Glu boss predicts further mobile consolidation

Glu Mobile CEO Greg Ballard has told the Mobile Games Forum in London that he believes that 2006 will see a large number of major media companies vying to acquire the major players in the mobile games business.

Addressing an audience of mobile industry leaders in a keynote address at the opening of the two-day forum in central London, he outlined a vision for the landscape of the industry in 2006 which was heavily influenced by EA's recent acquisition of Jamdat.

Ballard, whose games industry experience prior to joining Glu Mobile includes a stint as CEO of Capcom USA, said that media companies and licensors believe that they allowed EA to become too large and powerful in the videogames business.

The major media firms won't stand by and watch the same happen in the mobile space, he predicted - but EA has already made the first move, with the acquisition of market leader Jamdat, a fact which is likely to galvanise other firms into action.

"It's almost impossible today for a brand new company to come into this business and get up to speed," Ballard said, supporting the argument that media firms will try to enter the market through acquisition. "The largest videogame company in the world took a look at this business, put their foot in this business, and concluded that they couldn't do it on their own and had to pay a lot of money to get into it."

He believes that a huge number of potential market entrants, including many major western media and technology firms as well as rapidly expanding companies from Korea and Japan, will now be competing to acquire one of the small handful of global players in the market.

Among the companies which are likely to be acquisition targets he listed I-Play, InFusio, I-Fone, Digital Chocolate, MForma and, of course, Glu itself - describing the situation as "an interesting imbalance - like musical chairs on steroids."

However, in comments after Ballard's keynote, EA Mobile CTO Lincoln Wallen sounded a note of caution over the possibility of media companies acquiring large mobile games firms - pointing out that of the many media firms Ballard had mentioned, only EA, Activision and Microsoft are actually in the business of games.

Other firms, he argued, will buy in purely because they see mobile games as a way of promoting their existing brands. "They don't care about games," he concluded. "They care about brands and reaching their consumer."

Ballard responded to Wallen by saying that this had not been Glu's experience of license holders to date. "When push came to shove, with Fox for example, they were more interested in making money off their movies through us, than in promoting them," he pointed out.

"Today, brands are very important to these folks, but in the long run they're looking for growth," he argued. "They're stuck in an old media economy growing at 3 - 4 per cent, and they're looking to the internet and mobile not as a way to promote their brands in a slow growth environment, but as a way to grow more rapidly."