The worlds top four games publishers are taking an ever bigger share of the market for mobile games, according to the latest report from media analyst Screen Digest. EA Mobile, Gameloft, Glu and THQ Wireless have seen their global market shares increase from 11% to 22% in 2007 and the figure is rising, particularly in Western Europe.
The report, Mobile Gaming Value Chain: Opportunities for Publishers, Developers and Network Operators, is available to subscribers of Screen Digests Mobile Media Intelligence service. It includes a detailed description of delivery platforms, a competitive analysis of major mobile games publishers, and a description of value chain models for on-portal, off-portal and physical distribution. Forecasts are provided to 2012 with total market growth, total revenues, industry revenues and operator revenues for Asia Pacific, Europe and North America.
Touchscreens could revolutionise the market
The report, released in the same month that Apples iPhone 3G went on sale, reveals the potentially revolutionary impact that touchscreen handsets could have on mobile gaming. In particular, Screen Digest expects that the iPhone will drive the growth of the North American market, raising it to become the leading global market by revenue next year.
From the perspective of both games developers and mobile users, these handsets have the potential to be the number one device for mobile gaming, says Screen Digest. This is supported by recently-released retail sales figures that show that 10 million applications were downloaded from the Apple online store in the three days after the iPhone 3G went on sale on July 11. However, the handset presents technical challenges for developers, limiting the sophistication of the games on offer, which in turn restricts audience retention.
Gameloft poised to overtake EA Mobile
By consistently producing good quality titles and focusing on increasing its catalogue, Gameloft has created strong company growth, Screen Digest says. In comparison, the current market leader EA Mobile has faltered. On 31 March 2008, Gameloft reportedly earned $40 million (20 million) only $1 million less than EA Mobile. Screen Digest expects Gameloft to usurp EAs leadership position during the remainder of 2008 and then to retain its position as the leading mobile games publisher for the foreseeable future. Gamelofts next challenge will be conquering the all-important US market, where revenue shares are better. 
A 2.6bn market value by 2012
Screen Digest anticipates that the mobile games market will generate an extra 1 billion (787 million) in the next five years, to reach a total value of 2.6 billion by 2012. Historically, Asia has been the biggest market in terms of industry revenues, with over 37% market share in 2007, but Screen Digest predicts that from 2009 onwards, North America will become the largest market.
North America has been experiencing continued growth, generating an average of 125 million every year for the past four years. Screen Digest expects this revenue growth to continue and double the market value to just over 1.1 billion by 2012.
Ad-supported games market still evolving
While ad-supported games represent only a tiny proportion of total mobile games downloads, multimedia plug-ins such as Flash Lite, installed on many handsets in Japan and now increasingly in Western countries, may provide a platform for web-based games that rely on display advertising. Screen Digest believes that the future for advertising in mobile games will be through integrated campaigns, whether through multi-platform gaming specialists, or as part of larger mobile advertising.
Whilst the current demand for games that can be played on the iPhone is giving the mobile gaming industry a much needed boost, there are a number of issues that will need to be addressed by games developers, says Screen Digest Senior Mobile Analyst, Ronan de Renesse. They need to overcome technical challenges to deliver more enticing games to a wider audience of gamers and they need to do this fast. So whilst in the short term the iPhone is boosting sales of mobile games, the favour wont be returned until the iPhone can support a major blockbuster title or two.
