Thursday, December 31, 2009

10 Most Read Cabana Mobile Posts of 2009

  1. How Much Money Do Mobile Ad Networks Make?
  2. KongZhong Got It Goin' On
  3. Fish Broth: The Plot Thickens In GetFugu Investment Drama
  4. If The Top 10 Generate $700mil Can Mobile Games Really Be A $5.4bil Business?
  5. Palm Pre Demo From D7 Is Better Than Porn
  6. Updated: Top 10 Mobile Games Publishers WW
  7. MOBshop Speculation Is Red Hot
  8. Update: GLUU Volume Stays High As Boards Buzz About Changyou & Other Theories
  9. Will de Masi & Kranzler Finally Get Hands-On To Realize It's Potential?
  10. Report: At AT&T Motricity is Jen & Amdocs is Angelina

Some Predictions For 2010

  • The Nexus One and myriad other Android devices will launch with varying degrees of fanfare, but the Google devices in aggregate and the Android Market will continue to pale in the shadow of iPhone/iTunes as a consumer event due to inconsistent marketing, klugy app billing and OS fragmentation
  • Mobile marketing will graduate from the experimental stage, and become a core strategy component for several enlightened global brands
  • Several established mobile games publishers will either be acquired or file for bankruptcy protection... companies that could be in play during 2010 include: Hands-On Mobile, I-Play, Twistbox, Digital Chocolate and perhaps Glu Mobile
  • Apple will finally strike a deal with Adobe that will allow iPhone users to access content built in Flash through the browser, creating a boon for Hulu, Vevo, YouTube, MovieClips, et al
  • Apple will make eBooks and eMagazines available through iTunes for their upcoming tablet... but they will also be available for iPhone and touch
  • Nokia will scrap it's Comes With Music offering, will continue to struggle to make Ovi a meaningful consumer proposition and will see declining market share as it gets squeezed by Apple, RIM and Android devices on the smartphone front and by low cost Chinese manufacturers in developing markets
  • LTE & WiMax services will continue to roll out slowly, but 4G won't be a significant consumer event during 2010
  • Google Googles will move beyond Android and quickly establish itself as the world's most popular augmented reality application... leaving companies like Layar & GetFugu in its dust
  • The current Top 5 companies in my Cabana Mobile Entertainment Top 20 by Revenue (Zed, Index Mobile, UMG Mobile, MobiTV & Buongiorno) will all see mobile revenues decline during 2010. Smaller App-focused publishers will see the greatest revenue gains
  • Carrier-based App stores will make consumers yawn, but on a positive note they'll benefit the coffers of several advertising and identity/design agencies
  • An application developer, a credit card company and a major retailer will collaborate to launch the first commercial in-store mobile transaction service in the US
More to follow throughout the day...

Wednesday, December 16, 2009

Cabana Has Exclusive Mobile Rights To New Sony Device

Is Each Game App Rating Worth 75 Purchases?

As part of my ongoing (quixotic?) quest to create a correlation between the number of user ratings for a Paid Game App on iTunes and its downloads, I've been doing some concept testing with sources and just spent way too much time building the spreadsheet above to guesstimate the revenue generated by the top 30 best selling games in the US store from iTunes Rewind 2009. I'm beginning to get more comfortable with the idea that in general each rating is worth about 75 downloads (as opposed to 100 that I've posited previously), or in other words, that 1.33% of game App purchasers submit a review. In looking at the spreadsheet you'll notice that I've had to tweak to the download to review ratio in order keep Apple's Rewind ranking intact... and these mostly make sense to me intuitively. Basically, what this shows, is that purchasers of more casual games (e.g. Bookworm, Radgdoll Blaster) are less likely to submit a review and those that buy more gamerly titles (e.g. Zenonia, Myst) are more likely to submit one. There are two anomalies here worth noting... one which I can explain, the other I cannot. You'll notice that the revenue associated with Rock Band seems be out of sequence, however this is an App that allows in-App purchasing, so there's a revenue stream that I'm not capturing. The one I can't figure out is Sally's Spa, which in this analysis has the characteristics of a hard core game title... which doesn't make any sense. There may be a point when titles get over a certain number of ratings (this one has 16,750) that a different paradigm kicks-in. I know some of you'll be thinking that I partied too much in college (and after?) and this is all evidence of some kind of long-lasting impairment... but if that's not the case, and this model can be refined a bit further, it should be a great benchmarking tool. Let me know what you think. I'd especially love to hear feedback from peeps who weren't sleeping during statistics and, of course, from publishers.

btw - I have noticed that in some instances Apps have lost ratings from previous versions despite iTunes claiming to have ratings from all versions of the product. This is the case here with Wheel of Fortune, for which I was able to estimate all ratings from data I had collected for an earlier post.

Thursday, December 10, 2009

Will Ovi 2.0 Help Nokia Catch The App Store?


Earlier today I read Stuart Dredge's extensive, candid interview with Nokia's George Linardos about the Ovi store debacle, in which the VP of Product, Media & Games was refreshingly self-deprecating and obviously keenly aware that the store has deeply disappointed consumers and mobile content publishers. “We have screens in the office with the Twitter feeds running all day long, and it’s like constantly getting punched in the face!” he says... I probably threw a few of those punches and I have to admit it's kinda satisfying to know they landed (nothing personal, George). To the extent that awareness of a problem is half the battle to finding a solution, this is good stuff. In addition, the fact Nokia is in the final stages of building an all new infrastructure for Ovi, that will replace the current tape and glue version this Spring, is positively inspiring.

This interview confirms what we've all suspected for many months... that Nokia vastly underestimated Apple's ability to rapidly establish the iTunes App Store as the benchmark of mobile content retailing. But, despite the Finn's efforts to step it up a bit with a technologically enhanced Ovi 2.0, I feel pretty confident that Apple will continue to kick Ovi's ass for the foreseeable future. The "fruit company from Cupertino" accelerated out the gate like a bullet on a rail, and shows no sign of slowing, while Nokia hobbled onto the track and is just beginning to trot. Ovi claims almost 1mil app downloads per day with a 100% monthly growth rate, but as impressive as that sounds it's gonna be a herculean task for them to meaningfully compete with the App Store beast... with its 2bil downloads lifetime and 6.6mil per day, from a catalog of 110k Apps that's getting 10k new submissions per week. And then there's Nokia's crappy (and getting crappier) footprint in the US which, frankly, will make the job so much tougher. I recognize that Nokia has dominant share in much of the world ex US, particularly in some of the fastest growing markets. But, from a practical perspective the US market is really an ideal base from which to build a digital retail empire by virtue of its population, common language, developer community and culture of consumerism. That means Nokia will have to continue to build scale the hard way, from disparate territories with their own language/cultural issues that require multiple marketing and retail strategies, that are expensive and labor intensive to execute. This model creates a negative side-effect for publishers (especially those smaller shops that have benefited Apple)... who'll need to be convinced that it makes sense to deploy apps in 20+ languages before there's any meaningful sales volume. So bonne chance with that Nokia, and if you have the chops to successfully build scale this way you can shift your agida to Apple's other huge advantage... iTunes billing.

