We continue our live blogging at the sixth panel from Digital Media Wire’s LA Games Conference 2008. The mobile games panel focuses on the question, what’s it going to take for mobile games to go mainstream, exploring differences between the US and international markets, and different business models that are being used to tackle the mobile phenomenon.

Mobile Games: Challenges & Opportunities to Create a Mass Market Phenomenon
Scott Scherer, VP Product Management, Hands-on Mobile
Jill Braff, SVP, Global Publishing, Glu Mobile
Stephen Jackson, CEO, Smashing Ideas
Kay Gruenwoldt, Head of Industry Marketing, Nokia
Erica Chriss, VP of Strategy & Business Development, Greystripe
Moderator: Mark Donovan, CMO & Senior Analyst, M:Metrics

Jill, what have you seen shift in the last year in terms of drivers of your business?

Jill – The increase in people playing mobile games. Back in 2002 with Sprint, we were doing focus groups and couldn’t find anyone playing. Now we can find active players a day after posting an ad in CraigsList. The core audience may be different from the typical mobile user, but that’s what you need to grow a business. Also, we’re trying to see the carriers start to measure RPU (Revenue Per User). As the networks become a commodity, these services become more important.

Scott, HandsOn involves bringing titles like Incredible Hulk to market. How is that doing?

Scott – Guitar Hero 3 has been a tremendous success, the number one title since it’s launch in December. It’s a brand that’s hard to screw up, but also hard to create a long tail and ongoing revenue stream. So we deployed an option where if you buy the game you get three additional songs each month, which drives people maintaining their subscription. People are coming back and trying out the new songs and getting more great experiences each month.

Mark – That underscores the shift to subscription models and evolving content.

Jill – It’s awesome to see this kind of stickiness to content and episodic content. Mobile really should be about this kind of close relationship with consumers.

Steven, you’re a serial entrepreneur with Smashing Ideas, a smaller company. What does this market look like to you?

Steven – The company has been a casual game maker for 12 years, generated 150 million game plays last year. We’re the largest independent Flash developer in the US. Adobe decided they’d spend $900M to address the mobile space with Flash Lite and we jumped on the Adobe bandwagon for the mobile space. We have 30 applications on Verizon and 80 screen savers. We create 60% of our games, and then for the other 40% distribute for other developers. As a small player, we play in the Adobe Flash Lite niche and that’s where we focus.

Kay, tell us what’s happening with Nokia. When nGage was first launched it was laughed at, but you’ve been tenacious and successfully relaunched. How does it fit in?

Kay – We’ve learned a lot over these last 3-4 years. It took quite a while to come up with the new nGage platform, and we’ve accomplished all the points we set out to address: fragmentation, discovery, purchase process. We’re focusing on a premium experience for higher end phones. The average price for games on the platform is from $8-14. People pay for it because they can try the content out first and perceive the value. Now, original IP is leading ahead. The content that our games publishing unit creates is selling very well. That’s great news for smaller game companies and developers, they have a chance to be successful.

Erica, your business model is what Greg just said is way too early, ad supported games. How does that work, and is it cannibalizing the market?

Erica – We see it as a great market, and we know we are not cannibalizing it because our publishers are telling us so. It’s increasing the scale of the entire market, enabling discovery, and providing content for folks who will never pay for content. Instead of having them pirate your content and pay you nothing, why not allow them to create meaningful experiences that you can monetize. We’re seeing 300K downloads per day, and a large percentage surveyed would not pay for games, and are experiencing similar conversion rates as other distribution models.

Are there top tier publishers signing on with Greystripe?

Erica – We do have a number of top tier publishers whom we work with, including Hands On and Vivendi. First, we can be thought of as part of a windowing strategy, like DVD vs. theatrical. Things that are utility based, applications, do very well. We also have content from top tier providers who are experimenting with simultaneous introduction through us and carriers. They are measuring cannibalization careful and finding none – we’re just an addition channel.

