iPhone: the Great White Hype?

[24 June 2009]

By Brian Crecente

Kotaku.com (MCT)

The iPhone has been heralded as the second coming of mobile games. But just how important a piece of the more than $5 billion dollar mobile game industry is it?

Is the buzz surrounding Apple’s iPhone and iPod Touch deserved or just the byproduct of a vocal, technophile few?

While major mobile game developers like Apple-centric ngmoco and international powerhouse Gameloft all say the Apple devices are just a small share of the mobile market, they also all agree that the impact it is having on mobile games is unprecedented.

“Apple’s introduction has been a watershed moment for the industry as operators and handset manufacturers are increasingly focusing on their offering around apps and storefronts,” said Jill Braff, the senior vice president of Global Publishing for Glu Mobile. “We’re excited about the iPhone and iPod Touch market — it’s certainly a unique and compelling platform in the mobile business. “

Trip Hawkins, Digital Chocolate CEO and founder of Electronic Arts, says that he’s never seen a new device become important as fast as Apple’s iPhone and its App Store, which allows people to buy software and games on their iPhone or Touch through the device.

“Apple devices have only scratched the surface of demand so far,” he said. “Apple will provide sustained long-term growth, but they have also galvanized competitors who will help further expand this ‘nextgen’ consumer smartphone marketplace. Today Apple is talking about tens of millions of devices but they are the archetype for a market for several billion devices. It is already a big deal to us but the best is yet to come.”

With 40 million iPhone and Touch owners, it seems hard to believe that the Apple smartphone generates as much interest as it does from developers who create games for a potential market of billions.

Why care what one percent of what the total market things? Mobile developers say that’s in part because iPhone owners tend to buy a lot more games on their device than typical mobile phone owners.

Many, including Neil Young, founder of developer ngmoco, also sees the platform as the future for mobile gaming.

Mobile game sales had stagnated, he said, until the iPhone came along. Now most of the industry’s growth, he believes, will come from the iPhone.

“Gross App Store revenue is going to be about half a billion dollars in 2009,” he said, pointing out that that includes all applications, not just games. “We are just at the very, very beginning of an incredible explosion of mobile gaming. You are now seeing this blend of usability and capability driven by the ease at which people can develop for this platform and the ease that customers can get games on their devices.”

“This isn’t just about mobile gaming, it’s about portable gaming. The impact on not just mobile gaming but handheld gaming is huge. The (Sony’s) PSPgo is clearly a reaction to the iPhone.”

Despite singing the praises of the iPhone and its importance in the larger mobile gaming market, Digital Chocolate, Glu Mobile and Gameloft are still hedging their bets, continuing to do a bulk of their development for other mobile platforms.

Glu’s Braff says the company has dedicated about 30 percent of their development resources on the iPhone and other smartphone devices.

“While developing for devices like the iPhone is very important to us, a large part of our business still comes from traditional platforms like Java and Brew,” she said.

Hawkins was a little less specific, saying only that the iPhone is Digital Chocolate’s “No. 1 platform priority,” adding that their development tools allow them to “leverage our creative assets to many platforms.”

Gameloft’s Gullemont says the iPhone and Touch are just one of the 1,200 devices Gameloft develops for, but that the developer has assigned 500 of the company’s 3,500 developers to work on games for the platform.

“The iPhone is very significant, very important,” he said. “I think the iPhone is showing the way. That’s why we dedicated to it very early a large number of high quality developers.”

Despite what he and others say is Apple’s enormous potential in the mobile games market, Guillemot says that Gameloft is “still largely invested in mobile phones.”

“There are 40 million (iPhone owners) versus 4 billion (mobile phone owners),” he said. “There is still some way to go before the balance of power shifts.”

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Brian Crecente is managing editor of Kotaku.com, a video-game Web site owned by Gawker Media. Join in the discussion at kotaku.com/tag/well-played.

Published at: http://www.popmatters.com/pm/article/107173-iphone-the-great-white-hype/