Tuesday, December 8, 2009

Apple Finally Cracking Down On Bogus App Reviews

Based on a story on MobileCrunch yesterday, and a follow-up on PocketGamer today, it looks like Apple is beginning to aggressively pursue and punish publishers who engage in App puffery with fake reviews. The new poster child of this nonsense is a company that creates photo Apps called Molinker... who just had all of its 1,000+ titles pulled from the store (ouch!). According to MobileCrunch, this latest action was prompted by sleuths at the iPhoneography blog, who noticed that the vast majority of Molinker Apps reviews were posted by folks who only reviewed that company's products, and who then had the gumption to pass their findings on to Apple SVP of WW product marketing Phil Schiller. The PocketGamer story goes on to pursue a post in touchArcade alleging that Gameloft may have engaged in a similar tactic on its Modern Combat: Sandstorm title.

I presume these allegations are no great revelation to anyone who reads this blog. C'mon, the practice of self-submitted bogus reviews has been epidemic in the App Store for a long time and I think many publishers now look at this as a cost-effective component of the marketing mix (a necessary evil) to help cut through the cluttered chaos of its 110k active Apps. As a result, savvy App shoppers and insiders pride themselves on being able to distinguish between the legit and the crap iTunes reviews... but more often than not, they totally discount this feature, preferring to rely on 3rd party reviews and recommendations from friends. In the meantime, masses of unwitting consumers are getting burned by crApps that they believe have been legitimately lauded by the community... which is bad for the entire business. I'm glad Apple is finally waking up to this, and I hope they continue with aggressive crackdowns, so that the reviews component of iTunes can start to mean something again (or maybe for the first time) and become a useful decision making tool for App consumers.

Friday, December 4, 2009

Recent Mobile Tweets

So are you following me on Twitter? If not, here's a sampling of my recent tweets...
  • Get some Verizagra and trade hairdo for can do http://ping.fm/uWvui Wonder if Apple will think it's funny
  • PG.biz reports Nokia closing London flagship store http://bit.ly/5YVlGg Thought that was a brand not profit exercise... guess not
  • likes Twitter's new preview mobile site (mobile.twitter.com)... cause you don't need an App for that
  • thinks synergies, more often than not, are illusory
  • 'Twas the night before Christmas and Android was shipping | People's interest in iPhone rejections were slipping... http://bit.ly/4XSWVc
  • What do you think of my notion that 1 review gets posted per 100 Paid iPhone App downloads? http://bit.ly/5sd9VZ

Wednesday, December 2, 2009

James Lipton & LG: Don't Sext Your Junk

Mobile Holiday Cheer From John Szeder

'Twas the night before Christmas and Android was shipping
People's interest in iPhone rejections were slipping

AdMob was bought and Marvel was too
and the execs have finally gotten off of the GLUU

Deck managers everywhere were feeling rejected
And to social games many developers defected

Can you make more from each user? That really depends
If you can convince them to invite 20 new friends

Then post some achievements into their feed
And send gifts to their pals 'til their eyeballs all bleed

But you can play it for free, it doesn't cost money
Unless you don't want your avatar to look funny

We take PayPal and Amex and retail cards at the store
Unlock some premium levels and pay us some more

So I have this to say, in my Free Holiday Poem: Lite
Send me a nickel today, and I'll wish you Merry Christmas tonight!

~John Szeder

Top 10 Movie/TV Games For iPhone By Revenue?

Here's my stab at the Top 10 movie or TV based mobile games for iPhone and iPod touch, ranked by my latest guesstimate of the revenue that they've generated from inception to date... based on my notion that 1% of game downloaders post a review. In the spreadsheet above EAP = Estimated Average Price over the lifetime of the game on the iTunes platform, which I inferred from price movements listed on Appshopper.com. PubRev? = Publisher Revenue (caveated) which is calculated by multiplying EAP x Rvws/1% x 70% (publisher share of retail). Let me know if you think this is accurate and how well you think this model explains the performance of other iTunes App titles.

Assuming the data above is correct, it points to the value of publishers maintaining a higher price point for Apps. As you can see, Star Wars: The Force Unleashed is basically tied for the most revenue with The Price Is Right despite having 43% fewer downloads than the game show title... because it's retail price has been 75% higher on average. Actually, I must say, I was pleasantly surprised to see how much price testing publishers are doing on the platform. With a couple of exceptions, the price of each title on this list has changed (up & down) more than 3 times since launch.

By the way, it looks like Montreal based Ludia, which currently is only publishing 2 Paid Apps on the platform, made a solid bet with Fremantle's The Price Is Right.

Tuesday, December 1, 2009

Why Can't Glu Mobile Find A CEO?


I just finished reading Stuart Dredge's timely interview, for Mobile Entertainment, with Glu Mobile's freshly appointed interim CEO & President (and current co-chair of the board) Bill Miller... and I must say that I continue to be dumbfounded, and seriously concerned by that company's inability to recruit a new leader. As you'll recall, their venerable CEO Greg Ballard announced his resignation back in July and now he's actually left the building. Miller claims to Dredge that Glu's "search process kicked off in midsummer - not traditionally a fertile period for headhunting." He's gotta be kidding, right? I can't imagine that there's been any period in recent history where there have been more available, eligible candidates on the market! There have been rumors floating around for awhile that the board is specifically looking for someone with the skillset to package the company up for sale... but, there's gotta be swarms of those characters orbiting near San Mateo. Is it simply that they're not offering a reasonable compensation package? Needless to say, Glu's investors should be asking lots of questions about how this search is being conducted and why they "weren't able to close" with the few principal candidates they've identified to date.

Unfortunately the dysfunction of this process has already wounded the company tangibly by contributing to the resignation of Jill Braff, the company's respected head of publishing, and more subtlety (but no less significantly) in terms of industry and investor confidence.... and the hurt is likely to linger in light of Miller's admission to Dredge that the company is just now beginning its 2010 planning process. And, of course, all this chaos will continue to inure to the benefit of Glu's competitors, particularly EA Mobile and Gameloft (but also, nimble smartphone-focused upstarts), that will continue to steal its market share and usurp its market opportunities. Glu Mobile needs strong, visionary and permanent leadership now!

Monday, November 30, 2009

Linktone Revenues & Net Q3 08 to Q3 09


Chinese value-added services (VAS) company Linktone (LTON) reported earnings after the US markets closed on Monday. You may notice that there's some discrepancy between the comparable Q2 2009 and Q3 2008 revenue numbers in their release and my numbers above, which are based on what most financial sites have on record. I'll reconcile these if I determine the financial sites are incorrect. Either way, China Wireless News summed it up nicely by calling the Q3 numbers "dismal". Indeed the company seems stuck in a bit of rut and it's clearly not yet seeing meaningful results from diversification into services beyond the SMS & IVR vending of graphics, tones and fortunes or their international expansion initiatives beyond China. Investors are definitely not impressed and have been punishing the stock all morning... it's been down over 20% for most of the early trading session. I think that in order for Linktone to get back in the market's good graces and provide meaningful competition to China's #1 mobile content player, KongZhong (KONG), they're really going to have to step it up in the mobile games space, broaden their offering of 3G oriented services (like their recently announced MLB video deal) and quickly prove that they can be a relevant player in new markets they're pursuing in South East Asia.