What are you seeing as the relative importance of carrier vs. handset vs. direct to consumer distribution?

Scott – For HandsOn most of the revenue comes from the carrier deck. For B2C, it’s less about creating a portal for us, and more about working with larger brands like World Poker Tour where it makes sense – we run a website that offers free play online and then upsell to mobile

Jill – Certainly today, the lion’s share of the business comes from carriers. I’m actually interested in learning more about how much money you’re seeing from advertisers, Erica. There are other channels that are more direct that we are exploring. Over time this will look more like one-to-one marketing. The great thing about mobile is that literally it is always with people.

Mobile as an industry is a real pain, with so much fragmentation and handset standards. Is that getting any better?

Jill – We really like the complicated part. Not only is it a barrier to entry but it’s something that for us is a competitive advantage. We also do localization, day and date launches, event marketing tied in with carrier marketing. It’s similar to any other entertainment business. You can’t let people have a game only on one type of phone. Consumers don’t understand the technical complexity, it has to be seamless for the consumer.

Scott – For us it’s a lot like what Jill said. License partners expect global launches across carriers. We end up doing dozens of unique builds instead of a “high” and a “low”. It ends up creating a lot of extra work that changes the economics of the business.

Kay – What this discussion shows is that if you really want to grow this business you have to look across these issues as a whole. How you distribute. Consumer experience and discovery tools. Billing mechanisms. We are trying to address these as a whole, and those who do will be successful.

What would the panel’s advice be for people making games on other platforms and are eyeing mobile?

Kay – My key advice is do not copy and paste, it will not work. You can ruin great IP and a great brand by copying and pasting. The technology is a lot different from a PC and a console. It has a lot more – cameras, motion sensors, touch screens, wifi, GPS. Don’t just slap what you have onto mobile.

Erica – What’s interesting is that might decrease your chances of getting carrier distribution. But we believe that consumer choice leads to real experimentation, original IP, and reinforce the entire system.

Jill – If I were a strong brand holder I would build a really strong license business given the risks and uncertainties. If I were a developer I’d talk to carriers and publishers. You need to understand the carrier retail environment, and then partner with a publisher as a way of getting in the channel. On the flip side if you were going to develop for nGage, iPhone, etc, you wouldn’t have to deal with the porting issues but do have to deal with the complexity of developing for these platforms. There’s room for innovation. Even the videogame business, which is dominated by large publishers, has room for this kind of innovation (look at Guitar Hero).

Erica – It’s actually a wide open market, and new developers have the opportunity to take share with hit products.

Mark – But most of the volume is through the carrier channel, and that’s a tough channel to crack if you’re two guys in a garage.

Is location a component of games you are developing or see in the market?

Kay – Location is something that needs to develop, especially location based gaming. The only reason it’s not out there bigger is that noone has yet been able to develop a valid business model for it. With GPS in so many devices, it’s something we have to look at. I can’t say more at this point. If anyone here has a great concept, hit me up after the panel!

Erica – We’ll experiment with anything and we have a very cool distributed mostly in Japan that is all location based treasure hunting etc.

Are you seeing things outside the US that foreshadow what we’ll see here?

Stephen – We’re seeing a lot of interest in off-deck distribution models outside the US.

Jill – As an industry we make the mistake of talking about mobile from a US perspective. It’s also not one size fits all outside the US. We’re very successful in China and it’s all very local content that would probably be rejected by Verizon. In Europe networking is just starting to happen in terms of game play. Or in Latin America people are experiencing entertainment the first time through mobile, they don’t have cable or Wiis because of cost.

Mark – Did you just suggest that Verizon is a stronger censor than the Chinese government…

Are mobile games being usurped by casual online games; are these competition for eyeballs, dollars and entertainment?

Kay – Everyone is competing, it’s entertainment as a whole whether movies, mobile, or others. One note is that we are now looking at cross platform gaming across mobile and PCs.

