Welcome to GDC Mobile 2006! Global perspectives Entire ecosystem Motto: make better games! Debate and opinions are welcome

Everything is great!

Except… … consumption has been flat for

several months in the US. … evidence of price erosion in

Europe … costs are rising … some carriers plan to take a

greater revenue share

Room for growth or failure to market?US console game-playing audience: 50% of population Average age: 30 Gender: 48% female

Source: The Economist

US Mobile game audience: Fewer than 4% of total mobile subscribers

download a game in any month. Fewer than 10% play mobile games.

Source: Telephia and M:Metrics

Telephia: Penetration has remained stagnant

% of Subscribers Purchasing Games

0.00%

0.50%

1.00%

1.50%2.00%

2.50%

3.00%

3.50%

Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06

Telephia: Subscription growth rate outpaced new purchase growth rate; purchases have grown slowly since July

Montly Game Purchases

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06

# o

f P

urc

has

es i

n ,

000

All Purchases New Purchases Repeat Subscription Purchases

Expected bump due to Holidays but declined in January

~Annualized Growth =23%

~Annualized Growth =30%

“The Market is failing to give users an incentive to make repeat purchases.”

- Informa research

Erosion: End user price falling Average price for color game:

2004: Euro 4.30 2005: Euro 3.49

Source: NetSize Guide 2006

“Vodafone makes no price distinction between 2D games and the richer 3D titles.”

Source: Informa research

The best billing system for impulse purchases is wedded to the worst mechanism for merchandising.

Vicious Cycle of Stagnation? Carrier relies on content provider to

stimulate consumption. Content provider relies on proven

brands to attract audience. Audience fails to get excited by

derivative products or re-hashed arcade titles.

ELSPA #1 Mobile Game in UK

December 2004: Tetris by iFone November 2005: Tetris by

Jamdat

The Wal*Mart Effect

Brand Hangover

2005: the year of safe bets

2005: the year of new names

Extreme Makeover: mobile edition Sorrent Glu Digital Bridges I-Play Dwango Wireless Dijji Kayak / Synergenix Blaze Digital Chocolate Digital

Chocolate

Extreme Makeover: mobile edition (2)

Sprint/Nextel “Sprint together with Nextel”

Telefonica “Telefonica together with 02”

SBC “AT&T together with SBC, BellSouth, Cingular and

your bank account” Vodafone “no longer with J-Phone”

Extreme Makeover: new names for 2006? iFone: iPlay Better Digital Chocolate: Digital Chocolate MFORMA: MFRM GameVil: Game Evil: His Satanic Majesty’s

Studio

Telephia: The top 10 publishers made up 70% of mobile game revenues in Q4 2005

Top 10 Game Publishers by Share of Revenue - Q2-Q4

2.1%3.8%

2.5%1.3%

7.4%

4.1%

1.3%

4.3%6.7%

7.1%7.3%5.9%

30.5%

2.8%2.3%

5.2%

30.6%

5.9%

9.2%

5.7%

2.1%2.4%2.8%

2.9%4.5%

5.8%6.2%7.2%

28.7%

JAMDAT Gameloft Namco Mforma Glu Mobile I-Play THQWireless

EA Mobile Infospace Mobliss

Q2 2005 Q3 2005 Q4 2005