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Harrison defends Vodafone's revenue sharing model

Current revenue split is "right" for the moment, says operator gaming boss

Vodafone's head of games, Tim Harrison, has defended the company's revenue sharing business model for mobile games - saying that the oft-discussed split is "the right revenue share" given Vodafone's high level of involvement in the value chain.

Speaking exclusively to MobileIndustry.biz, Harrison said that the revenue sharing ratio had been decided based on what the different companies - operator and publisher/developer - contributed to the value chain, and how much risk each company took on.

"That's why the revenue share we operate on, we believe, is the right revenue share," he comented.

However, he said that in future, the roles of the different players on the value chain may change - leading in turn to a shift in the allocation of revenues from player purchases and subscriptions.

"As the industry develops, different parts of that value chain will be performed by different players," he explained. "So yes, I think that there naturally will be a shift in the way that revenues are split."

"It might even be that revenue share is a great model for an early industry, but it's not necessarily the best model for an industry in a state of maturity," he continued. "For example, in the music area, the commercial deals are not done on a revenue share basis - they're done on an the basis of an agreed price per download, which is a model that makes more sense for that particular service."

Harrison also commented on the price of games to end-users, saying that consumer forces cause a "continual downward pressure on prices," but arguing that the industry's biggest challenge at the moment is not pricing, but game quality.

"I think there are some games that are overpriced," he said, "but I think the fundamental thing comes down to quality. I think we need to raise the level of quality and therefore raise the value for money."

"I don't believe there's anything wrong with the pricing we have at the moment," Harrison continued. "I think that's the right level of pricing, but we need to ensure that the level of consistency of quality is higher so a customer knows, roughly speaking, what they're going to get for their money. I think that's the most important thing the industry needs to redress."

You can read the full interview with Tim Harrison in three parts on the site: Part One, Part Two and Part Three.

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