GDC: Tough times ahead for smaller developers, warns Maglione

Speaking at GDC, Paul Maglione, the president of Vivendi Universal Games Mobile, has warned that smaller developers will face increasing difficulties as larger companies enter the market.

According to Maglione, small studios must consider their distribution options carefully in order to survive. Direct distribution, he argued, is the most difficult option for small or newly formed development studios. Although it can earn developers a greater revenue share and more creative control, it also involves handling complex submissions, as developers must establish a community which can be leveraged, provide adequate testing and porting for up to 500 handsets and meet co-operative requirements.

Maglione said that developers must be able to approach carriers with a solid marketing plan, plus adequate expertise, experience, reach and funding, and warned that there's no second chance to make a first impression.

An alternative, he argued, is to work with a publisher, which means the pressures of porting, localisation and marketing are reduced. However, the greater the extent of the service offered, the greater the revenue share the publisher will take, which could easily exceed 50 per cent. Maglione also stressed that a publisher will not hesitate to drop a product if sales don't meet expectations quickly.

Web portals such as AOL, Yahoo etc have traditionally struggled to monetise mobile game downloads, though this is a valid option for niche products, Maglione stated. More specialised web portals such as Jamster also offer a valuable distribution network, although the VU Mobile president warned that "they will squeeze you for the maximum revenue share because they invest a lot in terms of marketing. You could end up left with just 20 percent."

Maglione was more positive about the services offered by content aggregators such as Player X and Telco Games, which offer sales support, may provide some porting services and will generally ask for around twenty per cent revenue share. However, he observed, there is normally no marketing support available, so this will need to be figured into the budget.

Whilst national aggregators may offer distribution in difficult to reach markets such as China and Brazil, Maglione said, the revenue share will likely increase to around 50 per cent - and aggregators will retain absolute control of the product in their territory.

Reiterating previous comments from Nokia, EA Mobile and several other mobile industry leaders, Maglione voiced concern over the number of titles available through aggregators and web portals, which could have a negative impact on a new game's potential as it gets lost amongst the crowd.

Concluding his speech, Maglione discussed the potential for huge share opportunities from consumer brands and adware games, stating: "Every fast-moving consumer goods company is looking at free mobile games that extend their brand, and this could energize the casual games market."