Going Mobile: The Old World's New Rules

In this 'Going Mobile' column, originally written for Gamasutra, Foci Mobile lead analyst Steve Palley takes a fascinating look at how the European cellphone game market differs from the North American one, suggesting that a change may be in the air for the US mobile monopolies.
Title Ah, Europe--the glorious cradle of Western civilization; a rich tapestry sewn together with some of the greatest intellectual, cultural, and architectural achievements in the history of our species; and, most magnificent of all, a continent-sized hotbed of innovation for the mobile entertainment industry!

European Charm!

Apparently, a trip to see the wonders of Europe can drive even a hard-bitten cynic to hyperbole. Here in stodgy old North America, where rigid structural constraints on the carrier and marketing fronts discourage experimentation, it’s sometimes easy to despair for the future; by contrast, the mobile content market across the pond offers a real impression of dynamism. Firms over there aren’t just willing to try new things--if they aren’t able to adapt to changing commercial conditions on the fly, they’re going to be in big trouble.

That’s because there are many more factors mobile content companies have to worry about on the Continent. The most important difference by far is the sheer number of carriers available to sell your products. In the United States, there’s the Big Three--Verizon Wireless, Cingular, and Sprint Nextel--and if you’re not on at least one of them, you’re basically out of luck. In Europe, however, every single country is likely to have its own Big Three, if not Big Four or Big Five.

The Bitterballen Approach

Arjan Olsder, a friend of mine who serves as Senior Content Manager for the Amsterdam-based mobile games firm Overloaded, put it this way during a recent interview over beers and bitterballen (think Chicken McNuggets, only made out of veal and much crunchier): “In the US, you are limited to a few operators, but we have a few operators in each country. There are some multi-country operators (like Vodafone, Orange, and T-Mobile) that have ‘global’ agreements, which means in theory you can publish throughout Europe with a limited amount of work...but in reality, all of the operators want you to sign local agreements.” According to Olsder, Overloaded maintains local marketing people in every important geographic area, so the company can understand “exactly what the operators want.”

The large number of carriers in Europe boosts competition for customers and data revenues. This, in turn, pressures the carriers to obtain the best games and implement the best commercial services for their subscribers as soon as possible. The American Big Three can afford to move at their own deliberate pace, but the European operators can’t. That’s why European firms like Overloaded have access to sales vectors that US companies are still dreaming about, such as Premium SMS, PayPal and credit card payments, and WAP.

WAP It On Your Own

In fact, Olsder mentioned that Overloaded actually runs its own WAP portal “that is linked directly to the WAP portals of operators throughout the EU.” In other words, Overloaded (or, more accurately, its new parent company Mocondi) serves as an aggregator as well as a games developer and publisher. This combination makes no sense whatsoever in North America, where publishers wouldn’t be caught dead selling their competitors’ games regardless of the revenue split; deck space is simply too precious a commodity here.

In Europe, however, the incentive structure is entirely different, because there are so many more opportunities for customers to discover and purchase products. Consequently, the best strategy there is to have as many products making money across as many regions and carriers as possible. Some of Overloaded’s clients even sell mobile games using print ads!

European Challenges?

Europe has its own unique set of challenges to wrestle with, to be sure. One of the most serious is localization, particularly when it comes to languages. “Games that are in the local language sell better, especially in countries where English isn’t taught in preschool,” said Olsder. “Some operators simply refuse to accept games that aren’t in the local language at all.”

Maintaining the delicate balance of political considerations between all the various countries, operators, and business units in Europe can also require a serious outlay of resources, as hinted at above. This is especially true for US publishers attempting to do business in unfamiliar European territory, which explains why so many have purchased local companies that have experience navigating these dangerous waters. “Most bigger US publishers have their local offices in Europe that basically run according to their own ideas,” noted Olsder. Clearly, there’s good reason for this level of independence.


So, given the vast differences between the two markets, why is it important for US mobile games firms to pay attention to the European mobile content model? Besides the obvious answer--there’s money to be made over there!--it looks like the European way of doing business is expanding rapidly. For example, Olsder thinks that Eastern Europe is “already on about the same level as the rest of Europe.” New markets are also burgeoning across the fertile demographic soils of Africa and the Middle East, where European companies like Celtel have already set up shop.

More importantly, looking at how European firms operate now may give us a glimpse into the American market’s future, because our market model is likely to evolve towards theirs over the next two to three years. MNVOs like Amp’d Mobile and Helio will grow up and put pressure on the Big Three with their innovative content models, and off-deck portals will gradually gain a foothold as carriers loosen their restrictions.

Once American financial clout is married to European business practices, mobile gaming will start to live up to the hype. Until then, I highly recommend taking a fact-finding tour to watch the process unfold. And don’t forget the bitterballen!

[Steve Palley is the Founder and Lead Analyst of Foci Mobile, a mobile games consulting firm. He was previously Chief Editor for Mobile Games at GameSpot and Wireless Gaming Review.]

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