Sunday, November 29, 2009

Updated: GetFugu Revenues & Net Q3 08 to Q3 09

Enhanced mobile search company GetFugu (GFGU) concedes in their latest 10-Q, filed with the SEC on 11/23/2009, that their accumulating losses and dearth of cash (less than $50k, with a burn rate of $500-$600k per month) make securing additional capital from external sources mission critical in the short-term. Failing that, these issues "raise substantial doubt about the Company’s ability to continue as a going concern." I would suggest that their prospects for obtaining those additional funds, considering their financial track record, recent investment drama, an alarming new exposé on Realtid.se and the fact that their lone product seems to have disappeared from the iTunes App Store, are about as paper-thin as expertly prepared blowfish.

UPDATE 12/1/2009: It looks like an updated version of the GetFugu Mobile Search App (v0.3.1) is now back up on iTunes, just in time to coincide with the company's oddly tardy announcement about a theatrical marketing tie-in with Summit's blockbuster film "The Twilight Saga: New Moon"... which released in the US on November 20th.

Thursday, November 19, 2009

Mobile Content Scamsters On Notice

It hasn't been a good couple of weeks for shadier side of the mobile entertainment business. On Tuesday the European Commission announced the results of an 18 month investigation into 301 mobile content websites, that were allegedly targeting kids, in "direct response to hundreds of complaints coming in from parents and consumers from many different EU countries." You know the sites, the ones that promote free ringtones, graphics or games on TV and the web, that when downloaded opt unsuspecting, undiligent consumers into expensive sleeper subscriptions. 159 of the EC investigated sites had to be "corrected" (shady) and 54 of them were completely shut down (scumbags). As a result, Italian authorities have already imposed $3mil fines on a broad range of perps, including big operators like TIM, Vodafone and Wind and web-to-mobile distributors Dada.net, Zed, H3G, Zeng, Jamba and Tutto Gratis. Congratulazioni!... but unfortunately that's tantamount to 40 lashes with a post al dente spaghetti noodle if you consider the $1bil European ringtone business that these companies dominate (Zed alone claims $870mil in annual revenue). Hopefully other countries will follow with their own, stiffer, penalties.

The European announcement comes 1 week after the approval of a settlement by a judge in Cook County Chancery Court in Chicago of a series of class-action lawsuits against mBlox, 2WayTraffic, Dada.net, UPOC, Playphone, etc. that alleged unauthorized sales and billing of mobile content. Same scam, different continent. The deal struck between the plaintiffs and defendants entitles each claimant to a $10 refund from a settlement fund capped at $63mil... now that's more like it.

The really good news is that based on rhetoric from European consumer advocates and the references within the Chicago settlement, it's clear that vigilance over this unsavory sector of our industry is elevated, and that more investigations, suits, settlements and fines are imminent. It can't happen soon enough. Companies involved with these tactics have seriously harmed the perception of mobile entertainment products in the minds of many consumers, and I'll go as far to say that they meaningfully contributed to the delay of broader adoption of mobile content in the pre-iPhone era. They've also hoodwinked other stakeholders in the ecosystem, notably content owners. These distributors regularly use premium entertainment products as a lure to create subscriber revenue streams that primarily inure to their own benefit. When I was on the content side I never once saw meaningful revenue from these distributors despite often having my publishers' content prominently featured.

Just to be clear, this isn't the first time that these distributors have been the subject of regulatory, media or legal scrutiny. Frustration with these tactics reached a boiling point in the UK in mid-2005 as memorialized in this Daily Mail article... which eventually led to some firms making disclosure and cancellation protocol changes. But clearly the punitive stick brought to bear wasn't big enough to put a stop to this bait and switch crap altogether. Hopefully this next round will be and these practices, that have been shamefully tolerated within the industry for the last 10 years, will be brought to their inevitable end sooner than later.

Wednesday, November 18, 2009

Updated: Movie & TV Paid Game Apps For iPhone

Click on the eye chart above for a clearer image of my latest version of this list. I've sorted this iteration by the product of the number of reviews and average score. Also, I've added a CatRnk column which shows in-category ranking from Mobclix. Highlighted titles are those that are either Top 100 Paid, Games or Grossing Apps on iTunes. You'll notice some new titles and some titles that I missed (oops...thanks for the feedback!) in previous versions... notably the #1 performer "The Price is Right" from Fremantle and #2 "Star Wars: The Force Unleashed" from Lucasfilm. Please keep the feedback coming. So, based on this list, who would you say is the most successful entertainment company in terms of iPhone games?

Tuesday, November 17, 2009

Mandalay's Gotta Shake It's Money Maker

Mandalay Media (MNDL), the parent of mobile adult content and games companies AMV & Twistbox, reported earnings and guidance yesterday for their fiscal Q2 2010. Revenue increased more than 100% from the year ago period... but that growth is almost entirely attributable to the AMV acquisition. A look at recent consecutive quarters and company guidance to full year revenue "in excess of $40 million"... indicates the company is running super-flat. I've posted a lot about Mandalay and my lingering concerns continue to intensify. They've gotta deal with their content identity crisis. I contend that they should focus on the adult content market, which provides 87.5% of their revenue, and in which they're a major player (remember Twistbox used to be Waat Media). However, I'm not at all convinced that's the direction they're headed following the appointment of Ray Schaaf as President and their recent Hail Mary attempt to buy World Poker Tour. More immediately, they've got to deal with their deepening cash crisis... as of September 30th they've dwindled their reserves down to $2.8mil, which won't last them 6 months at current burn rates.

Is Activision Using Zombie Publisher To Relaunch Mobile Ambitions?

Activision Blizzard (ATVI) announced yesterday that they've stepped directly into the iPhone Game App publishing fray with the release of Call of Duty: World At War: ZOMBIES, based on Treyarch's uber-successful console franchise. The 3-D, multi-player, Nazi zombie killer (is zombie it's own sub-genre yet?) was built by quality UK developer Ideaworks and retails in the US for $9.99. Initial user ratings are pretty good, but there aren't enough of them yet for it to be meaningful and we'll have to wait to see what the professionals say. I think there are 2 significant things to takeaway from this release:

1) This move makes it pretty clear that Activision licensee Glu Mobile (GLUU), which just released their Call of Duty: World At War: Force Recon mobile game on other platforms, is not going to be publishing Activision titles on iPhone anytime soon. Moreover, while this may just be a toe in the water, I think it probably means that Activison Blizzard is re-ramping their mobile publishing ambitions.

2) Assuming I'm right on the point above, then its super-ironic that Activision is using the account of the mobile games publishing unit they briefly had post-merger with Vivendi Games, and summarily dismantled last year to focus on licensing. Currently, in the App Store, Call of Duty: World At War: ZOMBIES appears as a Vivendi Games Mobile title. The good news is that under that moniker COD is in great company... VGM's only other title Crash Bandicoot Nitro Kart 3D continues to rock the Top 100 more than a year after release and is one of the all-time top grossing Apps on iTunes! The bad (sad) news is that Activision's lack of foresight (or patience) resulted in their losing a high-quality global team and to the extent they are rebuilding, it will inevitably cost them much more than if they had left Vivendi Games Mobile intact.

