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Java Games to Be Worth over US$3 Billion - Report
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Downloadable games will replace ringtones as the service that drives Western Europe's growth in mobile content and entertainment service revenue over the next three years, according to a new report released this week by Analysys. The report concludes that among mobile content and entertainment services, mobile games offer the greatest prospects in the short term. Analysys forecasts a more than tenfold increase in mobile service revenue from games, from US$245 million in 2002 to over US$3 billion in 2005.
"Ringtones, logos and other personalisation services have formed the backbone of mobile content and entertainment services to date, with an estimated market value of US$1.1 billion across Western Europe in 2002," notes principal analyst Katrina Bond, author of the report. "But growth in the personalisation market is slowing rapidly, while downloadable games, a logical extension of personalisation services, are just taking off."
Most mobile games today are either embedded in the handset, like the 'Snake' game on Nokia handsets, or are simple text-based games, such as quizzes like Who Wants to be a Millionaire?. Operators across Western Europe are now introducing arcade-type games that can be downloaded to mobile handsets. O2 UK, for example, offers a range of Atari games for EUR2.50 per download, with each game having a lifespan of one month.
Other services that will contribute to the growth in mobile content and entertainment services over the next few years include content messaging based on recently launched multimedia messaging services (MMS) and cross-media services such as submitting votes to TV programmes or radio stations.
The report points out that several factors must come together to enable the potential growth in the market for mobile content and entertainment services - which Analysys forecasts could give rise to a market size of US$10.5 billion in 2005 (from just over US$2 billion in 2002) - to be realised.
Two of the biggest factors currently constraining growth are lack of interoperability, and the absense of a common standard for digital rights management (DRM). Operators have been launching MMS for picture messaging across Western Europe over the past six months, but there is still no guarantee that customers will be able to send messages to their friends who use other networks. "Most MMS interoperability and interworking issues are likely to be sorted out during the first quarter of 2003," says Bond, "but DRM issues are going to take longer to resolve."
Contractual and technical solutions are required to ensure that downloaded content cannot be freely distributed, otherwise intellectual property will not be protected and operators and content owners will miss out on valuable revenue streams. In the absense of common standards for DRM, some content providers have taken a gamble that the benefits of viral marketing will outweigh the lost revenue associated with having their content freely distributed. But owners of the most valuable content brands have slowed their entry into the mobile market, or have restricted the distribution of their content to handsets that do not allow content to be forwarded to other users."
Tags: [mobile games] [drm] [digital rights management] [digital rights]
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