Jill – From the consumer point of view, people are used to being on many screens simultaneously. There’s a lot more gender neutral user base for mobile, so it’s more akin to and complementary with what you see in casual games. That seems to make the brands grow far more than a cannibalization effect.

Stephen – One of our customers is Cartoon Network and we’re taking their online games and immediately bringing them to mobile.

Are we seeing games start on mobile and then go to other platforms?

Jill – That’s where we are trying to go as an industry.

Kay – There are pretty good examples already of that happening, one example from Germany that went from mobile to retail distribution in supermarkets for PCs.

Stephen – The challenge for us is monetization. We are able to sell clicky sticky games for mobile, but not Flash games for online.

Erica – That’s a challenge as games go cross-platform, consumers free expectations transfer to mobile, so advertising is important.

You still haven’t told us how much money publishers can earn through advertising!

Erica – In places like India and China we are seeing advertising with higher CPMs through advertising than through purchase. We’re seeing CPM’s in the US as high as $40, and in India as high as $15.

What do you see for the mobile games market going forward?

Scott – The real innovation will be through multiplayer connected games, which is a way of having a terrific experience, to reach out and add new experiences.

Jill – All these new technologies and devices are not for technology’s sake but to create more immersive, richer experiences.

Stephen – We’ll see much better discovery, the ability to find, share and play content.

Kay – Richer, more immersive experiences. Multiplayer and connected game play going beyond what you can have on your PC because mobile is something you walk around with.

Erica – More UGC, more social viral content now that there is a revenue model that can support free things.

[tags]LA Games Conference 2008, Mobile gaming, International mobile[/tags]

This panel at the Future of Television conference focused on the state of Mobile TV and its chances for success.   How is it doing?  What is needed for breakout success?

Panelists
Bill Sanders, VP Mobile Programming & Digital Development, Sony Pictures Television
Derek Broes, SVP Worldwide Business Development, Paramount Pictures
Steve Smith, Managing Director, Playboy TV International
Douglas Craig, SVP Digital Media Operations, Discovery Communications
Seamus McAteer, Chief Product Architect & Senior Analyst, Media Metrics
Moderator: Ted Cohen, Managing Partner, TAG Strategic

What are the gating factors for Mobile TV acceptance?

Hasn’t been an overwhelming response for adopting Mobile TV.  Insufficient marketing to consumers; marketing is not the carriers’ core competence, just as software development is not the core competence of studios.  The numbers are still small – one or two percent – of the mobile phone market in US and Europe, but it’s meaningful, and five to ten percent of the addressable market of video-capable handsets.  The combination of flat rate data with increasing video capable handset and YouTube-like free video should be powerful drivers of adoption.  If it’s free, everyone will try it at least once.

What are the major content and user interface issues?

Need to build products and services in the way that our kids want, not based on the constraints that we place on them.  Examples of limitations: content deleted after 24 hours, inability to pause and come back to content later.  Short form is performing better than long form, of course.  Foreign language is an issue – need dubbing, subtitles don’t work on mobile (Sony does subtitle, though).  Every panelist is doing a combination of repurposing existing and developing original content.

Whether long or short form, it’s about building habit — people returning to the brand again and again.  For example, Sony did 200 Ripley Believe It or Not clips.  Traditional carrier approach, put them all out there on the shelf and let them die a quiet death.  Bill is pushing to go back to original comic strip format, thirty seconds every day with a shelf life.  Perishability is important to drive habit building.  On YouTube, you want to be the person who discovers the clip and forwards it to your friends.  This is something that we should have learned from traditional media.

On digital rights, the most important lesson is that the consumer will do what’s convenient whether it’s legal or not; we need to get in front of the needs and offer what consumers want legally.  Should you ask for permission first or forgiveness later?  With talent, ask for permission.  In other cases, bias toward asking for forgiveness.

What will make Mobile TV prime-time, with DVR- and HD-like uptake?

Forcing the issue on studios and other content owners by device users figuring out how to get the content on the devices.  These mobile devices increasingly have the capability of PCs, access to broadband networks, and the ability to sync with PCs.