Monday, November 16, 2009

The Mobile Hotness | India | Courtesy of Samir Bangara

The Mobile Hotness is a new series on Cabana Mobile in which leading mobile entertainment voices provide a quick summary (10 to 15 bullet points) of the latest trends they're seeing, and industry buzz they're hearing, in their part of the world or specific market segment. The inaugural post, which covers India, is courtesy of Samir Bangara, Chief Operating Officer of veteran, Mumbai-based, mobile and online games publisher Indiagames.
  • Ringback Tones Are Crashing: After a couple of years of ringback subscription hyper-growth in India, reality is setting in as the regulators crack down on 'aggressive' sales techniques
  • Pay-As-You-Go Data Access: Data access is now available to non-subscription customers giving operators a massive dollop of new data usage revenue… this move was a no-brainer, but it took awhile to implement
  • Publisher’s Share Is Still Bad, Maybe Worse: As a result of this new data protocol, not only are revenue shares on content lopsided in favour of the operators (as they have been historically), but now the data usage charges are off-bounds for content publishers
  • Data Subscriptions Are Stalling: Despite a rapidly growing overall subscriber base of 12-15mil per month, data subscribers aren't growing as rapidly, mainly due to limited network capacity pre-3G spectrum allocation
  • 3G Will Lift Data: 3G spectrum licensing, expected in Jan 2010, is a watershed event that will enable networks, currently overloaded just on voice, to support more data traffic
  • Per Second Billing Hurts Operators: Tata Docomo pioneered pay-as-you-go on a per-second basis in India and now regulators have mandated that all operators offer this option. This will hurt the incumbents, who were getting an estimated 40% of their gravy from 30 sec and 1 min pulse charging
  • Finally, Rationalised SMS pricing: Despite falling tariffs for every other service SMS remained at the same level it was 5 years ago. Now, Tata Docomo is rewarding those who keep their texts brief by charging Rs.0.01 (.02¢) per character!
  • Audio Cinema: UTV group has pioneered a rapidly growing service powered by OnMobile that allows users to HEAR abridged versions of 300 Bollywood titles for 30Rs (60¢) per 30mins
  • New Operators = More Competition: At least 4 new operators will launch in India in 2009. Massive competition will lead to further price reductions in a market that is already at USD 4 ARPU and 1 cent a minute voice rate
  • Ad-based Models Still Maturing: Ad-based ringback tones and ad-supported games have been tried and tested in India with very limited success. The model and the ecosystem of the content owner, operator and brand have yet to evolve
  • Long-Term Content Opportunity in India is Huge: The outlook for mobile value-added services (VAS) in India is still very strong, but the last 2 quarters have been, and possibly the next 2 will be, very challenging for the entire GPRS data services ecosystem
  • Billion Dollar Questions: (a) Given that at current growth rates, mobile subscribers in India will peak at 700-800mil in about 2-3 years and only then will operators need to focus on value-added content services to grow revenues & margins... how many incumbent publishers in India will survive until that day arrives? (b) Will the ad-based model, which intuitively seems apt for India, ever become viable and provide a real alternative to the ever diminishing wallet of the pre-paid consumer?

Wednesday, November 11, 2009

KongZhong Got It Goin' On

I've done a bunch of posts about Chinese mobile content kingpin KongZhong (KONG) in the past, so I'm not going to rehash what they do... but, generally you should know, I'm a big fan of this company, with the caveat that I've had lingering concerns that their success is unduly reliant on staying in the good graces of China Mobile. Based on their Q3 earnings conference call, earlier this evening, I feel confident that the company is keenly aware of this and that they're taking all the right moves to mitigate that situation. Currently, the fastest growing (246% y-o-y) sector of KongZhong's revenue mix (23.4% or $8.2mil in Q3) is coming from their catalog of 400 mobile games, which are distributed through multiple channels. Only 33% of their downloadable game revenue is billed through China Mobile, the rest comes equally from handset manufacturer and off-deck WAP channels (including their own Kong.net portal). The company is forecasting revenues of between $37-$38mil for Q4 and they believe mobile games will continue to be the revenue driver. They also mentioned that they are beginning to see real revenues from freemium (try & buy) and virtual goods billing models for games. I think these guys are firing on all cylinders, and given that they are the smartest and strongest player with the most cash ($135mil) in one of the fastest growing mobile markets in the world, I think KongZhong has the potential (within the next 3 years) to be the biggest mobile entertainment company in the world. Someone owes me a drink when that happens.

Updated: Top 10 Mobile Games Publishers WW

Tuesday, November 10, 2009

OMG! How Did I Miss The Film About Riot-E?

Check out the opening credits for Riot On!, a 2004 documentary Directed by Kim Finn and Written by John Hakalax. The film is about mobile entertainment's first colossal flame-out, Riot-E (or Riot Entertainment). The rapid rise and fall of that company basically ended the industry's first hype-cycle, early in the decade. Let me know if you've seen the film, and if so, what you thought. More importantly, let me know if you have a copy I can borrow... this DVD ain't easy to find. btw - thanks to the anonymous commenter who brought this to my attention.

Artificial Life Revenues & Net Q3 08 to Q3 09

Buongiorno Earnings Q3 2009: The Other Side of the Growth Curve

Italian mobile personalization and services giant Buongiorno (BIT:BNG) announced it's Q3 2009 earnings this morning. As I expected, the company continues to experience a "pattern of slight slowdowns in mature markets" (euphemism alert) for its D2C ringtone and graphics offerings in established markets. However, they're still claiming solid growth in developing markets (especially Africa) and now report to have 8mil D2C customers worldwide. Eventually these guys are going to run out of new markets to prop up this sector and unless they can find a way to reinvent this experience to compete with modern app stores, the maintenance of this anachronistic consumer-facing business is really going to start hurting them from a real and opportunity cost standpoint. Barring an epiphany on the consumer side, I think in order to begin realizing financial growth again the company needs to focus its attention on its B2B services, including its Intelligent Mobile Marketing CRM solution for carriers and its newly re-branded B!Digital marketing consulting and services group... which just landed a deal with Real Madrid. btw - no mention here about the performance of their mobile social network "peoplesound", which I predicted would be closed by next April.

Monday, November 9, 2009

Revenues Big 3 Mobile Games Publishers Q3 2008 to Q3 2009

GetMondo or GizFugu?: Carl Freer Appointed President of GetFugu

Enhanced mobile search marketing company, GetFugu (GFGU), filed an 8-K with the SEC on Friday to handle a bunch of housekeeping, the most notable item being the appointment of the company's largest shareholder (21%) and Co-Founder, Carl Freer, as President and board member. As part of the board appointment, Freer was granted 2mil options at a strike price of $0.37 (today's stock price) vesting over 3 years. Freer is (in)famous for his association with Gizmondo, the connected handheld gaming device he launched back in 2002, while Chairman of Tiger Telematics. The rise and dramatically scandalicious fall of that platform, the company, and some of the colorful characters associated with it, are the stuff of console and mobile games industry legend... giving rise to an extensive Wired article back in 2006 that, as I reported back in May, is currently being developed into a film.

