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Comment: Sorrent and InfoSpace kick off mobile gaming consolidation

It's not very long ago that the mobile games market was regarded with a high degree of suspicion by the rest of the games industry, and for good reason. Filled with a complex ecosystem of companies, many of them burning through venture capital at a rate unseen since the .com boom and some performing roles in the value chain so obscure as to be almost meaningless, the entire sector was confusing, over-crowded, under-performing and losing money at a rate of knots. Worse yet, the actual products being created were woefully poor, with mobile handsets really not capable of delivering more than the most basic gameplay experiences.

Attitudes to mobile gaming have improved significantly in the intervening years, and now almost all of the top tier publishers have their finger in the mobile pie either through a specialist partner or through the formation of a dedicated mobile unit. Revenues are increasing, the value chains are becoming more defined, and much of the dead wood has burned away in a puff of wasted venture capital. Even the games are becoming remarkably impressive, at least on relatively high-end handsets.

However, even after paring away some of the rather less useful companies, the mobile marketplace remains hugely complex and confusing, especially to those coming to it from the traditional games or other entertainment media markets. Several different revenue and distribution models exist, for starters, but more worrying to date has been the proliferation of small players, each holding a chunk of the marketplace and few emerging as real leaders in the sector.

This week saw not one but two positive steps being taken to resolve that situation, as a round of consolidation between some of the industry's biggest players kicked off. In both cases, major European mobile publishers and developers were acquired by North American counterparts, with US firm Sorrent picking up European outfit MacroSpace on Wednesday, while today saw the announcement that British developer/publisher IOMO is now wholly owned by Washington-based InfoSpace.

This consolidation is of the healthy variety. In each case, the deal will allow both companies to expand rapidly into territories in which they currently have a minimal presence, and will strengthen their negotiating positions with holders of globally relevant brands and, indeed, with global mobile phone operators. In effect, it goes quite some way towards establishing much needed market leaders in the sector, and simplifies the picture significantly for outside companies wishing to become involved in mobile gaming.

A similar round of consolidation happened in the console game industry as it matured, of course, and we doubt that the mobile consolidation will stop here - expect many more such announcements in the coming years as smaller firms quickly realise that the market is getting to big for them to compete in alone. In the meanwhile, this is just one more positive sign for mobile gaming - an industry which has grown up a little slower than it promised, but still faster than almost anyone dared to hope.

Rob Fahey is GamesIndustry.biz' editor, and can be reached at [rob@gamesindustry.biz].

This editorial originally appeared in the GamesIndustry.biz News Digest, a free email news bulletin which is distributed to subscribers every day of the week and features a round-up of the key headlines of the day, the latest major share movements from industry companies, and the day's new job postings. Each Thursday afternoon, this digest is presented in a special omnibus form with the week's game charts and an editorial focus piece.

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Rob Fahey: Rob Fahey is a former editor of GamesIndustry.biz who spent several years living in Japan and probably still has a mint condition Dreamcast Samba de Amigo set.