What about the opportunity for direct-to-consumer, internet / browser based mobile portals, bypassing operators?

Hard to market and reach consumers without carrier support.  However, YouTube has some success in mobile.  Operators are very concerned about this, want to stay well ahead of it.  Also, trying to convince carriers that they can be “smart pipes” without being the programmer, e.g. billing relationship.

Hallelujah! In a move long overdue, Verizon announced that it will be opening up its network to “Any App, Any Device” by the end of 2008. I can’t wait to see how it rolls out and whether we can publish podcasts to phones as easily as we can to the Nokia phones. Digital Podcast has provided ongoing support the Nokia’s podcasting application and I would love to see it on the Verizon network, so I can use it too.

Here’s the brief outline of the plan released via a press release from Verizon.

Verizon Wireless today announced that it will provide customers the option to use, on its nationwide wireless network, wireless devices, software and applications not offered by the company. Verizon Wireless plans to have this new choice available to customers throughout the country by the end of 2008.

In early 2008, the company will publish the technical standards the development community will need to design products to interface with the Verizon Wireless network. Any device that meets the minimum technical standard will be activated on the network. Devices will be tested and approved in a $20 million state-of-the-art testing lab which received an additional investment this year to gear up for the anticipated new demand. Any application the customer chooses will be allowed on these devices.

It seems that this move was driven by a “small but growing number of customers who want another choice”. Yea right, only a few of us would like an open network. Come on Verizon, cut the BS – Everyone who takes pictures, uses email or any other data service needs this and they need it yesterday. I think that means everyone who owns or uses a cell phone wants this.

Verizon Wireless will continue to provide a full-service offering, from retail stores where customers can shop, to 24/7 customer service and technical support, to an easy-to-use handset interface and optimized software applications.

While most Verizon Wireless customers prefer the convenience of full service, the company is listening through today’s announcement to a small but growing number of customers who want another choice without full service.

Both full-service and “bring-your-own” customers will have the advantage of using America’s most reliable network.

It will be interesting to see if they join with the scary guys from Google and join the Google-led Open Handset Alliance Probably wishful think on my part.

Even with my complaints, this should be a very good thing and I can’t wait to have an open phone that works on a network that works like Verizon’s.

[tags]verizon, open wireless, open handset, mobile[/tags]

I sat down with Derrick Oien, the President and Co-founder of Intercasting, at Digital Hollywood. Derrick shared with me the exciting new things Intercasting has going on in the mobile space.

 

 Digital Podcast 15: Play Now | Play in Popup | Download

Intercasting got started running a mobile social networking service called Rabble. From there, Intercasting has extended its offering to enable wireless network operators to integrate other social networking or community services through a social networking platform interface called Anthem.

The Anthem client is a user interface that provides access all of the user’s social networking providers. Anthem is currently used by Sprint, Virgin Mobile and Boost Mobile and will be launching on other top tier carriers. Through Anthem, wireless carriers are able to offer their subscribers access to social networking sites including LiveJournal, Vox, Xanga, AsianAve.com, BlackPlanet.com, Faithbase.com, GLEE.com, MiGente.com and Rabble.

With Anthem, camera on phone can be set up for one-click distribution of photos to PCs, email recipients, imaging services and social networking providers on the Anthem platform.

Anthem also provides users with the ability to connect their address books or Personal Information Manager(PIM) with some of the most popular social networking providers.

It’s exciting to see the extension of social networking services onto the mobile environment. The integration with the phone has so much potential to make social networking even more powerful when you have 24 hour access to your connections and data.

[tags]derrick oien, derrickoien, mobile, intercasting, anthem, rabble, social networking, mobile social networking[/tags]

BSG Clearing Solutions is a provider of clearing, settlement, payment and financial risk management services for communication service providers. Lance Devin, a vice president with BSG, sat down with me at Digital Hollywood to discuss BSG and a new service they are launching called Bill2Phone which allows content providers to sell and deliver products to mobile phones and bill those content charges to the subscriber’s mobile phone bill.