The 8-K also addressed the settlement of pending litigation against the company from spurned investor SpongeTech (SPNG). It looks like GetFugu was able to make SpongeTech happy by issuing 5.25mil shares of common stock to an associated holding company, R.M. Enterprises International, in exchange for retaining the $1.75mil advance deposit it received during the investment negotiation process. GetFugu also has issued 20mil shares to two former company advisors, Amber Capital Corporation and Summit Trading Limited, to settle outstanding compensation claims. These two items lead one to believe that the company, in the wake of the commercial rollout of its app, is trying to clean up its act a bit to make it more attractive to additional investors or, potentially, an acquirer. But, if that's the case then the Freer move is a bizarre one... as you will see from several comments to my previous GetFugu posts, he's a polarizing character, to say the least.

Wow! AdMob Sold To Google For $750mil In Stock

I must say, I'm almost speechless! Clearly I'm not drinking (or smoking) what everyone else was drinking (or smoking) this morning. In this case I'll leave it to The Business Insider to tell the story (be sure to check out the Henry Blodget link!) and I'll add more commentary later when I get off the floor. I will say, congratulations are in order to AdMob and, perhaps even more so to VC Accel Partners, who already has $1bil in exits today between AdMob and Playfish... not a bad way to start the week.

Playfish Successfully Sells The Hype To EA For $400mil


It looks like the rumor I reported on back in mid-October was indeed true, and Electronic Arts (ERTS) has purchased London-based, privately held, online social gaming hotness Playfish for even more money than was initially thought. According a company press release this morning, EA paid "approximately" $275mil, plus $25mil in equity retention and $100mil in cash consideration, tied to performance milestones through the end of 2011. $400mil ain't bad for a company started just 2 years ago, by former Glu Mobile exec Kristian Segerstrale, and fueled with $17mil in venture capital just last year, to build simple, casual, addictive gaming titles like "Pet Society" and "Who Has The Biggest Brain?" for social networking platforms (mostly Facebook at this point). They're currently the #2 player behind Zynga, which an anonymous analyst recently suggested to The Business Insider, could be on track to generate $250mil this year (hmm... I'm not so sure). Playfish has only dipped it's toe into the water on the mobile side... it launched "Who Has The Biggest Brain?" on iTunes back in June... but they claim to be (and given Segerstrale's background it's no surprise) big fans of the medium. As I mentioned in my post last month, there's so much hyperbole, froth and irrational exuberance around this space it's a little hard to believe that this transaction is happening at a reasonable valuation and for some EA executives, who were around during the $680mil Jamdat acquisition in 2005, this purchase will have to be feeling (as Yogi Berra would say) like déjà vu all over again. Congratulations to Playfish, you surely gone done your investors proud!

Friday, November 6, 2009

Top 10 Games in Android Market October 2009

Clearly, Android Market still represents a pretty nascent business opportunity for mobile game developers/publishers and it's mostly the purview of very small shops... some using (I'll be nice) "borrowed" IP. With a couple of notable exceptions, the bigger players are not yet committing content in any meaningful way. That's bound to change very quickly.

Check out the Mobile Entertainment article today for more insights about games revenues in the Android Market app store.

Daily Uniques At 4 Web-To-Mobile App Stores

Click on the chart above for a clearer image.

Wednesday, November 4, 2009

Artificial Life Issues Artificial iPhone Hype


Artificial Life (ALIF) put out one of those classic, cryptic mobile entertainment, performance-oriented, press releases on Wednesday... trumpeting their great success on iPhone. You know, the kind of document that despite the intention of the issuer, ultimately prompts many more questions than it answers. If this business is ever going to be taken seriously there needs to be much less of this sorta hype-massaging nonsense and much more transparency about numbers. For goodness sake Artificial Life, just tell us how much money you've made on iPhone in the last year.

The biggest problem with these releases is that they selectively blend Free App and Paid App download numbers. Our friends at D'Choc are masters of this form of obfuscation. If one wasn't paying attention, and assumed Artificial Life was only talking about Paid App downloads, one might determine that they made $6mil (after Apple share) from iPhone/iPod touch Apps over the last 12 months... based on their 21 Apps being downloaded an average of 220k times each, at an average price of $1.86 (based on their current US Paid App iPhone assortment). That would be about 22% of their $27.5mil of 2008 revenue... impressive, right? Unfortunately, that's preposterous considering Glu Mobile (which has 75% more Paid Apps live currently) disclosed on their quarterly conference call yesterday that they only made 2.5% or $500k of their Q3 2009 revenue from all new distribution channels, including Apple.

You'll notice in the release that Artificial Life uses variations of "download" and "sell" interchangeably to yield maximum dramatic effect. My favorite example is, "The number of iPhone game downloads is approximately equivalent to 37.8% of the overall number of games sold by the Company so far in 2009." I think what this actually means is that the combination of all Free and Paid App downloads of Artificial Life titles on iTunes is equal to 37.8% of total paid game downloads on all platforms during the period... which is much less impressive, but much more meaningless ;-). I'm also pretty confident that Artificial Life's claim that its "best selling game was downloaded close to 1.8 million times" on iTunes includes both downloads of the Paid App and the associated free teaser App. Btw - if anyone thinks I'm wrong, please let me know.

I think there are only three valuable pieces of information to take away from this release: 1) high quality iPhone App development takes Artificial Life 3 to 4 months, 2) the US is still the biggest individual iPhone App market by far for these guys, but overall the World ex US is bigger, and 3) this industry needs to stop with all this thimblerig reporting, and embrace the disclosure of real, comparable performance metrics, so that cynics like me don't assume everyone's business is smaller than they're making it seem.

Tuesday, November 3, 2009

Stuck In Low Gear: Glu Mobile Q3 2009 Underwhelms


Ask any of my former employees at Universal Pictures... I used to anticipate Glu Mobile (GLUU) quarterly conference calls like an 8 year old kid looks forward to Christmas morning. With Glu being one of the few pure-play mobile entertainment companies publicly traded on a US exchange, with all the concomitant reporting that requires, this event provides a rare, clear lens into the health of the industry. That's exciting, right? The Q3 2009 call was no different... but I must say it was a disappointing Christmas and the patient don't look so healthy. Here's why:
  • Uh.... where the heck is the new CEO? Didn't Greg Ballard announce his resignation back in July? Either no one wants this job (I haven't been asked, btw) or the board is fighting over what kinda leadership this company needs
  • There was no acknowledgment that longtime, lynchpin exec (and quarterly call participant) Jill Braff left the company last month. Tacky like...
  • $19.6mil in Q3 09 represents the 4th consecutive quarter of declining revenues (down 18% from Q3 08)... so much for being part of a growth business
  • The company lost $4mil during the quarter and expects to lose between $13.1mil and $13.4mil in 2009
  • Next generation platforms, including iPhone, Android and their experiments with social networking games only yielded $500k or about 2.5% of revenue... either iPhone hype is out of control or Glu isn't a meaningful player
  • Royalty payments of $5.8mil, or 30% of revenue, in the quarter is still crazy high... this cost has gotta come down either through development of more original IP or the negotiation of better deals with content owners (did I just say that?)
  • The Q4 title roadmap looks pretty good, and reviews of early titles have been pretty good, but I don't see anything that looks like a mindblasting breakout hit
  • Verizon Wireless still represents 20% of Glu's business worldwide. As VZW's ecosystem opens up, and the #1 US carrier embarks on its experiment with an "app store", Glu will need to fight harder than ever to maintain share at that operator
  • Only 1 analyst asked a question during the conference call (kinda sad)... have they all lost interest?
  • On a positive note, the company did generate $2.7mil in cash... which they can use to lure a new CEO

