How I Stopped Developing Mobile Entertainment and Found True Happiness

Note: This post is by Morten Hjerde . I saw it on forumoxford and it is reproduced with permission. I think its a classic!

Conforms to a lot of my own thinking especially the belief that the Mobile Web and the Web need to be more aligned – if we are to make any money from mobility! Enjoy!

For the last 7 or so years there has been a ongoing discussion about mobile data services and when are they going to take off? Now, first off all: mobile data services has taken off and are generating healthy revenues for operators. But its like William Gibson said “The future is here. It’s just not evenly distributed yet”.

I thought I’d offer a different perspective to the mobile data services discussion; that of a small creator of “mobile data services”. In 2001 I set up a company to develop entertainment services for mobile phones. Actually, we started out developing a SMS platform for creating interactive services, thinking that people would soon want something more than ringtones on their phones. Our original intent with the SMS platform was to make possible interactive or semi-interactive services like booking of tickets, directory services etc. Soon, we were approached by “content aggregators” (the guys that run operator portals and independent portals) about creating entertainment services. As you probably know, 70% to 100% of all mobile entertainment content is sold from portals.

Up until I left in the beginning of 2006, these SMS-based entertainment services were really what put food on the table for us. It were all sorts of “fun stuff” like horoscopes, robot chat, fortune telling and what not.

Our main interest however were games, and as soon as the color screen phones came to the market we started creating java based games. We did not take lightly to this. The games we made were high production value, very nice looking, with good playability. And they sold well. We had several games in the top 10 lists, one game was actually the top seller for all of 2004 in our market. But the future for independent content creators is not bright, because there is no long term reward for creating quality.

Mobile entertainment will not drive mobile data because the content is not good enough. The content is not good enough because the portals strangles talent that want to create good content. Here is a few examples:

1. The content creator has no name

The portals will sell a game exactly like they sell any other entertainment item like ringtones or the infamous “logo”s. The portal will not say who made the game, sometimes not even the name of the game. They will market it with a screenshot.

For the developer of a game this means that you build zero brand value towards the end user. If a customer love a game, there is no easy way for that customer to find your other games. For the portal it means that they can easily switch you out.

2. Garbage is marketed as gold

Lets be honest, 90% of mobile games stinks. The portals decide what to market based entirely on short term profit estimates. If they got a good deal on any miserable game, they will market it as Game of the Month. Of course this totally destroys customer confidence.

3. Aggregators will not commit to anything new

Development risk of any mobile service is 100% on the developer. The portal may sell your stuff, but in my experience they very seldom will commit to market anything that is new and unproven.

4. The aggregators will steal your stuff it they can

You may hesitate to believe this, but we could only sell services that were based on some form of technological solution that the portal could not easily duplicate. We had on staff a group of very talented designers and illustrators. Once we made a series of “background images”. The portals said no, thanks. A week later one of the portals launched their own series of home made copies of our stuff.

On other occasions, they used illustrations from our marketing kits for marketing their own or other services. (I am referring to large multinational portals and carriers here!)

I have not even touched on the value chain issues and on the revenue distribution. When I left, the portals offered about 10% of end user sales price to the content creator. That means that 90% of the tag price is cost of sales…

In short, you don’t want to be sitting on the short end of the stick in this sort of environment. When I left, the whole “mobile entertainment industry” were focusing on content containing ladies in various state of undress. English is not my mother tongue but I believe the expression “bottom feeders” may be close to my view of the sad state of this “industry”.

What WILL drive mobile data usage may paradoxically enough be off-portal stuff. And further more, a lot of the data delivered to mobile phones may not be delivered over the mobile networks, but over WLAN. There is many promising social network-esque services appearing. Personally I am now developing enterprise-type mobile applications. This is a very fast growing area and it will also drive mobile data use.

Both of these things has a PC and internet origin, and are just not going to deal with the kind of issues mentioned above.

Note: By Morten Hjerde . I and Morten will respond to questions here. It does illustruate many of the aspects I have been talking about – the Mobile data industry can only thrieve by being network agnostic i.e. Internet aligned – which will in turn overcome the application distribution problem

Comments

  1. Stephen says:

    I have been developing mobile games and i strogly feel taht The mobile game market is completely overrun by movie properties. In fact, the most popular games are almost always related to a product endorsement. But see there are new reslers like http://www.youpark.com are coming in depicting there still a good future in mobile applcations and games.

  2. Oaf says:

    There may be a good future in mobile applications and games, but not for the people making them.

  3. Adrian says:

    Interesting read.

  4. Rocco says:

    thanks morten for sharing your insights! i’m glad to be in a similar position like you are now (we’re in fact creating a social network-esque service) and i hope your expectations will come true and it will drive mobile data use.

  5. Mayank says:

    Morten, Good write-up.
    I am also a mobile developer (http://www.bluxone.com). It really sucks how this industry is in such a strangle-hold of operators, portals, etc.. As of today, it just looks so impossible for a software creator to reach his customers without these people eating away his money/brand etc.
    It seems like a good move to concentrate on enterprise mobile software than on the hobbyist market.
    Good luck.

  6. It seems like mobile games does not have a “long tail”. Not yet anyway. Mobile games are very much “the short head”.
    It may be due to the short “technical” lifespan. After 3 months you need to support another 10-20 handsets, and as we all know, you need to test on most of them and a couple may need yet another SKU.
    The other reason, at least here in my neck of the woods, is that the operators mainly sell over the mobile portals (wap/xhtml). Due to screen size, the portal will display maybe 3 games, and those 3 games are the ones that will sell. We know that gamers are very different, but I have not seen any portals that try to adjust their offers to customer preferences. I like logic and puzzle-type games, but even after buying almost every puzzle game on the portal, they don’t seem to get the message :-) Maybe the portals could take a lesson from Amazon.
    I really hope that some time in the future independent portals are able to overcome the technical complexities of delivering and charging mobile content internationally.

  7. RubberSquid says:

    Morten,
    Your post resonates with us too.
    We recognised the need to stay off portal when negotiating a contract with one of the UK big 5 – a contract we never executed – if we had, we would not only have lost control of our brand but would have had to indemnify the licensee against just about everything you can think of. The alternative is a long hard slog, but worth it if you can survive.