March 9th, 2009 by Arjan Olsder Posted in Analysis & Editorial | 6 Comments »
On Mobile Games Forum almost 2 months ago, there were big talks on things like mobile game rental, pay per play, paying for games normally – what is the best method, and what will stay on the market as the leader? Will it hurt the revenues? What about refunding policies of so called AppStores, where Google announced in their Android Market a 24 hour return policy for games? Where is this all leading?
Now currently, I think 95% of the European mobile games market is paying for games regularly (other then the ton of illegal game downloads), and most markets have not even seen the daily rental model or pay-per-play model. Me, I don’t believe in rental of mobile games – it can work on the PC or console market, but can’t work on mobile phones. Why? Mobile phones are so small and so cheap methods of fun, that fragmenting a couple euros/dollars worth of prices is useless. Standard mobile games with the open market models will get cheaper, and larger hardcore games will get more expensive, but will be a niche. I think any rental model basically hurts the mobile games market – sorry for the extreme opinion, but let’s discuss this in the discussion. Also, pay-per-play is very difficult – how do you do it in an environment with the operator billings mostly closed, with no universal technology out there for mobile billing? Would definately be difficult.
Incoming with AppStores, there are many things that publishers have not yet taken in consideration, like the mentioned cheap prices. What I think can happen though, is that methods like free lite download and pay-per-level could become very popular. Especially seeing the current downloads of lite products. Pay-per-play is hard to do, especially in the billing environment and taking in consideration the distribution channels and the fragmented operators/appstores on the market.
I believe the 2 most favorite methods will be still paying for a game, and then the pay-per-level method.
Now what about money back? This policy was introduced by Google, and honestly, I think it’s great on one side – as a user, on the other hand I think it could potentially be a killer – as a person from the mobile market. Will more of these methods be introduced? I hope Google will not go overboard and there won’t be users asking for return on every single game, and there will be some policy to it. It will be interesting to see it in a micro-market like the Android, what it will do. I am sure others will follow, if it proves to be succesful.
I guess the following quarters to come, we will see some changes. Will definately mean opportunites for the little and mid-size guys, who have been constantly pushed out to the edge of existence by mobile operators worldwide, but now have a chance to seriously strike back with new games, and it can potentially cut the bigger guys revenue.
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Thanks for the input and you are of course entitled to your opinion. However, one of the major problems in the mobile games market is the low penetration still only around 5%. This is partly a result of the limited pricing models offered. Most people are not comfortable with paying full price for a product without trying it first. We have seen huge uptake in rentals and pay-per-play yet we do not see a drop off in full purchases. In fact daily rentals are as popular as full purchases and this helps serve a completely new market of customers who do not want to pay full price for a product that they cannot try. This is where new price models help. Also if you look at the number of failed billings you have on a traditional pay-per-download portal you will soon realise what you are missing out on. We have a lot of data to share on this subject. Implementation of new pricing models is not difficult at all. Have a look at O2Uk who offer this for all of their games.
@Jens,
You are free to contact us if you like to write your thoughts on the subject, in combination with those numbers. Just drop us a line.
Hi Jens,
thanks for your opinion, I very much value it and partly agree with it. I would say those people that dont want to pay full price should download a demo or lite version, and then unlock or buy it. I think I did not cover that area clearly enough, which I agree with you, and agree with what you guys at Accumulate are doing.Its just I dont get the pay-per-play and rentals. Of course, there is a lift there, as its a new market – and I dont know where you would be getting the entire market numbers, but of course they wont decrease day by day. Probably pay-per-play has talked to a completely new group of people in your case, but in my view on the mid-term future, that is covered by the Appstore models, and people will not require the rentals, etc.
This is certainly a worthy discussion to have. Cracking the 5% penetration (known as the Golden Nickle) is a challenge that has lingered for far to many years. Fortunately as an industry the quality of games has risen with the quality of devices. Publishers should no longer fear consumers trying games before they buy.
That said, I believe we need to allow people to try the games online within the app store experience. Allow users to try a handful of games and really commit to the one they can’t live without. Ultimately when they do make the purchase to the handset we know they will be satisfied. Further, they will be that much more familiar with other titles for future purpose.
Try out this philosophy at http://www.mplayit.com or deploy it on your D2C site and see for yourself.
Much needs to continue to be said and done about the mobile content purchase experience.
What about running costs of e.g. pervasive games that use telephony features. Such games can not be operated on a single buying fee but need some kind of pay-per-use or player’s account.
We are currently considering to publish a game on the apple app store but do not see any way to share revenues in the long term. We worry whether apple will tolerate that. Any experiences with that?
Jan, it is always dangerous to judge a market after one’s personal preferences.