Gameloft vs Glu Mobile Revenues Last 6 Quarters

€/$ = 1.471 | $mil

Pinch Media Estimates Publishers Have Made $900mil From iTunes Paid App Downloads

Mandalay's Bold Bid To Buy World Poker Tour Fails According To Report

According to a post this morning on GamblingOnline, the shareholders of World Poker Tour Entertainment (WPTE) voted to accept a $12.3mil purchase offer from UK online gaming powerhouse PartyGaming Plc (PRTY), through its Peerless Media subsidiary, at meeting in L.A. last Friday night. This presumably brings to an end the ambitions of Mandalay Media (MNDL), parent of mobile entertainment consumer brand Twistbox, to buy the company. Mandalay had mounted a bold (audacious), last minute bid that looked to be substantially superior ($36.5mil) from a purely financial standpoint... but apparently many WPTE shareholders felt that the match was not strategically superior. The deal should be completed at the end of the month according to the post. Given the massive discrepancy in the offers, I'm guessing this isn't the very end of the story... I'll keep you posted. If it is the end of this story, it'll be interesting to see if Mandalay diverts its acquisition ambitions elsewhere.

Monday, November 2, 2009

Updated: Movie & TV Paid Game Apps For iPhone

Click on the image above to see updates to my post from last Monday. I added Cirque du Freak: The Vampire's Assistant and America's Next Top Model by request (thanks for the feedback!), and highlighted the 7 titles that are in the Top 100 Paid Games Apps... but otherwise there isn't much change. Let me know if I'm still missing any titles or if you have anything in the queue for which I should keep an eye out.

Layar Puts The Reality in Augmented Reality


There's a lot of giddiness out there about Augmented Reality (AR)... and (this time) I'm not talkin' about the kind you find on LA beaches or at Las Vegas nightclubs. This is the AR, experienced through an application on a mobile phone, that blends imagery of the world around you as seen through your device's camera (reality), with data about that world based on GPS, mapping software, compass, accelerometer, etc. (the augmentation). It's all very cool, very sci-fi stuff, that ostensibly has a lot of commercial potential... and companies like Nokia (who call their version Mixed Reality) have been playing with this technology (including extra-cool image recognition features) for yonks.

Media coverage of AR has really heated up in the wake of Layar B.V.'s launch of the first meaningful consumer version of this technology, Layar Reality Browser, on iPhone in early October (it's been on Android for months), followed by a Symbian launch last week. The Dutch start-up, which just got another $1mil in funding, looks at their application service as a platform (smart) on which developers can build different "layers" (basically mobile websites that sit on top of images). Users can customize these layers based on their interests, which is similar to what Google Maps is now doing with their mobile application (and funnily enough, they also call their augmentation layers). Currently Layar has over 183 layer partners, such as Yellowpages.com, Yelp, Wikipedia, real estate site Trulia, UC Santa Barbara campus map, etc. Monetization will come from advertising, sponsored layers and, presumably, affiliate deals.

The company claims, in a Venture Beat story, that its free application has been downloaded 250k times and that they have 100k unique users per week. Early consumer reviews in the App Store have been mixed, with a fair number of complaints about the App's UI design and its heavy tax on battery life. That said, most consumers seem genuinely excited about the possibilities of AR on the phones... and I tend to agree.
I think, if executed properly, AR presents a massive new opportunity for brands, content owners and venues, to leverage the unique features of the mobile medium, in order to reach consumers via opted-in, contextual marketing. AR should become a hyper-targeted, mobile specific extension of search marketing, and it definitely feels like a space that Google will eventually want to own. The ability of AR to realize this potential will, as always, come down to execution. AR application developers need consumers feel that these applications are useful and relevant in their daily lives, so that they become a regular part of their interactions with their devices, and take great care not to overwhelm them with gimmicky features or messaging that will make the applications feel trivial or overly promotional. I'm hopeful that Layar, or someone else, can pull this off artfully and I'm unabashedly super-excited to see how this space evolves in coming months.

Friday, October 30, 2009

Top Paid Mobile Game Title In 10 US App Stores

N-Gage 1.0 Was A Taco, N-Gage 2.0 Is Toast


Mobile Entertainment & mocoNews both had good stories today covering Nokia's confirmation of what mobile games publishers had been buzzing about for months, and that I had anticipated back in July (truly the worst kept secret in mobile entertainment)... that the second iteration of Nokia's N-Gage (the SDK and services iteration) was well and truly dead. The plan is to roll all of the Finnish handset manufacturer's mobile games retail initiatives into the "dynamite" Ovi app store that you're all enjoying. The good news for Nokia is that they lost all their credibility with games publishers and content owners on this initiative a long time ago. The bad news is that they're not going to get many more chances to convince those stakeholders that they have the chops to play a meaningful role in the development of the mobile content business. Nokia desperately needs to start executing on services.

Quick Updates: Mandalay Ups WPT Bid & 3M's Artificial Life Investment

  • Apparently Mandalay Media (MNDL) is jonesing hard for that World Poker Tour Entertainment (WPTE). According to a press release this morning it's now offering to "acquire WPT for $36.5 million, consisting of $28.5 million in cash, $5 million in Mandalay Media stock and perpetual revenue participation rights, guaranteed to be at least $3 million. The estimated value to shareholders per share is $1.77, including the guaranteed portion of the revenue participation rights, and as adjusted for the actual share count at closing. The proposal represents a premium of approximately 61% over the closing price of WPT’s common stock on October 26, 2009 and a premium of approximately 28% over the implied value at closing of WPT’s pending asset sale with Peerless Media Ltd." Investors clearly like this potential marriage because both stocks are up over 10% in early trading this morning. Mandalay estimates that if the acquisition is successful that synergies (buzzword alert) realized in the combined company will yield annual revenues in excess of $60mil (compared to $47mil if you add their 2008 revs) and EBITDA in excess of $8mil. btw - if anyone has any insight into how this potential deal is going to be financed, I'd love to hear about it.
  • Just some quick housecleaning in terms of my post Monday about 3M's investment in Artificial Life (ALIF). In the end the 6,447,491 shares of common stock 3M purchased at $1 each actually gave them an 11.31% stake in the company... the original estimate was 10%.

