Mobile oligopoly

Command & Conquer is coming to PSP in no time. The reputation of the platform is so important that I suppose any crappy game deck would suffice as a PSP just because it is PSP. Well, PSP happens to deliver against the expectations so they did not fumble on that respect.

Now it sure looks like GBA and PSP will form the oligopoly to the mobile game markets. N-Gage will be pushed aside and only maintains some visibility as a mobile phone game device. New entrants like Gizmondo will not have money to slug it out. What do I think about this? I think this is great! The less there is choice in case of platforms the more GAME matters.

Will Gizmondo imitate N-Gage?

Matthew Maier wrote interesting piece in Business 2.0, called Gizmondo: Loaded With Features, but Hopelessly Doomed. He compares the launch of Gizmondo to the launch of N-Gage, because it will probably end miserably. According to Matthew, Gizmondo is all you can ask for and it doesn’t have any major design flaws like N-Gage had when it was first launched.

Similarities come when he looks to the market place, lot of competition at nice price and Gizmondo’s price climbs on a plateau of its own. Biggest obstacle is the fact that Nintendo and Sony eat up all the reserves of game developers, hence, no flood of games for Gizmondo. Also other portable devices do better job in their niches, everybody seems to have a MP3 player, why use Gizmondo to play music? It also goes with other areas of potential uses – address book, calendar, email, games and messages... It will be a long wait for Mr. G and they don’t have deep pockets like Nokia does.

Nokia should parrot Gillette

Yes, Gillette is the company that Nokia should copycat. Practically give out those game decks and then charge money with networked wireless games. Give them one wireless game for free to roam about, just like in PC persistent world genre. They will be nailed into the game, it follows them all around and they keep on paying subscription fees.

Not interested in never-ending games? Not to worry, uncle N is going to see that you also get your single packaged fixes. Those babies just aren’t that cheap, but you already have your phone and your friend has this cool game that he can serve for you, but poor you. You are enslaved as a client and loose the joy of it, when the link-up is disconnected. You just have to have your own version otherwise you are never going to be as good as your friend.

PSP vs N-Gage

PSP has amassed impressive slate of titles in this short time that it has been on the market. Surely it didn’t happen in a snap, but these games have been in development for a long time. Still it is interesting to watch, how much more buzz they are able to raise on the field, compared to the Nokia’s N-Gage.

Unlike PSP, N-Gage came to the market without the strong support of game brand. Nokia had only one advantage – wireless gaming. It didn’t really caught on, because nobody knew with whom they could play wirelessly, nobody had the deck. Pretty hard to convince your buddy that it is super cool device – Hey, it doesn’t even work.

For a portable device, PSP boasts with huge screen that is very easy to show to your friend. “Best bloody piece of entertainment technology here my friend”, and everybody will believe you, because it has the name, it has the looks, it has the wireless hook-up, and you know do know people who already have it, now all it needs are good games.

I’m afraid that N-Gage just can’t compete against PSP, because the game name buzz is not there. Moderate price cuts do work with Nokia phones – Nokia phone in sale, sure, I’ll take two. N-Gage must engage the market, give it out for free or just do anything.

Is N-Gage pricing strategy flawed?

I have to ask, whether the new pricing model of N-Gage is still flawed? What Nokia tries to do here is that it keeps the prices of the game deck and the games on the level where it can still make money from both. This way they are still not able to break into the portable gaming platform genre. Sales will definitely increase, but I doubt that they are able to start positive cycle where sales feed even more sales.

I have no idea, how profitable N-Gage has been up until now, but I am betting that it has been loosing some serious money. Present changes in pricing strategy will not be able to turn the market trend and those losses just keep on coming. At some point of time, they just have to plug off the project N-Gage. Blame the investors they want speedy results.

Now, what if Nokia sets a special offer in which you can go to any store or chain or online shops that sell N-Gages and order the N-Gage as a FedEx delivery. Lets set an ultra optimistic price tag of 50 USD for this service. Shops would love it, they would get a sales commission without having to put up with stock units, and just couple of test devices would suffice. People would love it, cheap N-Gage as a home delivery. Nokia would love it, because every shipped N-Gage would be paid and would help to create a market.

At one part, the problem lies in the cannibalization that would become problem for Nokia’s other phones. Cheap N-Gage model would lower the sales of popular teenage cell phone models. There is a benefit though, a severe blow for the competition too. Nokia could benefit from operational revenue of scale production while competitors would be in trouble with their production capacity.

