Nokia recently launched its latest interation of the N-Gage - no longer a phone/handheld gaming hybrid device, but a mobile gaming service designed to provide trial downloads, score tracking, sharing, points and features similar to those found on Microsoft's Xbox Live service.
We caught up with the company's Director of Technology and Strategy, Dr. Mark Ollila, on the eve of GDC 2008 to ask him about the challenges ahead, whether he is worried about Apple's potential plans for the game space, and how Nokia might be able to overcome traditional barriers to mobile gaming.
Q: GamesIndustry.biz: What percentage of mobile phone users would you estimate to be playing — or not playing - games on their handsets?
Dr. Mark Ollila: When we look at what percentage of people are playing games or using games on mobile, I think it's more apt to look at the category we're focusing on in gaming. From the Nokia perspective, it is the N-Gage platform which is across multiple devices - typically our N-series devices.
Last year we sold about 38 million N-series devices. This is something which we're seeing an increase in. People actually buying these multimedia rich devices - multimedia computers, we call them, because of what we've been able to do with them.
What we know is that when we look at this sort of consumer group, from our studies, we see that 50 per cent of them are gamers. Over 50 per cent of them are gamers in this target of N-series devices. Gaming is an important feature for them.
But then, when you look at the market, that we only have about 5 per cent of people purchasing games at the moment in mobile - what are the problems? What are the barriers? What's been happening?
It's about discovery, ease of use, accessibility - that's what our N-gage platform, a software platform across multiple devices, is looking to solve.
Q: What is the benchmark that you'll be looking at in determining whether or not N-Gage is a success?
You've got to remember Nokia's DNA, its values, is connecting people. I mentioned that at the DICE conference. And what we're doing with gaming, with N-gage, is connecting people through play.
One of the benchmarks that we'll be looking at is how many active users will we have - how many people will actually be in this N-Gage community?
We've had experience in building up communities with the original N-Gage arena. We had 700,000 active users and we had 3 million N-Gage devices out there. So that's quite a high uptake, actually.
With the fact that we're shipping a lot of devices a year, and they'll be N-Gage compatible — we have a lot of devices which are already on the market which are N-Gage compatible — I think we've got a great opportunity to actually have higher community penetration. So, I think our number of active users I think is one of the key [benchmarks].
Q: What was the impetus behind the decision to move away from an actual hardware platform — like the original N-Gage - to a delivery system?
When someone went to buy a phone, gaming was on the top of their mind, but other aspects of the phone were on the top of their mind — messaging, communication, camera, video, music, things like that. The combination of those different parameters then actually influences the purchasing decision.
I think what we looked at and learned, when we looked at our customers and consumers, was that gaming was very important to them, but what was important to them also was the ability to choose the form factor they want.
For example, I love this N95 but I also love the N81, but maybe I love this more. But I still want to do gaming on it. So I'll sacrifice the fact that I don't have the shoulder keys here. Whereas someone else might say "I love gaming more, so I'll go for the shoulder keys and all that, because that's what I want."
Still, I'm delivering the N-Gage experience to both of them. So they have the choice about the handset that they want - the form factor.
Q: How many third parties are committed to the N-Gage platform at the moment?
I think we've got 9 or 11 third-party publishers signed on. It's Electronic Arts, THQâ¦the usual suspects. And that was very important for us to bring on those key third-party publishers.
Q: One unique aspect of the mobile games market is the level of involvement of the carriers. Have you experienced any difficulties working with them?
I think one of the key things to look at is we have discussions with carriers at all levels — small carriers, large carriers. We've announced just recently over the past three months relationships with Vodafone, Telefonica around services, and so there has been a dialogue that we have with each individual operator about what makes sense for their services, and our services, so that we can actually bring the best to the consumer. That's what we're driving towards. How do we make the consumer get the experience that they want?
That's why, like with N-Gage, we can get the stuff through the air, or through WiFi, or through the Internet and deliver it through some mechanism, and there is still operator billing, credit card, and all that. So, how we work with the operator is a conversation we obviously have, and if there is push back, there's push back, and if there is acceptance, there is acceptance.
But the whole matter is that we're driving towards the consumer experience and operators can see the value that we bring. They can really see it.
Q: Apple has been extremely successful making the iPod a "must have" device. There has long been talk of the company getting into gaming on their devices — most recently filing trademark applications along those same lines. Is that something Nokia will have to be concerned about?
I'm not particularly commenting too much on what Apple is doing. Apple's entry with the iPhone is something that we celebrated in many ways because of the messages that they are bringing - they've been preaching the messages that we've been preaching for very much a long time. Like we've been calling this a multimedia computer for several years.
The fact that it gives mindshare to people about what they are able to do on these devices is just better for the whole industry.
I'm not too concerned about that they are doing because it is only going to be beneficial — developers and publishers will look at what is available out there, and the fact that we have the volume which is so important and the fact that we have a system that is out right now.
Q: Some people would say that most consumers only buy phones to communicate. If consumers want a portable gaming system, they will buy a PSP or a DS. How do you respond to that?
When you look at this device hereâ¦Hold it in your hand. That's got 8 GB in it. It has WiFi. It's got 3G network. It's got some hardware accelerated graphics in that, a built-in GPS, and the 5 megapixel cameraâ¦this is an amazing thing.
The point is that we are not interested per se in what the PSP is about or what the DS is about. That's portable gaming, and has its place. What we are interested in is that 50 per cent of people buying these devices have a clear interest in gaming. How to we deliver the gaming experience to them in the easiest way possible? That's the opportunity.
Like I said, we shipped about 38 million N-series devices during 2007. Not all of them, obviously, are N-Gage compatible, but it just gives you the scale of numbers that we are talking about.
Q: The worldwide sales figures for the PSP and the DS are really small compared to the number of phones you have out there. Is that where your opportunity lies?
It is a great opportunity for us, but also our partners that will be working with us, and I think that's what we are very clear and humble about. It is not about us trying to dominate It's about how we can work together to sort of make a "win-win" for everything out there.
The numbers are there for that opportunity to be realised — we just need to execute. That's the reality of it. The big news, I think, is that we've been out for two weeks. And I'm looking forward to next year when I can talk about what we've achieved.
Dr. Mark Ollila is Head of Nokia's Game Publishing, Multimedia. Interview by Mark Androvich.