Thursday, October 29, 2009

Mandalay Trying To Get More Game With Schaaf & $35mil World Poker Tour Bid

Not only is Mandalay Media (MNDL) clearly not heeding my advice to focus on adult mobile content, rather than trying to become a major player in the crowded mobile games space, it looks like their gaming ambitions run much deeper than mobile. Yesterday they announced that former Sorrent (now Glu Mobile) and Navio executive Ray Schaaf, a guy they characterized as a "mobile gaming veteran," has taken a position as company President. They followed that today with an announcement that the company has made a $35mil cash & stock bid to buy World Poker Tour (WPTE), at a 54% premium over its stock price and a 23% premium over an offer that's apparently already on the table (and pretty close to being done) from a company called Peerless Media. I don't have a clue where Mandalay is getting the cash for this audacious bid for a company, that at first glance, looks to be in better (if not equally not good) financial shape than it's in. But what I do know, is that if this acquisition is successful, it will radically realign and diversify the media holding company beyond mobile porn and games. That said, on the mobile front it would give Mandalay (and its Twistbox division) access to a proven, powerful franchise that's been shepherded for many years, under license, by Hands-On Mobile... who can't like this one bit.

Tuesday, October 27, 2009

Monty Munford Leaving Player X

Our old friend Paul "Monty" Munford resurrected his dormant (and sorely missed) Gaming and Wireless Outlook newsletter to announce, in inimitable style, that he's leaving his longtime employer Player X. The London content publisher and aggregator was acquired by The Borg... oops, I mean Zed, back in May. Monty is one of the reasons that I once characterized Player X as "the new cool kid on the block of mobile publishing" and he'll be indelibly associated in my mind with an exuberant (sometimes irrationally so) era of mobile entertainment. I greatly anticipate hearing more about his future endeavors... some of which are teased below.

Monty's Gaming and Wireless Outlook - Leaving Player X


After four years, three months and 21 days, Player X and I have severed our ties and are going in separate directions, both richer and wiser for the experience; so where better to announce this than in the newsletter that defined me.

Some marriages don't last that long and it was only as I stripped out my emails did I remember how hard we all worked to get Player X out there. We did a good job, I reckon. From start-up to a multi-million sterling sale wasn't bad at all.

I'd like to thank Tony Pearce and Ari Honka for giving me a job at Player X when others were unsure of employing a maverick and I'd also like to thank innumerable people over their years for their help when I was new to the business. You know who you are. As for the occasional twat, you too know who you are. Fortunately there weren't many of them.

Most of you know that I relocated to India 13 months ago and have been writing for UK broadsheets including The Sunday Times, The Guardian, The Telegraph and this weekend I have my first piece in the Financial Times. I have also published more than 50 issues of my Indian newsletter, Monty's Indian Outlook.

But writing today for a living is impossible, so while I like to keep my eye in, I have been concentrating more as a fulcrum between UK and Indian companies; a vocation that is working very well... although Hindi isn't easy and driving here is even worse.

I'm also heavily involved with a project that is OFF-THE-RECORD but means working personally with one of Hollywood's most successful film directors on taking the portfolio of his films to mobile. Unbelievably exciting but you'll hear more about that later I'm sure.

I am also off on location this month as a speaking 1930s British officer in a Bollywood movie being filmed by an Oscar-nominated Director in Goa about the 1930s Chittagong uprising (long story). Very David Brent, but life continues to be interesting, and that's how it should always be.

For those who'd like to keep in touch my email is montysmobile@gmail.com or I'm active at www.twitter.com/montymunford.

Thanks for listening and see you from time to time... I thought I'd give Nokia one last plug for all their previous love. Cheers Kamar.

Monty

Monday, October 26, 2009

Movie & TV Paid Game Apps For iPhone

I've recently been looking at games based on entertainment industry brands in the iTunes App Store. I've been paying particularly close attention to Paid Apps, because they're generally much higher quality and less ephemeral... and contribute directly to those oft-discussed, yet oft-elusive digital revenues the old media companies crave. The most striking thing I've noticed is how few of these Apps there are on iTunes. I could only find 40 (let me know what's missing from my list below), which is a measly 0.29% of the 14k Paid Games Apps that Mobclix claims are available in the App Store. Remember, back in the day, when all the operators had Movie/TV categories on their game decks that were chock full'o titles?

Does this mean that entertainment brands are less important on this platform? That seems counter-intuitive considering how cluttered the store is and how critical off-channel marketing is to gaining awareness... and when you consider that 4 of these 40 titles are currently in the Paid App Top 100, these brands can legitimately claim that they over-index in terms of popularity. Perhaps it's that a lot of the smaller developers, who are directly publishing game apps, can't afford licenses for premium brands. Perhaps it's that ongoing perception in gaming circles (some, but not all of it warranted) that games based on entertainment brands are crap. Whatever the reason, it looks like the studios seriously need to step up their distribution into the App Store via licensing or self-publication... to the extent they believe it's important place to own mindshare and a real opportunity to make money (it is and it is, btw). Let me know what you guys think.

When you click on the eye-chart above you'll see that I've sorted this list of 40 by the number of reviews... which gives an indication of popularity over lifetime. The most important thing to look at the star rating in relationship to the number of reviews. Currently the highest rated title is the Twilight Scene It? from RealArcade/Summit Entertainment with 4.5 stars... but it's only been out for a week and I'm sure most purchasers so far are delirious Twilight fans.

Where Is EA Hiding Their 8lb Gorilla?


Back in July, gaming behemoth EA (ERTS) quietly opened a small studio called 8lb Gorilla (8PG) to create smaller, casual, cheaper-to-build, cheaper-to-buy (sub $3) games for iPhone and iPod touch. Their first release, "Zombies & me", debuted in the App Store on July 10, 2009 at a 99¢ price point. In a review touchArcade called this initial effort "good, but not great" and to date, on iTunes there have only been 376 user reviews with an average rating of 3 stars. Nevertheless, I think the general perception was that this was a decent first foray and that EA's strategy behind 8PG was fundamentally sound... industry folk were generally eager to see what they came up with next. The plan, according to touchArcade, was that the studio would launch new games (under the EA banner), like a little factory, on a "near-monthly" basis... provided there were no snafus in the App Store submission process. Uh...so, what happened? It's been 3 months and no new games, no updates to their website and no updates to their Twitter feed since the end of August. Has EA killed this initiative as quickly and stealthily as they launched it? If so, why? That's hardly giving a brotha a chance. The only explanations that I can come up with, at my current caffeine dosage, are the following: 1) 8PG's games are getting reject by Apple, 2) EA is reshuffling personnel at the unit or, my favorite... 3) the rumors about Playfish are true and EA is going to use those guys to build their casual mobile games. Any other theories out there?

