Game makers face own 'survival game'
By Ben Charny, CNET News.com
globeandmail.com
San Jose, Calif. — Three months ago, Sorin Papuc wouldn't even consider using a cellphone's cramped keypad for anything other than dialling his friends and family. Now he's among hundreds of software makers pitching cellphone gaming.
Mr. Papuc is one of a few hundred developers, wireless engineers and traditional PC game makers that just in the last few months have gone in search of gaming gold inside cellphones. All want in on the ground floor of an industry expected to generate $7-billion (U.S.) in revenue for U.S. cellphone carriers by 2007.
Like the pioneers of other industries, they're in for the ride of their lives.
"This is a survival game," Nokia senior manager Vesa-Pekka Kirsi said at the Game Developers Conference 2003, taking place here this week.
The industry, Mr. Kirsi said, is too young to support so many companies. Many pitching their wares at this year's GDC, one of the largest game conferences anywhere, aren't expected to survive to the next GDC conference.
Mr. Papuc, a Lithuanian also attending the show, shrugs his shoulders at Mr. Kirsi's sentiments. "I will try to show them," he said.
But executives of cell phone companies attending the conference sent a maddeningly mixed message to those who want to make games for handsets. Carriers all say games will become an important revenue source to help them recoup the billions they spent building new cellphone networks to keep up with demand for voice calls. At the same time, however, developers of cellphone games shouldn't expect much support, such as advertising budgets for their games, development work or research money.
Jerry Rocha, a marketing manager at Cingular Wireless, said most carriers are instead focusing their resources now on what they do best — selling voice-calling services — to battle a possible third year of declining cellphone sales.
"We are the 'phone' company," Mr. Rocha reminded a group of wireless game developers clamoring for more marketing support. "We have to make $4-billion" — that is, Cingular's network construction costs.
Jamdat chief executive officer Mitch Lasky said carriers aren't spending lavishly on development of cellphone games because the revenue even from blockbusters in that category isn't enough to cover the cost of a magazine ad.
A big-selling cellphone game, he said, earns about $100,000 a month. The sales are the same even in Europe and Asia, where these sorts of games have been around longer than in the United States.
"There are very few games doing those kinds of numbers. Even on hit games, with our margins, a single-page advertisement eats up the revenue," said Mr. Lasky, whose company is perhaps the biggest provider of cell phone games in North America. "We can't afford it, the revenues won't support it."
He did offer a note of encouragement: "We are about ready to pay our first royalty cheques to developers." The company has been selling wireless games for at least two years.
In Japan, too — a nation crazed about wireless data — cellphone game sales have been somewhat disappointing. NTT DoCoMo has 36.9 million subscribers, who generated a relatively small amount, about $100-million, by buying cellphone games in 2002, NTT executive vice-president Takeshi Natsuno told cellphone game developers. That's an estimated 7 per cent of the carrier's revenue.
"To Nintendo, this looks small," he added.
In Korea, the biggest-selling cellphone game right now is "Tetris," which sold about 70,000 copies at $2.40 each. In Europe, a hit game in Europe generates about $150,000 in revenue.
The modest returns, however, haven't done much to scare game makers and wanna-bes away from cellphones.
Nokia's Mr. Kirsi is witness to the rush hour. He plays a role in deciding what games will go on Nokia devices, including the N-Gage gadget, which is a Game Boy-like handheld console first, cellphone second.
Many of the games he's seen are from small and unknown developers. Nokia prefers for now to use games from recognized game makers, like Sony, believing new players of cellphone games will be attracted by a brand they recognize.
Sooner or later, the software makers say, carriers will reap the rewards of games on cellphones.
"It'll be the rescue of 3G," or third-generation technology, said Brian Pearson, a senior software engineer for Ideaworks, which makes software to run cell phone games. Third-generation, or 3G, technology has largely been a misfire, despite expectations that it would be the next big thing for mobile phones.
Danh Le Ngoc, vice-president of Ajile Systems, rushed to add wireless gaming to his company's offerings because he spotted the attention carriers were paying to it — the same reasons Mr. Papuc gave for bringing his company into this new field. Ajile is now working on creating a way for makers of popular game consoles, such as Nintendo, to buy their games from cellphone companies.
"The carriers need us," he said. "That's exactly why we did this." |
