TGS 2003: Mobile gaming workshop

TOKYO--In this workshop, held the opening day of the Tokyo Game Show, four mobile gaming heavyweights described their firm's current involvement in the space and future plans--and shared thoughts on the major obstacles they face.

The presentations by employees of Nokia, Taito, Namco, and Hudson Soft reflected on a commonly shared theme, that technology continues to evolve rapidly and that the challenge falls to game developers to keep pace. But each had theories of how to meet that challenge.

Nokia stressed the importance of standardization with respect to cellular Java implementations, a concern that was echoed by the other developers, who agree that ensuring handset compatibility for each of their games on multiple handset models is an increasingly heavy burden. But despite the headaches, the large market for current mobile gaming applications and the market's strong growth potential mean that this is an extremely attractive sector for Nokia as well as the content providers and is one that they continue to target.

Nokia's Ilkka Raiskinen, senior vice president of the entertainment and media business unit, kicked off the workshop by describing the market for mobile gaming in general and mobile Java in particular.

Nokia alone has shipped more than 250 million devices with some kind of game application worldwide--though some countries, like Japan, have taken a clear lead in bringing mobile gaming applications to market, consumer demand for mobile gaming is a global trend. Java-enabled handsets are another global trend: Currently, 75 cellular carriers offer 160 different Java-enabled handsets from 22 mobile makers, and Nokia estimates an installed base of more than 100 million handsets.

Raiskinen remarked that Japan still dominates the market for mobile Java applications, so the issues affecting the first release of Java are particularly relevant here. Developers, he said, have criticized the lack of features in the API, and implementations have been very different from vendor to vendor, with many nonstandard extensions.

Nokia believes the second release will improve the situation, offering enhanced multimedia and network capabilities (including push, TCP sockets, and UDP) and security (https and SSL).

The N-Gage will benefit from these enhanced capabilities, he said, as he then repeated the Nokia party line that the device will draw users from a "larger community" than is currently involved in games--a position that has drawn some criticism from the gaming community and suggests that the N-Gage has to meet some aggressive sales targets in order to repay Nokia's investment.

Still, Raiskinen's product demo looked enjoyable enough. He showed a video clip of a Lara Croft racing game with a twist--rather than using a car, the object is to run Lara around an obstacle course faster than another user. To play the game, the user goes online, picks an opponent, and downloads and races that player's "ghost," a wire-frame Lara that replicates the opponent's fastest performance. Points are awarded based on the results, and users can view online rankings updated in real time.

Unlike the demo at this year's E3, which apparently suffered from a bad projector, the resolution and frame rate in today's video clip were acceptable to good.

Yukiharu Sambe, managing director of the EW division of Taito, followed Raiskinen with an announcement that Taito will release a head-to-head multiplayer version of Puzzle Bobble for the N-Gage with support for up to four players.

The rest of Sambe's presentation focused on Taito's current content business. Ring tones and karaoke were some of the first hit applications when cellular Internet took off in Japan, and these music applications are still big draws, accounting for 64 percent of Taito's revenue from mobile content, with Java games accounting for another 20 percent and the remaining 16 percent from non-Java games and other content.

Growth, he said, in the last three years has been explosive, with annual domestic revenue doubling from 2000 to 2001 and again from 2001 to 2002, and although domestic growth has slowed this year, overseas revenues are just beginning a rapid growth stage. Introduction of Java-enabled phones in overseas markets is likely playing a large part in this accelerating growth. These phones have proved to be a key driver in the domestic market.

Shigeichi Ishimura, president of Web and mobile content, Namco, drew on Namco's experience in Japan's competitive mobile content market to deliver a thoughtful analysis of revenue maximization strategies.

Namco has found that new users are most likely to cancel subscription-based services on their first day of membership. The probability of cancellation drops sharply after that and eventually levels off, forming an L-shaped curve. So, though it may seem simplistic, Namco's approach is to maximize the number of new subscriptions by heavy use of promotions and then minimize the number of quitters, in particular, to make a special effort to retain users past that all-important first day.

Ishimura also illustrated the difficulties raised by handset proliferation by commenting that a company that offers 50 games and tries to support six handset models must do 300 rounds of QA, an observation that drew sympathetic grimaces and agreement from the other content developers in the workshop. They believe that handset compatibility issues are the single largest problem currently facing the mobile content industry.

Kunji Katsuki, executive officer of the mobile business division at Hudson Soft, wrapped up the session with interesting comments on the pace of handset development.

Like many firms, Hudson Soft released its first games for NTT DoCoMo's i-mode service in 2000, the year after it launched. These first games were simple HTML with static images. The following year, Java-enabled handsets hit the market, and limited animation became possible. Now the quality of animation the handsets can handle has improved, and the upcoming 505 series of phones for NTT DoCoMo's FOMA service will raise the bar even higher with QVGA high-resolution screens.

Katsuki likened this process to going from the NES to the Super NES in a year, followed by the PlayStation and then the Xbox in the next two years, and made his point by showing a full-motion, high-resolution CG movie for use on the 505 handsets that drew a collective gasp from the developers in the room.

The session ended up with a question and answer period. The main point made was that the mobile game business is very difficult for small operators, especially when they are attempting to enter foreign markets. While Taito and Namco were able to rerelease well-known properties like Space Invaders and Pac-Man for mobile use--games that have instant credibility both in Japan and overseas--an operator without these assets is forced to develop a brand from scratch in the face of entrenched competition.

Namco's Katsuki further remarked that Namco has found it necessary to test connections and download speeds in the target market when localizing games, something that is easy for a firm that has overseas offices but that is a significant challenge for a smaller company. Of course, localization itself requires an investment that is hard to sustain for a small company--and can be an unpredictable process.

Sambe pointed out that Taito's localized version of Elevator Action for the UK wasn't acceptable because of the market's distaste for handguns, and it was forced to change the protagonist's sidearm to a "paralyzer gun."