Mobile Gaming On The Rise, But Still Not A Critical Mass

More than 98 million mobile subscribers in the U.S. and Western Europe played a game on their handset last December, according to new research from M:Metrics.

Despite high demand, advances in mobile tech and the emergence of mobile marketing service providers like Medio, the market still isn't ripe enough to snag major ad dollars.

"No one has cracked the code when it comes to ad-funded mobile gaming in the U.S. or Europe," said Seamus McAteer, chief product architect and senior analyst at M:Metrics. "There's a substantial enough opportunity to capture experimental ad dollars, but I don't see mobile games becoming a real solid part of the digital media mix yet--at least not in 2008."

Part of M:Metric's logic stems from the fact that while more mobile subscribers are playing games on their phones, the number of users that have actually downloaded a game--which is typically the ad-supported operating model--has remained relatively flat. Just 14.4 million (3.3%) of subscribers in the U.S. and Western Europe (France, Germany, Italy, Spain and the U.K.) downloaded a game in December 2007, versus 14.6 million (3.6%) in December 2006.



McAteer gave a number of reasons for why users were opting not to download mobile games, including pricing concerns, difficulty in finding games, and the lack of effective marketing info on the games themselves. "The extent to which games are merchandised on handsets is limited. Most of the time it's just the name of the title and one or two lines of brief description," McAteer said. And if users aren't able to try the game before they buy it, they are less likely to make a purchase.

In other cases, the trial version of a game that comes preloaded on a handset is enough. "The free version provides ample entertainment for people who are occasional casual gamers," McAteer said. "And if the experience is sub par, then they're not going to take the risk of buying another one." There's also the lack of knowledge of the pricing models--such as whether users are charged for minutes while they're playing free games, and whether the carrier charges extra just for the download.

McAteer added that while companies like Greystripe, Medio and Motricity have tried to bridge the gap between consumers, service providers and advertisers, the process of finding and playing ad-supported games is still too problematic for users. And without the critical mass, the ad dollars will still be relegated to experimental budgets. "All advertisers care about is reach," McAteer said. "When they start seeing reach in excess of 10 and 20 million, then it gets kind of interesting for them."

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