SAN JOSE, Calif.--Mobile game companies have been perennially plagued by one set of problems: how to reach, entice, and hook casual gamers.
At the 2006 Game Developers Conference currently taking place in San Jose, Mitch Lasky, the founder of Jamdat Mobile and current senior vice president at EA Mobile, underscored the enormous advantage that the mobile industry has in addressing these problems and its failure to do so.
In an opening day keynote address titled "The Future of Mobile Gaming and Its Enemies," he also spoke of an exciting future for mobile games, possible only if the industry took into account its myriad of problems, past mistakes, and future challenges.
Lasky was introduced by GDC Mobile founding chairman Robert Tercek, who, prior to welcoming Laskey to the podium, painted a picture of a mobile gaming market with minimal consumer penetration and characterized by recent stagnation in its consumer growth. Citing statistics that indicated that less than 4 percent of mobile subscribers download a mobile game in any given month, he stressed that the market is not doing a good job at any level in offering consumers incentives to download games.
Tercek then yielded the stage to Lasky, gushing that there was one mobile developer who stood out above all others in mobile content development--Jamdat Mobile, which was recently acquired by software giant Electronic Arts.
"We're at a critical transition in this industry," began Lasky, with giant EA logos flanking him on both sides of the stage. "I think we are at a point in this business where in order for it to grow and fulfill its potential…we're really going to need to embrace a common vision, all of us--handset manufacturers, developers, publishers, and carriers--to get this business back on track and see the growth that we need and really to prevent the enemies from overwhelming us and holding this business back."
His decision to first discuss the significance of EA's acquisition of Jamdat may have undercut the "common-ness" of his vision of the mobile industry, but given that this was Lasky's first public appearance since December 2005's $684 million deal, it was, perhaps, an unsurprising choice of topic. He feared that the deal's price tag would be misinterpreted by the industry, like Jamdat's IPO was in the summer of 2004, and argued that neither event ought to be seen as a financial benchmark for other mobile developers.
He also addressed his decision to sell Jamdat to EA, claiming that it was what the overall market needed in order to move to the next level. He characterized the acquisition as the perfect marriage between a company with global reach, tremendous resources, and solid IP (EA) and a company with financial discipline, expedient execution capabilities, and six years of profitable experience in the mobile industry (Jamdat).
Lasky argued that the mobile industry will become more competitive, more complicated, and more expensive. He suggested that it may already be too late for midsized publishers who don't have their own mobile hits and that smaller developers with innovative and original products will become increasingly valuable.
Innovation, he continued, was the most exciting part of the mobile industry itself, since the era of inexpensively developed console or computer games has long passed.
"At this stage in the market, I think as long as you own your hit--and that's the most important part--as long as you retain ownership of your intellectual property…you can create really significant value from creating just one hit in this space," he said.
Lasky then addressed the four largest "enemies," as he sees them, to the mobile gaming industry.
Enemy #1: Unpredictable business models. Lasky suggested that the mobile industry operates without a governing set of rules that help dictate financial relationships between developers and publishers and emphasized that publishers would not grow their games businesses by allowing developers to demand a higher revenue share. He cautioned the industry that it should not treat the mobile games business like the ringtones business. "We actually make stuff," he jibed.
Enemy #2: Unpleasant shopping experiences. There was clearly no disagreement from the audience that buying games is at best a boring experience and at worst utterly confusing. Lasky showed figures that indicated most consumers found buying ringtones, legally downloading music, and purchasing pay-per-view films on their television to be easier than downloading games onto their phones. So while there is stiff competition in content development, Lasky observed that "the lack of competitive pressures at the carrier levels has basically stalled innovation on the e-commerce systems at 2002, 2003 levels."
Enemy #3: Bad games, and too many of them. In recent years the dominant philosophy among US carriers has been to offer volumes of content and allow consumers to choose what they want. But, Lasky said flatly, "there are simply too many games, and most of them suck." He reminded the audience of the cautionary tale of Atari's eventual lack of quality control that nearly led to the collapse of the entire video game industry in the early 1980s. Not only is this excess of subpar content overwhelming to the consumer, he explained, but it's also an enormous waste of revenue for the publishers, since they spend as much money distributing lesser-known titles as they do with established franchises.
Alternatively, Laskey said the industry should have a system of "promotion and relegation" to ensure that proven companies have content displayed more prominently than less-established developers, who would have to prove themselves with retail hits.
Enemy #4: Lonely, unconnected games. Lasky lamented the lack of networked mobile games on phones. Addressing the cellular phone as a device primarily intended for communication and secondarily as a computer platform, he acknowledged the tremendous difficulties in developing these games, asserting that these particular games are complex, expensive, and difficult to test across phones. Though he did not have a solid suggestion on how to specifically address this shortcoming, he excitedly commented on the possibility of a mobile massively multiplayer online game. "Somebody is going to come up with the casual mobile equivalent of World of Warcraft," he predicted, "and it's going to blow the lid off this market. It is going to expand this market in ways we can't imagine."
At the conclusion of his talk, Lasky summed up the essential components of the future mobile gaming industry: stable business models, a good e-commerce system, quality control and merchandising, and emotional connections with others via games.
"The new team at EA Mobile is committed to this business for the long term, and we're going to invest in mobile gaming at unprecedented levels. We're going to be a tough competitor, but I think we're also going to be a great and willing partner. So if there are brave companies out there who want to join us in trying to advance the future that I've tried to lay out over the last half hour, we're ready to embrace you."