UK based research group The Multimedia Research Consultancy (TMRC) has just completed a review of the world's mobile games industry, the culmination of three years of research.
This has involved the production of a worldwide database, in which almost 2000 actively trading mobile games businesses - Developers, Aggregator-distributors, Publishers and Portals (DAPPs) - have been profiled.
Completely enhanced and updated in the last three months of 2007 the database now covers 1968 actively trading mobile games enterprises in 93 countries - and is around two to three times greater than previous industry estimates.
DAPPs dealing with all variants of mobile phone games (Java, BREW, i-Mode/Doja, Smartphone, Symbian, Mophun, ExEn/EGE, Palm Treo, NSeries/N-Gage, iPhone and Blackberry compatible) have been included.
The result is a database that's one of the most comprehensive, accurate and up-to-date sources of mobile games business information that exists, and here is a selection of some of the findings.
The Global Mobile Games Industry: Evolution and Natural Selection
In 2007 the global mobile games industry celebrated its tenth anniversary. A decade earlier Snake was the first game to be embedded onto a mobile handset (Nokia's 6110), effectively marking the birth of today's industry.
Following this tentative first step the number of enterprises drawn to the then fledgling industry rose from just six in 1997, accelerating year-on-year through to 2003, when the number of entrants reached its peak.
Mobile Games: The Industry's Evolution
|Year||When current actively trading DAPPs started mobile games activities||No. of current actively trading DAPPs||Year-on-Year increase (+) / decrease (-) in market entrants|
(i)We were unable to identify the year that some enterprises started their mobile games activities
(ii)This analysis is based only on enterprises who are currently trading and so the figures represent net changes, rather than absolute changes
However, while the number of market entrants has declined since 2003 the overall total of active enterprises continues to increase year-on-year. We see this as a classic market development pattern suggesting sector maturity and consolidation, rather than decline.
We estimate that 57 per cent of today's actively trading enterprises were originally Start-Ups, having entered the mobile games market within months of being formed.
Conversely 43 per cent of the current universe moved into mobile games by diversifying, either from mainstream console, PC or handheld video games, or from other unrelated commercial activities. Our research has revealed that the industry debuts of these diversifiers generally lagged slightly behind those of the Start-Ups.
Numbered in this latter group are a raft of international media and marketing conglomerates, like News Corp (USA), Bertelsmann (Germany), Vivendi (France), Boungiorno SpA (Italy) and LaNetro Zed (Spain), which have diversified into mobile content as a means of extending their reach into new media.
Ephemeral or Here to Stay?
While the number of new market entrants has fallen since 2003 the number of mobile games enterprises attaining a sense of longevity and maturity, in what is an aggressively dynamic market place, is encouraging.
53 per cent of enterprises have now been trading for five years or more, dispelling fears that mobile games are just an ephemeral market phenomenon. In fact 17 per cent have now been active in mobile games for seven years or more.
Meanwhile, given the earlier stranglehold on portal development by incumbent mobile network operators, it is not surprising to see that mobile games portals (and, in particular, off-deck direct-to-consumer portals) have been around for less time than the other enterprise types.
Mobile Games Enterprises: Number of Years Actively Trading
|Trading 3 years+||Trading 5 years+||Trading 7 years+|
The Story of 2007
2007 has maintained the trend of recent years with the mobile games industry continuing to consolidate. While there have been some casualties in the past 12 months we estimate that relatively few (less than 50) could be classed as genuinely defunct (in that their businesses literally failed).
At the same time we estimate that 55 mobile games DAPPs were involved in mergers and acquisitions in 2007, most of which were principally designed to provide a complementary strategic fit for the predatory enterprises.
In around two-thirds of cases the target enterprises have subsequently been absorbed by their new parents and their trading names eliminated. Legion Interactive Ltd (Australia) acquired by belong group and Moai Technology Co Ltd (South Korea) acquired by UI Magic are cases in point.
Meanwhile the remaining third of the targeted enterprises have had their trading and brand identities retained by their new owners, although history suggests that total absorption and elimination of the targets' brand identities cannot be ruled out in the long term.
I-Play (UK) acquired by Oberon Media, SoGoPlay (UK) acquired by SCi Entertainment and Alltel Wireless acquired by TPG Capital and GS Capital Partners are prime examples.
Meanwhile, the global mobile games space continues to attract new enterprises, with nearly 80 entering the market in 2007, either as Start-Ups or by diversification.
Finally, a small number of enterprises abandoned their mobile games activities (Infospace being a prime example) over the past year, focusing instead on other gaming platforms or moving into other mobile related fields.
2007 in Numbers
|Defunct||Under 50||Have ceased trading|
|Acquired - Trading and Brand Identity Eliminated||35||Trading and Brand identities of acquired companies eliminated by new parents|
|Acquired - Trading and Brand Identity Retained||20||By providing a complementary strategic fit the trading and brand identities of acquired companies have been retained by the new parents|
|New Market Entrants - Start-Ups||41||Includes a high number of D2C Portals and enterprises in Greater Europe|
|New Market Entrants - Diversifiers||37||Relatively strong in the Americas|
|Moved out of Mobile Games, but still trading||10||Have abandoned mobile games to focus on other gaming platforms or other mobile related activities services|
Mobile Games Enterprises: The World's Lead Territories
In terms of individual countries the greatest numbers of Mobile Games enterprises are presently to be found in the USA, the UK, China (including Hong Kong) and South Korea, with Japan currently ranked a distant fifth, only just ahead of Germany.
Mobile Games Enterprises: The World's Top 10 Countries
|Ranking - 2007||Country||No. of Actively Trading Mobile Games Enterprises|
|3.||China (including Hong Kong)||140|
In the USA and UK many Mobile Games enterprises were initially comparatively small, but predatory acquisitions, mergers and alliances have been commonplace in the past four years.
As a consequence the US now boasts some of the largest individual mobile games enterprises, with THQ Wireless and, of course, Electronic Arts, the world's largest games software company, (following its acquisition of Jamdat in 2005) being standout examples.
Meanwhile, new frontiers have opened up in the Far East and Asia. China (where the total of 140 enterprises includes 45 based in Hong Kong) leads the way, ahead of India (58), Taiwan (29), Singapore (27), Thailand (21) and Malaysia (20).
With mobile games activities now present in 93 countries, the industry has at long last assumed the status of being a truly global phenomenon. Helping to extend its territorial reach even further has been the recent surge in direct-to-consumer portals, which are now impacting countries previously untouched by mobile games.
Two versions of the Mobile Games DAPPs Database are now available from The Multimedia Research Consultancy. Further details are available on the company's web site.