Analyst Screen Digest has released its latest repoprt, New Mobile Games Platforms: Challenges and opportunities.
The report examines the impact on the mobile games market of the new platforms and distribution channels that have sprung up in the wake of Apples success with the iPhone, iPod Touch and the App Store. It also looks at how top publishers have responded to the developments in the market, and offers profiles of the mobile games markets in major North American and European countries. The report covers 27 countries, with a particular focus on the key North American and Western European markets.
Screen Digest believes that new mobile games platforms for Smartphone devices will boost the mobile games industry, which has shown signs of slowing. Growth in the operator distributed mobile games market, which peaked at over 50% in 2004 and 2005, will drop to just 7% in 2009, it says. New platforms such as iPhone, N-Gage and Android will help grow the market for mobile games outside operators portals. In total, games for new platforms accounted for no more than 15% of mobile games revenues in the major North American and European markets in 2008.
Apple in control
Whilst Nokias N-Gage games platform and Googles Android Market application store also have the potential to grow the market for mobile games outside operators portals, it is Apple that has the key elements to retain its position at the head of the market, the report notes.
A range of mobile players, including operators, device manufacturers, platform providers and third party retailers have all launched their own stores; but Screen Digest research suggests that games for Apples iPhone accounted for over $100 million (62 million) in revenues in the second half of 2008, taking more than 10% of the North American mobile games market.
It is Apples combination of high-end appealing hardware, a large developer community, and easy to use retail environment, for which it had already built a strong billing relationship with consumers, that has enabled Apple to maintain its lead, the report concludes.
While new platforms and sales channels will grow the market for mobile games outside operators portals, the market for games from operators will, in the short to medium term, remain the largest. Screen Digest believes that the trend for new platforms and application stores, which offer developers a greater share of revenues, a more receptive audience, and a wider array of content, will see smaller publishers reduce or abandon development of games for release through existing operator-run portals. With their operator deals already in place, this trend will present the big publishers with the opportunity to consolidate their lead at the top of the largest market for mobile games. 
The App Store effect
For the big publishers, the greatest impact of the iPhone and App Store may not be in the extra revenues derived from selling games through the store, but in the effect of the App Stores business model on the wider mobile games market. The report notes that awareness of mobile games has increased, and the success of the business model has already persuaded some network operators to lower their revenue shares and move towards their own application stores. The 70% share of revenues offered to developers by Apple is now practically the default minimum that new store owners offer to developers and publishers.
At the moment, Apple is out in front, in terms of user experience, range of content and in generating consumer and developer interest in mobile games for its devices, says Screen Digest Research Analyst, Jack Kent. While the market for mobile games on the App Store is strong, iPhone users still only account for a tiny proportion of the market. In Q4 2008, iPhone shipments made up less than 2% of total handset shipments. Handset manufacturers and network operators currently adopt a one store for all approach, although platform-specific and on-device stores stand the best chance of success, as far as mobile games are concerned.
The report costs 595 for a printed copy, or 1,190 for an electronic (PDF) version.There's more information about the report here.