One part of the problem is that production runs might not be able to react to the increased demand, but this really is an area where Nokia is very strong. They actually tend to shun low production runs.

Naturally the biggest problem would be the STAGGERING cost that would sink in to such a business model, but think of it as a campaign. Run it for a half a year and then update the game deck, just some minor updates, and raise the price for the total service. Markets would be flooded with N-Gages and game sales would pick up. Every update would increase the price and narrow the loss margin of game decks. Some of the loss would be cover by the increasing game sales.

Nokia has lot of experience on setting the market price and production volume so that they manage to grab large chunks of market in a very profitable manner. However, it could be so that what works with mobile phones, does not work with mobile games. They have already gambled with N-Gage that mobile gaming will be successful market area. I know that they want to make it a double gamble by introducing new delivery and revenue models. So it will be just a battle of wear and tear while fine-tuning those margins.

New RedLynx mobile game for N-Gage

All About Symbian informed that RedLynx, the company that came out with wonderful ”Pathway to Glory” mobile game title for N-Gage, is now mulling new project, which is called “High Seize”. This new project is about pirates and is coming to markets for Christmas 2005. Surprise, surprise, it takes place on Caribbean and mixes fantasy storyline and strategy game playing. I suppose lot of good elements from Pathway to Glory will be present so expect an enjoyable game. Timing for one is impeccable as it comes for the best sales season and still has the chance to ride with the coming wave of success of the movie “Pirates of Caribbean” that is coming to theaters during 2006. I almost star to believe those press statements from Nokia that they continue their strong support for N-Gage.

Nokia plans redesign for N-Gage

Reuters reported that mobile phone maker Nokia is mulling possible redesigns on its N-Gage mobile console. One of the changes could be the support for CDMA networks. Price cuts for US are also planned to boost the sales. Prices have already been slashed in UK.

JAMDAT and Gameloft race for growth

JAMDAT and Gameloft both announced their numbers for year 2004. JAMDAT is approximately twice as big as Gameloft, but this smaller competitor is much more profitable. Gameloft benefits from its close relationship with Ubisoft, but JAMDAT had to fight its way to the top. This can be seen in the product palettes of these two companies – JAMDAT has more licensed and casual game material, while Gameloft has bit more refined slate of products. Ownership plays crucial role for both companies, Gameloft has it safe as its major shareholders include Ubisoft’s Guillemot brothers. However, JAMDAT doesn’t enjoy such a security and could be target for hostile tenders, after all, JAMDAT has lot of talent and money they just lack some good franchises that they can turn into mobile form. This is why JAMDAT could probably benefit from being bought by major game company like Electronic Arts, Activision or Take-Two Interactive. Market valuations for both companies hover so low that it wouldn’t be a problem for any of the mentioned game companies to make the purchase.

Ring back tones are coming to West

Red Herring wrote about ring back tones that are widely popular in Asia. For those of you, who don’t know what it means – ring back tones are the sound you hear while calling to someone and still waiting for them to answer your call. In this case, ring back tones just aren’t dull bleeps instead they can take a shape of any sound, from noise to talking and music. Article elaborates the business model and writes about companies offering such a service. As a reason for all of this, according to Safa Rashtchy, managing director of Piper Jaffray (he was interviewed for the article), this phenomenon is just another extension of accessory craze that has taken especially teenagers by storm. Maybe so, but to me, ring back tones are much more personal than ring tones, you don’t hear them unless you call to someone. This also makes them more private and therefore will eventually differ from ringtones completely.

Mobile game show from Indiagames

According to Mobile Entertainment Analyst, Indiagames is going to start a 24/7 mobile “Game Show” that actually runs as an online mobile game. Game runs on several platforms and one can take part via SMS, WAP and JAVA. Basically it should be just like any radio or TV game show, without the radio and TV (duh). Vivid and beautiful Mandira Bedi (Google her to see some colorful pictures, I did...) has been chosen to host the show – I want to see it too!

I think that this kind of a show can only happen in Asia. In Europe or in States, the production values of such a show would climb sky high. People would be arguing about distribution and show localization for different markets. Budget would just shoot through the roof. I do hope that Indiagames manages to get this new game flying. This would expand the mobile offerings that we now have on the markets. Potential surely is there, via Tom Online, the backdoor to Chinese markets is open.