Spot On: What's keeping the mobile revolution on hold?

Though he didn't know it at the time, in 1997, Nokia programmer Taneli Armanto was told by the company's product-marketing team to create the seed of a billion-dollar industry.

"There was a consensus in product marketing that something 'new' should be added to the Nokia phones," Armanto said, "and it was decided that it would be some 'nice little games.'"

Armanto was charged with finding and programming the games. What he found was Snake, a simple time killer where a player guides an ever-lengthening serpent around the screen while making sure not to run into the snake's own tail.

The game came preloaded on Nokia's 6100 series of mobile phones, and the response to it was so positive, the company has included updated versions of it on virtually all of its handsets since. All told, Nokia estimates that 370 million handsets have a version of the game on it.

From that inauspicious birth at the request of a marketing department, mobile gaming has grown rapidly, much like the protagonist of Snake, and it might also need to shed a few layers of skin if it wants to keep growing. The question is what exactly has been holding the industry back, and what are the current players going to do about it.

Namco was among the first traditional game publishers to jump into the mobile-gaming space, eventually splitting off its mobile division into its own company and establishing Namco Networks America in January. Scott Rubin, the company's vice president of sales and marketing, says Namco's mobile sales have been growing steadily for years. But he adds that while everybody knows Pac-Man, not everybody knows he's available on their cell phones.

"There are 200 million people in America that have mobile phones," Rubin notes, "and about four to six percent have ever even downloaded a game or even know they can download a game, I think the statistic is. So, the biggest challenge is education. I also read that one-third of people that have cell phones would like to play a game on their phones. So, one-third would like to play it and yet four percent know they can actually do it."

To address the problem, Namco Networks is working on educational campaigns to increase awareness of their games. Beyond running copromotions with cell-phone carriers such as Verizon and Sprint, the company had a high-profile booth at this year's Electronic Entertainment Expo, featuring a number of cell-phone demo kiosks styled after arcade machines, a Volkswagen Beetle painted up to promote Super Pac-Man, and booth workers wearing Pac-Man headgear. The company is even looking out for more nontraditional venues to get the word out to people wherever they may be stuck for a few minutes with nothing to do, such as running commercials on domestic United Airlines flights. Clearly, Namco considers the mobile audience to extend far beyond those who play traditional console games.

"I think the fact that we have an audience of 200 million people that all share this need to be constantly entertained no matter what they're doing is the best opportunity we can ever ask for," Rubin said. "People are constantly looking for something to do. They constantly want to be entertained at some level, and the cell phone is sort of the one that fills that casual five-minute gap."

While Namco may be focusing its efforts on the mass market beyond its console and arcade-gaming audience, cell-phone manufacturer Nokia has devoted a good number of resources to attracting the hardcore gamer. The company's N-Gage, originally launched in 2003, was a high-profile flop for a number of reasons.

"In retrospect, it's really pretty simple to look at where we faced some challenges there," said Nokia director of games publishing Gregg Sauter. "For us, it was really an issue of providing a device that wasn't quite optimized for your everyday user. We provided a device that worked great for the guy that was really, really into playing games...Unfortunately, for your guy that wanted an everyday phone that he wanted to use for business or what have you, it just wasn't really the right device."

Nokia has since moved the bulk of its mobile-gaming efforts to its Series 60 line of phones, some of which will be optimized for gaming. Sauter also said the new phones will still provide a good gaming experience but added that users wouldn't be embarrassed to bring them out in any kind of setting. But the fight for core gamers is just a small aspect of the overall mobile scene, and Nokia's current approach also calls for broadening the cell-phone-gaming market.

"On the console side, nobody's really too concerned about how many PS3s they're going to ship in Malaysia or India or China where there are billions of people," Sauter said, "but we're already there. It's an existing business, so when you think of [the] mobile-games business, it's immediately a global business. And nobody has as many relationships as we do in those territories like India and China where [there] are just massive opportunities."

One way Sauter hopes to take advantage of those opportunities is to improve the customer experience, from the way they find out about games to the amount of information they have before making a purchase to the end product itself.

"We've plateaued a little bit in terms of the user experience," Sauter said. "What we feel the industry really needs to be focused on now is the whole end-to-end experience...Once you get the game, yeah, it has to be good, but that's just a piece of it. And that's really where our focus is in the coming years, not only delivering the best quality games on the highest-end handsets but really filling the holes in this whole end-to-end experience, from discovery to purchase to managing and sharing and playing with your friends."

One current sticking point is the actual purchase of a game. The current standard in mobile gaming is for a customer to go to the "store front" screen of their phone and be presented with a list of games, each with a short description of gameplay and (in rare cases), a screenshot of the game. Nokia has begun to emphasize free demos of games and a feedback system that will let customers see other users' reviews of a game before buying it, but these features are far from industry standard at the moment.

However, not everyone is hurt by the dearth of information available to consumers. Rubin acknowledges that the state of current mobile-gaming storefronts tilts the playing field in favor of Namco's lineup of simple, highly recognizable arcade classics.

"The carriers are starting to realize that if that one-word line says 'football,' then maybe the consumer has this huge image of what it's supposed to play like because they just bought a new Xbox 360," Rubin said. "So they download it on their mobile phone--it's instant disappointment. [But if] you see Ms. Pac-Man, you have an image of what Ms. Pac-Man is supposed to look like, you download it on your phone, and it plays and looks exactly like Ms. Pac-Man--it's instant satisfaction."

But what's worked for Namco hasn't necessarily been good for other publishers, or the industry in general, according to Parks Associates analyst Michael Cai.

"I think focusing on chasing franchise and porting popular console titles might be the biggest mistake some companies are making," Cai said. "Due to the limitations of the mobile platform, many games are not yet suitable for mobile play."

One publisher that Cai thinks is handling the transition to mobile properly is Square Enix. And it's not the publisher's insistence on tying in its cash cow Final Fantasy franchise into the games that has him approving.

"They are trying to leverage the unique characteristics of the mobile phone," Cai said in reference to Before Crisis - Final Fantasy VII. "It does not support full interactivity and a persistent world, but it allows gamers to communicate with each other in order to fight monsters collaboratively. The phone camera is also incorporated into the game design, which allows gamers to create [materia, the game's form of magic]. You have to leverage the unique characteristics such as location-based services capability, built-in camera, always-on-and-always-connected, and short gaming sessions. I'm also a big believer in cross-platform gaming that involves mobile phones."

It's not just the publisher's approach to mobile-game development that has tempered the industry's growth, according to Cai. The myriad handsets on the market have different screen sizes, operating systems, and user interfaces, all of which need to be addressed if a publisher wants to get a game out to the widest number of potential consumers. Cai also expects that new business models will need to be introduced in the future, including free, ad-supported content, as well as micropayment and pay-for-play schemes.

As for the programmer whose work first clued people into the potential of mobile gaming, Armanto is watching its growth from the sidelines. Shortly after the game's completion, he was moved over to work on ringtones for the company. He still works for Nokia today as a software specialist encompassing "duties that sound much less interesting from the 'early days.'"

However interesting his duties might have seemed, Armanto admitted he didn't realize at the time exactly what he was a part of.

"I didn't expect that mobile gaming would be a big thing, at least not how it is today," Armanto said, "although I knew some people would definitely love Snake. I loved it myself, and liked to play it even though I'm not a computer-gaming 'freak.' So there were some expectations, but I guess nobody foresaw where it would lead to."