One of my team members and I will be at CTIA next week. If anyone is going and would like to meet, please let me know.
Category: Mobile Platforms
Issues related to different social mobile platforms and operating systems
Dell’s Ophelia can be the biggest thing to rock gaming since the iPhone
The unveiling this week at Mobile World Congress from Dell about their Ophelia project (thank you Jon Downey for bringing it to my attention) may have a profound impact on the game industry as early as Q3 of this year. Ophelia is a stick that turns a TV or monitor into your computer (through the HDMI port initially but there will be a USB version in the future), powered by Android. It is effectively your computer on a stick, which then integrates with Dell’s cloud services and allows you to use your apps or play your games. You can even upload and download files as if you were at your PC (or Mac).
Think about pulling out your Ophelia stick, plugging it into your TV and you can just start playing Bejeweled or Slotmania. Later, you plug it into your monitor at work. When you’re traveling, just plug it into the TV in your hotel room. You can play all your games, edit your documents, view your pictures, and anything you would do with a laptop or tablet. Continue reading “Dell’s Ophelia can be the biggest thing to rock gaming since the iPhone”
Facebook’s importance, or lack thereof, for social gaming
I have been reluctant to join the bandwagon of people declaring Facebook dead, either overall or as a social gaming platform, but I have gotten to the point where I have lost confidence in Facebook. It has been fashionable since Facebook’s IPO to say the platform was in trouble because of the shift to mobile. In the game space, the anti-Facebook crowd got started even earlier, suggesting the only wise course for social game companies was to develop for mobile platforms instead of Facebook. I was reluctant to join this chorus, given the incredible user numbers Facebook has and the revenue that some games were still generating on Facebook (which dwarfed comparable mobile games). However, I have been rethinking my position.
Continue reading “Facebook’s importance, or lack thereof, for social gaming”
What GREE’s Q1 2013 financials mean
Last week, GREE released its financials for the Q1 2013 fiscal year. GREE generated revenue of $466.7 million for the quarter, representing an annual run rate of over $1.8 billion. GREE also had a profit for the quarter of $111.5 million, which extrapolates to about $450 million in yearly profits. I am not a professional (or even amateur) stock analyst, so rather than predict—or try to predict—GREE’s future performance, I will highlight its impact on other social and mobile game companies.
The numbers showed GREE’s dependence upon the Japanese market. Unlike DeNA, which I wrote about a few weeks ago, GREE does not yet have a major success in North America (outside of the Funzio games it acquired). It does, however, have significant costs in its efforts to grow internationally. GREE’s cost of sales increased 123 percent year-over-year, which GREE attributed to its aggressive international expansion.
GREE’s financial results overall were not nearly as strong as DeNA’s but a much more positive sign for the industry than Zynga’s results. They reinforce you can generate high revenue (a $1.8 billion run rate in sales is not bad) and profitability by primarily selling virtual goods. They also show how one or two hits in a portfolio of over 50 games can move you from good to great (Rage of Bahamut probably accounts for most of the difference between DeNA and GREE) and are the difference between success and failure in global expansion. Next quarter, the results may be the inverse and probably would not make one company better than the other. Overall, though, it is great to see multiple social gaming companies with strong revenue and profitability.
DeNA’s results show the opportunity in social mobile
Earlier this week, the Japanese-based social mobile game company DeNA announced its results and the numbers show that great opportunities still exist in the social gaming space. I have written several times about the importance of DeNA (and its Japanese competitor, GREE) in the social gaming ecosystem, in particular that they are better industry bellwethers than Zynga. DeNA is best known in the US as the parent company of ngmoco:), which it acquired in 2010 for $400 million.
DeNA’s results for the quarter that ended in September show the health of the social gaming and free-to-play business. For the quarter, DeNA generated $627 million in revenue and $254 million in profits. At that run rate, DeNA would see about $2.5 billion in revenue and $1 billion in profits for a twelve month (one year) period. The quarterly numbers also show a 45 percent increase in revenue and 38 percent increase in profits over the same period from the previous year.