 

 Digital Podcast 14: Play Now | Play in Popup | Download

The transaction flow shown below shows how the process works from time your user selects your service or product through the billing and payment cycle.

If you want to sell content through mobile phones, BSG seems like an interesting option for getting a payment process set up.

UPDATE:

Here’s the mobile version of the transaction flows:

[tags]BSG Clearing Solutions, Digital Hollywood, mobile payments, payments, mobile[/tags]

I met with Matthew Feldman of Versaly.com, a company that produces and publishes a network of different mobile media channels. The service is available from Sprint and some of the other major carriers and is focused on delivering mobile content. You can sample the content at VMBC.TV where there are videos from the mobile channels. The most popular channel is Fast Lane, which focuses on the young male demographic.

Matt told me that the content is free for users and that Versaly offers content providers the opportunity to monetize their content on the mobile platform.

Here’s the interview with Matt.

[tags]mobile media, versaly, fast lane, vmbc.tv, digital hollywood, digitalhollywood[/tags]

 

 Digital Podcast 12: Play Now | Play in Popup | Download

Apple and T-Mobile today announced that T-Mobile will be the exclusive German carrier of Apple’s revolutionary iPhone when it makes its debut in Germany on November 9.

iPhone is scheduled to go on sale on November 9 and will be sold in Germany through Telekom Shops of Deutsche Telekom and the T-Mobile web shop. iPhone requires a new 2-year T-Mobile tariff and will be available in an 8GB model for €399 including V.A.T. and will work with either a PC or Mac.

[tags]iphone, apple, t-mobile, tmobile[/tags]

Apple and O2 announced today that O2, a UK wireless carrier, will be the exclusive UK carrier for Apple’s iPhone when it makes its debut in the UK on November 9th.

Unique to the UK, iPhone users will have free access to the O2’s public Wi-Fi network, covering over 7,500 cafes, restaurants, airport lounges, pubs and other locations across the UK.

iPhone is scheduled to go on sale on November 9 and will be sold exclusively in the UK through Apple’s retail and online stores, O2 and The Carphone Warehouse’s retail and online stores. iPhone will be available in an 8GB model for £269 (inc VAT) and will work with either a PC or Mac. Three iPhone tariffs will be available from O2 starting at £35.

[tags]iPhone, iPhone UK, O2, Apple, mobile[/tags]

In the spirit of spreading rumors as far as possible there have been lots or reports(here, here and here for example) recently of the emergence of the Google Phone. How much of this is just circular linking of the same tiny bit of news remains to be seen.

But it is interesting that the buzz level is rising so fast.

From GigaOM, here are claims about “Five Facts About Google Phone”

1. Google Phone is based on a mobile variant of Linux, and is able to run Java virtual machines.
2. All applications that are supposed to run on the Google Phone are java apps. The OS has ability to run multimedia files, including video clips.
3. The user interface is similar to a UI typical of mobile phones…is said to be done in Java and is very responsive. And of course it has a search box.
4. There is a special browser which has pan-and-browse features that are common to modern browsers such as browsers for iPhone and Symbian phones.
5. Initially there was one prototype, but over past few months Google has the mobile OS running on 3-to-5 devices, most of them likely made by HTC, a mobile phone maker, and all have Qwerty apps.

So there is the gossip of the day. Make of it what you will.

The Register is reporting on rumors that Nokia will jump on the music download bandwagon.

Nokia is on the verge of launching its own iTunes-like music downloads service, if rumours are correct. Online reports suggest the handset vendor is to unveil the service later this month, alongside two new music-oriented handsets.

Speculation has it that Nokia will unveil the service on 29 August at the Ministry of Sound nightclub in London. The unnamed service could allow users to download songs, and potentially games, onto their PCs and then transfer them to their mobile phone or other music player.

Nokia already offers a podcasting capability on some of its phones and offering an iTunes competitor that works seemlessly with Nokia phones would be a good addition.