Abstract

With improved chip processing ability, screen color quality, and 3D graphics processing in mobile phones and increased mobile network transmission speeds, the mobile game development environment has matured considerably and has attracted the attention of many companies. The global mobile phone market is also growing rapidly, and mobile games have become one of consumer's mainstream forms of mobile entertainment. So the mobile gaming market has much potential, but several key issues still play an important role.

Flexible Fees Are a Key to Bridging the Gap

Playability determines whether or not a game will sell well, but if companies cannot construct friendly channels to move closer to consumers, then they cannot play the games, no matter how playable.

Japan and Korea initially accounted for the largest share of mobile gaming market value, but recently Verizon Wireless and Sprint Nextel in the United States have aggressively marketed 3D mobile games and network games, and used pay-per-play or subscription systems to meet demands of even more customers, thus greatly increasing mobile gaming market value. Verizon Wireless, for example, focuses on 3D network games for US$7.49-13.49 for unlimited play or US$2.49-5.49 for monthly use.

In Western Europe, most mobile operators use on-portals to provide 400 - 600 games and do not do much game lifecycle management, leading to customers' negative user experiences. Most games are charged on a per-download basis, with only first-tier operators like Vodafone, 3, and Telefonica using pay-per-play or subscription systems. Flexible charge rate plans will stimulate consumers to move from wanting mobile games to actual demand for them.

M&A Activity in the Mobile Game Industry to Continue

The mobile gaming market is growing steadily and some companies are making profits. The majority of the leading companies have received investments from large game software vendors or have maintained close cooperative links with these vendors. These include EA/Jamdat, Gameloft, In-Fusio, and THQ Wireless. In addition, some determined mobile game publishers like Glu Mobile, I-play, and Digital Chocolate have created stable revenues. Companies with less financial strength are either fading away or being bought by larger companies, and this is expected to continue in the future.

Early on this trend toward mergers and acquisitions arose from the fact that the industry had not yet entered a period of stable growth and the resulting market naturally weeded out weaker companies. But with large game console software companies moving into the mobile gaming industry, mobile editions of popular games are released. Also, media enterprises are expanding into the mobile gaming market, stimulating another phase of acquisitions.

The large number of mergers indicates that mergers are the best way for companies to quickly acquire new technology, markets, and licenses. And with the mobile gaming industry still growing, we can expect mergers and acquisitions to continue, and for the strong to continue to get stronger.

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