12 Predictions for Mobile and Games in 2012

It’s near the end of the season to make predictions for 2012, so hopefully I get this in under the wire.  In the startup world we call such running around and almost missing deadlines being “nimble…” but we might be the oldest startup in mobile games:  From ’06 to ’08 we were the only bootstrapped Top 10 mobile games publisher in the US.  I’ve been in this space so long, I was even there when Jamdat pitched us on making a bowling game for phones, which turned into the top selling mobile game in the US for the next 3 years.  It was black and white… and I think it had B.C. in the title…  So I’ve seen and ridden most waves that have come and gone in the history of mobile games, and I’m more excited by the current wave than any before, hopefully because Mobile Deluxe is helping create it.  Could be why Moby has a surfboard.

So what is that current wave?  Well, here’s part of it, a little off the beaten path (meaning there’s nothing about Facebook’s IPO):

1. Top charts will NOT be dominated by brands (still).

Most brands don’t translate to the top genres we see in the App Store and in Android Market (sandbox games).  So until brand owners come up with effective freemium models, they will languish.

2.  Speaking of freemium: Top games will be freemium.

Seems obvious, but maybe there are people that still think it’s a fad… It’s not.

3.  Middleware engines that port to iPhone and android and other middleware tools that simplify game creation will still not catch on.

I would not invest here.  Coders don’t like using other coders’ code, because they all know that they can do it better, and for not much more time.  The only way to make this work is to sell the biz dev teams at the developers’ businesses on the cost savings… but 99.99% of dev shops don’t have biz dev teams.

4.  This will NOT be the year for HTML 5.

Performance is not there, but the fragmentation is… the fragmentation is worse than Android.

5.  Amazon will kill it in mobile/tablets.

These guys are good, and they can bridge some gaps that others cannot.

6.  Apps will be inundated with video ads, which consumers will NOT love.

Everyone but consumers is excited about this.

7.  iAd will finally take off.

Mobile Advertising is still difficult and frustrating on the buy side.  When larger companies come in with larger budgets, they will want a one stop shop that is SIMPLE to work with.

8.  Zynga’s stock price will double.

I am not a broker.  I am not an analyst.  I have no Zynga stock.  This should not be taken as advice.  It should really just be met with a, “huh?”

9.  EA will turn a profit for the first time in 5 years.

10. Gameloft will attempt an acquisition (they’ve never done this).

11.  Ad revenue will even out between Android and iPhone.

12.  We’ll learn what the shelf-life is for some top mobile game genres.

Alright, there are five more… think of it as the “Top 12 predictions plus 5 bonus ones.”  (But I understand if you need to stop reading now, both of you).

13.  Mobile shopping system companies will become VC darlings.

I’m talking about companies that make it easier for people to shop on their mobile devices.  Yes mobile holiday sales were through the roof, but that was for the huge companies that have solved this on their own.  Everyone else is in need of an elegant solution (for payment, and input of payment info).

14.  Android will launch a realtime rankings system for apps (please!)

15.  EA will announce ‘Aikman Football’ to replace Madden.

At least they should.

16.  I won’t win the battle to delineate between “games” and “gaming.”

Gaming has traditionally meant “gambling,” but has been commandeered by video games, or those that write about them.  Unless we all join forces, this trend will continue, and casino companies will continue buying game companies!

17.  There will be a major cross-licensing deal to solve a big part of the patent wars.  Everyone will participate but one (easy to figure mystery).

Best regards,
Josh

Five Mobile and Tech Predictions for 2012

2011 was a great year for mobile and tech in general.  Free apps emerged as a win-win for publishers and consumers.  Amazon entered the mobile market in a big way.  Apple made it cool to talk to your phone, even without someone connected at the other end.  And Google launched the fastest growing social network in history.  What’s in store for 2012?  Read on to find out.

1. 3-6 Months of BS iPad 3 Rumors

Blah blah blah, retina display!  Blah blah blah, $299!  If your job is to analyze tech companies for an investment bank, you probably don’t know shit about the iPad 3.  Until Digitimes gets the real info from the supply chain in China, give it a rest.  Ditto for iTV, or whatever it may be called, only add 6 months to the timeframe.

 2. Android Tablet Relevance

First, a quick peek at some internal Mobile Deluxe stats for Android and iOS tablet usage.  In Solitaire Deluxe, we allow unlimited game play in the Solitaire Arcade section and monetize with in-game banner ads.  Analyzing the number of ad impressions generated by device size is a good way to get a feel for the relative usage of phones versus tablets.  On Android, only 6% of our ad impressions come from the tablet range.  On iOS, fully 30% of our ad impressions come from the iPad.  So, Android tablets are lagging very far behind.

