Sunday, January 01, 2006

Wireless gaming awaits market breakthrough

Telephony online reports on the potential for mobile gaming although "the less-than-ubiquitous availability of game-capable handsets, a high-cost game title licensing structure and a previous lack of innovative marketing and pricing strategies may have thus far limited a mobile market segment that many observers long have viewed as a sure thing."

Clint Wheelock at NPD Group noted "about half of all mobile handsets currently in use are capable of accepting mobile game downloads." He said, "As that increases--and it will continue to increase rapidly--consumer awareness and the addressable market will grow, and the adoption curve will follow."

According to an earlier report from NPD, "a survey of about 8500 teens and adults revealed that about 27% play games on their wireless handsets, a figure up from 20% the previous year. However, about two-thirds of those users prefer to play free games or those that were downloaded to the handset prior to purchase, while only one-third of those respondents actually purchased game downloads or game subscription services."

Game pricing might still be a prohibitive factor with research indicating a price preference closer to $2.25 per game. Carriers are expermenting with monthly subscriptions too. Wheelock said, "but that's not really working. People just don't want to pay that much [around $7 per month, with a potential premium range of $8-$11] for a gaming subscription."

On the topic of games licensing, Wheelock added, "Licensing deal costs are skyrocketing. Media companies have realized that this is a real market now, and everybody wants a piece of the pie. That's part of what makes pricing so hard to manage. There is a lot of pressure on carriers, and really no guarantee of the quality of a particular title in a mobile gaming format."

Wheelock pointed out "carriers are getting more aggressive and more experienced in their marketing of mobile games." He said, "Before with gaming, there was a lot of throwing things against the wall to see what stuck. Carriers are more experienced with their merchandising tactics now. They are more focused and better understand the segments they are trying to reach."

Wheelock said Sprint "has taken the market more seriously than others" early on, and "understands all aspects of the gaming market very well. Cingular and T-Mobile have a lot of good experience behind them. Verizon Wireless came on a little bit later, but is now putting richly capable handsets out there that will improve the gaming experience."