-Mode subscribers were using games and information services.

In Ireland, both O2 and Vodafone have recently launched services offering video game classics such as "Pacman", "Bubble Bobble" and "Asteroids" to their customers on media-rich handsets.

A spokesperson for Vodafone, which is offering Java game downloads for free until the end of January 2003, said that there had been thousands of downloads since the service's launch in late October. When the trial period is up in January, users will be charged between EUR2 and EUR7, depending on the complexity of the game, for each game they download.

O2 said that it was too early to say what take-up levels had been like for its service, but pointed out that its own research has shown that 65 percent of customers aged between 16 and 19 expressed a "strong interest" in downloading games to their mobiles. O2 is currently charging EUR2.50 per game with an additional cost for time spent downloading, which is less than EUR1 in most cases.

Analysys is not the only research company to predict big things for mobile games. Forrester recently forecast that 45 percent of European mobile subscribers in Europe will regularly pay to play games on their phones.

Analysys also said that the market for mobile content and entertainment services could grow from just over EUR2 billion in 2002 to EUR11 billion in 2005 as long as issues over interoperability and digital rights management are resolved.