Winning and Losing in Mobile Games

Published October 2003. Approximately 140 Pages

Table of Contents

1 Executive summary

2 Introduction to mobile games

Introduces the concept of mobile games and provides a snapshot of the industry

Table 2.1 Sample games from around the world

Table 2.2 Past and present in mobile games

3 Myths of mobile games exploded

Illustrates questions that need to be asked regarding this industry to analyze its performance objective. Media and the industry itself are often caught up in the numerous myths that pervade current analysis

4 Headline figures for mobile games

Provides an overview of what W2F and industry analysts are saying regarding the potential market valuations for the mobile games industry in the foreseeable future.

Table 4.1 Analyst market valuations for mobile games 2001-2008

Figure 4.2 Graph of analyst market valuations 2001-2008

Table 4.3 Market valuations for ringtones and electronic gaming 2003

Figure 4.4 Average user spend on mobile games by country 2003-2006

Figure 4.5 Mobile games market spread internationally

5 Japan and Korea lead the way

Highlights the advances made by the Japanese and Korea markets, assessing the growth both in quantitative and qualitative terms

Figure 5.1 Comparative sizes of mobile games market 2003

Table 5.2 Sample images form games available in Japan and Korea

Table 5.3 Aggressive forecasts for mobile games users in Japan and Korea 2003

Figure 5.4 Regular mobile games players by country 2003-2006

Figure 5.5 Detailed graph of regular mobile games players by country 2003

Figure 5.6 Mobile games market valuations for Korea 2001-2003

Figure 5.7 Number of regular mobile games players in Japan 2003

Figure 5.8 Mobile games market valuations for Japan 2001-2002

Figure 5.9 Mobile games market valuations by country 2003-2006

Figure 5.10 Console shipments per 1000 population by region 2002

Table 5.11 Console shipments by region 2002

6 Telecommunications Industry Evolution

Provides the backbone to all industry analysis. Understanding the services sector for telecoms can only be done on appreciating the needs of the mobile operators and how these needs change over time. W2F finds that the growth of mobile games and other services is inextricably linked to the developed of the telecoms industry as a whole.

Figure 6.1 Theoretical modelling of Telecoms Industry Evolution

Figure 6.2 The ARPU "gap" resulting from declining voice revenues

Figure 6.3 Illustration of mobile network operator strategies

Table 6.4 Mobile network operator strategies as a function of evolution

Table 6.5 Comparison of evolutionary stages for regions globally

Figure 6.6 Evolutionary stages of global market regions plotted

7 Mobile games publishers

Analyses the roles and responsibilities associated with mobile games publishing.

Figure 7.1 Theoretical modelling of aggregation strategies for publishers

Table 7.2 Licensing fees paid by electronic games publishers in 2002

8 Mobile games developers

Analyses the roles and responsibilities associated with mobile games development

9 Mobile game market evolution theory

Developed from the fundamental theories of telecoms industry evolution, the mobile game market evolution theory explains how the market will develop over time. Factors that affect growth – from cost to profitability are discussed in detail in this section

Figure 9.1 Comparison of regional development plotted against evolution curve

10 Barriers to entry

Provides an overview of how market supply will be affected by the inherent mobile games market barriers to entry. For mobile games companies this section identifies how competition will change over time and what strategies becomes available to the provider to maintain long term profitability

10A Barriers to entry: Market knowledge

Identifies the role of sector knowledge in restricting market supply and how this will change over time, particularly how this will keep electronic games publishers out of the industry

Figure 10.1 Knowledge barriers to entry as a function of market evolution

10B Barriers to entry: Cost of production

Examines how the costs of production for mobile games will change over time and what the implications are for publishers. Evidence from electronic games industry is used to illustrate potential growth curves for cost and identify what contingency plans publishers need to implement to stay in business

Table 10.2 Typical costs of development for mobile and PC/console games

Figure 10.3 Costs of mobile game production as a function of market evolution

10C Barriers to entry: Control of distribution channels

Provides an overview of how distribution channels will change over time as a function of market evolution and what this implies to publishers and developers. This section identifies the growing importance of distribution strategies and provides the publisher with advice as to how to remain competitive in the long term through effective distribution