Why is the tablet ratio important?  Because tablet users over index  in engagement.  The tablet form factor is better suited to situations that can allow for longer play sessions.  How often do you see someone in line at the grocery store pull out their tablet and play a few minutes of solitaire?  Never.  But you do see people on their smartphones while standing in line, riding in an elevator or various other micro-play situations.  Tablets are more of a couch device, used in parallel with other media such as TV.  Also, tablet users are typically more affluent, so they would be more likely to spend money on IAP.

Google’s iPad killer notwithstanding, no one Android tablet is going to prove to be the iPad’s equal.  The good news is that one doesn’t need to.  As with the handset segment, the sum of the Android tablets can combine to compete with the iPad.  The Kindle Fire and other low priced 7″ tablets will provide a significant boost to the tablet ranks in early 2012.  If the larger tablets can find a way to add a little more oomph to their sales figures, the overall numbers should be solid.  More devices = more revenue for publishers.

BTW, if Google really wanted to provide an iPad killer to Android consumers, they would help get ICS rolled out to more devices, more quickly.  The OS experience is the main area where iPad rules the roost.  The hardware form factor for the full sized Samsung Tab was perfect in my eyes.  If the UI worked like iOS, it would have been an equal device.

3. Twitter Transitions to a Media Platform

John Battelle nailed it in two posts.  Twitter is the most interesting of the social media companies, primarily because it is still so undeveloped.  I use Twitter almost like an RSS feed to scan for important news and tech articles.  I also use Twitter to communicate with friends and converse with colleagues.  When I get really brave, I click on the trending topics just to see how creative one can get with the English language.  Twitter has a multitude of facets and can be used by different people in different ways and still remain part of the unique Twitter experience.

In John Battelle’s second post on the Free Radical nature of Twitter, he plants a very interesting seed in the last three sentences.  The transparent and egalitarian nature of Twitter allows for conversations that could not otherwise happen.  Sure, there’s about a .001% chance that Bill Gates will respond to your tweet, but there’s a much better chance that Alton Brown will.  Twitter drips with the potential to evolve into something even better.  I can’t tell you exactly how, but I would bet that Twitter will end 2012 looking a lot different than it does now.

4. Mobile Publisher Consolidation

Mobile 1.0 went through a consolidation phase in the mid 2000’s and reached a level of relative maturity with a handful of major players (Gameloft, Glu, EA, Dchoc) dominating the space.  The combination of smartphones, free apps and open markets (iOS and Android) has created the Mobile 2.0 games space.  There are now a significant number of independent iPhone and Android publishers that consistently get multiple games to the upper echelon of the Top Grossing chart.  EA, Gameloft and Glu are still big players, but they do not dominate the way they did when Verizon’s Brew deck and AT&T’s J2ME deck were the biggest streams of revenue around.

Storm8/TeamLava, Backflip, Tiny Co, Pocket Gems and some other companies are under the mainstream consumer radar, but kicking butt and making serious money.  Storm8 has pulled at least one $1MM IAP day.  Backflip has seen DragonVale hang out in the Top 10 Grossing apps since its launch in mid-September.  However, a lot of these companies find themselves in a no-man’s land, where they make too much money to be a value acquisition for a big publisher, but not enough money to IPO or pull a JAMDAT.  Top tier independent publishers will be looking to acquire smaller publishers to grab market share and bulk up.  The second tier of indie publishers are still profitable and growing, but not to the extent of the top tier.  These are the publishers most likely to be snapped up by the Zyngas and Googles (and Storm8s and Backflips) of the world.  They have tremendous growth potential, but are still in the $20MM – $50MM valuation range.  Patents, tech advantages and scalability will be the key differentiators for the second tier of publisher.

5. User Acquisition for Mobile Takes Center Stage

Now that (almost) everyone is on the same page and cranking out free apps, the game has shifted to acquiring as many users as possible for as cheaply as possible.  Apple and Android only promote a limited amount of apps each week.  Publishers are responsible for driving their own traffic, for the most part.  User acquisition channels (Ad networks, Pay-Per-Install providers) are getting more and more crowded.  More demand for users means that User Acquisition prices are bound to rise.  Monetization enablers will still play an important role, but I expect to see a steady stream of new entrants to the user acquisition game.  Expect to see the mobile-specific game networks (OpenFeint, Mobage, Papaya, Playphone) tout the size of their user base and the ability to drive installs as key features.

Another trend to watch for in 2012 is an increase in the number of branded free apps.  Free has eliminated the barrier to entry for downloading an app, but it is still tough to get noticed in today’s massive marketplaces.  Brands can provide a differentiator that will pull users into an app.  Smurf’s Village was the first app to show the power of applying a good brand to a complimentary style of gameplay.  The results were spectacular.  Family Feud & Friends has been climbing within the Top 100 Grossing and is now a consistent Top 25 performer.  It will be interesting to see which brands are able to pair up with the correct gameplay styles and make an impact.