Archive for July, 2012

“Mobile Gaming – Everything to Play For”

Thursday, July 19th, 2012

A $60 billion market over the next five years

A brand new and increasingly popular category of business, Mobile Gaming, has taken the market by storm. Three interrelated components of the converged wireless world have given rise to its exponential growth and rapidly increasing popularity:

  • Increased availability of wireless broadband on cellular and Wi-Fi
  • Abundance of reasonably priced smartphones and tablets
  • Easy accessibility to app stores that expand the functionality of mobile devices

 

 

Mobile Market Developments

Mobile gaming is a global phenomenon but because it is leading the world in 4G, LTE and smartphone penetration, the U.S.market is taking off more rapidly, as shown by the following developments:

  • Forecasts indicate that 4.3 billion smartphones and 1.2 billion tablets will be sold globally over the next 5 years. These devices have transformed daily habits, enabling mobile entertainment – and gaming in particular – to become an integral part of everyday life.
  •  ComScore saw gaming usage increase by 77% in 2011 in the U.S. where 31% of mobile users play games on their devices, and 27% in the 5 largest European countries. Gaming is the number one entertainment activity for tablet users in the U.S.

P.J. McNeally, of Digital World Research, concluded: “Gaming is now a ‘need to have’ category, not a ‘nice to have’ category for mobile devices, whether they be tablets or phones.”

Shifting Business Models

The impact of these developments is that the industry’s value chain and the way that games are sold are being forced to change with the adoption of the new “freemium” business model in the mobile environment. The “freemium” model provides the initial game for free but the user is then charged for subsequent in-game purchases. Currently incremental revenue is only generated by about 5 -10% of active game players and this will have to increase if existing games companies are to survive.

The impact of value chain shifts can be seen in the plight of Nintendo where the console market has been severely impacted by the “freemium” model. Consumers find it difficult to justify paying for a stand-alone gaming device, plus games, when they can download these for free on their smartphones or tablets and then play them on their TV’s using HDMI cables.

What does the Future Hold?

For the mobile consumer, the online “word-of-mouth effect” combined with the growing power of social networking will be a significant driver of viral game growth and in-game purchases.

In the mobile gaming category, businesses boundaries will continue to blur as value chains adapt to the converged space of ICT, telecoms and consumer electronics – coined the “Crossover Era” by Gamesbeat. As devices become more sophisticated, games incorporate more advanced features and gamers continue to view mobile entertainment as a “must have”, this market segment will without doubt continue to grow rapidly, evolving into a $60+ billion market over the next five years.

Contact us at info@keysoglobal.com or +1847-478-1633 to obtain a copy of our final report on Mobile Gaming.

Article first published as Mobile Gaming – Everything to Play For on Technorati.

Steve Bell, President, KeySo Global   www.keysoglobal.com

The Emotional Pull of Technology

Monday, July 9th, 2012

What could be easier than shopping for a cell phone, especially when you already know what you want? My wife had already decided that she wanted to upgrade her old Blackberry Bold so, being with T-Mobile, off we went to their store.

We wandered around, looked at and played with the two Blackberrys on display and asked a sales associate for advice. The youngster seemed technically competent but totally disengaged, probably having given the same spiel to customers a thousand times. It was obvious that, to him, our purchase was purely a transaction.

The Blackberry Bold was priced at $650 but as “loyal customers” we could purchase the phone for $360 with a $50 mail in rebate from T-Mobile. For this price my wife would have an upgraded phone with both touch screen and keypad, a faster camera, plus newer technology enabling the downloading and interaction with apps that hadn’t been possible on the older version. Ok, great – mission accomplished! I was getting ready to pay and leave.

My wife had other ideas. She was clearly not impressed with either the price or the salesperson. He had failed to connect with her and convince her that she was getting the phone she really wanted. She decided to “think about it”.

Our next port of call was the Target store. They hold wide range of phones – just no Blackberries. A very pleasant and competent salesperson explained that Target could no longer get hold of Blackberry devices. She empathized totally with my wife’s apprehension about transitioning to a large touch screen smartphone and explained that she herself had handled the switch over with remarkable ease. On her own phone, a Samsung Galaxy S11, she demonstrated with verve the swipe mechanism for texting, enthused about the high capability camera and beautiful images displayed on the large screen. She took time to answer questions and form a relationship with my wife, making the whole purchase exercise a fun and informative experience. Who would’ve thought that you’d find this degree of engagement at Target!

Ok, so what about the price? This was going to be the killer. As it turned out the Samsung Galaxy S11, after a trade-in refund for the RIM device and a loyalty discount for Target customers, retailed at … $137. That’s all it took to convince my wife – the offer and the phone were too good to resist!

So what are the “walk aways” from this experience?

  • Firstly, purchasing a cell phone is not just a technical sale; it’s an emotional one as well. Even when a customer’s requirements are clearly voiced, the engagement with this customer is crucial and can result in surfacing and satisfying unmet needs.
  • Secondly, RIM has a very hard job ahead if most retail stores do not have the product available to satisfy brand loyal purchases.
  • Finally, mobile operators had better start thinking about improving their retail business model and experiences to compete with Target-type competition; otherwise Vodafone’s proud boast in Barcelona at Mobile World Congress 2012 of being the 8th largest retailer in the world could very quickly transition a precious asset into an expensive embarrassment.

After much apprehension, my wife is now an avid fan of the larger, touch screen smartphone and after only two days of intense interaction, became a total convert. Who says technology doesn’t evoke emotions? Not me!

Steve Bell, President, KeySo Global

www.keysoglobal.com

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