10D Barriers to entry: Brand

Examines the role of the branded game and the company’s own brand over time and how this change will force strategic change in companies

10E Barriers to entry: Economies of scale

Assesses the growing importance of scale economies in the maturing market and how this will impact and inevitably polarize the mobile games industry between market leaders and dependents

Figure 10.4 Economies of scale and polarization of market structure

11 Market evolution and supply

Aggregates W2F theory presented in this report to determine the current and future levels of competition within the mobile games market

Figure 11.1 Aggregate barriers to entry as a function of market evolution

Figure 11.2 Theoretical modelling of mobile games supply and demand curve

11B Market evolution and revenue shares

Illustrates typical content revenues share agreements, who gets what and how these agreements will change over time as operators potentially shift their market focus

Table 11.3 Typical revenue shares in emerging mobile games market

Figure 11.4 Pie chart of typical revenue shares in emerging mobile games market

Table 11.5 Typical revenue shares in maturing mobile games market

Figure 11.6 Pie chart of typical revenue shares in maturing mobile games market

12 Mobile games and the consumer

Answers the question of "who is the consumer?". W2F research is presented to provide a theoretical model for publishers, developers and operators to understand how to effectively segment the market and target the product specifically for the desired audience

Figure 12.1 Observable and functional layers for consumer drivers in mobile games

13 Potential market size

Summarises the theoretical grounding of this report in a straightforward modelling tool for assessing potential market size

Table 13.1 Consumer profiles and access populations as a function of evolution

14 Summary of mobile games market evolution

Provides a brief review of all evidence presented in the theoretical section of this report

Table 14.1 Summary of mobile games market evolution

15 Evolution and the electronic games industry

Examines the relationship between mobile and electronic games. This section provides an overview of the electronic games sector and a basic understanding of the drivers of this sector. It examines how the mobile channel is relevant to the electronic games sector and what this means for both channels in terms of competition and opportunity

Figure 15.1 Market capitalization of lead players in games industry 2003

Table 15.2 Electronic gaming market values 2001-2004

Table 15.3 Market values for mobile and electronic games markets 2001-2006

Figure 15.4 Value of mobile channel to electronic games sector

Figure 15.5 Comparative mobile and non-mobile games market values 2001-2006

Figure 15.6 % share of market value of mobile and non-mobile 2001-2006

16 Conclusions

Figure 16.1 Traditional industry "value chain"

17 Recommendations

18 Mobile Games Statistics

Australia, Austria, Belgium, Canada, China, Czech Republic, Denmark, Finland, France, Germany, Greece, Hong Kong, India, Ireland, Israel, Italy, Japan, Korea, Malaysia, Mexico, Netherlands, New Zealand, Norway, Philippines, Poland, Portugal, Russia, Singapore, South Africa, Spain, Sweden, Switzerland, Taiwan, Thailand, Turkey, UK, USA

Figure 18.1 Mobile ownership by country 2003-2006

Figure 18.2 Mobile penetration by country 2003-2006

Figure 18.3 Java enabled handset ownership by country 2003-2006

Figure 18.4 Number of mobile gamers by region 2003-2006

Figure 18.5 Regular mobile games players by country 2003-2006

Figure 18.6 Mobile games market value by country 2003-2006

Figure 18.7 Comparative sizes of mobile games market 2003

Figure 18.8 Comparative sizes of mobile games market 2006

Figure 18.9 Average user spend on games by country 2003-2006

19 Technology of mobile games

Figure 19.1 Strengths and weaknesses of J2ME

Figure 19.2 Strengths and weaknesses of BREW

Figure 19.3 Strengths and weaknesses of ExEn

Figure 19.4 Strengths and weaknesses of Mophun

Figure 19.5 Strengths and weaknesses of WGE

20 Case studies: Mobile Network Operators


AT&T Wireless





Case studies: Games Developers





Digital Bridges


Electronic Arts





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