A day after Glu Mobile said it would shed staff and cut CEO Greg Ballard’s salary to prepare itself for what it called the “increasing economic headwinds” facing the sector, its larger rivals Electronic Arts and Gameloft, told Reuters that the market is doing fine, thank you very much. A Gameloft (EPA: GFT) spokeswoman said “it’s all going well,” while EA’s mobile business head Barry Cottle went further: “Mobile games are actually thriving right now,” he said, dismissing the idea that declining handset sales had hurt the market. He added, however, that while it was “too early” to tell what sort of impact the weakening economy would have on the company, so far, they had grown in all regions, including Europe where handset sales have dipped. 

So what accounts for this disconnect?  Senior Forrester Analyst Thomas Husson says the larger companies have economies of scales that their smaller rival doesn’t. They can, for instance, more easily take the same title and port it to different platforms. Glu (NSDQ: GLUU), on the other hand, said that it was taken off guard by the success of the iPhone, admitting that it should have put more resources toward the new platform. They also have wider distribution partnerships in place, with Gameloft having particularly good relations with operators and handset markers. Plus for EA, mobile games is still a small part of its business, with mobile sales making up around 5 percent of overall revenues. For Glu, mobile is it.

More after the jump

Husson adds, just because the sector may see a slow down, and some companies may be hurt in the decline, doesn’t mean all companies won’t do well, or that some parts of the mobile gaming sector won’t thrive. In November, at its gaming forum in Rome, Nokia (NYSE: NOK) head of gaming Jaakko Kaidesoja said it was likely that the overall market was not going to grow in 2009,but he excluded the company’s gaming platform N-Gage (of course), the iPhone, and emerging market from this dire fate. Still, despite EA’s rosy view of the market, it’s obviously not always smooth sailing, even within the company. Cottle told Reuters that he was “bullish” on N-Gage, yet just a few weeks ago at Nokia’s gaming forum, his colleague Peter Parmenter, told the audience that he still considered N-Gage a “soft launch,” grousing that “it’s easier to get an audience with the Pope than it is to get a game through certification at Nokia.”

Meanwhile, RCR Wireless has a story on Trism, a cautionary tale for all the big mobile game publishers. Trism is an iPhone game built by Steve Demeter, a 29-year-old developer who was able to quit his day job at a bank after he raked in $250,000 from the game after two month’s on Apple’s App Store selling at $5 a copy. Demeter spent four months—nights and weekends—coding the game, in which players line up triangles of the same color depending on how the iPhone is rotated. As RCR Wireless notes, Demeter’s story manages to show at once both how popular mobile games can be, while also pointing out why the industry as a whole has struggled so far. With Trism, there are “no exorbitant subscription price points. No expensive licenses from production studios, and no prohibitive porting fees to address dozens of phones. No fancy 3-D graphics, which can be costly to produce, and no ridiculous rev-share payouts for the privilege of being merchandised on the consumer-hostile storefront that is the carrier deck.” So yes, mobile gaming is thriving for some, but it’s clear with new distribution platforms opening up, how and which games are made is going to have to change too.

• Glu Aims To Cut Expenses By 19 Percent Through Layoffs, Cutting CEO’s Pay
• Nokia Sees Overall Gaming Market “Not Growing”; EA Slams N-Gage