Wireless Gaming Could Bring Relief To Mobile Operators

For some time now, the mobile industry has been waiting on the much lauded arrival of third generation, or 3G, services. This system will allow the transfer of more information across the mobile networks, allowing images, audio and video to be exchanged. As a result, the networks can be used for wireless gaming.

Mobile operators having been searching for a killer application to drag them out of fairly widespread financial difficulties. Multimedia messaging services (MMS) are also touted to be a strong source of revenue (see MMS Will Not Take Off Till 2004, Says Ovum), although Ovum has argued that MMS is not the killer-app that will sort all the woes of the telecoms industry and nor is anything else.

Wireless gaming has also become a ‘poster child’ for the mobile data industry in this ‘relentless’ search for a killer application, says Ovum. “The logic behind this is hugely seductive – game players already pay billions to play each year. Mobile devices already have mass-market penetration and with the advent of 3G networks, we will get colour, video and blazing, real-time multi-player games. Take this logic, and wireless gaming has to be a goldmine,” says the report.

However, Rosalie Nelson, Digital Media director at the group, remains sceptical. “Once again players in this market risk going down a technology driven road – with the assumption that if mobile can offer the gaming functionality, the users will come,” she says. “Industry players are failing to account for the many gaming and entertainment substitutes that are cheap, readily available and compete for the fickle users’ attention.”

Ovum’s recent research finds that the value of wireless gaming is not in bringing ‘mobility’ to the high-spending hardcore gaming market, which will in any case always opt for a dedicated gaming device and are expensive to manage. Instead it is social and casual players, who pay very little to play and so may not generate huge revenues individually, but through their sheer mass’ are valuable to target. These are the users who can be encouraged to play and spend more – particularly in Asia Pacific where the demand and experience with games is so high, says Ovum.

A recent report from Informa Media Group (see Web, Mobiles And iTV Move Into Fast-Growing Gaming Market) found that mobile and iTV gaming are each to become an increasingly valuable component of the gaming industry’s revenues. The move towards 2.5G and 3G devices will drive the wireless games market, says Informa.

From a slow start, the mobile games market is due to rocket, especially from 2005 when more than $1 billion will be added to the combined subscription and pay-per-play revenues each year. By 2010, the 743 million paying players will create revenues of $9 billion. The US will provide $1 billion of the total and the Asia Pacific region $4.1 billion.

Global Games Market Value by Sector (%)
	2001	2002	2006	2010
Console Hardware	25.9	26.3	19.3	9.8
Console Software	40.1	43.3	31.3	22.9
Handheld Hardware	7.3	6.2	6.1	2.8
Handheld Software	9.4	8.0	6.6	3.6
PC Software	16.0	13.5	10.9	6.7
Online	0.6	1.1	6.2	12.2
Interactive TV	0.3	0.6	7.9	18.4
Mobile	0.4	1.1	11.7	23.7
Total ($ billion)	27.8	31.2	30.1	38.1
Source: Informa Media Group