Platform and Hardware Fragmentation – Is It Inherent In the DNA of the Mobile Industry?

Thursday, 28 August 2008

It's time for an editorial again here at MobileGamesBlog.com. Today, Mike Yuen, the one and only mobile gaming expert at Qualcomm Internet Services talks about platform and handset fragmentation in the industry.

Juniper Research analysts have stated that by the year 2010, two-thirds of the world’s population will have cell phones and that 460 million – or roughly 12 percent – of those four billion people will be downloading games. With global revenue from mobile games expected to surpass $10 billion in 2009, the stakes have never been higher for industry players, as they look to capitalize on the potential growth of mobile gaming. But even with the mobile gaming market maturing, there continues to be uncertainty regarding the future vision of the industry. Adding to the uncertainty are external forces attempting to fundamentally redefine the mobile gaming realm.  Will these forces help or hinder? Only time will tell, but several things can be learned from the landscape as it currently stands.

The lack of platform and hardware standards continues to be a major inhibitor to mobile game growth in the United States. This diversity in development platforms (Android, BREW, Flash Lite, iPhone, Java, Linux, Symbian, WAP, Windows Mobile) and hardware configurations (display resolutions, RAM/heap memory size, processing and graphics power, audio formats, keypad and other input modes) has forced developers to create thousands of SKUs for each game they develop. For a large global mobile publisher deploying several games a month this translates into tens of thousands of SKUs on a monthly basis. Contrast this with traditional video game console games, where a single, master build simply has to be replicated for packaged goods to be shipped into the retail channel.

In many cases, the costs associated with individualizing software builds to the particularities of each handset, operator and language account for more than half of the overall development budget for new game titles. It’s a simple, but important concept. If fewer resources were diverted to porting a title from handset to handset, operator to operator, more resources could be dedicated to advancing the development of new and innovative gaming concepts. In fact, the relative scarcity of operator and handset choice in Japan and Korea is a primary reason why those countries are outpacing the United States and Europe in mobile game development from a platform commonality standpoint.

During his keynote at this year’s GDC Mobile conference in San Francisco, Gameloft CEO Michel Guillemot stated that only five to seven percent of American and European mobile owners buy games regularly, while in Japan and Korea the rate is as high as 10 percent to 15 percent. But operators are not always motivated to adopt a universal standard because they have a financial interest in supporting the investments they’ve made in their existing platforms and ecosystems, which they have often selected as a point of differentiation to keep their offerings unique. The reality is that operators are also quite wary of a Wintel-like duopoly rearing its head in mobile despite its likely ability to establish a common platform.

Right behind platform fragmentation in the list of obstacles facing mobile gaming is hardware fragmentation. The fact of the matter is that there are hundreds of mobile handsets introduced every year, each with its own combination of features that developers must support in order to have their games run on a given handset. It’s essential that a gamer feel comfortable with the physical controls he or she uses to play a game, but button placement can be different from one phone to the next. Now, with the arrival of the iPhone and its touch screen technology, a new component has been added to the mix and hardware fragmentation is greater than ever.

Speaking of Apple, it is a member of the recent vanguard of companies entering the mobile realm offering new platforms with the intent of making the development of mobile applications easier…but only for their platforms. These companies are exceedingly confident and aren’t afraid to fail, a quality that has been lacking in the wireless industry as of late. It’s altogether apparent that the average mobile user doesn’t know what their device can do until an innovative company like Apple comes on the scene (with lots of marketing savvy and a huge marketing budget) to disrupt conventional wisdom. Those who really care about the wireless industry should be welcoming Apple with open arms, even as they further fragment the market, as the situation has served to jostle the complacency that has frozen innovation in mobile gaming. For example, touch screens and other user-friendly technologies have been around for years, but the market has been slow to modify its vision to changing usage dynamics. We saw this at work with last year’s launch of the Apple iPhone, as six months after the iPhone launch several mobile device manufacturers had also released their own touch screen devices. It is evident that even though they had the technology, device manufacturers were reluctant to introduce similar technology due to its inherent risk of failure. This sort of paralysis serves no purpose in an industry that prides itself on innovation. It would be great to see companies from the mobile space be more proactive and take calculated risks versus reacting to the moves of someone like Apple.

Taken a step further, fixed-mobile convergence and the expansion of more open development platforms coupled with open networks will have serious implications for mobile gaming as developers increase the crossover between Web and mobile-based casual and 3D games. Web companies entering the mobile gaming market will leverage proven Internet strategies such as widgets to change the marketing dynamic.  This will go head-to-head with emerging widget strategies from traditional wireless players including Qualcomm and its Plaza platform, which allows operators to be the primary driver of the mobile Internet experience. Further driving this convergence is the fact that more than 115 million handheld devices now have Flash technology embedded in them and developers are actively creating games that use Flash Lite. Adobe is further expanding adoption of its technology by teaming up with Qualcomm to incorporate Flash on the BREW Mobile Platform, which will bring the power of an open platform to mobile devices while accelerating the development of rich Flash-based applications, UI, and Internet content in mass market devices. It remains to be seen whether mobile operators will start selling Flash Lite games on their portals in a much more heavily supported way in countries like the U.S., and if so, how they’ll be priced compared to regular games. But if the double-digit growth rates for global spending on mobile data is any indication, BREW and other “native” platforms that enable richer content for certain types of games like 3D and multiplayer are going to continue to play an important role in driving usage and revenue growth.  This is especially critical as the global market sees broader penetration of 3G devices, wider availability of 3G network access and growing consumer awareness of content available through non-operator channels. And just like in the traditional game industry, some consumers will always be willing to pay more for the most cutting edge game experiences and some developers will always want to push the envelope in terms of technical capabilities.

Mobile gaming is in a state of flux – platform and hardware fragmentation has clouded the once blue sky of gaming’s future and positive disruptive products such as Apple’s iPhone have changed industry perception and consumer expectations about the future of the mobile gaming device. I’m not expecting us to reach consensus anytime soon. Fragmentation is an inherent element of the mobile industry and perhaps always will be. At this stage in the game it is something developers entering the space accept, understand and adapt to. They will naturally gravitate towards the platforms that have the largest installed base of devices so as to generate the most revenue from their games. Ultimately market forces will drive the platform and hardware winners, but the truth is the mobile industry will probably never only have just a few platforms or a duopoly in the form of a Wintel. If this day does come, the Internet giants will have defeated the traditional operators and successfully expanded the Internet paradigm to the mobile space. Is this a good thing or a bad thing? The answer to this question depends on what space you occupy in the value chain. Perhaps the mobile industry will come out on top, perhaps not, but it would be a shame if industry incumbents allowed others to create their own vision for mobile. After all there’s nothing worse than letting someone beat you at your own game.

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