Mobile Gaming Strategies

© Ovum 2006. Unauthorised reproduction prohibited. © Ovum 2007. Unauthorised reproduction prohibitG STRATEGIES
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operators with much larger and granular handset portfolios, as it has a faster time from development to release. Of course, 3 is at an advantage here as it is a relatively young and 3G-only operator with a small handset catalogue O2 has more demanding handset requirements – it asks for compatibility with the top 30–50 handsets out of around 150 for games on its Active service. However this is still fairly small compared with some operators, and it is well aware of the need to keep its compatibility requirements reasonable. Education/marketing In order for mobile games offerings to reach a wider market operators need to market games to a wider variety of users, and consumers must be educated about the range of games services that are available. 3 aims to encourage mass-market take up by making services attractive to nonhardcore gamers. Games are a key element of 3’s positioning of itself as an “entertainment” provider. O2 currently pushes games heavily through its portals, but not as heavily as it pushes music. i-Mode is still building a user base, so O2 does a lot of the marketing rather than its partners. This further builds O2’s reputation in terms of its games offering, but it must be careful not to confuse consumers and to make clear the distinction between i-Mode and its Active games offering. Ultimately it is a question of priorities for an operator. While players such as 3 that want to position themselves as entertainment companies need to push games heavily, for those that focus more on their overall service offering and value, such as O2, it may not be worth the expense. Service offering Operators must concentrate on a small selection of very high-quality games rather than a huge list of titles, which can be daunting for consumers. 3 has a definite strategy of trying to keep its games offering relatively small, and works hard on lifecycle management to keep its offering fresh. While O2 also employs lifecycle management to some degree, it currently has too many titles on offer, and navigation between them is somewhat complicated. However, it intends to implement a new content management system that will allow far greater management and manipulation of its catalogue. Operators should do more to draw new users into downloading games. Free demos are an excellent way of doing this, and embedding them on the device represents a particular opportunity, as it may entice users who would not normally do so to visit a games portal.
© Ovum 2006. Unauthorised reproduction prohibited. © Ovum 2007. Unauthorised reproduction prohibited.
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MOBILE GAMING STRATEGIES
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Segmentation Operators should think hard about who they are targeting their games offering at, and their marketing and service offering should reflect this. 3 segments its users into three groups – hardcore gamers, casual gamers and mass market – and targets its offerings appropriately. It realises that casual games alone won’t satisfy the mass market, and thus aims to cover all niches with a range of titles so that so that everyone is kept happy. Its rental offer allows those wary of mobile games to try them for a relatively small outlay, after which they can be upsold into a full purchase, and also allows them to experiment in finding a game that they really like, which increases the likelihood of further purchases. O2 also sees a wide demographic for mobile games. At present its offering is very broad, and it doesn’t segment. There is a danger that in having such a broad offering it appeals to no one rather than everyone. O2 should consider segmenting its offering to some extent, whether it be through marketing or the presentation of content on its Active games site, which is currently very youth-oriented. Pricing Operators have changed the way they price games over the past 12–18 months. Many now offer tiered pricing and a range of titles from budget to premium. However, they must be prepared to go further if they are to broaden their customer base for games services. 3 UK offers rental, pay-per-play (for connected games) and pay-per-download. It is right to do so; indeed, segmented pricing is necessary for the mass-market to take off. O2 has four price points for titles, and in the long term is looking at mapping in subscription. However, it really needs to look at offering a wider range of payment structures on its Active portal, such as rental and subscription. Future strategies Operators are moving beyond the very simple games stores they originally offered, and are starting to recognise that mobile games need to be managed and presented carefully in order to maximise uptake from consumers. In addition, the mobile games industry is undergoing a wave of consolidation, with several large players now emerging. There are still key differences in the way that operators approach their games offerings, and while there is not necessarily one ‘right’ approach, choices made now may be highly significant in the future.