MEM: I-Play exec talks tough on mobile gaming costs

Speaking at the Mobile Entertainment Market event in London this morning, I-Play publishing and marketing VP Paul Maglione said that the mobile gaming industry may have to accept changes to its revenue models if the market is to take off.

At present, only 4 per cent of consumers with enabled handsets use them to download games, Maglione said. "We're still not getting true traction in penetrating the potential here. We have to look at the obstacles and where we should start with removing these barriers."

Operator mark-up on mobile games is currently often around 50-60 per cent, and Maglione believes that the industry may need to rethink this figure in order to "lower prices for the consumer and therefore grow the market, including greater use of free or flat rate browsing and data charges."

By dropping the browsing and data charges, operators would decrease the overall cost of mobile games to consumers, he explained; while passing on a larger share of the revenue to publishers would allow them to undertake more ambitious marketing schemes and grow the market as a whole.

"Operators should look more closely at the new Telefonica model which creates more margin for publishers who can then increase their investment in marketing and other market-expanding measures," he suggested.

In addition, he continued, consumers must be made aware of how and where games can be purchased - only then can mobile gaming become truly mass market.

Maglione observed that the industry uses a problematic business model, particularly in Europe where transaction and distribution costs are high. He suggested a range of possible solutions, such as establishing global franchises, setting up multiple distribution channels and making greater use of the Internet for marketing and selling - in Europe, 20 per cent of consumers look to the web to learn about games, while only 18 per cent get their information from WAP.

The figures come from an I-Play survey of more than 2500 consumers from the US, UK, Italy, Germany and Spain, which also revealed that more than 50 per cent of mobile phone owners have played a mobile game before.

Of this number, 25 per cent have tried to download a game - but less than two out of five have successfully completed the process.

In total, 29 per cent of UK participants surveyed were not even sure if they were able to download games to their particular handsets. The figure rose to 33 per cent for US participants, while Germany had the lowest level of awareness at 34 per cent.

The survey confirmed that mobile games are most popular with 'tweenage' consumers, with 80 per cent of 12-15 year olds saying they had played a game on a mobile phone. However, only 8 per cent had downloaded one, and more than half said they wouldn't consider doing so because prices are too high. Just under 50 per cent said they would prefer to download free trials, and 51 per cent said they would consider purchasing full games if prices were lowered.

As a result, Maglione said, the industry needs to look at ways of improving accessibility to mobile games as well as consumer awareness before mobile gaming can make the shift to becoming a mass-market phenomenon.

Update: Clarified Maglione's statements on revenue-sharing and end-user costs.