Moving to the mainstream
Posted in Despite the ongoing hype surrounding 3G, mobile gaming has yet to make the most of its massive potential market. Sarah Treanor discusses how such promise will be fulfilled by gaming companies in the future
The launch of the first 3G network in 2003 was heralded as the beginning of a new era for mobile in the UK. Extensive ad campaigns showing how we would soon be making the most of our mobile seemed to offer a brave new world of connectivity.
Such at least was the hope. But if the reality in terms of 3G take-up has been far from astounding, there is evidence of interest on the part of mobile users to utilise their devices for interactive gaming. Of huge significance is the potential scale of the mobile gambling market. The very latest technology may still be an expensive option for most, with latest estimates suggesting there are only around 10 million 3G users worldwide. But products such as mobile lotteries, for instance, do not even require 3G handsets. They are simple to run, and they are increasingly popular worldwide.
With clear evidence of mainstream demand for products and services such as mobile banking, wireless internet on mobiles, and picture and video messaging, it is a fair assumption that take-up of mobile gaming may not be far behind.
Nader Rahimizad, president of mobile games provider PlayWizard, says: “As with any new technology, once the early adopters are saturated and time passes by, the normal consumer starts to nibble.”
Untapped potential
Where the technology uptake is high enough, there is ample evidence that the interest in mobile gaming is on the rise. Yet, with complex and demandingly fast-paced mobile developments, and limited cross-over from the online space, it means that at present the market is largely untapped.
As Simon Swanson, UK country manager for Wild Jack Mobile Casino (WJMC), says: “The potential is huge, but so are the challenges.” A report from UK-based consultancy Juniper Research states that use of mobile handsets for TV, interactive downloads and gambling is on course to increase rapidly in the next five years.
Research director Bruce Gibson and report author Aditya Kadul say that consumers are now familiar with a multi-purpose handset. Gibson argues this in itself suits the impulsive gambler. “The mobile channel takes gambling to the mass market. The mobile phone is a wonderful device for doing things on impulse, and for all but the regular gambler, betting is an impulse activity.”
He continues: “Current trends suggest that gamers gamble more frequently on the mobile than other channels, but with lower stakes.”
Women on top
This trend for small stakes may account for the fact that women are forecast to play an increasingly important role for mobile operators. As research firm Telephia reported in June this year, 65% of mobile games revenue is gained from female users. This report also cites the casual  appeal of mobile games for women, and explains that for puzzles and skill games, which account for 34% of the total revenue, women formed 72% of the customer base. But despite positive indicators, a consensual opinion from developers and operators is that mobile needs both a high level of commitment and investment.
Customer crossover from online cannot be relied upon to provide a pre-existing playerbase. Rahimizad explains: “Originally, the casino operators thought they could just put out a few games on their portals and all the consumers would flock over to mobile gambling, but they were proven otherwise.”
He continues: “We have argued that the normal casino customer is not a mobile customer since they are not early adopters. Our bet was the real novice or the really early adopters would be the initial audience. We saw this back in 2000 when we developed the Push2Bet proactive mobile betting system for Victor Chandler and William Hill.”
Matti Zinder, chief executive of Spin3, agrees that online and mobile customers are distinct. He says: “There is not much crossover between egaming customers and those who play on the mobile casino.”
Equally, the games themselves cannot automatically be transplanted, as Swanson from WJMC says: “Our markets are certainly distinct at this stage. Some people have tried to transport their operation onto mobile platforms; it is not the best way to do things,” he says. “This is not something you set up on a whim.”
Obstacle course
Zinder adds that not only does the mobile games operator have to recruit new customers, but the pace of development poses a continual challenge: “It is difficult to compete in this market, you have to have a willingness to stay abreast. This market is very unforgiving. The barriers to entry are quite significant.”
Aside from the challenges of player recruitment, technology remains an obstacle. Unlike the relative uniformity offered for online developers, where Microsoft and Apple Mac systems are dominant across the globe, mobile game development is hampered by the volume and variety of handsets.
“If you are not at the cutting edge, the technology will leave you behind,” says Zinder. “There are issues with handsets. Manufacturers are bringing out new handsets practically every week and they all run on different systems. For each game you have to remake it for more than a 100 handsets. It¹s not like an online game. Every time, you have to rework it so it fits the handsets. We need to create 900 versions for each game. It does cost quite a bit.”
Location, location, location
There also appears to be a consensus that the global market needs specific country-focus. Zinder says: “The Asian market presents a particular issue. In Japan, some technology is specifically not available anywhere else. The manuals and everything else are only in Japanese, it¹s not available in the West, so we have invested in that as
well.”
Juniper’s Gibson agrees: “Mobile gambling success is very much dictated by local regulation.” The US  legislative issues aside  lags behind Europe and Asia in terms of telecoms technology, making it an unattractive area for investment according to Zinder.
He says: “The US has a number of issues, for a start their technology is between six and eight months behind Europe. The best return is not from the US.” Although there are barriers to success, those within the space remain
optimistic of progress.
Focused campaigns for individual markets, and bespoke regional product offerings provide solutions to problems of uptake according to both researchers and the companies themselves. Gibson says: “Currently the UK is one of the most attractive markets due to the recent overhaul of gaming legislation.”
Zinder is positive that looking further afield is equally beneficial: “South America is interesting, we have just concluded a deal with Mobistar to provide services for 11 different South American countries with a local partner.”
Rahimizad argues that regional trend spotting is key for success. He says: “Hong Kong has the highest uptake worldwide for play for points.” Says Juniper’s Kadul: “Japan has been very receptive in terms of 3G penetration so far.” Zinder agrees: “In China and East Asia there is a huge cultural tendency to gamble. There is massive potential there.”
Indeed, where there is a generally high uptake of technology in general, there is a proportional likelihood of successful mobile launches. Japan’s reputation as technology-friendly and receptive to gambling means mobile products are being pitched to a responsive audience.
Interactive connections
A similar logic is used by Dale Tempest, PR director at Skybet. Following a recent deal between BSkyB and mobile operators for the provision of mobile sports content to subscribers from the UK Premiership, he argues that where uptake of interactive television is high, mobile use will follow.
He says: “We have 70% of the interactive market, and we understand that our customers are very technologically sophisticated. Interactive television customers are the kind of people who will take well to mobile betting. Anything Sky does with mobile content, we will be there.”
The betting exchange is, according to Betfair, another transferable concept. Betfair spokesperson Oliver Bowen argues that mobile betting is the future for the sector. “Successful exchange betting is about getting the right price at the right time, and mobile allows customers to adjust their Betfair positions on the move.” In 2000, the World Health Organisation predicted there would be 1.5 billion mobiles worldwide in five years. For established online operators this represents a market opportunity which is too good to miss.
Swanson from WJMC argues that the outlook is positive: “My perspective on the market is that it is still in its infancy.” Zinder agrees: “Generally speaking, online is so established now as an industry it is getting close to mainstream. I can see the same indicators happening with the mobile space. We are getting a huge deployment for our products.”