The other interesting result in DeNA’s report was the revenue per daily active user (ARPDAU) it is generating from some of its titles in the US and Europe. Continue reading “DeNA’s results show the opportunity in social mobile”
The need to focus on tablets
I have written several times about the increasing options in the tablet market and the great opportunities they represent for social game companies. A recent piece on Techcrunch further illuminates this point and makes a great case on why developers should create first for tablets, then turn their attention to smartphones. The author, Tadhg Kelly, points out that Apple has sold over 100 million iPads and in 2–3 years there may be as many as 400 million tablets in the market. Moreover, price points for paid apps on tablets are higher, and Kelly expects greater monetization for free-to-play games due to longer engagement.
I am equally optimistic about prospects for tablets. Amazon’s new line of Kindle Fires will be a huge holiday seller. The devices are attractively priced, and the ability to focus holiday shoppers’ attention on the devices on the Amazon.com home page and through cross promotion ensures millions will see—and many likely buy—the new tablets. Barnes & Noble’s new Nook tablets share a similar advantage. Again, they are very attractive devices at even better price points. Barnes & Noble also has huge retail reach, with 689 stores and 667 college bookstores, all of which will be prominently showing the new Nook tablets during the holiday shopping season. In addition to these very attractively priced devices that will be in consumers’ faces this holiday season, Samsung (the second largest manufacturer of mobile devices) has a strong line of tablets (including the intriguing Galaxy Note Tab). Also, do not forget Google, that little California company, who has the resources to push its attractive Nexus tablet. Continue reading “The need to focus on tablets”
Opportunities in emerging, emerging markets
To me, one of the most exciting opportunities in social media and gaming is in the truly emerging markets, the countries one or two economic tiers below what is currently considered the emerging economic group (the latter consisting of countries like Brazil, Russia, India and China). I wrote a few months ago about how interesting Africa is potentially to social game companies and I wanted to expand on those thoughts now that a recent TechCrunch article has highlighted the opportunity. Continue reading “Opportunities in emerging, emerging markets”
Here comes the Nook Tablet
With all the excitement around Amazon and Apple’s new tablet announcements in September, there was little attention given to Barnes & Noble’s plans for the Nook. There will be two new Nook tablets coming out later this year to compete directly with Apple and Amazon. One, the Nook HD (priced at $199-$299 depending on storage), is a 7-inch tablet that will compete directly with the Kindle Fire HD, Google’s Nexus 7 and the 7 inch iPad that Apple will announce imminently. Barnes & Noble will also have a 9-inch table, the Nook HD+, that directly targets the iPad and Fire HD 8.9 inch. Couple the potential and value of these devices with Microsoft’s major investment in the Nook division earlier this year, and it is apparent you should not ignore the impact of these devices.
Another Android device loses a lawsuit to Apple
In late August, I wrote about the $1 billion plus jury decision in favor of Apple against Samsung for patent violations. Last week, a German court ruled that Motorola Mobility (which is owned by Google) violated Apple’s “bounce and scroll” patent (the same one that led to Apple’s victory over Samsung in the US). If Apple puts up sufficient bond, the German court will ban the sales of Motorola Android devices and could even force them to recall all devices sold in Germany.
Continue reading “Another Android device loses a lawsuit to Apple”
GREE and DeNA, the real companies to watch in social gaming
I find it interesting that the two largest social game companies, GREE and DeNA, generate virtually no press, while you can’t avoid articles about the third largest social game company, Zynga. I believe that because they are Japanese and not US companies they do not generate the same level of attention, but that is unfortunate. People do not draw conclusions about the viability of the airline industry by looking at Spirit’s performance or determine whether the auto industry is rebounding by analyzing Audi, so why look at the third largest game company when assessing the social game industry? If you are an investor, entrepreneur, engineer, etc., and trying to judge the opportunities in social gaming, it makes sense to benchmark against the biggest and best, and that is DeNA and GREE.
Continue reading “GREE and DeNA, the real companies to watch in social gaming”
The Business of Social Games and Casino 