3M Invests $6.5Mil in Artificial Life


3M now stands for Minnesota Mobile Marketing and the company's New Ventures arm is buying 6,447,491 shares in LA/Hong Kong based Artificial Life (ALIF) at a price of a $1 each. OK, the first part of that statement isn't true, but the announcement today, that 3M is taking 10% of the mobile marketing games company, does seem to indicate that the Maplewood, MN conglomerate believes mobile marketing is mission critical for the company going forward. The investment is part of a broader alliance between the companies which will focus on the following areas:
  • General mobile and broadband applications and technologies
  • Digital Watermarking
  • Virtual Reconstruction of 2D and 3D Objects
  • Augmented Reality
  • 3D Image processing
  • Object recognition
  • Mobile Healthcare and Diabetes Solutions
  • Mobile Marketing and M-Commerce Platform
This list indicates to me that Artificial Life is in the process of broadening the scope of its mobile marketing remit. Not a bad plan, frankly. Given the current glut of content plays and cluttered distribution channels, I think mobile marketing currently represents the biggest opportunity in mobile. The other really good news here for Artificial Life is that this investment bails them out of an uncomfortable cash position... at last check they had under $2mil in the bank (yikes!). Clearly the markets like it, as Artificial Life's stock is up over 20% today in early trading. But let's get to the most important question... so, what does a mobile Post-it note look like?

Friday, October 23, 2009

Unhappy Ovi Customer Gets Animated

Retailers know that satisfied customers generally tell 5 people about their positive shopping experience, but that 85% of dissatisfied customers tell 9 people about their poor experience, 13% tell 20 and, I guess, every now and again one gets so frustrated he makes a cartoon about it and posts it on YouTube to tell the whole world about it. Kudos to Ben Smith at The Really Mobile Project for creating this and MobileGamesBlog.com for making me aware of this gem.

Wednesday, October 21, 2009

Amazon MPS Could Enable Real App Store Competition

A couple of weeks ago, just before CTIA in San Diego, Amazon.com made an announcement I somehow missed in the cacophony of show announcements, but that just may come to be regarded as a watershed moment in the history of mobile commerce. The Seattle e-retailer, said in a press release, that it was opening up its 1-Click checkout service to mobile developers and distribution channels through a series of APIs and an "optimized mobile browser experience." They call the service Amazon Mobile Payment Service or Amazon MPS.

So why is this important? One of the key components of Apple's phenomenal, meteoric rise to success in the mobile content space has been their legacy billing infrastructure... iTunes. Think about it, how many companies have your credit card on file and have authorization to bill that card with one click of a mouse or the D-pad? Remember that the seamless, established billing relationship, inherent in operator billing, was what was sexy about mobile content (post-dotcom) in the first place... but unfortunately, it eventually became clear that operators didn't know how to sell content. Now that every handset OEM, Google, tout le monde is opening up an "app store" to prove that it can be a digital merchant, this basic component has gone missing. I think the notion that consumers will feel comfortable surrendering their credit card and opting-in to future billing in order to facilitate their first purchase on Nokia's Ovi Store, or that they'll gladly link that tired ole PayPal account (where's that password anyway?) to Blackberry App World, is hopeful at best. For most folks Amazon, like Apple, is in the billing circle of trust.

So finally it looks like there's a weapon in the arsenal that will allow the most ambitious mobile content retailers to do battle with Apple, without the carrier... at least on the billing front ('cause they still need to build a compelling retail experiences, by the way). The whole mobile content ecosystem (content owners, developers, publishers and consumers) is screaming for meaningful challengers to Apple's dominance. Without competition Apple will have free reign to define consumers' content options and dictate wholesale and retail pricing. My recommendation to Nokia, Samsung, RIM, etc. is to seriously consider Amazon MPS to help them fight the good fight in the interest of at least being a strong second player (because it ain't bad being Target)... or don't, and leave it to those savvy guys at Handmark, who have already implemented it, or to the series of application creators I've spoken with recently (who currently sell via WAP and online) who are keen to deploy this purchase mechanism within their own specialty retail stores.

Self Published Film Apps for iPhone

Here's a tally of the current film-based (not TV) applications, self-published (not licensed) by the studios, that are currently live on the iTunes App Store. The only title that is currently in the Top 100 (Paid or Free) is Paramount's Top Gun (#62), which has been live since May 5, 2009. In terms of licensed film titles (which I'll cover in more detail soon), there are currently two Top 100 Paid titles: Gameloft's Shrek Cart (#25), from the Dreamworks Animation title and RealArcade's Scene It? Twilight (#64) from the Summit Entertainment title. These two titles are also currently #7 and #40 respectively, in terms of Top Grossing Apps.

Monday, October 19, 2009

Will de Masi & Kranzler Finally Get Hands-On To Realize It's Potential?


PocketGamer.biz is reporting, and the company's website is confirming, that Hands-On Mobile's President (and former Monstermob wunderkind) Niccolo de Masi has taken over as CEO of the San Francisco based mobile games publisher, replacing David White. I've also heard rumors recently that Dan Kranzler, who founded the company back in 2001 (when it was known as Mforma), may be planning to take a more active role in its management, after years of being a very passive Executive Chairman (and peacing out with the Dalai Lama).

Does this mean there's a massive restructuring in the works? Hopefully... because Hands-On, the poster child for unrealized potential in mobile entertainment, is long overdue for a shake up. This is a company that raised $63mil in venture funding in 2004, was on an IPO path in 2005, was an early content rockstar in China and at various times over its 5 year history has employed some of the smartest folks in mobile and controlled some of the most powerful brands in gaming (Marvel, Guitar Hero, World Poker Tour, etc.). Hands-On could have been, should have been, a global mobile gaming powerhouse like Gameloft or EA Mobile, but instead in 2009 they're a tertiary player that doesn't even make my Top 10 Mobile Games Publisher list.

So what's to do? According to PocketGamer they've been diversifying into platforms like PSP Minis, DSiWare, Facebook games and, get this, iPhone (where they currently have 8 Paid Apps, none in the Top 100)... hmm, but that sounds like what all the other kids are doing. Perhaps they should be really alternative and focus on the carrier business... oh, and while they're at it change the company name back to Mforma (which is cooler and more potential-ly). We'll see. Let's just hope the re-emergence is in process, the rumors about Kranzler are true and that he and de Masi have a few more rabbits (and a bunch of cash) in their hats.

Friday, October 16, 2009

Comes With Music Experiences A Difficult Takeoff

Music business news & strategy source Music Ally put a post up on their blog yesterday with some juicy details they obtained about total worldwide subscriber uptake of Nokia's vaunted Comes With Music service. Apparently there were only 107k activated user accounts, across the 9 territories in which the service has launched, as of July.

When Music Ally confronted Nokia with the unspectacular numbers a spokesperson for the Finnish handset maker bragged about their rapid multi-territory rollout plans, acknowledged the inherent difficulties associated with a business model paradigm shift (true that) and then said, with regard to these specific stats, that "per our longstanding policy we do not comment on industry speculation or rumors." I guess the numbers are accurate.
This appears to be yet another case (like Ovi) where Nokia is trying to roll-out a content service globally, before it's fully baked. I would suggest that they should have tested this model a little bit longer in the UK (and maybe in one developing market) to better understand consumers' propensities to adopt it, and the ability of retailers to sell it, before pushing it out to all of their territories. Unfortunately this plane has already taken flight... and perhaps that stalled engine under the left wing will restart itself, and if not, perhaps Nokia's mechanics can fix it in the air... right?