Gameloft On Metrics, Brand, And Why They’re #2

I had a pre-CTIA talk with Gonzague de Vallois, Vice-President of Worldwide Publishing of Gameloft to talk about the mobile game business…naturally we talked about how to promote mobile games to increase the number of people buying them (or buying them more than once) and the old brand vs quality chestnut, and we also talked about how to measure the mobile games market. Particularly, which company is the second largest.

Metrics—How to know if mobile games measure up
One of the big issues with mobile games is metrics—how should the mobile game market be measured? There are different figures based on whether the metrics are for the US, Europe or global, whether they measure downloads of mobile games or just sales of mobile games and so on. Ultimately, the only metrics that matter are revenue and profit. In this regard Gameloft’s revenues for the first half of 2006 were €30.5 million (US$39.2 million), up 50% year-on-year (press release).

Gonzague points out that only EA and Gameloft publish their results, and takes issue with Glu’s claim to be the second largest mobile game company in the world. Gameloft reckons it is the second largest mobile game company in the US and the largest in Europe, making it the second largest overall. Gonzague also pointed out that the analysts only counted downloaded games, not those available by subscription. “With the subscription services of Verizon and Sprint, the games are not present on the deck but people are still subscribing, they can still play (and) pay every month,” he said, saying the subscription model was mainly popular in the US. “I would say that over 30%-50% of our business is subscription.” I don’t know how you’d compare subscription-games to download-games, I’m not sure it’s possible.

Anyway, squabbling over how big the slices of pie are is irrelevant when the overall pie is growing at a pretty good rate, and when one of the most discussed topics about mobile games is how to promote them.

Promoting games—Quality products, reasonable prices
“The key question on the market today is how to grow the awareness of the business,” said Gonzague. “First, make sure that all the phones on the market can go on a portal and download games. Make sure people know they can download games. Create awareness in the shop, that mobile content is sold as well as handsets…Make sure all the phones are supported by the best games there…If you buy a new handset it’s important that the first day you buy it there is content available.” Some studies have shown that people tend to buy a lot of content when they first get their phone, and then it drops off, so you want to have something to sell them straight away. Gameloft thinks the penetration rate can reach more than 15-20%.

One think Gameloft thinks is very important is the price of mobile games. “We think the prices are still to high in some markets,” said Gonzague, pointing to prices of $6-7 plus data charges. “People are paying $7-9 for a mobile game which we find much too high…We have done some tests with carriers…and there is a real price elasticity.” He said that by reducing the price of games they increased volumes enough that total revenues were higher. That being said, the price of mobile games is a common decision between the games publisher and the carrier.

“Our vision is to grow the business in the long term so we want to make it a mass market and we think price will be a key element to this,” said Gonzague. “Carriers have another opinion because they’re mostly focused on the short term because they need to grow their revenue on a quarterly basis.”

Brands—Good promotion, but it has to promote something relevant
Gonzague came down heavily in favor of brands as a way to promote mobile games, as long as they’re handled correctly. While emphasizing the importance of investing in the quality of the game he claimed that you also need to invest in targeted marketing, which is what the deal with Paris Hilton was about. “Without Paris Hilton there it would be harder to convince people to buy this type of game,” said Gonzague.

The only input Paris had was to ensure the game fit with her image (that’s important for her, since her image is her business). Gonzague said the game style had to be carefully selected to match the brand, so the Paris game has to be different from the Desperate Housewives game. When I suggested Gameloft might be able to increase its targeted market my rebranding a game Gonzague disagreed, pointing out that people often buy games on the deck, often based only on the title. If brands are similar enough to work with the same game, they’re probably similar enough to target the same audience, and if a customer buys the same game twice they’re not going to be happy.

“On the deck of Helio or the deck of Amp’d, the buying experience is much richer, but with today the way people are purchasing games we want to make gameplay different with different brands,” said Gonzague. “A game is not just a piece of software with a brand around it, a game is a whole experience.”

Related stories:
—Telephia: One In Three Mobile Games Given Away
—Gameloft Q1 Revenue Increases 49%
—Carriers Are Not In Competition