Postcard from GDC Europe Mobile 2005: Yahoo! Games Gone Mobile: The Power of Connected Communities

Introduction

Rob Tercek, the Founding Chairman of the Game Developers Conference Mobile event and a strategic consultant for mobile publisher MForma, kicked off Tuesday's GDCE Mobile event with a short introduction on the defining industry trends for 2005.

Introduced by GDC and GDCE conference director Jamil Moledina, Tercek commented on overarching themes for the day, pointing out that the mobile phone industry will sell 700 million handsets this year, and in a games market that grows so fast that typically revenue is doubling each year.

Thus, the revenue opportunity for a single game in multiple territories for multiple handsets can range from $3 to $5 million - that's a potential return of 10 to 20 fold on the development and marketing of a title. Tercek ended his own introduction by discussing a few other intriguing trends, including the increasing sophistication of the publishing function, an increased focus on consumer retailing and merchandising, and in particular, a possible convergence between PC casual/online gaming and mobile gaming functions.

The Casual/Mobile Connection

With this, Tercek introduced to the stage John Cahill, Director of Games Operations, Yahoo!, and the keynote speaker for GDCE Mobile. Cahill started by throwing out a few facts and figures about the mobile game market, according to analysts, figures that indicate the market should more than triple to $7.1 billion by 2008 - meaning that it's on the radar even for massive companies like Yahoo!.

But of course, Yahoo! and Yahoo! Games is not necessarily a brand you might associate with mobile gaming, and Cahill went on to explain his company's market position, and why it felt convergence between the casual online gaming it specializes in and mobile gaming is overdue.

Specifically, Cahill revealed, Yahoo! Games itself had 23.8 million unique visitors in June, and is currently seeing around 6 billion user minutes of gameplay per month. Since Yahoo! started its mobile game business about 6 months ago, it's positioning itself to keep its strength in the free, advertising-supported online casual game market, and expand its reach into mobile by offering an SDK which means you can play a game at home on your PC, and then go out and play that same game on your mobile phone.

Indeed, Cahill commented: "We're seeing a fundamental shift in consumer patterns - they want to play games anywhere, anytime, and anyplace." But he stressed that the community behind content is very important - in Yahoo!'s opinion, people come to its site for games, and stay for the community. Yahoo evidently sees this as transferrable from the PC to any number of other platforms - in fact, one of Cahill's slides referenced the Sony PSP as another eventual target for the company as well as mobile titles, although this is clearly in the longer-term.

SDK To Play

Essentially, Yahoo!'s angle, as relayed by Cahill, is: "The key message is that good community integration combines with a very active user base means that people will come back again and again." Thus, Yahoo! is offering itself as an online service provider, and wants to see multiplayer, ideally cross-platform games by other developers running on Yahoo's network, all run with a central Yahoo! log-in and potentially billing software.

Cahill's explanation of the Y! Game Engine SDK, which plans to integrate both Yahoo! content and third-party content into a network, which will be available through PC, mobile, and eventually other devices such as set-top boxes and even consoles, would obviously be relatively flaccid without some idea of the advantages.

Yahoo! was pushing concepts such as a gamer profile, which could give personalized results like the Xbox 360 Live statistics, as well as the concept of mobile developers also creating, as well as the obviously large marketing/attraction advantage of getting those already playing an online version of a casual game to pay for a mobile version of it - in other words.

Fortunately, Cahill had a case study to show how the Game Engine SDK would work, with a poker title that ran with a Flash-based PC client, and for which Yahoo! and third party contractors had created J2ME and BREW mobile clients. The game took 6 months to create, using Yahoo! in-house talent and external contractors in California and the Ukraine, and Cahill remarked on the relative complexity of development with multiple developers. As there are 5-10,000 simultaneous players on Yahoo!'s casual network right now, and all web features, including login, chat, avatars and so on are supported from the mobile version, integration appears completely seamless, especially because poker is a turn-based game, in which sometimes high mobile latency does not significantly affect gameplay.

Question, Questions?

With this, Cahill turned things over to answer questions from the assembled mobile developers, publishers, and distributors, and it was reasonably clear that, although intrigued by the concept, the fragmented world of mobile gaming publishing and distribution meant that the audience had plenty of questions about how this neat concept would work in practice.

In particular, the audience questions centered around how Yahoo! would work with network operators or phone carriers, since Yahoo! has its own framework for multiplayer that not immediately mesh with other systems. As an example, Cahill mentioned that Yahoo! would be launching multiplayer titles on Sprint in the U.S., and would be integrating with the multiplayer M7 SDKs to make that happen - officially, Yahoo! sees itself as being complementary to operators, as opposed to trying to work outside the system, as one-time download operators such as Jamba have done successfully in Europe.

As for possible revenue splits, Yahoo! did not yet have specifics, but saw similar splits in revenues to the casual webgame world, such as 50-50, and expect to see that move across to its mobile titles. However, not necessarily stated was the necessity to factor in the additional revenue that the phone carrier might want to get from hosting a Yahoo!-platform game, meaning revenue might potentially be split three ways.

Another possible sticking point was the size of the Yahoo! SDK, which Cahill revealed was around 14 or 15 kilobytes. He cannily made the point that 15k will not sound like much soon, but with the relatively small memory footprint of many current phones, some in the audience clearly felt this was quite a significant number.

Finally, questioners raised the possible issues around getting games approved to be sold on the carrier. For example, even though a game has been created by a mobile developer for Yahoo! to run cross-platform on mobile and PC platforms, Cahill conceded that he can't guarantee Sprint will take that title to sell.

The Upside?

Some healthy skepticism aside, the questions also illuminated some possible positives. For example, games would not have to be developed from scratch for Yahoo! - the game developer could make game available elsewhere, in different versions, but Yahoo! but would want an enhanced version to take advantage of its community and ideally cross-platform gameplay.

In addition, Yahoo!'s gigantic amount of Internet users and page views are an obvious advantage, if the concept of casual game players paying for mobile versions of the same game takes off. Cahill was unwilling to offer estimates of conversion percentages, but given the rise in casual game playing and the inherently casual nature of mobile gaming, this could be a massive plus, if taken alongside Yahoo!'s community aspects. Finally, Yahoo!'s power to cross-market versions of its games in multiple arenas means a possible win on multiple platforms simultaneously for any successful product distributed this way.

Overall, Cahill's keynote, though definitely pitched to inform the community about his company's product, was a fascinating example of how even the largest Internet companies are making waves in gaming, and their plans to expand beyond simple websites, as mobile or even set-top box gaming becomes increasingly ubiquitous.

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